GLOBALFOUNDRIES Inc. (GFS) Earnings Call Transcript & Summary

Good morning, everyone. Welcome to this session. I'm Vivek Arya from BFA's semiconductor and semi cap equipment team. I'm really happy that you could join us with the session and really excited to introduce the team from GlobalFoundries, Tim Breen, CEO; and Sam Franklin, the Senior Vice President of Finance, Operations and Investor Relations. And as usual, I will go through a quick fireside format, my questions. But if you have anything you would like to bring up, please feel free to raise your hand. But with that, a very warm welcome to you Tim and Sam. And Tim, 4 months into the job, I was hoping that maybe you could introduce yourself right to our investor audience and what you're to GlobalFoundries and how you're kind of looking at the strategic direction of the company.

No. Thank you. Great to be here. And as you said, sort of 4 months since we announced the transition. But for me, it's more than 7 years with the company in different roles on the strategic and financial side and then more recently on the operations side. So I got a chance to know this company very well, which gives me a lot of conviction about why even if our past is good, our future is even better. Very excited for what's to come. The last 4 months I've been on the road. I don't think my family recognize me anymore, but that's the negative, the positive as I've been spending time with customers, with our teams globally and our partners around the world and a huge level of good support for the future. And we'll talk more about that. But I think when we talk about what we're trying to do is GF focusing on really the differentiated technologies that we've been investing in for now many years, building that deep rich ecosystem and those partnerships with customers. And then lastly, and I'm sure we'll talk more about that, that global footprint that is hard to build, but we have today really resonates. And so I left a lot of meetings with a lot of opportunity to do more. And that's obviously very good for me as a new CEO in the role.

Got it. Excellent. So maybe as a way of kind of level setting, Tim, usually when investors think about the foundry ecosystem, the perception is there's the leading/bleeding-edge mostly in Taiwan, right, some -- a little bit in the U.S. And then there is a big kind of lagging edge or mature node ecosystem where there's a lot of capacity being put up in China. Where -- how should -- help investors put GlobalFoundries on this map, right? Where do you fit in? What do you differentiate in so we have a better view of, right, how you can grow in this market?

I think what we're seeing is that the singular vector of innovation called the nanometers is no longer the right way to talk about the future of the industry. And I think, for sure, there is a role to play for a single-digit nanometer technology. What TSMC is doing that space is fantastic. And obviously, others are trying to compete in that space, and it's a challenging market. But we see a lot of other innovation, which is really going to where semiconductors get used today. And so given how broad our end markets in the satellite, in automotive, in mobile devices, in the Internet of Things, in medical devices, that breadth of kind of market penetration means the features that our customers need are very different. It's no longer about the fastest compute. It could be about the lowest power, the best RF connectivity, the best ability to move data quickly at low power consumption. And so you're seeing many, many different ways to innovate. And so for us, I think we fall into neither of those 2 buckets. Where we have fallen is something different, which is basically a differentiated provider of technologies for fast-growing end markets delivering from that global footprint, which we'll talk more about, but obviously, it's increasingly a critical priority for those customers.

I see. And you mentioned the global footprint. So how are you aligning the footprint given the, I guess, by the minute evolving nature of all the geopolitics and trade and tariffs?

I think for those who don't know the history of GF, GF came together from multiple companies. We started as AMD in Dresden, actually, it was our first fab AMD. We acquired Charter Semiconductor in Singapore. We eventually built greenfield in Malta, New York, not too far from us today geographically. And then we bought IDMS business as well, which we bought it 2 fabs, one of which we still have today. And so we've got a footprint that grew inorganically, right, and organically a little bit in New York. And it was very different when it started. And what we've been doing over the last several years now is making more and more of the technologies that we innovate in available at more and more locations. And so now the majority of our differentiated technologies are available in 2 and even in some cases, 3 fabs. And that gives customers something that I think is the buzz what we hear from all of them is optionality. They don't know what the future looks like. They don't know what will happen in terms of trade policy and customer demand, market shifts and so on, but they do know they need choice. And when you can do 1 tape-out into 2 fabs or even 3 fabs, that gives you that flexibility. And so to have that, you need that global footprint, but more than that, you need the technology across qualifications to make it possible.

Got it. Makes sense. So you recently had pretty strong results in the March quarter, right, and good guidance for Q2. Maybe walk us through what were the drivers behind the upside in March and how you're thinking about the current quarter?

