亞德諾半導體 (ADI) 2018 Q2 法說會逐字稿

Good morning, and welcome to the Analog Devices Second Quarter Fiscal Year 2018 Earnings Conference Call, which is being audio webcast via telephone and over the web. I'd like to now introduce your host for today's call, Mr. Michael Lucarelli, Director of Investor Relations. Sir, the floor is yours.

早安，歡迎參加 Analog Devices 2018 財年第二季財報電話會議，本次會議將透過電話和網路進行音訊直播。現在我謹向大家介紹今天電話會議的主持人，投資者關係總監麥可‧盧卡雷利先生。先生，請您發言。

Thank you, Jennifer, and good morning, everybody. Thanks for joining our second quarter 2018 conference call. With me on the call today are ADI's CEO, Vincent Roche; and ADI's CFO, Prashanth Mahendra-Rajah. For anyone who missed the release, you can find it and related financial schedules at investor.analog.com. This conference call is being webcast live, and a recording will be archived in the Investors section of our website.

謝謝你，珍妮弗，大家早安。感謝您參加我們2018年第二季電話會議。今天和我一起參加電話會議的有 ADI 的執行長 Vincent Roche；以及 ADI 的財務長 Prashanth Mahendra-Rajah。如果您錯過了此次發布，您可以在 investor.analog.com 上找到它以及相關的財務報表。本次電話會議將進行網路直播，錄音將存檔於我們網站的投資者關係版塊。

Now on to the disclosures. The information we're about to discuss, including our objectives and outlook, includes forward-looking statements. Actual results may differ materially from these forward-looking statements as a result of various factors, including those discussed in our earnings release and our most recent 10-Q. These forward-looking statements reflect our opinion as of the date of this call. We undertake no obligation to update these forward-looking statements in light of new information or future events.

接下來是資訊揭露部分。我們即將討論的訊息，包括我們的目標和展望，包含前瞻性陳述。由於各種因素的影響，實際結果可能與這些前瞻性聲明有重大差異，這些因素包括我們在獲利報告和最新的 10-Q 文件中討論的因素。這些前瞻性陳述反映了我們截至本次電話會議之日的觀點。我們不承擔因新資訊或未來事件而更新這些前瞻性聲明的義務。

Our commentary about ADI's second quarter financial results will include non-GAAP financial measures, which exclude special items. When comparing our second quarter results to our historical performance, special items are also excluded from the prior quarter and year-over-year results. Available reconciliations of these non-GAAP measures to their most directly comparable GAAP measures and additional information about our non-GAAP measures are included in today's earnings release and on our web schedules, which we've posted under the Quarterly Results section at investor.analog.com.

我們對ADI第二季財務表現的評論將包括非GAAP財務指標，其中不包括特殊項目。在將我們第二季的業績與歷史業績進行比較時，上一季和上年同期業績中也排除了特殊項目。這些非GAAP指標與其最直接可比的GAAP指標的調節表以及有關我們非GAAP指標的更多信息，均包含在今天的收益報告中以及我們發佈在 investor.analog.com 網站“季度業績”欄目的網絡日程表中。

Okay. So with that, I'll turn it over to ADI's CEO, Vincent Roche.

好的。那麼，接下來我將把發言權交給ADI的執行長Vincent Roche。

Thanks, Mike, and good morning, everyone. Well, the second quarter of fiscal '18 was remarkable for ADI. We posted non-GAAP diluted earnings per share above the high end of our guidance and set a new high-water mark in free cash flow generation, and I'm pleased to share some perspective on our results with you now. So revenue in the second quarter came in just above the high end of our guidance as strength across our B2B markets, especially in the industrial and communication sectors, offset the expected decline in Consumer. Our results were also supported by our Linear Tech franchise, which posted a record revenue quarter. Gross and operating margin expanded substantially compared to the year ago quarter, driving a more than 40% increase year-over-year in our non-GAAP diluted earnings per share. This execution resulted in record free cash flow in the quarter, and our combined company adjusted free cash flow margins over the trailing 12 months continue to place us in the highest tier of the S&P 500.

謝謝你，麥克，大家早安。2018 財年第二季對 ADI 來說是意義非凡的。我們公佈的非GAAP稀釋後每股盈餘高於預期上限，自由現金流也創下新高，現在我很高興與大家分享一些關於我們業績的看法。因此，第二季的營收略高於我們預期的上限，這主要得益於 B2B 市場（尤其是工業和通訊領域）的強勁表現，抵消了消費者業務的預期下滑。我們的業績也得益於Linear Tech業務部門，該部門創下了季度營收紀錄。與去年同期相比，毛利率和營業利潤率大幅成長，推動非GAAP稀釋後每股盈餘較去年同期成長超過40%。這項措施使本季度自由現金流創下歷史新高，過去 12 個月我們公司合併後的調整後自由現金流利潤率繼續使我們躋身標普 500 指數的最高層級。

Now before we go deeper into our financial performance, I'd like to take this opportunity to provide investors with a deeper perspective on some of our key technology and market trends and ADI's strategy relative to them. I've spoken before about the dawn of the third wave of information and communications technology, or ICT, which is characterized by ubiquitous sensing, hyperscale and edge computing and pervasive connectivity. In this world, digital systems increasingly rely on real-world information to make mission-critical decisions, and the accuracy and the integrity of this information is becoming more and more important. Simultaneously, the actual challenge of identifying and extracting signals in the presence of increasing levels of noise is becoming harder. Now I believe that this is creating an inflection in the analog industry, and it's enabling ADI to play a critical role in generating and communicating high-quality information to leverage our cutting-edge innovation and solutions to tackle our customers' hardest problems, from sensor to cloud, microwave to bits and nanowatts to kilowatts. It's our ability to sense, measure, interpret, power and connect these 2 worlds that is helping to enable autonomous machines, natural human to machine interaction and future important technologies, such as virtual and augmented reality and so on.

在深入探討我們的財務表現之前，我想藉此機會為投資者提供一些關於我們關鍵技術和市場趨勢以及ADI相關策略的更深入見解。我之前談到過資訊和通訊技術（ICT）的第三波的到來，其特點是無處不在的感知、超大規模和邊緣計算以及無處不在的連接。在這個世界上，數位系統越來越依賴現實世界的資訊來做出關鍵決策，而這些資訊的準確性和完整性變得越來越重要。同時，在噪音水平不斷增加的情況下識別和提取訊號的實際挑戰也變得越來越大。現在我相信，這正在模擬行業中創造一個轉折點，並使 ADI 能夠在生成和傳遞高品質訊息方面發揮關鍵作用，從而利用我們尖端的創新和解決方案來解決客戶面臨的最棘手的問題，從感測器到雲，從微波到比特，從納瓦到千瓦。正是我們感知、測量、解釋、驅動和連結這兩個世界的能力，才使得自主機器、自然的人機互動以及虛擬實境、擴增實境等未來重要技術成為可能。

Today, though, I'd like to talk more specifically about connectivity and 5G, which has been the subject of much news coverage lately and which represents the next big investment phase in wireless infrastructure and how we view its evolution and timing. In fact, an entirely new wireless and wireline network architecture will ultimately be needed to meet the demands for orders of magnitude increases in bandwidth-hungry areas such as high-definition video streaming. Although 5G will provide revolutionary capabilities, the transition to 5G will be evolutionary.

不過，今天我想更具體地談談連接性和 5G，這是最近很多新聞報導的主題，它代表了無線基礎設施的下一個重大投資階段，以及我們如何看待它的發展和時機。事實上，最終需要一種全新的無線和有線網路架構，才能滿足高清視訊串流等頻寬密集型領域對頻寬數量級成長的需求。雖然 5G 將帶來革命性的功能，但向 5G 的過渡將是一個漸進的過程。

We see the first phase of this evolution being the addition of massive MIMO, which will provide a significant increase to the capacity of the current 4G wireless network. The use case and benefits of massive MIMO to the carriers are real. A massive MIMO system can deliver a greater than 3x data capacity increase in the same spectrum as a current 4G base station. And this helps to solve 2 large challenges for carriers: capacity and cost. ADI is enabling these massive MIMO implementations today through our highly integrated software-defined transceiver platform. This solution reduces the radio card area by a factor of 10 and overall remote radio head footprint by 50% while simultaneously reducing power consumption. These are critical success factors with massive MIMO systems since they use, on average, 8x the number of radios compared to today's systems.

