微晶片科技 (MCHP) 2024 Q3 法說會逐字稿

Greetings, and welcome to the Microchip's Third Quarter Fiscal Year 2024 Financial Results Conference Call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, CFO, Mr. Eric Bjornholt. Thank you. You may begin.

您好，歡迎參加 Microchip 2024 財年第三季財務業績電話會議。 （操作員指示）謹此提醒，本次會議正在錄製中。現在我很高興向您介紹主持人、財務長 Eric Bjornholt 先生。謝謝。你可以開始了。

Okay. Thank you, operator. Good afternoon, everyone. During the course of this conference call, we will be making projections and other forward-looking statements regarding future events or the future financial performance of the company. We wish to caution you that such statements are predictions and that actual events or results may differ materially. We refer you to our press releases of today as well as our recent filings with the SEC that identify important risk factors that may impact Microchip's business and results of operations.

好的。謝謝你，接線生。大家下午好。在本次電話會議期間，我們將對未來事件或公司未來財務表現做出預測和其他前瞻性陳述。我們希望提醒您，此類陳述僅為預測，實際事件或結果可能會有重大差異。我們建議您參閱今天的新聞稿以及我們最近向 SEC 提交的文件，其中確定了可能影響 Microchip 業務和營運績效的重要風險因素。

In attendance with me today are Ganesh Moorthy, Microchip's President and CEO; Steve Sanghi, Microchip's Executive Chair; and Sajid Daudi, Microchip's Head of Investor Relations. I will comment on our third quarter fiscal year 2024 financial performance. Ganesh will then provide commentary on our results and discuss the current business environment as well as our guidance, and Steve will provide an update on our cash return strategy. We will then be available to respond to specific investor and analyst questions.

今天與我一起出席的有 Microchip 總裁兼執行長 Ganesh Moorthy； Steve Sanghi，Microchip 執行主席；以及 Microchip 投資者關係主管 Sajid Daudi。我將評論我們 2024 財年第三季的財務表現。然後，加內什將對我們的業績發表評論，並討論當前的商業環境以及我們的指導，史蒂夫將提供我們現金回報策略的最新資訊。然後我們將可以回答具體的投資者和分析師的問題。

We are including information in our press release and on this conference call on various GAAP and non-GAAP measures. We have posted a full GAAP to non-GAAP reconciliation on the Investor Relations page of our website at www.microchip.com, and included reconciliation information in our earnings press release which we believe you will find useful when comparing GAAP and non-GAAP results.

我們在新聞稿和電話會議中提供了有關各種公認會計原則和非公認會計原則措施的資訊。我們已在我們網站www.microchip.com 的投資者關係頁面上發布了完整的GAAP 與非GAAP 調節表，並在我們的收益新聞稿中包含了調節信息，我們相信您在比較GAAP 和非GAAP 業績時會發現這些資訊很有用。

We have also posted a summary of our outstanding debt and our leverage metrics on our website. I will now go through some of the operating results, including net sales, gross margin and operating expenses. Other than net sales, I will be referring to these results on a non-GAAP basis which is based on expenses prior to the effects of our acquisition activities, share-based compensation and certain other adjustments as described in our earnings press release and in the reconciliations on our website.

我們也在我們的網站上發布了未償債務和槓桿指標的摘要。我現在將介紹一些經營業績，包括淨銷售額、毛利率和經營費用。除了淨銷售額之外，我將在非公認會計原則的基礎上提及這些結果，該結果基於我們的收購活動影響之前的費用、基於股份的薪酬以及我們的收益新聞稿和財務報告中所述的某些其他調整。我們網站上的對帳。

Net sales in the December quarter were $1.766 billion, which was down 21.7% sequentially. We have posted a summary of our net sales by product line and geography on our website for your reference. On a non-GAAP basis, gross margins were 63.8%, operating expenses were 22.5% and operating income was 41.2%. Non-GAAP net income was $592.7 million and non-GAAP earnings per diluted share was $1.08.