Yes. So we framed 2025 as the year of resumption of growth. And as those who have observed the industry for a longer term have obviously seen the cycle that's played through from a kind of incredible upcycle in '21, '22, to not necessarily deep or relatively long down cycle in '23 and '24. I think we start to see the green shoots of, let's say, the minimum stability and in many pockets also growth. And we hear optimism from our customers from other participants in the market, and that's what we're seeing in our business. I think some specific drivers for us that are more GS specific, one, automotive, despite the market environment, not necessarily being extremely strong content growth in the car is growing. But I think more importantly, GS growth in the car continues to be strong. We grew 15% last year. We'll grow meaningfully again this year even in a flat market. And that's mainly because of share we're able to gain on the back of previous design wins we have and we see that continuing with new design wins and new applications in the car. Our franchise today is very much around microcontrollers in the future going to new areas like battery management, imaging, image sensing, radar, other areas as the car becomes a more complex set of technologies. And so GS specific, we see no one is surprised by the fact there's a lot of raw data center demand given the pace of build-out in the data center technologies that we manufacture like silicon photonics for pluggable applications today and then future applications like co-packaged optics, but also power applications, silicon germanium playing a critical role in other forms of optical communication. All of that drives incremental data center demand. And actually, that market is growing very well for us and will grow kind of high teens this year on the back of that. Another market within that area for us is satellite communications. We've historically had an active presence in there given our RF franchise. What we see today is that with the proliferation of satellite connectivity, lower satellites, you have a lot more reasons to connect and a lot more ability to connect at high bandwidth that has a lot of RF content tied to it. So we're going to start to see that pull through in that business. And so on the back of, say, other markets that are relatively flat for the year, like mobile, we see these pockets of growth that are quite meaningful and are continuing to drive, let's say, growth for us through the course of year.

I see. I know you are further upstream, but was there any notion of pull-in or other behavior that you saw from your customers over the last 1 or 2 quarters?

I'd say less than people talk about and less than we perhaps thought could happen. And we could have thought about pushouts on the back of uncertainty of demand pull-ins on the back of kind of getting ahead of regulation. We probably saw less of both of those in the end. And so I'd say, for the current quarters, limited impact on the current environment.

I see. One other thing I remember, Tim, from the call was wafer pricing was somewhat below the trend line that you guys had stablished. So how do you think about wafer pricing this year? And what brought it below trend and what can help it kind of get back to trend?

I think obviously, we report average selling price. So a big factor in that is always the impact of mix on our business. And it can be the case that you ramp a product with a lower ASP, but higher profitability that may be less complex to manufacture and so on. So there's always a mix dynamic that I think can kind of be mixed up with is there a constructive pricing environment. But for the technologies we compete in, we still see a pretty constructive pricing environment and largely because the conversation with customers is performance -- performance, time to market, can this application help them win in their market where they compete. And yes, you have to be competitive, but it's much less kind of commodity-driven discussion than it might be for other parts of the market. So look, you will see in some technologies, slow year-on-year price declines and you don't see any significant change in the environment. And I think the more differentiated technologies, actually, you have pretty good pricing power going forward.

I see. On the content data center, which you mentioned, right, as a key, is there a way to size what GS content is in that opportunity, right? You mentioned you play an important role in pluggable transceiver. So where exactly do you play? And then as that industry transitions from these optical pluggables to more co-packaged optics, how does the direction of your opportunity and content change?

So I think the way to think about that is because as you say, today, the transition to optics has mostly been in pluggable transceivers and so on. And that's what's powering a lot of data today. We have a meaningful share there, and we have technologies that play in that space. Of our overall sort of data center business, maybe 1/3 is kind of that overall space of that market segment. I think the really interesting story is what happens next around the transition to co-package. If you went back 2, 3 years, the industry was a little bit unsure. The industry was saying, well, maybe copper will have a few more generations. I think now the if has become a win right, NVIDIA before OFC here in San Francisco a few months ago talked about co-packaged optics, really for the first time in Broadway for scale-out applications. We see other companies we're working with in scale-up applications. And so this transition from a device that is improving versus copper versus the one that's really integrated in the package. That's the transition point that I think will drive very content growth for CPO in general. And for sure, for GF, that's the area we focused on within photonics. It's a good inflection point for us. When -- that's always a debate about when the ramps really start to happen. I think the industry consensus is really the '27 is that you start to see significant, let's say, switches to co-package optics. Could some happen earlier, some happen later? For sure. Everyone's architecture is different, but we definitely see much more pull today than we did even 6 months ago.

I see. Does your content change, Tim, if in this industry transition from 800 gig to 1.60 or that is not a driver of any?