我們看到這一演進的第一階段是大規模 MIMO 的加入，這將顯著提高目前 4G 無線網路的容量。大規模 MIMO 對營運商的應用場景和益處是真實存在的。大規模 MIMO 系統在與現有 4G 基地台相同的頻譜範圍內，可提供 3 倍以上的資料容量提升。這有助於解決營運商面臨的兩大挑戰：運能和成本。ADI 透過我們高度整合的軟體定義收發器平台，正在推動這些大規模 MIMO 的實現。該方案將無線網卡面積減少了 10 倍，將遠端射頻頭的整體佔用面積減少了 50%，同時降低了功耗。對於大規模 MIMO 系統而言，這些都是至關重要的成功因素，因為它們平均使用的無線電數量是當今系統的 8 倍。

Equally important, these transceivers have the flexibility to operate from 300 megahertz to 6 gigahertz as they are software programmable, giving our customers a single platform-based design that can quickly be modified to operate in any of the many different cellular bands that exist around the world. These radios can also scale from small cells to macro base stations to massive MIMO radios, and they offer a flexible architecture capable of rightsizing the analog and digital performance needed by a customer's product family.

同樣重要的是，這些收發器具有從 300 兆赫茲到 6 吉赫茲的靈活工作範圍，因為它們是軟體可編程的，這為我們的客戶提供了一個基於單一平台的設計，可以快速修改以在世界各地存在的許多不同的蜂窩頻段中運行。這些無線電設備可以從小型基地台擴展到宏基地台，再擴展到大規模 MIMO 無線電設備，並且它們提供了一種靈活的架構，能夠根據客戶產品系列的需求調整類比和數位效能。

However, to realize the longer-term 5G ambition, further network change is needed. In order to further expand the network bandwidth, millimeter wave solutions will come into play in order to provide multi-gigabit per second wireless connectivity using phased-array solutions. In that arena, ADI is leveraging the capabilities from our Hittite acquisition. We have a very unique market position of having deep competency from antenna to bits up through millimeter waves, and our solutions and technologies are well positioned in the current millimeter wave trials around the world. This will expand ADI's sun as it emerges.

然而，要實現更長遠的 5G 目標，還需要對網路進行進一步的變革。為了進一步擴展網路頻寬，毫米波解決方案將發揮作用，利用相控陣解決方案提供每秒多千兆位元的無線連線。在這一領域，ADI 正在利用我們收購 Hittite 所帶來的能力。我們在市場上擁有非常獨特的地位，從天線到比特，再到毫米波，我們都具備深厚的專業能力，我們的解決方案和技術在目前世界各地的毫米波試驗中都佔據著有利地位。這將擴大ADI的太陽，使其逐漸顯現。

In addition to adding massive MIMO and millimeter waves, 5G will require a complete re-architecting of the core wireless and wireline network, including a move toward network virtualization and more edge computing. This backbone network will be required to meet the 5G vision of greater than 1 gigabit per second download speeds, low latency and high reliability demanded by mission-critical applications such as digital health care, autonomous vehicles, fully autonomous factory floors and augmented reality systems. This network expansion will drive a significant upgrade of the backhaul system, opening a new stream of opportunity for ADI's optical and point-to-point microwave solutions.

除了增加大規模 MIMO 和毫米波之外，5G 還需要對核心無線和有線網路進行徹底的重新架構，包括向網路虛擬化和更多邊緣運算轉型。該骨幹網路需要滿足 5G 的願景，即每秒下載速度超過 1 千兆比特，低延遲和高可靠性，以滿足數位醫療、自動駕駛汽車、全自動工廠車間和擴增實境系統等關鍵任務應用的需求。此次網路擴容將推動回程系統的重大升級，為 ADI 的光纖和點對點微波解決方案開闢新的機會。

5G represents an enormous opportunity for ADI as we are uniquely positioned to provide the enabling technology through our comprehensive portfolio of high-performance mixed signal, RF and microwave and power management technologies. The combination and integration of these innovative capabilities will allow us to create even more comprehensive and compelling signal chain solutions for our customers and the opportunity to capture up to 3x the BOM when compared to our 4G solutions.

5G 為 ADI 帶來了巨大的機遇，因為我們擁有獨特的優勢，可以透過我們全面的高性能混合訊號、射頻和微波以及電源管理技術組合來提供必要的技術。這些創新能力的結合與整合將使我們能夠為客戶創造更全面、更具吸引力的訊號鏈解決方案，並有機會獲得比 4G 解決方案高出 3 倍的物料清單效益。

Now while we're obviously excited about the remarkable potential of 5G, the greater volume of our communications business in the next couple of years will still be 4G. And here, our business is strong and has been growing at a high single-digit rate over the trailing 12 months. Our growth has significantly outpaced industry CapEx spend as we have seen share gains in traditional 4G macro products, thanks to new RF offerings resulting from the combined strength of our ADI and Hittite engineering teams. Those results have been augmented by strong adoption of our integrated software-defined transceivers across macro, small cells and massive MIMO trials.

雖然我們對 5G 的巨大潛力感到興奮，但在未來幾年內，我們通訊業務的大部分仍將是 4G。而且，我們這邊的業務發展強勁，在過去 12 個月裡一直保持著接近兩位數的成長率。由於 ADI 和 Hittite 工程團隊的聯合實力帶來了新的射頻產品，我們在傳統 4G 宏產品領域獲得了市場份額，因此我們的成長速度顯著超過了產業資本支出。這些成果得益於我們在宏蜂窩、小蜂窩和大規模 MIMO 試驗中對整合軟體定義收發器的大力採用。

So in summary, we feel very confident and energized by our communications market success, which is built upon close partnerships with our customers, our domain knowhow, our unwavering desire to solve the toughest engineering challenges and strategic investments in research and development, along, of course, with our acquisitions of Hittite and Linear Technology. So looking forward, we expect to continue to outperform in the communications market and accelerate our growth as we fully address our customers' needs well into the 5G future.

總而言之，我們對通訊市場的成功感到非常有信心和振奮，這得益於我們與客戶的緊密合作、我們的領域知識、我們解決最棘手工程挑戰的堅定決心以及對研發的戰略投資，當然還有我們對 Hittite 和 Linear Technology 的收購。展望未來，我們期望在通訊市場繼續保持優異表現，並隨著我們全面滿足客戶在 5G 未來的需求，加速成長。

Of course, 5G is just one of the many areas ADI is taking advantage of in the era of digitalization. In this ubiquitously sensed and connected world, there are many exciting new opportunities, areas such as industrial 4.0, autonomous and electric transportation and cloud computing. And in future earnings calls, I'll continue to speak to these opportunities with you and look forward to sharing how we are creating long-term value for our customers and for our shareholders.

當然，5G只是ADI在數位化時代所利用的眾多領域之一。在這個無所不在、互聯互通的世界裡，湧現了許多令人興奮的新機遇，例如工業 4.0、自動駕駛和電動交通以及雲端運算等領域。在未來的財報電話會議上，我將繼續與大家探討這些機遇，並期待與大家分享我們如何為客戶和股東創造長期價值。

And so with that, I'd like to hand over to Prashanth.

那麼，接下來我將把麥克風交給普拉桑特。

Thank you, Vince. Good morning, everyone, and let me add my welcome to our fiscal 2018 second quarter earnings call. With the exception of non-op expenses, my comments on the P&L line items will be on a non-GAAP or adjusted basis, which excludes special items outlined in today's press release.

