Even if the unloading will move down significantly — moving in the second part of the year, and so the gross margin will increase. Then at that point, we will not be actually at the best of our efficiency. Anyway, we do expect to exiting the year above the midpoint, definitely of the — around the, let’s say, the 40s. So we will be higher than the 44%, 45%. But yet this year will be, let’s say, a year of transition for our gross margin.
Jerome Ramel: Okay. Thank you. And maybe a follow-up on costs. How should we model OpEx for this year?
Lorenzo Grandi: This year, we think that our OpEx, we will stay substantially flattish when we look at the sequential in Q1, but the increase, there will be some increase because definitely, you see there is some inflation. As usual, there will be some salary increase. This is obvious. We think that we will increase our revenue in the year range of between 3%, 4% compared to 2023.
Jean-Marc Chery: OpEx.
Lorenzo Grandi: OpEx, yes.
Jerome Ramel: Okay. For the full year?
Lorenzo Grandi: Yes. And just that usually, we talk about net OpEx, so including also the other income and expenses. And here, our other income and expenses will help somehow to keep our OpEx increase, not too much high because we forecast at this point to be well above $100 million range $140 million, $150 million positive impact on our other income and expenses.
Jerome Ramel: Okay. Thank you. Perfect.
Celine Berthier: Thank you, Jerome. Next question, please.
Operator: The next question is from Gianmarco Bonacina from Equita. Please go ahead.
Gianmarco Bonacina: Yes. Good morning. Just a little bit more color, you gave an outlook for the full year on the verticals which give us an outlook on the first quarter in particular, if you expect Automotive to show year-over-year growth in Q1 and the net of product..
Lorenzo Grandi: [Technical Difficulty] Let’s say, give a very simple summary of how we perceive the full year 2024. If, okay, we correct, let’s say, our year 2023 from clearly the optical module that I already shared with you many times, okay, last year. And this specific contractual inventory replenishment for ADAS that we have done in 2023, having capacity available. And the capacity fee reservations that are decreasing in 2024 as expected. Overall, the — if we have to clear 2023 as a reference, okay? We have about US$800 million of revenue that will not be repeated in 2024. So that’s the reason why at the midpoint, of our indication, so 16.4. Okay, we have to compare not with 17.3 but with 16, let’s say16.5%. And all is the dynamic.
The dynamic is very simple. Automotive will grow 13%, so about 700, let’s say, US$50 million, US$800 million, completely offset by the inventory correction of Industrial in the same range of amount. And then Personal Electronics and Computer Equipment and communication, okay, will be basically flattish, which is coherent with a very soft increase of the smartphone market in 2024 as reported by some analysts. As you know, there is no impact, okay, from the 5G because ST is not present on radio frequency. And then Communication Equipment and Computer Peripheral, for us, we have a clear strong growth with our engage customer program in the satellite communication. And this is offset by a legacy exit of our business. So this is overall takeaway for the company.
So I repeat, we have to clean by US$800 million with clear revenue that will not be repeated. Automotive will grow US$800 million, 13% offset by a strong inventory correction in H1 by Industrial, Personal Electronic and Communication Equipment and Computer Peripheral, basically flattish. Well, if I go more in detail, but Automotive, I confirm, is mid-single digit overall, clean is low double digit. Industrial will decrease about mid-teens in 2024 versus 2023. Personal Electronics will decrease, okay, by, let’s say, low-teens in 2024. But like-for-like, it’s basically flattish if we remove the optical module. And basically, okay, as I said, Communication Equipment and Computer Peripheral will be flattish. So this is, okay, the — or we can classify at the midpoint of the range we indicated over revenue in 2024.
I hope I am clear.
Gianmarco Bonacina: Okay. Thanks a lot. Just a quick follow-up on your midterm model. Can we assume that, especially on the gross margin side, the current transition here doesn’t have any impact on your ability to achieve the 50% gross margin in the midterm? Thank you.
Jean-Marc Chery: It’s clear that looking at our market positioning, our strength, our operating model, we confirm the model. Clearly, we have just to have a look in detail of the implication of this transition year, but we confirm the model.
Celine Berthier: Thank you. very much. Next question please, Moira
Operator: The next question is from Joshua Buchalter from TD Cowen. Please go ahead.
Q – Joshua Buchalter: Yes. Good morning. Thank you for taking my question. I was hoping you can maybe expand on your visibility into the back half ramp. I mean in particular, in Industrial. Generally, when you’re in an inventory direction and lead times are coming down, it’s hard to get a great grasp. So maybe you could provide some anecdotes of what you’re seeing that’s driving the sharp rebound in Industrial in the back half. Maybe any details on how cancellations or bookings are trending underneath in the near term? Thank you.