It's one of the several drivers. I think look, the bigger driver is really the transition, think about optics as optics used to connect data center to data center and then they move to rack-to-rack and now they're talking about within the rack, those scale-up applications. That's when you're talking about not just kind of 1 to 2 to 4, you're talking about 1 to 10 to 100 in terms of content. So the big drivers are the applications rather than the bandwidth requirements. Now the bandwidth requirements are what's making it very difficult to continue with copper. You just cannot do these things with copper and anywhere near the power consumption that you could before. And so I think that's -- those 2 things are playing out, but it's really the architectural change that makes a bigger difference than, for example, the individual spec of transceiver performance.

I see. And the other interesting thing, Tim, you mentioned was the SATCOM opportunity. So give us a sense for how big is that today? And is that kind of exposed or levered to the same kind of aerospace, defense spending environment that we are seeing? So what is it being driven by now?

So it's growing. It's relatively small today, but we see that as a multiple hundreds of millions of dollars of future business opportunity for us and ramping pretty quickly. And I think the reason is that there have been really fundamental breakthroughs in the deployment of, I think, particularly low orbit satellites, right now, you have thousands rather than hundreds that are able to provide inspection activity. If you're in rural California or if you're in rural Africa, you're going to have that access that the consumers are doing. So that's where you're seeing global subscriber growth to these kind of services. If you think about what they have to do, you're talking about transmitting a signal from a device that sits on your house or your car to a satellite 300 miles and Airbus traveling 4 times the speed of sound. The amount of kind of precision RF for the phased arrays and so on that are necessary for that is significant. And so this is a very big application growth that really wasn't there before, but it's a new use of RF connectivity for a front-end module that is much more higher performing than, for example, you'd see in a cell phone or another smaller shorter-range device. And that puts a lot of content for us.

Are you levered to a lot of these Starlink type programs?

It's those kind of programs. We have good broad engagement in the ecosystem. And so yes, there are plenty out there that are driving that growth. And I think more will come as well.

And perhaps to pick up on one point to build on Tim's comment there. For us, a real focus area is how do we see the design win momentum pulling through in the business? And where do we see that design win momentum from a product perspective within that end market. And we talked about this on prior calls as well, but that momentum across the product portfolio into satellite communications, it's been quite pronounced, whether that's on our 22FDX platform going into beam-forming devices, that's an ultra-low power product application as well as to Tim's point on the explosion of RF content within these devices, our 130 NSX has seen good design momentum as well. So it's not just a narrative for us as it relates to satellite communications, it's really seeing those proof points pull through within the design wins.

And how is the competitive landscape in that? Is that something like where you are 1 of 5 or you're 1 or 3? Or like how many people can do this?

I think if I zoom on the RF component, obviously, our RF franchise is one of our longest standing one. It predates GF in many ways. And so I think in those areas, we're one of very few. And I think we're comfortably able to say we are ahead and we can stay ahead based on that level of technology. There are obviously others playing in different parts of that -- those architecture. I think that will continue. But we have a few advantages, including that technology. I'd say the other piece of it is this is also a sector where geography is sourcing matters, right? Again, some of these devices are for consumer devices, some are also for military applications. And so sourcing matters. It's not a case of I source it from wherever the lowest cost option is.

Got it. And then automotive, GFS had an interesting journey in that the company continued to grow even when the automotive, right, industry softened, right? So there's always been this question well -- was it based on a lot of take-or-pay type contracts? Were there pull-ins or other situations? How would you describe what is the utilization of your product customer with the end customers? So are you going to see growth with the market? Or your growth is -- I mean, your growth is already pretty strong. So how do you see the state of the automotive market right now?

So I think the drivers of, I'd say, sustained above-market growth market, I think we can still be bullish on around content increases that everyone reads about and talks about. I think look, we are still ramping on core platforms microcontrollers and 40-nanometer embedded memory technologies that they still have reached their peak revenue. And as you know, these are very long cycle, right? So they take a while to reach peak. They take a while to decline from peak. And so you still have a way to go in those areas. And those are areas where these design wins are several years ago, right, ramping through. So it's good visibility for us as well. We have other next-generation MCUs engagements and those are ongoing and going well. But then a lot of the content growth in the car is also pretty interesting. And we've had a big effort to make all of our fabs, automotive-grade cable. Many of our technology platforms are automotive grade. So we can port an application that could be, for example, an image sensor in a phone but also can go in a car with a higher spec and so on. And so those are easy wins for us to again capture that share to grow ahead of the market. So I'd say for auto, pretty good conviction to grow ahead of the market for some years to come.