謝謝你，文斯。各位早安，歡迎參加我們2018財年第二季財報電話會議。除了非經營性支出外，我對損益表項目的評論將以非GAAP或調整後為基礎，其中不包括今天新聞稿中概述的特殊項目。

Revenue for the quarter was just over $1.51 billion, above the high end of our guidance and increasing 25% year-over-year and up 7% sequentially on a 13-week basis.

本季營收略高於 15.1 億美元，高於我們預期的上限，年增 25%，以 13 週計算較上季成長 7%。

Now before I move on to the rest of the P&L, let me give you some commentary around our market performance in the quarter. Looking at the combined company, our B2B revenue increased 14% year-over-year, led by double-digit growth in the industrial and communications markets. The industrial end market represented 52% of sales in the quarter. Growth in this market was once again broad based, with nearly all applications and geographies increasing double digits compared to the year-ago quarter. Momentum continues as our targeted R&D investments aimed at the underlying sector trends of automation, instrumentation and health care continue to drive outperformance.

在繼續分析損益表的其餘部分之前，讓我先對本季的市場表現做一些評論。從合併後的公司來看，我們的 B2B 收入年增 14%，其中工業和通訊市場實現了兩位數的成長。本季工業終端市場佔銷售額的 52%。該市場的成長再次呈現全面性，幾乎所有應用領域和地區都比去年同期實現了兩位數的成長。我們針對自動化、儀器和醫療保健等產業發展趨勢進行的有針對性的研發投資，持續推動公司業績超越預期，發展動能依然強勁。

Turning to the comms market, which represented 19% of sales in the second quarter. Sales into both wireless and wired applications increased compared to the same period last year. Furthermore, our wireless business has increased at a high single-digit rate over the trailing 12 months. Our growth is due to share gains related to our complete portfolio of high performance mixed signal, RF and microwave as well as the strong demand for our integrated transceiver and our position on virtually all of the 5G and massive MIMO trials.

再來看看通訊市場，該市場在第二季佔銷售額的 19%。與去年同期相比，無線和有線應用領域的銷售額均有所成長。此外，在過去 12 個月裡，我們的無線業務實現了接近兩位數的成長。我們的成長得益於我們高性能混合訊號、射頻和微波產品組合的市場份額成長，以及市場對我們整合收發器的強勁需求，以及我們在幾乎所有 5G 和大規模 MIMO 試驗中的地位。

As Vince mentioned, we expect to grow our comms revenue at a mid-single-digit rate in the backdrop of a flat CapEx environment ahead of 5G rollouts, and 5G represents an enormous opportunity for ADI as we are positioned to provide the enabling technology with our comprehensive portfolio.

正如 Vince 所提到的，在 5G 推出之前，在資本支出持平的環境下，我們預計通訊收入將以中等個位數的速度增長，而 5G 代表著 ADI 的巨大機遇，因為我們擁有全面的產品組合，能夠提供必要的技術。

Our auto business represented 16% of sales in the quarter. After a better than seasonal first quarter, second quarter sales increased at a low single-digit rate compared to the year-ago quarter, with growth led by the infotainment and powertrain applications. And finally, our Consumer business represented 13% of sales in the second quarter, and as previously communicated, decreased compared to our year ago quarter.

本季度，我們的汽車業務佔銷售額的16%。在第一季業績好於往年同期之後，第二季銷售額與去年同期相比僅實現了個位數的低成長，其中資訊娛樂和動力系統應用帶動了成長。最後，我們的消費者業務在第二季度佔銷售額的 13%，正如先前所溝通的那樣，與去年同期相比有所下降。

Let me now move to the rest of the P&L. Gross margins of 71.3% came in around the midpoint of guidance and increased slightly compared to the first quarter on a more favorable mix. OpEx in the second quarter was $442 million or approximately 29% of revenue. Strong revenue growth combined with operational execution delivered operating margins above 42% and at the upper end of our guidance. Non-op expenses in the second quarter were $62.5 million. We expect our non-op expenses to be approximately $58 million in our third quarter and to decline by $2 million to $3 million in our fourth quarter of fiscal '18.

現在讓我繼續分析損益表的其餘部分。毛利率為 71.3%，接近預期中位數，較第一季略有成長，這得益於更有利的產品組合。第二季營運支出為 4.42 億美元，約佔營收的 29%。強勁的收入成長加上高效的運營，使營業利潤率超過 42%，達到我們預期的上限。第二季非經營性支出為 6,250 萬美元。我們預計 2018 財年第三季的非經營性支出約為 5,800 萬美元，第四季將減少 200 萬至 300 萬美元。

Our second quarter non-GAAP tax rate was 5% as we adjusted the tax rate for the full year to 6%. Looking to the third and fourth quarters, we expect our non-GAAP tax rate will remain between 5% to 7%. There is no change to our expectation for fiscal 2019, and we continue to expect our long-term tax rate to be approximately 12%. Non-GAAP diluted earnings per share for the second quarter came in above the high end of guidance at $1.45, increasing over 40% year-over-year.

由於我們將全年稅率調整為 6%，因此我們第二季的非 GAAP 稅率為 5%。展望第三季和第四季度，我們預期非GAAP稅率將維持在5%至7%之間。我們對 2019 財年的預期沒有變化，我們仍然預期長期稅率約為 12%。第二季非GAAP稀釋後每股盈餘為1.45美元，高於預期上限，較去年同期成長超過40%。

Now I'll cover the balance sheet. As we planned, inventory decreased 2% sequentially and days were 116 in the quarter, down from 124 days in the first quarter. Distribution inventory was approximately 7.5 weeks, which is flat sequentially and up slightly compared to the year-ago quarter. We generated record free cash flow of approximately $665 million in the quarter, with associated free cash flow margins of 44%. And in the trailing 12 months, adjusted free cash flow for the combined enterprise was $1.9 billion.

現在我將介紹資產負債表。正如我們計劃的那樣，庫存環比下降了 2%，本季庫存週轉天數為 116 天，低於第一季的 124 天。分銷庫存約為 7.5 週，與上一季持平，與去年同期相比略有上升。本季我們創造了約 6.65 億美元的自由現金流，創歷史新高，自由現金流利潤率為 44%。過去 12 個月，合併後企業的調整後自由現金流為 19 億美元。

During the quarter, we paid down $450 million of debt, which helped reduce our net debt-to-EBITDA ratio to 2.2x, down from the 2.4x in the prior quarter. We expect to achieve our 2x leverage ratio within the next 2 quarters. Capital additions in the second quarter were $54 million, and we expect CapEx for fiscal '18 to run at our model of approximately 4% of sales. And during the quarter, we paid $178 million in dividends, with an associated quarterly cash dividend of $0.48, representing an annual dividend payment of $1.92 per outstanding share of common stock.

本季度，我們償還了 4.5 億美元的債務，這有助於將我們的淨債務與 EBITDA 比率從上一季的 2.4 倍降至 2.2 倍。我們預計將在未來兩個季度內實現 2 倍槓桿率。第二季新增資本支出為 5,400 萬美元，我們預期 2018 財年的資本支出將按照銷售額的 4% 左右的模型進行。本季度，我們支付了 1.78 億美元的股息，相應的季度現金股息為每股 0.48 美元，相當於每股流通普通股的年度股息支付額為 1.92 美元。

So let's now turn to our outlook and expectations for the third quarter of fiscal '18, which with the exception of revenue, are also on a non-GAAP basis and exclude items outlined in today's release. At a high level, we're expecting third quarter to look a lot like second quarter. We're planning for revenue in the third quarter to be in the range of $1.47 billion to $1.55 billion. At the midpoint of guidance, we expect our B2B markets of industrial, auto and comms in the aggregate to increase approximately 10% year-over-year. We're planning for gross margins to increase approximately 50 to 150 basis points compared to the year-ago quarter. And we expect our operating expenses to be flat to up $10 million year-over-year. At the midpoint of guidance, this implies OpEx as a percentage of sales of approximately 29%.