12 月季度淨銷售額為 17.66 億美元，季減 21.7%。我們已在網站上發布了按產品線和地理位置劃分的淨銷售額摘要，供您參考。以非公認會計準則計算，毛利率為 63.8%，營運費用為 22.5%，營運收入為 41.2%。非 GAAP 淨利潤為 5.927 億美元，非 GAAP 稀釋每股收益為 1.08 美元。

On a GAAP basis, in the December quarter, gross margins were 63.4%. Total operating expenses were $590.6 million and included acquisition and tangible amortization of $151.3 million, special charges of $1.1 million, share-based compensation of $38.8 million and $1.5 million of other expenses. GAAP net income was $419.2 million, resulting in $0.77 in earnings per diluted share. The GAAP tax rate was favorably impacted from an IRS notice that clarified the treatment of costs incurred by a research provider under contract that we had been accruing for and that accrual was released in the quarter.

以 GAAP 計算，12 月季度的毛利率為 63.4%。總營運費用為 5.906 億美元，包括 1.513 億美元的收購和有形攤提、110 萬美元的特殊費用、3,880 萬美元的股權激勵和 150 萬美元的其他費用。 GAAP 淨利潤為 4.192 億美元，稀釋後每股收益為 0.77 美元。公認會計原則稅率受到美國國稅局通知的有利影響，該通知澄清了我們一直應計的研究提供者根據合約產生的成本的處理方式，並在本季度發布了應計費用。

Our non-GAAP cash tax rate was 13.2% in the December quarter. Our non-GAAP cash tax rate for fiscal year 2024 is expected to be just under 14%, which is exclusive of the transition tax and any tax audit settlements related to taxes accrued in prior fiscal years. Our fiscal '24 cash tax rate is higher than our fiscal '23 tax rate was for a variety of factors, including lower availability of tax attributes, such as net operating losses and tax credits, lower tax depreciation with our expectation for lower capital expenditures in the U.S. in fiscal '24, as well as the impact of current tax rules requiring the capitalization of R&D expenses for tax purposes.

我們 12 月季度的非 GAAP 現金稅率為 13.2%。我們 2024 財年的非 GAAP 現金稅率預計略低於 14%，其中不包括過渡稅和與上一財年應計稅款相關的任何稅務審計結算。由於多種因素，我們的24 財年現金稅率高於23 財年的稅率，包括稅收屬性的可用性較低，例如淨經營虧損和稅收抵免、稅收折舊較低以及我們預計2023 年資本支出較低。美國 24 財年的情況，以及現行稅收規則（要求出於稅收目的將研發費用資本化）的影響。

We are still hopeful that the tax rules requiring companies to capitalize R&D expenses will be pushed out or repealed. The House actually passed the tax bill last night that would achieve this, and we will see how this progresses through the Senate. If this were to happen, we would anticipate about a 200 basis points favorable adjustment to Microchip's non-GAAP tax rate in future periods.

我們仍希望要求公司將研發費用資本化的稅收規則將被推遲或廢除。眾議院昨晚實際上通過了旨在實現這一目標的稅收法案，我們將看看參議院的進展如何。如果這種情況發生，我們預計 Microchip 的非 GAAP 稅率在未來期間將進行約 200 個基點的有利調整。

Our inventory balance at December 31, 2023, was $1.31 billion. We had 185 days of inventory at the end of the December quarter, which was up 18 days from the prior quarter's level. Although we reduced inventory dollars in the quarter, we were not able to make as much progress as we would have liked, as we continue to accommodate requests by customers to push out delivery schedules for products that were very far through the manufacturing process. At the midpoint of our March 2024 quarter guidance, we would expect inventory dollars to be up modestly and days of inventory to be in the range of 225 to 230 days due to the significant reduction in revenue and cost of goods sold.

截至 2023 年 12 月 31 日，我們的庫存餘額為 13.1 億美元。截至 12 月季度末，我們的庫存為 185 天，比上一季的水準增加了 18 天。儘管我們在本季度減少了庫存，但我們未能取得我們希望的那麼多進展，因為我們繼續滿足客戶的要求，並推遲已完成製造過程的產品的交貨時間表。在我們 2024 年 3 月季度指導的中點，由於收入和銷售商品成本大幅下降，我們預計庫存金額將小幅上升，庫存天數將在 225 至 230 天之間。

We also continue to invest in building inventory for long-lived, high-margin products whose manufacturing capacity is being end of life by our supply chain partners and these last time buys represented 10 days of inventory at the end of December. Inventory at our distributors in the December quarter were 37 days, which was up 2 days from the prior quarter's level.