Got it. And I think this year's expectation were like mid-teens plus/minus, right, growth in...

That's right. we did about $1.2 billion of revenue in automotive last year. That was a 15% growth year-over-year and expectations for all the reasons Tim has outlined,, particularly on the content growth side is for a similar rate of growth in 2025.

And I think again, a bit like the satellite sector, automotive be pretty vocal about supply security. And so manufacturing in Europe for the European automotive, the OEMs, the Tier 1s and the IDMs, that matters a lot to them. But obviously, here in the U.S., partnerships like the one we announced with GM a couple of years back, these were good examples of how automotive companies think about local sourcing.

Got it. And are you also seeing some improvement on the industrial side, like many of the traditional industrial vendors are starting to see some have called it inflection. Are you starting to notice that?

Yes, so essentially that is actually a bit smaller for us leaving aside kind of aerospace, defense, pure kind of industrial, a little bit smaller for us. I think, actually, it's a growth opportunity longer term because a lot of the same dynamics that play through -- also play through to industrial, especially as you get to more complex microcontrollers, more complex sensors that need low power applications that are difficult, for example, for IDMs to do in-house. So I think there's a good longer-term potential. I think short term, I think I would measure it more in engagement. We have a lot more coming to engage on future platforms for a general purpose microcontroller with certain features that we had in the past. So there's green shoots, let's say, in the overall market. We're not seeing it today in tactical revenue that much.

Got it. One other thing about microcontroller is Tim that often comes up is we have vendors such as Texas Instruments, right, who is deploying a lot of capacity in the U.S. right? And in the past, they used to outsource a lot of their embedded products. Now they're saying they will in-source a lot of it. So does that create incremental competition for GF even within the U.S. market going forward?

Look, I think every -- we take every one of the industry as a relevant consideration. I think look, in automotive, not so much as far as we're seeing. And I think TI strength is very much in general purpose microcontrollers and I think they're doing well there. But again, as those technologies move to more complex process technologies, it's harder for them to do that in-house, right? So they don't have 22-nanometer fully depleted silicon insulator platform. They don't have a FinFET platform. And so when you think about what those applications will do, today, if they do just a simple device, that's one thing. But what about an AI accelerator for a motor control application. That's a lot harder to do. And again, with that process technology leadership is more important. So I'd say there's plenty of opportunity for us to grow.

All right. So one should essentially think of GFS more as a specialized fab that just happens to do trailing edge, like geometries as opposed to just a trailing edge.

And we don't compete on the geometry, right, if you think about it, right? We think much more about what does this allow us to do from an application point of view. And whether that also goes to where we invest money in design, in IP, because we've also learned that when you have specialized technologies, you need to help customers get the full value of that technology. That includes building reference designs and building kind of basically a lot of tools to enable that. We spend a lot of time investing in that now, so customers can go faster, go cheaper in some cases, too, but then get more performance out of technologies. And I think that the 22FDX is a great example, right? There are companies who are using all of the futures of that technology for things like [indiscernible] where they can modulate the power consumption for different workloads. That's quite easy to do the first time. But once you build up a set of libraries and capabilities, you can do with that then what you couldn't do with any other platform, which obviously is very sticky for us.

Got it. And then mobile and IoT. So a lot more consumer exposed and consumer as being subject to a lot of noise, right, and macro issues. So how are you thinking about the market in the back half of the year? And this smart mobile and IoT, right, as a broad category, for '25, can it grow?

Let's say if you kind of put consumer IoT and smart mobile together, you sort of talk about a flattish profile for the year. I think why is that, as you said, consumer demand not terrible, but equally not super bullish. We haven't yet seen the replacement cycle, right, that we, I think, still may see in the future when your device can do a lot more in terms of edge AI applications. New devices like smart glasses promising, but early. We have significant design wins in that space. But I think we're a year or 2 out of that form factor becoming well adopted, but I'm actually personally very bullish about that. I'd say the short term, like we said, more flat. I still have longer-term view that the content will grow and the device proliferation will be there. We haven't seen the last device that we're going to use, right? I would let you believe that. Others wouldn't let you believe -- Meta wouldn't let you believe that. But I think we haven't yet seen that inflection point where we take the hunk of glass of plastic and replace it with something else.

But you see content growth opportunities in those markets?

Yes, because you have -- for example, when you switch to new bands for RF connectivity, you need to find a way to basically without more space and connect to more bands with FR3 transition. That's end of any type of transition. But again, the work will start to happen at some point. So optics, audio, there's still plenty of content growth.