現在讓我們來看看我們對 2018 財年第三季的展望和預期，除收入外，這些展望和預期也是基於非 GAAP 準則，並且不包括今天發布的公告中概述的項目。從總體上看，我們預計第三季的情況將與第二季非常相似。我們預計第三季營收將在 14.7 億美元至 15.5 億美元之間。根據預測中位數，我們預計工業、汽車和通訊等 B2B 市場整體將年增約 10%。我們預計毛利率將比去年同期成長約 50 至 150 個基點。我們預計營運費用將與上年持平或增加 1,000 萬美元。根據指導意見的中點計算，這意味著營運支出佔銷售額的百分比約為 29%。

Based on these inputs, we expect operating margins in the third quarter of 2018 to be in the range of 41% to 43% and for diluted earnings per share, excluding special items, to be in the range of $1.38 to $1.52.

根據這些投入，我們預計 2018 年第三季的營業利潤率將在 41% 至 43% 之間，不計特殊項目後的稀釋每股收益將在 1.38 美元至 1.52 美元之間。

So to wrap it up, this was another terrific quarter for ADI, and we set a few records along the way. Our B2B business increased double digits year-over-year, and our strong operational execution drove gross and operating margins higher, which resulted in a record free cash flow in the quarter.

總而言之，對於ADI來說，這又是一個非常棒的季度，我們在過程中創造了一些紀錄。我們的 B2B 業務年增兩位數，強勁的營運執行力推動毛利率和營業利潤率上升，從而在本季度實現了創紀錄的自由現金流。

And with that, I'll turn it over to Mike for our Q&A session.

接下來，我將把問答環節交給麥克。

Thanks, Prashanth. Now let's get to our Q&A session. (Operator Instructions) Jennifer, can we have our first question, please?

謝謝你，Prashanth。現在我們進入問答環節。（操作員指示）珍妮弗，我們可以問第一個問題嗎？

(Operator Instructions) Our first question comes from Tore Svanberg with Stifel.

（操作說明）我們的第一個問題來自 Stifel 公司的 Tore Svanberg。

First question for Vince. You talked about participating in 5G trials. Could you elaborate a little bit more on that? It sounded like you're participating in pretty much all of them out there. But if you could give some context, that would be great.

第一個問題問文斯。你提到參與5G試驗。能再詳細解釋一下嗎？聽起來你好像幾乎參與了所有這類活動。如果您能提供一些背景信息，那就太好了。

Yes, thanks, Tore. Well, as I said in the prepared remarks, there are really kind of 2 phases to 5G, at least from an ADI perspective. There is the pre-millimeter phase and the millimeter phase. And the pre-millimeter phase is really dominated by this massive MIMO expansion, which is really an overlay on 4G. So our software-defined transceivers are absolutely everywhere in the systems that are being brought to market this year and next year. In fact, it's one of the fastest-growing product sectors inside ADI. So that's been a very strong contributor to our communications business and, in fact, beyond. These transceiver technologies, because they're so flexible, are usable as well in places beyond communications.

是的，謝謝你，托雷。正如我在準備好的演講稿中所說，5G 實際上分為兩個階段，至少從 ADI 的角度來看是如此。分為毫米波前階段和毫米波階段。毫米波之前的階段實際上是由大規模的 MIMO 擴展所主導的，而 MIMO 擴展實際上是對 4G 的疊加。因此，我們軟體定義的收發器在今年和明年推向市場的系統中無所不在。事實上，它是ADI內部成長最快的產品領域之一。因此，這極大地促進了我們的通訊業務，實際上，其影響範圍也擴展到了其他領域。由於這些收發器技術非常靈活，因此除了通訊領域外，它們還可以用於其他領域。

Also, the combination of Hittite and ADI from RF to bits and microwave to bits is enabling us to capture new content in kind of pre-5G systems. But it's the combination of our massive MIMO, our Hittite ADI microwave and millimeter wave to bits technology that is enabling us to be participating in virtually all these field trials across the globe. My sense, Tore, is that U.S. and China will be in the kind of '19, '20 time frame, we'll be at least trialing some particular applications. China will get faster to mass market, I think, with what they call 5G, which is really to me, 4.5G plus massive MIMO. So I hope that explains what it is we're doing. And in the run up to what will be pure 5G in the 2024, 2025 time frame, where the core network gets changed with virtualization, edge computing and pure millimeter wave-type technologies, spanning multiple different frequency levels.

此外，Hittite 和 ADI 從射頻到位元以及微波到位元的結合，使我們能夠在類似 5G 之前的系統中捕獲新內容。但正是我們大規模 MIMO 技術、Hittite ADI 微波和毫米波到位元技術的結合，使我們能夠參與全球幾乎所有這些現場試驗。托雷，我的感覺是，在 2019 年、2020 年這段時間裡，美國和中國至少會試用一些特定的應用程式。我認為，中國會更快地將他們所謂的 5G 推向大眾市場，而在我看來，5G 實際上就是 4.5G 加上大規模 MIMO 技術。所以，我希望這能解釋清楚我們正在做的事情。在 2024 年、2025 年左右，純 5G 時代即將到來，屆時核心網路將採用虛擬化、邊緣運算和純毫米波技術，跨越多個不同的頻率等級。

Thanks, Tore. Do you have a follow up?

謝謝你，托雷。您還有其他後續問題嗎？

Yes, just a follow up for Prashanth. Prashanth, with the gross margin being up year-over-year, is that mainly a function of mix? Or is there any other contributors there? I mean, obviously, the revenues are slightly higher. But is the main upside to gross margin year-over-year coming from mix?

是的，只是對 Prashanth 的後續回應。Prashanth，毛利率年增，這主要是產品組合變化的結果嗎？或者有其他貢獻者嗎？我的意思是，很顯然，收入略高一些。但毛利率年增的主要動力是否來自於產品組合？

Sure. Well, Tore, remember that we have now completed the implementation of all of our synergies related to the acquisition of Linear. So we now have built into our run rate the cost synergies that we committed to at the time of the acquisition. So that is contributing as well to the gross margin strength. And then I would also say that with volumes where they are, we're getting the benefit of strong utilization at our internal fabs.

當然。Tore，請記住，我們現在已經完成了與收購 Linear 相關的所有協同效應的實施。因此，我們現在已經將收購時承諾的成本綜效納入了我們的營運成本中。因此，這也對毛利率的提升起了一定作用。此外，我還想說，以目前的產量來看，我們內部晶圓廠的產能利用率很高，這為我們帶來了好處。

I'd just add that, we have an additional $100 million of cost synergies we talked about. So the $150 million is complete, and we still have another $100 million on the come. We'll take our next question, please?

我還要補充一點，我們之前討論過，還有額外的 1 億美元成本綜效。所以1.5億美元的目標已經達成，我們還有1億美元的目標即將實現。請問下一個問題是什麼？

Our next question comes from the line of John Pitzer with Credit Suisse.

我們的下一個問題來自瑞士信貸的約翰‧皮策。

Can you hear me?

你聽得到我嗎？

Yes, John. You're a little faint, but good morning.

是的，約翰。你有點暈倒了，不過早安。

Vince, really appreciate all the color on the comms business, but I want to talk a little bit about your auto business. You had really strong growth in the January quarter that decelerated pretty significantly in the April quarter, which was a little bit surprising, especially, I think, you said in your prepared comments that the Linear business was achieving new all-time records. So I'm just kind of curious, you've kind of been undergrowing your peers in autos, which was explainable over multiple years because of the MEMS part of your business. But that should be a fairly small part of the business now. So I'm just kind of curious as to what's holding back growth in that market, and how you kind of feel your long-term position is in the auto space.

