Chris Caso: As a follow-up, you mentioned in your remarks, some pricing pressure on the automotive side. I wonder if you could expand on those remarks, where you’re seeing that pressure, how you’re dealing with it? And I guess since you constrain those remarks to the auto segment, does that suggest that pricing in other segments is stable?
Rajesh Vashist: Yes. The pricing for SiTime between the past quarter and this quarter is going to continue to be the same. In general, our price is driven — our corporate ASP is driven more by mix than by individual places where we might be under pressure, which does happen in pretty much every segment, just to be clear. But it’s just in the aggregate, I see it more in automotive simply because, I think there is some pressure on EV pricing and some of it is rolling down to us. But this is at the margins. I was just sharing those thoughts in the spirit of great transparency, just to say that, it’s not like we’re completely impervious to macro events, but we do have ameliorating parts to it, which is that our mix is changing.
And so, we’re getting to work around the pricing that we are getting through. In coming years in automotive, I want to put in a plug for the new product portfolio that we are attempting to build in that market. I think that’s going to be significantly differentiated to deliver reliability and performance for the automotive market, the likes of which they have never seen. I think we’re already doing that in CED. I think we’re going to repeat that in automotive, but that’s going to take a couple of years.
Operator: [Operator Instructions] Our next question comes from Tom O’Malley with Barclays. Your line is open.
Unidentified Analyst: This is [Will Levy] on for Tom O’Malley. Just a quick question on gross margins in this trajectory into ’25. If the consumer business is recovering and off of March lows, how do you see margins trending for the rest of ’24, especially with mix as other segments grow as well?
Beth Howe: Sure. I’ll take that one. If you think about gross margins, as I said in Q2, we expect them to be kind of roughly similar to Q1. In the back half, I would expect that they would see some improvement off those levels.
Unidentified Analyst: Should we assume like maybe 50 bps increase in September, December, maybe exiting the year close to 59-ish? Is it a little granular there?
Beth Howe: I appreciate. May I give you some insights on how to think about gross margins? I think they will trend up as we go into second half versus first half. There’s a number of things that go into gross margin and then we’ll have to see how that evolves. Clearly, product mix is a big driver of gross margins. And then we also look at to grow the revenue, then we would expect some better manufacturing absorption that should be a benefit as well. We’ll have to see how costs play as we go through the year. Those are kind of the puts and takes that I’d be thinking about as I thought about second half.
Operator: Our next question is a follow-up question from Tore Svanberg with Stifel. Your line is open.
Tore Svanberg: Rajesh, I had a question on the Aura business of the clocks. You talked about 40 new products being released at the end of the year. I know you had talked about not just the SAM expansion here, but also strategically how important it is to sell clocks in addition to your oscillator devices. Could you just elaborate a little bit on that? And then as you launch those 40 new products, how is the sampling going to be as far as garnering more content? Because, I do assume the clocks probably pull more oscillators too, if I’m not mistaken.
Rajesh Vashist: That’s right. There are many strategic elements to that. The first and foremost is that the SiTime focus is right now on the CED market with the clock and oscillators being sold as a bundle, because we believe that, that is where the biggest precision timing needs are and where we can help our customers, particularly in AI right now and even in telecom, we can help our customers a lot. Think of it this way. Our customers today have to go to semiconductor companies such as Skyworks, Renesas and Microchip to name a few to get the clocking portion. Then they have to go to the crystal companies to get the oscillator and then the burden falls on them to make the matching of these two under very tough conditions of performance and environment to make that work.
SiTime makes it super easy for them with these new 4D products and the current ones that we’ve already launched that we can put that integrated and make it work as a subsystem. We are getting significant traction on that. My comments on getting traction on that with our customers in the data center market as well as in the NIC card business are very much focused on that. I think we’re going to start. We’re not focused on the consumer space as much. We’re focused mostly on the CED space. That is where the high margins are. The clocking business also does have high margins, although not as high ASPs. ASPs are typically in the $5 to $10 range. Oscillators can go as high as $30, but the gross margins are higher close to 65% to 70%.
Tore Svanberg: Last question then I’ll go away. You talked about obviously data center strength now, sounds like telecom more next year. But what about enterprise networking, are you starting to see that market waking up as well?
Rajesh Vashist: Yes, we are. Although I have to say, I’d put it at the bottom a little bit. I think some of our customers there are figuring out, where to play a little bit more. But right now, I think the beauty of SiTime is that with so many horses in the race in any different application or market, we can ride some that are really trending forward just like we are right now in data center and telecom, as you point out for the future. I think we’re in pretty good shape. We also have storage business, which is doing okay. I think that’s the best part about SiTime that I like in which we are a highly diversified, but at the same time high growth business and that’s what makes us unique among most other companies.
Operator: I’m not showing any further questions at this time. I’d like to turn the call back over to management for any — actually, we just have one other question pop-up. One moment. Our next question is a follow-up from Quinn Bolton with Needham. Your line is open.
Quinn Bolton: Two quick follow-ups for me. One, the Aura semiconductor products you just mentioned 40 clocks by the end of the year. I know these things sometimes take time to go out get design wins and to ramp to production. Wondering if you could just kind of give us your latest thoughts, when do you think you’ll start to see revenue from the Aura transaction, obviously excluding the cascade product that used Aura originally?