Got it. Anything, Tim, you are doing different because of tariffs?

So I mean, first of all, we're paying very close attention, not just to the direct effects, which are relatively easy to measure, but I think it's making sure that the strategic conversations with customers are kind of well thought because what we're seeing for sure in the last 2 months, 3 months or so is customers are thinking much more about supply strategy. And for them, they're saying, what could I be developing in the U.S. that say, perhaps I manufacture somewhere else. For us, it is coming out of Taiwan, that's good news, new business coming to us. But even if it couldn't be growing with GF to say, I'm manufacturing that in Singapore today, could I manufacturing that also in the U.S. So I think lining up the technology portfolio to the location, maximizing the flexibility, obviously, in a prudent way, you don't want to double up everything everywhere all at once with the investments that come with that. But you do enough to make flexibility kind of your good strength. That's the big strategic change that we have to keep doing. And to do that, it's not just conversation with customers. It's also with big end customers who control a lot more of the demand to say, think 3, 5 years out, what do you need, where do you beat it? And do you have a strong view? And I think what we're hearing, and I think you'll hear more about that in the weeks to come, more and more companies trying to set more strategic view on where they want to source product. And I think they have no choice, right? The world is too complex for them to say, I'm getting on path, they need the optionality.

I see. But there is nothing in your cost structure that is impacted by the tariff situation.

Very limited. I mean, there are some things that are now tariffs going to the U.S. The majority of categories are exempt. There's a few things that are not exempt. They don't make a large share of our cost structure. An obviously, we'll do our work to swap out something if there's something we can source from somewhere else. But we've had a pretty good [indiscernible] so far.

Okay. And in terms of some of your customers are also starting to develop what they call a China for China strategy, right? And because China is the one market that continues to grow, right, for them, they think that it would be more advantageous to partner, right, with foundry that are in China, right, for that strategy. So have you seen that effect as you deal with customers over a multiyear contract bases that they are starting to diversify?

So the way we think about China, and maybe it's good level set kind of where we are starting point, we have pretty low direct revenues in China today. The GF is less than 10%. And so if anything, my training of China for us as the company is more of an opportunity than a risk given that low base today. But there's a few sort of, let's say, points to come. One is the technologies we're focusing on are not the technology that China capacity build-outs are largely focused on, right? China imports about $380 billion of semiconductors 2024 numbers. The majority is bulk semiconductors, things we wouldn't necessarily invest on and focus on. So let's say, the direct competition is between that and potentially also chasing DV equivalent of a leading-edge node and things like that, again, areas that we're not exposed to. So technology-wise, the supply is not matching our supply very much. So that's a very good first point. But I think the point you raise is a good one about what are non-China customers doing, but then also what China customer doing. Certainly non-China customers first. For sure, for those customers who sell our customers, we sell a lot into China. I think the EV industry as a good example. They want to have a local supply option. What we said publicly we're doing, and we're in the process of making happen is making a local foundry partner, enabling specific technologies that already run in GF fab today for a portion of that demand to be manufactured in China, we maintain the customer relationship, the quality, by the way, still want tape out to manufacturing locations. And that's our way of providing that local sourcing option. primarily initially for those foreign, let's say, non-China customers who want to have a portion manufactured locally. But what we're learning through that process is that China customers are also looking for the reverse. And so they're saying, well, listen, I'm -- I have local demand. I need a China for China strategy. But actually, I also have an export market and you can name 5 to 10 Chinese companies with big export ambitions, whether it's an automotive OEM that's kind of 60%, 70% extend or even some of the fabless companies in the middle, they want to export. And so they know to do that. They can't have 100% manufactured locally. And they also like the idea of 1 tape out, 2 fabs. And so we're seeing a very good pickup of China interest in non-China, non-Taiwan demand. And this is the interesting inflection point we started seeing on Taiwan demand. It was always, I get it, but it can't be in China, but now this is -- Taiwan is not a diversification as far as our end customers are concerned. We need it in Singapore, particularly Singapore benefits a lot. Guangzhou is 4 hours from Singapore and 4 hours from Beijing. So we're not talking about a very big distance to cover. So we think that upside on China customers is also a good. I think for all those reasons.

We watch it for gross margins, so 24% in Q1, right, expanding in Q2. And then I think you said exiting this year at closer to 30%. So what are the drivers this year and then expanding that into your longer-term target, right, which have a 4 handle in gross margins?