Vince，非常感謝你對通訊產業的精彩見解，但我更想和你談談你的汽車產業。你們在 1 月份季度實現了非常強勁的增長，但在 4 月份季度增長明顯放緩，這有點出乎意料，尤其是我認為，您在準備好的評論中提到，Linear 業務正在創造新的歷史紀錄。所以我就有點好奇，你們在汽車領域的成長速度似乎一直落後於同行，這在過去幾年裡是可以解釋的，因為你們的業務主要集中在MEMS（微機電系統）方面。但現在這應該只是業務中很小的一部分了。所以我很好奇是什麼阻礙了該市場的成長，以及您如何看待您在汽車領域的長期地位。

Yes, thanks, John. So look, our business right now, our long-term goal is to grow at the high end of kind of 2 to 3 SAAR. And our objective, obviously, is to get the combined company onto that trajectory. So obviously, we're performing below my expectations, and we're not happy as a management team right now as to where we are. But let me try and unpack this story a bit for you and bring you through where we are right now and what the pathway ahead is going to be. So we were clear in our last call that the growth profiles for ADI and LTC are quite different in the automotive sector today. ADI, we -- the ADI legacy business increased at the kind of level of 2 to 3 SAAR in '17. And it looks like we're on track again this year to achieve that kind of level. Whereas the LTC growth level has been in the low single digits or closer to kind of 1 SAAR.

是的，謝謝你，約翰。所以你看，我們目前的業務，我們的長期目標是實現 2 到 3 年的 SAAR 高速成長。很顯然，我們的目標就是讓合併後的公司走上這條發展軌道。很顯然，我們的表現低於我的預期，作為管理團隊，我們對目前的狀況並不滿意。但讓我試著為你詳細解讀這個故事，帶你了解我們現在所處的位置以及未來的道路。因此，我們在上次電話會議中明確指出，如今汽車產業的 ADI 和 LTC 的成長情況截然不同。ADI，我們－ADI的傳統業務在2017年實現了2%到3%的SAAR成長。看來我們今年又有望達到這樣的水準了。而長期照護 (LTC) 的成長水準一直處於個位數低位，或接近 1 SAAR。

So -- but what I will tell you is that we're making a lot of progress in improving LTC's growth rates, and we've uncovered a lot of revenue synergy opportunities. And we've also changed the business logic within LTC and tilted more towards growth. Profitability has always been important, will always be important, but we're also tilting more aggressively towards growth. But as you know, in this market, it just takes time to materialize the design wins that we've got in place. And my sense is those design wins won't materially impact the revenue, will not materially impact the revenue for a couple of years.

所以——但我可以告訴你們的是，我們在提高 LTC 的成長率方面取得了很大進展，並且我們發現了許多收入協同效應的機會。我們也改變了 LTC 內部的業務邏輯，更重視成長。獲利能力一直都很重要，將來也永遠很重要，但我們也正在更加積極地向成長傾斜。但正如你所知，在這個市場中，我們需要時間才能將我們已經制定的設計方案轉化為現實。我的感覺是，這些設計訂單的得標不會對收入產生實質影響，至少在未來幾年內不會對收入產生實質影響。

What I'd like to do is just turn my attention now to giving you a sense for what momentum we have in our business and what we're doing to get our revenue towards -- to get the growth levels to the higher end of the 2 to 3 SAAR. And as you know, we've talked before, we have 3 primary application areas in our business: infotainment, autonomous driving and electrification. I'm going to talk to those in a little bit of detail and try to unpack the story a bit for you. So in infotainment, we've won a lot of premium audio sockets. That's a great heritage for ADI across all geos, and that's really the foundation of the infotainment business. And the good news there is we're now beginning to attach LTC power to the clusters of ADI, DSP and mixed signal technologies. We've talked before as well about our A2B technologies, and we're really getting a lot of momentum there. And what I can tell you is that about a dozen OEMs are planning to deploy that technology in the next few years across the globe in many, many geos. Now that is also -- everything I talk about here is an opportunity for LTC power attachment.

現在我想把注意力轉移到讓大家了解我們業務的發展勢頭，以及我們正在採取哪些措施來提高收入，使成長水準達到 2 到 3 SAAR 的較高水準。如您所知，我們之前也討論過，我們的業務有 3 個主要應用領域：資訊娛樂、自動駕駛和電氣化。我打算和他們詳細談談，並試著為你梳理一下事情的來龍去脈。所以在車載資訊娛樂系統領域，我們贏得了許多高階音響介面的市場份額。對 ADI 而言，這是一項偉大的傳統，遍及全球，也是資訊娛樂業務的真正基礎。好消息是，我們現在開始將 LTC 電源連接到 ADI、DSP 和混合訊號技術叢集。我們之前也討論過我們的 A2B 技術，而且我們在這方面確實取得了很大的進展。我可以告訴大家的是，大約有十幾家原始設備製造商計劃在未來幾年內在全球許多地區部署這項技術。現在，我在這裡談論的一切都是一個獲得長期照護（LTC）電源的機會。

If I turn to autonomous vehicles, we haven't really talked much before about our LIDAR solution, but we're gaining design ins today in long- and short-range LIDAR systems, with both the ADI mixed signal technologies and the LT portfolios and even getting some sockets for Hittite in the very, very high-frequency areas. These components complement the more advanced capability that we're working on now to produce a solid-state beam steering and photodetector technology. And that will dramatically drive the size, the cost, the power, and we believe enable, over the longer term, the kind of mid- to long-term 3, 4, 5 years, mass deployment of LIDAR. And we got that new technology in terms of that more integrated system capability through the acquisition of Vescent sometime last year.

說到自動駕駛汽車，我們之前並沒有過多談論我們的光達解決方案，但如今我們在長距離和短距離雷射雷達系統中獲得了設計上的突破，包括 ADI 混合信號技術和 LT 產品組合，甚至在非常非常高頻的領域也為 Hittite 提供了一些應用場景。這些組件是我們正在研發的更先進的固態光束控制和光電探測器技術的補充。這將極大地推動光達的尺寸、成本和功率，我們相信，從長遠來看，這將實現雷射雷達在中長期（3、4、5 年）的大規模部署。去年我們透過收購 Vescent 公司獲得了這種更整合的系統能力的新技術。

Also in autonomous vehicles, we have several design ins in place with our inertial management units, our IMUs, as we call them. And we're engaged today on almost every self-driving platform that is in development today, both with what we would call traditional OEMs and some disruptors out there as well. So that technology, which we've been using, we've gained traction in mission-critical aerospace areas, for example. It's a really ideal fit to the emerging autonomous vehicle requirements and it's used as a failsafe function in the event of a radar system failure.

此外，在自動駕駛汽車方面，我們的慣性管理單元（簡稱 IMU）也採用了多種設計方案。如今，我們幾乎參與了所有正在開發的自動駕駛平台項目，既包括我們所說的傳統 OEM 廠商，也包括一些顛覆性廠商。因此，我們一直在使用的技術，例如在關鍵任務航空航太領域，已經取得了進展。它非常符合新興自動駕駛汽車的需求，並且在雷達系統發生故障時可用作故障保護功能。

And I will turn to the electrification side of things and our BMS business, which we got from our LTC acquisition. We've been winning back business that we might have lost or had lost and by changing, again, our business logic, as I talked a little earlier about, to tilting towards growth, defending our sockets aggressively and also leveraging the scale and flexibility of the ADI manufacturing system to change the kind of the cost profile of the products. And we're broadening LTC's customer base, bringing that technology into the strong relationships that legacy ADI has in North America and with European OEMs. Also, our next-generation BMS will improve on our already leading performance levels by delivering, again, more miles per charge and bringing all the robustness and safety features to play as well.

接下來，我將談談電氣化方面以及我們從收購 LTC 中獲得的 BMS 業務。我們一直在贏回那些我們可能已經失​​去或曾經失去的業務，並且透過再次改變我們的商業邏輯（正如我之前談到的），轉向成長，積極捍衛我們的插座，並利用 ADI 製造系統的規模和靈活性來改變產品的成本結構。我們正在擴大 LTC 的客戶群，將這項技術融入 ADI 在北美和歐洲 OEM 廠商之間的牢固關係中。此外，我們的下一代電池管理系統 (BMS) 將在我們已經領先的性能水平基礎上進一步提升，再次實現每次充電行駛更長的里程，並帶來所有穩健性和安全功能。

And one other aspect of the electrification business is the momentum that we have in our isolation. We have a franchise of very unique isolation technologies that tend to get used anytime that there's a high-voltage and low-voltage connection. So these technologies are very important in electrical vehicles, so I think we're doing well there. And not to mention the broad-based revenue synergies that we've got on the power side of things. My sense is that in a reasonable period of time, we should be able to add 1 point or 2 of overall growth to the automotive business, given the design cycles that we've got and the strength of the power portfolio.