我們也繼續投資建立長壽命、高利潤產品的庫存，這些產品的製造能力已被我們的供應鏈合作夥伴淘汰，而這些最後一次購買代表了 12 月底 10 天的庫存。 12 月季度我們經銷商的庫存為 37 天，比上一季的水準增加了 2 天。

Our cash flow from operating activities was $853.3 million in the December quarter. Included in our cash flow from operating activities was $30.4 million of long-term supply assurance receipts from customers. We have adjusted these items out of our free cash flow to determine the adjusted free cash flow that we will return to shareholders through dividends and share repurchases, as these supply assurance payments will be refundable over time as purchase commitments are fulfilled. Our adjusted free cash flow was $763.4 million in the December quarter. As of December 31, our consolidated cash and total investment position was $281 million.

12 月季度我們的營運活動現金流量為 8.533 億美元。我們的營運活動現金流量包括客戶的 3,040 萬美元長期供應保證收入。我們已經從自由現金流中調整了這些項目，以確定調整後的自由現金流，我們將透過股息和股票回購將其返還給股東，因為隨著購買承諾的履行，這些供應保證付款將隨著時間的推移而退還。 12 月所在季度調整後的自由現金流為 7.634 億美元。截至 12 月 31 日，我們的綜合現金和總投資部位為 2.81 億美元。

Our total debt decreased by $392 million in the December quarter, our net debt decreased by $416.4 million in the quarter. Over the last 22 full quarters since we closed the Microsemi acquisition and incurred over $8 billion in debt to do so, we have paid down $7.1 billion of the debt and continue to allocate substantially all of our excess cash beyond dividends and stock buyback to bring down this debt.

我們的總債務在 12 月季度減少了 3.92 億美元，淨債務在該季度減少了 4.164 億美元。自從我們完成對美高森美的收購並為此承擔了超過80 億美元的債務以來，在過去22 個完整季度中，我們已經償還了71 億美元的債務，並繼續分配除股息和股票回購之外的幾乎所有多餘現金，以降低這筆債。

Our adjusted EBITDA in the December quarter was $796.2 million and 45.1% of net sales. Our trailing 12-month adjusted EBITDA was $4.26 billion. Our net debt to adjusted EBITDA was 1.27x at December 31, 2023, down from 1.56x at December 31, 2022. Capital expenditures were $59.5 million in the December quarter. Our expectation for capital expenditures for fiscal year 2024 is between $300 million and $310 million which is down from the $300 million to $325 million we shared with investors last quarter as we are delaying certain capital given the more challenging economic backdrop.

12 月季度調整後的 EBITDA 為 7.962 億美元，佔淨銷售額的 45.1%。我們過去 12 個月的調整後 EBITDA 為 42.6 億美元。截至 2023 年 12 月 31 日，我們的淨債務與調整後 EBITDA 比率為 1.27 倍，低於 2022 年 12 月 31 日的 1.56 倍。12 月季度的資本支出為 5,950 萬美元。我們對2024 財年資本支出的預期在3 億至3.1 億美元之間，低於我們上季度與投資者分享的3 億至3.25 億美元，因為考慮到更具挑戰性的經濟背景，我們推遲了某些資本支出。

We expect that our capital investments will continue to provide us increased control over our production during periods of industry-wide constraints. Depreciation expense in the December quarter was $47.1 million.

我們預計，在全行業受到限制的時期，我們的資本投資將繼續增強我們對生產的控制力。 12 月季度的折舊費用為 4,710 萬美元。

I will now turn it over to Ganesh to give us comments on the performance of the business in the December quarter as well as our guidance for the March quarter. Ganesh?