Yes. And I think it's a simple set of drivers and we're starting to see those start to play out this year. I think that the obvious one is that we need utilization to pick up. The good news, bad news story, right? The bad news story is we took a bold decision in the pandemic to invest. You can never perfectly time this. We, therefore, have landed with more capacity today than we have revenue to fill it. That's bad news, good news story. Good news is we can expand quickly with limited additional CapEx and very limited additional fixed cost, and that's the important part of any dollar you bring in revenue means it will flow through at 60%, 70% of depending on the product, maybe even more incremental. So any business is incremental. So it's the current gross margin. So that footprint makes a big difference. Role of depreciation, we've talked about in earnings. Some of that is time-based. Some of that is driven just by the nature of the footprint. But we're seeing around $250 million year-on-year, '24 million to '25 million decrease in depreciation, and that will continue in a modest way in the future as well. And then the last piece of this is product mix and looking for those more accretive products that we're bringing into the mix. I think that's more of a longer-term story into '26 and beyond with things like photonics, right, where there's a lot of different content coming there. But that does play a role in kind of that story, especially to get to that 40% target that we still maintain is very achievable for us. Obviously, [it gets 40% to start by getting to 30%]. And assuming that we continue on the same demand trajectory we have today, we're confident that in the back half of this year, we'll get the 30% gross margin.

I see you don't need any extraordinary recovery in the smart mobile or consumer IoT to get towards those targets.

I think I would say modest demand increase gets us there. You don't need a hockey stick profile.

Got it. Okay. Makes sense. And then finally on capital management, still strong balance sheet. You guys have been generating very good cash flow. What do you do with that cash? And at what point start doing more buybacks? Or do you think industry consolidation is still on the table?

Yes. So obviously, we've been focusing a lot on free cash flow generation in the last couple of years. I mean the fact that free cash flow in 2024 was more than net income tells you a little bit about the quality of earnings that we have. I think that will continue this year with a good momentum. I think we can continue that flywheel, still growing and creating free cash flow. So that's a very good position to be in. In terms of use of cash, look, M&A is the first topic people ask us about. I'd say that our M&A will be targeted at increasing our differentiation, right? The 3 kind of pillars I talked about at the beginning, the more I can bring differentiated technologies to market, the more I can win by customers' business again and again and again, our acquisition of Tagore Technologies last year, GaN, small but very good example of kind of adding differentiation to the mix. We'll do many -- more of those and they're small, but that's why you can do many of them. And they will always be lined up against does this add differentiation, by the way, process technology, design, IT, these kind of areas that can enrich my platform. I may do other partnerships in the ecosystem. Those are less likely to be M&A deals, more likely partnerships that I might do. Again, that's all about creating a better environment for my customer. I don't think on the footprint side, I have a lot of inorganic in my future. I don't need it. I need organic investments at the right time at the right pace here in the U.S. and around the world. Look, I think the industry will always speculate on consolidation. I think at the moment, you don't see a lot of things moving from speculation to action for good reason. Every company is facing its own set of challenges. The good thing for us is that we have optionality with our balance sheet. We have areas we can invest with a very good return for that differentiation. And then look, later in the year, we will be more sort of outgoing about what we do with excess cash beyond inorganic opportunities. I think we're not at a point yet to complete the care of policy there. But given that we will be generating some excess cash going forward, we'll obviously come with a plan for that.

I see. And which -- final question, Tim, which end market excites you the most? Like if you could have a magic wand and say, look, in the next 5 years, this is what I really want to GF to mark, like which end market excites you the most right now?

So this is like me which of my children I like the most...

[indiscernible] all will have...

Look, I'll pick 2, just I'll cheat a little bit. Look, I think the data center is really exciting. It provides unique challenges. I think we don't understand that a modern rack uses more power than my house, right? And the data center is no longer one rack, it's many, many racks. And so anything you can do to dent that power consumption to improve data flow, to improve latency. And these are technologies we've worked on, like I said, we're early, but I'm finally seeing those inflection points. So that for me is super exciting. I think the satellite one, I'll do it too much. But the reason I like it, it's not just that it's technologically interesting, right? Being able to deploy this RF capability is amazing and other applications to support it. But also it does a real good thing for humanity, right? We can connect people who previously couldn't access technology, couldn't access the Internet, couldn't access AI. What an incredible thing to contribute to. And I know our team is excited about that. So these are 2 children.

Excellent. Very nice, and both good ones. Great. Thank you so much.

Thanks, Vivek.

Thanks, everyone.