電氣化業務的另一個面向是，我們在孤立狀態下所擁有的發展勢頭。我們擁有一系列非常獨特的隔離技術，這些技術通常會在高壓和低壓連接處使用。所以這些技術在電動車領域非常重要，我認為我們在這方面做得很好。更不用說我們在電力方面所獲得的廣泛收入綜效了。我的感覺是，考慮到我們現有的設計週期和強大的動力產品組合，在合理的時間內，我們應該能夠為汽車業務的整體成長增加 1 到 2 個百分點。

So I think we're very focused on bending the growth curve. I believe we're focused on the right apps, the right customers. We have a terrific technology story. And with the complementary customer bases and geo footprint coverage, I feel very optimistic about the future and our ability to get that growth curve to where we have publicly said it should be and will be. So I know that's a long answer, John, but I thought it was important to give the story in terms of where we are today and talk a little bit about the future as well.

所以我認為我們非常注重扭轉成長曲線。我相信我們專注於正確的應用程式和正確的客戶。我們有一個很棒的科技故事。憑藉互補的客戶群和地理覆蓋範圍，我對未來以及我們實現成長曲線達到我們公開宣稱的目標的能力感到非常樂觀。我知道這回答很長，約翰，但我認為有必要把我們目前的處境交代清楚，並且稍微談談未來。

Your next question comes from William Stein with SunTrust.

下一個問題來自 SunTrust 銀行的 William Stein。

Thanks, especially for the robust answers, in particular around wireless and 5G. But there's a controversy brewing in that market with these decisions around ZTE as to whether you might or might not be able to ship components to them. I'm wondering -- 2 questions around that. One, what do your -- what does your outlook assume in terms of sales to ZTE going forward? And second, how would a stop ship order to ZTE influence your view as to the growth of that market overall? In particular, might you see a sort of slowdown of adoption in China if they don't have 2 local champions?

非常感謝，特別是您提供的詳盡解答，尤其是在無線和 5G 方面。但是，圍繞中興通訊的這些決定，市場上正在醞釀一場爭議，即你是否可以向他們運送零件。我有兩個關於這方面的問題。第一，您對未來向中興通訊的銷售前景有何展望？其次，如果對中興通訊下達停止供貨令，您對該市場整體成長的看法會受到怎樣的影響？特別是，如果中國沒有兩家本土領導企業，會不會出現中國市場普及速度放緩的情況？

Yes, thanks for the question. So the way we view it in the short term, there's a certain amount of fixed CapEx in place to upgrade the various networks across the globe and particularly in China. So my sense is that there are many other competitors in play who will fill the demand for building out the networks across the globe. We have factored into our numbers a potential continued embargo with regard to ZTE, so it's built into our numbers. It was a small amount of headwind for the company last quarter. So I think, overall, most geos are up in communications for ADI, we're gaining share. You know, my sense is as well, just we're obviously staying close to the situation as best we can tell, the negotiation outcomes that are taking place. But I will tell you, clearly, U.S. and China need each other. And I think trade between both is very, very critical. My sense is that sense will prevail and the need for free trade, unencumbered trade will prevail. And we're expecting political leaders to figure this out. So my sense is at the end of the day, there's demand there for more and more connectivity. Carriers are determined to keep building their networks out, to capture the opportunity to build their revenue and profit streams. And that demand is going to be fulfilled one way or the other.

是的，謝謝你的提問。因此，從短期來看，我們已經投入了一定數量的固定資本支出，用於升級全球各地，特別是中國的各種網路。因此，我的感覺是，還有許多其他競爭者將滿足在全球範圍內建立網路的需求。我們在計算中已將中興通訊可能持續受到禁令的影響考慮在內，因此這部分影響已包含在我們的數字中。上個季度，這對公司來說只是略微有些不利因素。所以我覺得，總體而言，ADI 的通訊業務在大多數地區都有所成長，我們正在獲得市場份額。你知道，我的感覺也是，我們顯然會盡我們所能密切關注局勢，以及正在進行的談判結果。但我可以明確地告訴你，美國和中國彼此需要。我認為兩國之間的貿易非常非常重要。我的感覺是，理智終將戰勝一切，自由貿易、不受限制的貿易的需求終將得到滿足。我們期待政治領袖能夠解決這個問題。所以我的感覺是，歸根結底，人們對連結性的需求越來越大。營運商決心繼續擴大網絡，以抓住機會增加收入和利潤來源。這種需求遲早會被滿足。

Our next question is from Craig Hettenbach with Morgan Stanley.

下一個問題來自摩根士丹利的克雷格·赫滕巴赫。

A question on Consumer. You appear to be navigating the falloff at your largest customer. So just from kind of a high level, if you could just talk about the puts and takes from some of the drop-off there versus other opportunities and areas where you're actually growing within Consumer.

關於消費者的問題。看來您正在應對最大客戶流失的問題。所以，從宏觀層面來說，您能否談談消費領域中一些下滑帶來的利弊，以及在其他領域和成長機會方面有哪些值得關注的地方？

Yes, so as you know, Craig, our Consumer business is a tale of 2 -- we've got 2 different stories there. One is our prosumer, which looks a lot like our B2B market, with lots of customers, products and different applications globally. And that business has been strengthened as well with the addition of the LTC revenue and applications. And that's in the $300 million-plus area, so it's a significant portion of Consumer for ADI. We're expecting -- looking into our -- somewhere in the back end of third quarter and fourth quarter, we're expecting what is normally a seasonally strong quarter to be so. We've stated previously that Consumer will be down 20% to 30% for the year, and this is how the year appears to be trending now. So our strategy remains the same, to focus -- or to leverage our technologies into areas of very, very high differentiation where we can get a higher return on investment and we continue to execute against that strategy.

是的，正如你所知，克雷格，我們的消費者業務分為兩個部分——我們有兩個不同的故事。一個是我們的產消者市場，它與我們的 B2B 市場非常相似，在全球範圍內擁有眾多客戶、產品和不同的應用。隨著 LTC 收入和申請的增加，這項業務也得到了加強。這筆金額超過 3 億美元，因此對 ADI 的消費者業務來說，這是一個相當大的比例。我們預計——根據我們的調查——在第三季末和第四季末，我們預計通常季節性強勁的季度將會如此。我們之前說過，今年消費者支出將下降 20% 至 30%，現在看來，今年的趨勢正是如此。因此，我們的策略仍然不變，即專注於——或者說利用我們的技術——進入差異化程度非常高的領域，在那裡我們可以獲得更高的投資回報，我們將繼續執行這項策略。

Craig, do you have a follow up?

克雷格，你還有後續問題嗎？

I do. Just a question on free cash flow and kind of capital allocation for Prashanth. So encouraging to see the big step-up in free cash flow in the quarter. As you're on the doorstep of that 2 turns target for net leverage, can you remind us in terms of just priorities, be it acquisitions versus returning cash and how you think about that?

