Liam Griffin: Yes, I mean, we’re going to do everything we can, as we always do, to create the best answer and the best outcome for the shareholders and our customers. And that’s what we always do. I mean, as you know, our business and our company, we have a very, very extended bench of opportunities and technologies and knowhow. We can do a lot of really interesting things, and we’ve created a lot of categories that just didn’t exist. And so we’ll lean on that and continue to leverage the high-class engineering talent that we have at Skyworks, the scale that we have, the customer relationships. Also, really happy to see that we’re doing more outside the largest customer, great customer, but we’d like to do more with others. So the setup process is certainly going to improve. We’re going through this cyclical load that we’re all in, in the industry, but we look forward to executing and clicking the steps again to continue to drive the RF technology.
Operator: Our next question comes from Matt Ramsay with TD Cowen.
Matt Ramsay: Thank you very much. Good afternoon. Liam, I don’t think it’s a huge surprise given what’s going on. What’s so many of your peers with the industrial markets that Broad Markets is the source of the weakness. But I wanted to spend a little bit of time trying to unpack the different pieces of Broad Markets. So I would have, I mean, the timing business that you guys acquired from SLAB had wireless infrastructure and telco exposure to it. I’d be interested to hear about that, given what’s going on there. There’s been Tesla unit weakness and consternation about EVs in China and maybe that’s turning. So there’s some voltage isolation business in there. Just things that might have to do with IoT, given what’s going on in some of those places.
If you could just, maybe, and I’m sure I’m missing some sub segments for sure. So if you could just kind of walk through those different buckets and are there any where we’re closer to the end in the beginning of the correction is what I’m trying to get at. Thanks.
Liam Griffin: Yes. No, I got you, I appreciate it. And I’m going to start with, I think it’s going to get better for everybody in the industry. I really think that we’re getting through it. But one of the things that’s interesting, and I’m really glad that you threw the question here, with Skyworks, we obviously, we have an incredible franchise built around mobile technology and adjacent technologies. We’ll continue to leverage that. And we’re very profitable in those markets with our scale, with our execution, and our know-how. But I’ll tell you what, we have, as I said, a tremendous opportunity to take the technology knowhow that we have, the scale that we have, and go into broader markets. So the automotive right now, maybe on a macro level slow, but for us, would not that be where it’s going to be a problem.
So when you’re really big and you’re a 30%, 40% share player, and you get knocked down, it’s going to hurt you. But when you’re going from 5%, 10%, 15% to 20%, growing up into the markets, like automotive, you look at Skyworks three or four years ago, we wouldn’t talk about cars at all. And now they’re a meaningful piece. Adding the I&A business from Silicon Labs is only fueled more opportunities for us. So there’s a lot of opportunities like that. We’ve got design wins and data Center now. Didn’t have that two, three years ago. The Wi-Fi portfolios are really strong right now. I think everybody in the industry is going to recognize that Wi-Fi 7 is going to be a catalyst for significant growth, enabling a lot of broad categories from consumer to industrial.
So we’re really excited about that. We have the technology to do that today. So I think the difference is you’ve got mobile, and we all understand it, and everyone on this call probably has a really good view on that technology and that market. But when you go to the broad markets, the real broad markets, there are so many different endpoints. We’re trying to pick and choose the right ones, but the good news is we’re not heavily concent-, other than mobile. There’s not a lot of concentration, so you are getting big diversified technology play at Skyworks with scale, with technology knowhow, with the ability to hit the fastballs with the toughest customers. We can deploy that across multiple markets. If we’re doing that today, but it’s a long way from now on how we can get even better.
Our teams are excited about that.
Matt Ramsay: Thank you very much for all the perspective there. Maybe just building on some, I mean, we’ve been going through this correction and sort of the broader markets for a while now, and companies like yourselves have the balance sheet and the margin structure to sort of lean into it and bear it until it gets better. I imagine there are smaller competitors in lots of those diverse end markets that maybe don’t have the balance sheet and the scale to get through. So, I guess my question is, how active is the M&A funnel right now? And if it’s not, why isn’t it?
Liam Griffin: Yes, well, it’s one of those things that’s off until it’s on, right? So clearly, the dynamics, it feels like 10 years have happened in one, right? A lot of activity up and down, seeing some pretty wild swings with significant companies that are really strong players. So we are fortunate, and we’ve worked hard to get there to deliver the kind of cash performance that will put us in position to do the right kind of transactions. And as you know, at Skyworks, we’re very, very picky. But I think in this case, honestly, I think there’s more opportunities for M&A and the like than I’ve seen in a long time. This has been kind of a really interesting time in semiconductors and in other markets. And I think the stronger going to get stronger, and I think the weaker, probably not going to do as well.
And I know what side we’re going to be on. So it’s an opportunity for us to take advantage, leverage the balance sheet, you look at the free cash flow margins that are sustainable. I mean, these aren’t one quarter stats. And so yes, I mean, we will continue to be very, I will say picky, I guess, I’ve run some of these transactions because we know how good our company is. So but the opportunity to step up on that is definitely there.
Operator: And our last question comes from Vivek Arya of Bank of America.
Blake Friedman: Hi, this is Blake Friedman on for Vivek. Thanks for taking my question. One of the questions on the China smartphone market. I know in the past it’s been hard to precisely nail down share. [Inaudible] So how do you make that determination in the future on how many orders to fulfill? So there no inventory issues thereafter just walking us through that process would be helpful. Thanks.
Kris Sennesael : So in the China market there is still some excess inventory, right? But as you point out, it’s a complex market. There are multiple players. Some of that is for the domestic market. Some of that is for the export market. They also have flagship models all the way down to mid-level, low-level, going into 4G and 3G. Obviously, we focus mostly on the flagship level, maybe one or two steps below that, that of course translate with a potential bigger focus on their export markets. But we also of course support them in their domestic market as well. And there is still some excess inventory. It has been coming down. It’s improving, our revenue for three, four quarters now with China Android has been up substantially on a percentage basis, not necessarily on an absolute dollar basis, but has been up substantially on a sequential basis on a relative percentage basis.
