Jean-Marc Chery: Okay. So yes, maybe I will comment, okay, the full year plan, okay, we have indicated at the midpoint. Well, clearly, at the midpoint of the plan, we indicated, so $17.3 billion. It is clear that we will grow every quarter sequentially and we will grow every quarter year-on-year basis. But moving forward, okay at, let’s say, suffer the base. And why, because we have to look dynamics, by product group and dynamics, by verticals. So by product group, as we said, okay, clearly, ADG and MDG will grow double digit, okay; while IMS, okay, will have let’s say, slightly decrease. By end market, it is clear that on Automotive and Industrial, the company will grow and will perform better than the market we address with double-digit, driven by the high-growing application we are focusing on and by the increasing capacity, okay, we built in H2 2022 and we are building in H1 2023.
On communication equipment and computer peripheral, we will grow slightly in line with the market. And clearly, here it is driven mainly by the engage customer program we have, offset by, let’s say, the computer personal. Well, now in Personal Electronics, it’s another dynamic year. We will have a decrease. We will, let’s say, decrease our revenue, so lower definitively than the market. Why? Because we will have a change in detail in important engaged customer programs, which will be accretive on our gross margin, but with less . So this is okay the dynamic, okay, we will have on the — moving forward in 2022.
Operator: The next question is from Matt Ramsay from Cowen and Company.
Unidentified Analyst: This is Josh Buchalter on behalf of Matt. And congrats on the awesome results. I guess I wanted to follow up on a previous question and double-click on Industrial and Auto in particular. I mean there’s widespread, I guess, concerns of macro softening. And one of your large peers earlier this week called out some weakness in digestion in industrial. I guess can you walk us through and provide a little more granularity on what gives you confidence in Industrial? And I guess also Auto, is that still benefiting from replenishment inventory like it was last quarter?
Jean-Marc Chery: Yes, okay. I think it’s important to spread the industrial market into. I repeat, this is what we classify the B2B. B2B, first of all, there is power and energy. And when I have spoken about power and energy, I have spoken about the generation of energy, conversion of synergy and storage. And with the whole initiative, you have worldwide and renewable energy, okay? And in all geographies, okay, the demand for power electronics and, let’s say, board controllers, encompassing microcontroller, gate driver and sensor, is huge, okay? There is absolutely no investment softening in the field of power energy. Then the second point, okay, about power energy is the main consumption of electricity in the world is related to motion, okay, but engine, water or electrical.
Everywhere in the world, okay, there is an initiative, okay, to make more efficient all the engines which are connected to industry and factories. And here, the demand for power electronics, again, in terms of investors, in terms of board controllers, MCU, power electronics, is huge. This is exactly the same for factory automation and robotics, okay? So because of the shortage of talent in the world, because of the lesson learned, okay, for the post pandemic, okay, there is many, many industries which are making them more automated and asking for more robotics. Here is the same. It’s also the same in the logistics, okay? The robots you need in the massive, let’s say, storage infrastructure are completely with the robot, okay, asking for many microcontroller and so on and so forth.
And last but not the least, you see the heavy infrastructure that you have in countries and in cities. This market is growing at the same pace in automotive, asking for power, MCUs and BCD technology for driver. Then the second part of the industrial market is more what we call the consumer one, which are battery-operated tool, okay? Because since 2, 3 years, there is an acceleration of all, let’s say, professional and consumer small tools, okay, to move from thermal combustion engine base or plug-in on the grid to battery operators. Yes, here, okay, there is a softening of the market, but the expectation of customer is a restart in Q2. Except there is health care, where the volumes are less, but is in the, let’s say, similar part. So here, I would like to insist that on Industrial market, you have 2 different dynamics.
You have really a dynamic which is strong, the B2B, and here is driven by a transformation, so decarbonization and automation of the industry. So . And there is a second dynamic which is going back to suffering, which is battery operated tool, all appliances is basically the same and health care. So I don’t know what the bad competitor, you refer say. But I can confirm to you, this is what we see. This is a backlog we have and this is what the customer demand is.
Celine Berthier: Did that answer your question?
Unidentified Analyst: I guess for my follow-up, I wanted to ask about silicon carbide substrates. You’ve seen a player — the leading player in substrates sort of have yield issues of the last quarter or 2, it was great to hear you reiterate the confidence in 40% internal substrates over the next year. Could you just walk me through what gives you — how can you be so confident, I guess, in your ability to, both medium term and longer term, get access to substrates, and particularly given some of your peers are going full vertical, others are going to the other end and placing bets all over the place with multiple suppliers? Would just be great to hear an update on the silicon — your view of silicon carbide substrate supply.
Jean-Marc Chery: No, I would like to comment, okay, let’s say, the planning horizon of 3 to 5 years, okay, and to confirm what is our strategy. Again, on substrate initiative, our intention, okay, was to, let’s say, build an internal source in order, okay, to warranty to any customer with whom we have a strategic agreement, okay, let’s say, some security of the supply chain, okay? We have seen during the past few years, okay, that some issues could occur. And one of the lessons learned we have taken, this silicon carbide is so key enabling technology for the electrification of the MOSFET and the decarbonization of the industry that we consider that, for a while, to offer strategic independence to our key customer was, let’s say a key initiative of us.
But then the second objective to acquire internal capability on this substrate initiative is R&D and efficiency. We want to be, let’s say, not dependent in anybody to move our production to 200-millimeter. And we do not want, okay, to be dependent to anybody to insert strong innovation in our substrate initiatives. As an example, just mark technology from Soitec. So now ST will be equipped, is equipped, very soon with all this internal capability to offer strategic independence to our customers, and to drive in the safe management mode, our efficiency and innovation. So this is what we want during now and the next 5 years. So beyond this reason, okay, we will see which complementary partnership or open partnership we can do. No, ST is not a company close to partnership.
I would like to recall a global foundry partnership, partnership. So ST, okay, is perfectly open to any manufacturing cooperation and agreement. But it’s too early to speak about that.
Operator: The next question is from Francois Bouvignies from UBS.