我願意。請問關於Prashanth的自由現金流和資本配置方面的問題。令人鼓舞的是，本季自由現金流大幅成長。眼看就要達到淨槓桿率 2 倍的目標了，您能否提醒我們一下，就優先事項而言，例如收購與現金回報之間，您是如何考慮的？

Sure. Thanks for the question, Craig. So yes, it was a great quarter for us in free cash flow, but I do want to remind folks that our cash flow can be lumpy quarter-to-quarter. So the right way to measure us is on a trailing 12 month, and we finished this quarter with trailing 12 month of $1.9 billion. So we recognize that this franchise throws off a considerable amount of cash and, therefore, we want to be very thoughtful on how we deploy that excess cash once we achieve our 2x leverage ratio, which we would expect to do in the next 2 quarters. We're very mindful of the debt that we took on as a result of the Linear acquisition as well as the opportunities that we have in front of us with the share repurchase dividend and potentially some other uses as well. So it's something that we spend some -- quite a bit of time internally debating. And I think you'll hear from us in a coming earnings release that we're ready to talk more about our capital allocation strategy once we clear that important 2x threshold.

當然。謝謝你的提問，克雷格。所以，是的，就自由現金流而言，我們本季表現非常出色，但我確實想提醒大家，我們的現金流可能會出現季度波動。因此，衡量我們的正確方法是以過去 12 個月的業績為準，而我們本季末的過去 12 個月業績為 19 億美元。因此，我們意識到這項特許經營權會產生相當可觀的現金流，因此，一旦我們達到 2 倍槓桿率（我們預計在接下來的兩個季度內達到），我們​​希望非常謹慎地考慮如何部署這些多餘的現金。我們非常清楚因收購 Linear 而承擔的債務，以及我們面前的股票回購分紅機會，還有可能用於其他用途。所以，這是我們內部花費相當多時間進行討論的問題。我認為，在即將發布的財報中，我們會宣布，一旦我們突破了重要的 2 倍門檻，我們將準備更詳細地討論我們的資本配置策略。

Our next question is from C.J. Muse with Evercore.

我們的下一個問題來自 Evercore 公司的 C.J. Muse。

I guess, if I could combine my questions into one large one. On the industrial side, could you share with us a little bit more detail in terms of what the drivers were there underlying that superb growth? And then can you talk about the sustainability of that growth going forward? And then longer term, as part of revenue synergies with Linear, clearly, auto has been a major focus. So could you kind of, I guess, help us see what kind of underlying growth we could see from top line synergies in that segment looking out the next 1, 2, 3 years?

我想，如果我能把我的問題合併成一個大問題就好了。在工業方面，您能否更詳細地介紹一下推動這項卓越成長的因素？那麼，您能否談談這種成長在未來能否持續？從長遠來看，作為與 Linear 實現收入協同效應的一部分，汽車顯然一直是重點領域。那麼，您能否幫我們預測一下，在未來 1、2、3 年內，該業務板塊的營收綜效能帶來怎樣的潛在成長？

Yes, great. Thanks for the questions, C.J. So the industrial business has been doing extraordinarily well, as you mentioned. We continued to be driving this with the technology investments that we've made. It is across the board, C.J. It is all geographies, it is all products. So this is really a combination of the strength of a global expanding environment, and you know the PMI continues to be in an expansionary phase. And that's compounded by the technology investments that have been made over the last several years, which have now come together at a time where you can really see the driver in automation, you can see the driver in our instrumentation business. So it's really across the board, and it's hard to point to any one particular segment because it is so broad based and it's a reflection of the investments that have been made over the last several years. From where we sit today, and you can see it reflected in our guidance for the coming quarter, we feel very strong about the coming quarter. The outlook is solid. Our book-to-bill is greater than 1. Information from the channels, the information Vince gets from his customer visits are all continuing to tell us that we're going to see this run for a bit longer.

是的，太好了。謝謝你的提問，C.J.。正如你所說，工業業務發展得非常好。我們透過持續的技術投資推動了這一進程。C.J.，這種情況普遍存在。它涉及所有地區，所有產品。所以這其實是全球擴張環境優勢的綜合體現，而且你知道，採購經理人指數 (PMI) 也繼續處於擴張階段。在過去幾年裡，我們在技術方面進行了大量投資，這些投資如今匯聚在一起，讓我們真正看到了自動化和儀器業務的驅動力。所以這種情況是普遍存在的，很難指出是哪個特定領域，因為它的基礎非常廣泛，也反映了過去幾年所進行的投資。從我們目前的情況來看，正如您在我們對下一季的業績預期中所看到的，我們對下一季充滿信心。前景穩健。我們的訂單出貨比大於 1。來自管道的訊息，以及 Vince 從客戶拜訪中獲得的資訊都持續告訴我們，這種情況還會持續一段時間。

Thanks, C.J. And I'll just remind you, our long-term growth in that business, we say, is over 2x GDP. If you look at the 5-year CAGR in that business, it's right up -- it's about 8%, 9%. So that's kind of the long-term growth for that business, and we think that's a great growth for -- it's 50% of our business and it throws off great cash. Do you have a follow up, C.J.? Actually, you fit in 2 questions there. Let's move to the next caller.

謝謝，C.J.。我還要提醒你一下，我們說，該業務的長期成長是GDP的2倍以上。如果你看一下該行業 5 年的複合年增長率，你會發現它正在穩步上升——大約是 8%、9%。所以這就是該業務的長期成長方向，我們認為這是一個非常好的成長——它占我們業務的 50%，並且產生了巨大的現金流。C.J.，你還有其他後續問題嗎？實際上，你可以問兩個問題。我們接聽下一位來電者。

Our next question is from Chris Caso with Raymond James.

下一個問題來自 Raymond James 的 Chris Caso。

The first question, a little bit of a big picture question. And based on your -- the comments from the prior question, it sounds like you do have a good degree of conviction that these favorable conditions will continue. Can you talk about visibility you have into customer inventory levels into the channel inventory? And generally, with -- amid the strong industry conditions, the ability you have to make sure that customers are ordering in line with their needs and not over ordering at this point.

第一個問題，一個比較宏觀的問題。根據您在前一個問題中的評論，您似乎很有信心這些有利條件將會持續下去。您能否談談您對客戶庫存水準和通路庫存的了解情況？總的來說，在當前強勁的行業情況下，你有能力確保客戶根據自身需求下單，而不是過度訂購。

Yes, thanks for the question. So first, as a reminder, we have not moved to ASC 606, so remember that our revenue is recognized on sell-through from the channel. So we really do provide our investors a reflection of what is the actual activity happening at the customer level. The inventory that we're seeing in our channel now, roughly 7.5 weeks, that's relatively consistent with where we have been. And we would expect, just through the normal course of business and over the course of the rest of the fiscal year, we'd expect to see that come down a bit. The inventory that we have in-house is at 116 days. That's an improvement of about 8 days from where we were in the first quarter. We are comfortable kind of in that 115 to 120, so I think that's where you'll see us for the balance of the period. Our sales organization does work very closely with channel partners to monitor that order activity to ensure that we're being mindful of the order lead times and ensuring that, that behavior is appropriate. But again, the biggest metric for us is -- the revenue we're reporting is on sell-through, so it's really not impacted by any noise in the channel, whether they're building or subtracting from inventory.

是的，謝謝你的提問。首先提醒大家，我們還沒有採用 ASC 606，所以請記住，我們的收入是根據通路的銷售額確認的。因此，我們確實向投資者反映了客戶層面實際發生的活動。我們現在渠道中的庫存大約為 7.5 週，這與我們之前的情況基本一致。我們預計，隨著正常的業務開展和本財年剩餘時間的推移，這一數字會略有下降。我們公司內部的庫存週轉天數為 116 天。這比第一季的情況改善了大約 8 天。我們覺得115到120這個區間比較合適，所以我認為在接下來的這段時間裡，你們會看到我們保持在這個區間。我們的銷售組織與通路合作夥伴密切合作，監控訂單活動，以確保我們注意訂單交付週期，並確保這種行為是適當的。但再次強調，對我們來說最重要的指標是——我們報告的收入是基於銷售情況，因此它實際上不受通路中任何干擾因素的影響，無論他們是在增加庫存還是減少庫存。

Yes, just another bit of color on that. All the macro dynamics that we talked about, that I used in the -- I talked about at the start of my prepared remarks there benefit the industrial sector. So my sense is, from talking to customers globally, as has been the case at least for the last couple of years, they're pragmatically optimistic about the future, that we're in a longer-term secular growth trend across the various applications in industrial. And I think the optimism is even across automation, instrumentation and the aerospace and defense areas. So I think our customers are feeling good. And I'm also feeling very, very good about where we are and where the market is.