現在我將把它交給 Ganesh，讓我們對 12 月季度的業務表現以及 3 月季度的指導進行評論。加內什？

Thank you, Eric, and good afternoon, everyone. Our December quarter results were disappointing and below our expectations with net sales down 21.7% sequentially and down 18.6% from the year ago quarter. Non-GAAP gross and operating margins came in at 63.8% and 41.2%, respectively, down from our recent strong performance, but somewhat resilient despite the significant sequential decline in revenue. Our consolidated non-GAAP diluted EPS came in at $1.08 per share, down 30.8% from the year ago quarter.

謝謝你，埃里克，大家下午好。我們 12 月季度的業績令人失望，低於我們的預期，淨銷售額環比下降 21.7%，比去年同期下降 18.6%。非 GAAP 毛利率和營業利潤率分別為 63.8% 和 41.2%，低於我們最近的強勁表現，但儘管收入連續大幅下降，但仍具有一定的彈性。我們的合併非 GAAP 攤薄後每股收益為每股 1.08 美元，比去年同期下降 30.8%。

Adjusted EBITDA was 45.1% of net sales in the December quarter, continuing to demonstrate some resiliency. As a result, we had good debt reduction in the December quarter and despite the lower adjusted EBITDA we generated, our net leverage ticked down to 1.27x. However, we expect our net leverage ratio to rise for a few quarters, as trailing 12-month adjusted EBITDA drops when replacing stronger prior year quarters with weaker ones.

調整後的 EBITDA 佔 12 月季度淨銷售額的 45.1%，持續展現一定的彈性。因此，我們在 12 月季度的債務減少良好，儘管我們產生的調整後 EBITDA 較低，但我們的淨槓桿率下降至 1.27 倍。然而，我們預計我們的淨槓桿率將在幾個季度內上升，因為在用較弱的季度取代去年較強勁的季度後，過去 12 個月調整後的 EBITDA 將會下降。

Our capital return to shareholders in the March quarter will increase to 82.5% of our December quarter adjusted free cash flow as we continue on our path to return 100% of our adjusted free cash flow to shareholders by the March quarter of calendar year 2025.

隨著我們繼續努力在 2025 年 3 月季度向股東返還 100% 的調整後自由現金流，我們在 3 月份季度向股東返還的資本回報率將增至 12 月份季度調整後自由現金流的 82.5%。

My thanks to our worldwide team for their support, hard work and diligence as we navigated a difficult environment and focus on what we could control so that we are well positioned to thrive in the long term.

我感謝我們的全球團隊在我們度過困難的環境並專注於我們可以控制的事情時給予我們的支持、辛勤工作和勤奮，以便我們能夠長期蓬勃發展。

Taking a look at our December quarter net sales from a product line perspective, our Mixed-Signal Microcontroller net sales were down 22.3% sequentially and down 18.5% on a year-over-year basis. And our Analog net sales were down 30.9% sequentially and down 29% on a year-over-year basis.

從產品線的角度來看我們 12 月季度的淨銷售額，我們的混合訊號微控制器淨銷售額環比下降 22.3%，年減 18.5%。我們的模擬淨銷售額季減 30.9%，年減 29%。

Now for some color on the December quarter and the general business environment. All regions of the world and most of our end markets were weak. Our business was weaker than we expected as our customers continue to respond to the effects of increasing business uncertainty, slowing economic activity and a resultant increase in their inventory. In addition, many customers implemented extended shutdowns of closures at the end of the December quarter as they manage their operational activities.

現在對 12 月季度和整體商業環境進行一些分析。世界所有地區和我們的大部分終端市場都很疲軟。我們的業務弱於我們的預期，因為我們的客戶繼續應對業務不確定性增加、經濟活動放緩以及由此導致的庫存增加的影響。此外，許多客戶在 12 月季度末實施了延長關閉時間以管理其營運活動。

We continue to receive requests to push out or cancel backlog as customers sought to rebalance their inventory in light of the weaker business conditions and the increased uncertainty that we're experiencing. And we were able to push out or cancel backlog to help many customers with these inventory positions.

鑑於業務狀況疲軟和我們面臨的不確定性增加，客戶尋求重新平衡庫存，因此我們不斷收到推遲或取消積壓訂單的請求。我們能夠推出或取消積壓訂單，以協助許多客戶解決這些庫存狀況。

With no major supply constraints, coupled with very short lead times and a weak macro environment, we believe there is inventory destocking underway at multiple levels at our direct customers and distributors who buy from us, our indirect customers who buy through our distributors and in some cases, our customers' customers.