是的，再添點色彩吧。我們討論的所有宏觀動態，我在——我在準備好的演講稿開頭提到的——都有利於工業部門。因此，我的感覺是，透過與全球客戶的交流，至少在過去幾年裡，他們對未來持務實的樂觀態度，認為我們在工業領域的各種應用方面都處於長期的長期成長趨勢中。我認為這種樂觀情緒甚至蔓延到了自動化、儀器儀表、航空航太和國防領域。所以我覺得我們的客戶感覺不錯。我對我們目前的處境和市場狀況都感到非常非常滿意。

Your next question is from Ross Seymore with Deutsche Bank.

下一個問題來自德意志銀行的羅斯·西摩。

Vince, thanks for all the wireless comms commentary earlier in the call. Just wanted to level set. How does your 20% roughly comms business split between wireless and the wired side? And given that you gave us all that color on the wireless side, I wondered what your expectations were for the wired part of the equation.

Vince，感謝你之前在電話會議中對無線通訊的所有評論。只是想說明一下情況。你們的通訊業務大約佔總業務的 20%，其中無線通訊和有線通訊各佔多少比例？鑑於你對無線連接方面描述得如此詳盡，我想知道你對有線連接方面有何期望。

Good question, Ross. Thank you. Well, today, with the acquisition of LT, our business now is about 50-50 between wireless and wireline. The wireless business, my sense is that can grow in the high single digits for quite a while to come. That's my long-term growth objective in that business. Wired is somewhere in the kind of mid-single digits as it has been growing, and I think that's a reasonable way to balance the growth expectations across that business.

問得好，羅斯。謝謝。如今，隨著對 LT 的收購，我們的業務現在無線和有線業務的比例約為 50/50。我認為無線業務在未來相當長的一段時間內可以保持較高的個位數成長率。那是我在該業務領域的長期發展目標。Wired 的成長速度一直保持在個位數中段，我認為這是平衡該業務成長預期的合理方式。

Do you have a follow up, Ross?

羅斯，你還有後續問題嗎？

Yes, and I'll make it a quick one for you. Vince, you mentioned a few times in this call about changing the business model at Linear to be a little bit more growth-centric. Can you give us an idea, given the long-term design cycles, I know it's not going to be immediate, but when should we as investors start to see the benefits of those tweaks to the admittedly successful Linear model turning to a little bit more growth-centric?

是的，我會盡快做完你。Vince，你在這通電話中多次提到要改變 Linear 的商業模式，使其更加以成長為中心。鑑於長期的設計週期，您能否給我們一個大致的想法？我知道這不會立即見效，但作為投資者，我們什麼時候才能開始看到對目前公認的成功線性模型進行調整，使其更加以成長為中心所帶來的好處？

Yes, I think the areas where we believe that we'll see the growth uptake in the shorter term, kind of over the next 2 years, that will be in the probably communications as well as automotive areas. We have sockets already in place now that we should see the uptake on. And it's going to take -- to get to what I would consider to be the objective to put a couple points more of total growth on the company's top line, it will take in the kind of 3 -- 2 to 4 year kind of area. And if Hittite is any indication, given that the technologies play in similar markets, we're virtually 4 years into the closure of the Hittite acquisition. And over that period of time, we have managed to double the growth rates of Hittite in that period of time. So given, Ross, that we expect for every dollar of ADI revenue, which is largely mixed signal base, we expect $1 of power. That's the kind of opportunity spread we're looking at, but it's going to take us 2 to 4 years, I think, to see any meaningful change to the top line.

是的，我認為在短期內，也就是未來兩年內，成長動能可能會在通訊和汽車領域出現。我們已經安裝了插座，應該很快就能看到使用者開始使用。要達到我認為的目標，也就是讓公司營收整體成長幾個百分點，需要大約 2 到 4 年的時間。如果以 Hittite 為例，考慮到這些技術在類似的市場中發揮作用，我們實際上已經完成了對 Hittite 的收購 4 年了。在此期間，我們成功地使赫梯語的成長率翻了一番。羅斯，鑑於我們預計 ADI 每 1 美元的收入（主要來自混合訊號）將帶來 1 美元的電力收入。這就是我們正在關注的機會範圍，但我認為，我們需要 2 到 4 年的時間才能看到營收方面有任何實質的變化。

And our final question comes from Craig Ellis with B. Riley.

最後一個問題來自 Craig Ellis 和 B. Riley。

I wanted to follow up on Ross's comment and maybe take a longer-term look at the 5G opportunity that's in front of ADI. If we look back at the transition from 2G to 3G, and then 3G to 4G, as you look ahead and look at 5G and the potential for 5G to impact ADI revenues, the questions I have are, one, how do you expect pacing in the 4G to 5G revenue transition to compare to prior transitions? When do you think we get to a point where 5G would be a majority of communications revenue? And relative to some of the growth rates that you talked about earlier on a subsegment basis, would you expect 5G when it becomes a much more material part of revenues, to accelerate those growth rates?

我想就羅斯的評論做個補充，或許可以從更長遠的角度來看待 ADI 面臨的 5G 機會。如果我們回顧從 2G 到 3G，再到 3G 到 4G 的過渡，展望未來，考慮到 5G 以及 5G 對 ADI 收入的潛在影響，我的問題是：第一，您預計 4G 到 5G 的收入過渡速度與之前的過渡相比如何？你認為5G何時才能佔據通訊收入的大部分？相對於您之前提到的某些細分市場的成長率，您是否預期 5G 在收入中佔據更重要的份額後，會加速這些成長率？

Good question, Craig. And if you consider 5G to be the initial introduction of 5G to be adding massive MIMO to 4G core network, I think we'll see meaningful revenue in the 2020 time frame. And I still think that 4G, without massive MIMO, will be a significant portion of revenue into the kind of 2022 timeframe. So somewhere between 2022 and 2025, we'll start to see what we would consider to be 5G become a more dominant part of our wireless communications infrastructure revenue. So at this point, Craig, it's a bit of a guess based on trying to triangulate on all the various conversations we have with carriers and customers. But I think, clearly, we're starting to see the uptick in 4.5G, or as it's called in China, 5G, massive MIMO based on 4G infrastructure at this point. So hopefully, that helps to give a bit of clarity to you.

問得好，克雷格。如果你把 5G 的最初引入看作是在 4G 核心網路中加入大規模 MIMO 技術，我認為我們將在 2020 年左右看到可觀的收入。我仍然認為，即使沒有大規模 MIMO 技術，4G 在 2022 年左右仍將佔據相當大的收入份額。因此，在 2022 年至 2025 年之間的某個時候，我們將開始看到我們所認為的 5G 成為我們無線通訊基礎設施收入中更主要的組成部分。所以，克雷格，目前這有點像是一種猜測，我們試圖透過綜合考慮與營運商和客戶的各種對話來得出這個結論。但我認為，很明顯，我們開始看到 4.5G（或像在中國被稱為 5G）的興起，它是基於 4G 基礎設施的大規模 MIMO 技術。希望這能幫助你更清楚地了解情況。

Okay. Thank you, Jennifer. And thank you, everyone, for joining us this morning. A copy of the transcript will be available, and all available reconciliations and information can also be found at the Quarterly Results section of our Investor Relations site at investor.analog.com. Thanks for joining and your continued interest in ADI.

好的。謝謝你，珍妮弗。謝謝大家今天早上收看我們的節目。屆時將提供成績單副本，所有可用的帳單和資訊也可在我們投資者關係網站 investor.analog.com 的季度業績部分找到。感謝您的加入以及您對ADI的持續關注。

This does conclude today's Analog Devices conference call. You may now disconnect.

今天Analog Devices的電話會議到此結束。您現在可以斷開連線了。