由於沒有重大的供應限制，加上交貨時間很短和疲軟的宏觀環境，我們相信，我們的直接客戶和從我們這裡購買的經銷商、透過我們的經銷商購買的間接客戶以及一些地方正在多個層面去庫存。案例，我們客戶的客戶。

The very strong upcycle of the last 2 to 3-years drove many of our customers to build inventory in order to be able to capitalize on strong business conditions in an uncertain supply environment. The term, "just in case", instead of "just in time," was used by customers to express their approach to these conditions. But as the macro environment slowed, many of our customers found their business expectations to be too optimistic and ended up with high levels of inventory. And as a result, they sought to cancel or reschedule backlog.

過去兩到三年的強勁上升週期促使我們的許多客戶建立庫存，以便能夠在不確定的供應環境中利用強勁的業務條件。客戶使用“以防萬一”而不是“及時”一詞來表達他們對這些情況的處理方法。但隨著宏觀環境放緩，我們的許多客戶發現他們的業務預期過於樂觀，最終導致庫存水準較高。因此，他們試圖取消或重新安排積壓的工作。

An update on our PSP program. During the early stages of the upcycle, we launched our PSP program requiring non-cancelable backlog in exchange for supply priority in a hyper-constrained supply environment. The program was aimed to discourage speculative demand and achieve mutual commitments between our customers and us for future demand. The program worked extremely well for many customers who participated during all of 2021 and 2022 as well as the early part of 2023, supporting strong growth in their businesses.

我們的 PSP 計劃的更新。在升級週期的早期階段，我們啟動了 PSP 計劃，要求以不可取消的積壓來換取極度受限的供應環境中的供應優先權。該計劃旨在抑制投機需求，並實現我們和客戶之間對未來需求的共同承諾。該計劃對於 2021 年和 2022 年全年以及 2023 年初參與的許多客戶來說效果非常好，支持了他們業務的強勁增長。

However, the business challenges, which led to the creation of the PSP program are no longer relevant, and we have, therefore, decided to discontinue the program effective today. If business conditions warranted, we may at some point in the future, initiate a similar program, which will, of course, have to be adapted to whatever that situation requires.

然而，導致創建 PSP 計劃的業務挑戰已不再相關，因此我們決定從今天起終止該計劃。如果業務條件允許，我們可能會在未來的某個時候啟動類似的計劃，當然，該計劃必須適應任何情況的需要。

Reflecting the slowing macro environment, our distribution inventory grew to 37 days at the end of the December quarter, as compared to 35 days at the end of the September quarter. We are working with our distribution partners to find the right balance of inventory required to serve their customers, manage their cash flow requirements and be positioned for the eventual strengthening of business conditions.

反映宏觀環境放緩的情況是，我們的分銷庫存在 12 月季度末增長至 37 天，而 9 月季度末為 35 天。我們正在與我們的分銷合作夥伴合作，尋找服務客戶所需的適當庫存平衡，管理他們的現金流需求，並為最終加強業務條件做好準備。

Our internal capacity expansion actions remain paused. Given the severity of the down cycle, our factories around the world will be running at lower utilization rates and also taking up to 2 shutdown weeks in each of the March and June quarters in order to help control the growth of inventory. We expect our capital investments in fiscal year '24 and fiscal year '25 will be low even as we prepare for the long-term growth of our business.

我們的內部產能擴張行動仍處於暫停狀態。鑑於經濟下行週期的嚴重性，我們在世界各地的工廠將以較低的利用率運行，並且在 3 月和 6 月季度每個季度將停產最多 2 週，以幫助控制庫存成長。我們預計，即使我們為業務的長期成長做準備，我們在 24 財年和 25 財年的資本投資也將較低。

To that end, we reached a preliminary memorandum of terms with the Department of Commerce for $162 million in grants targeted at existing projects for 2 of our U.S. fabs. These grants are subject to diligence by the CHIPS office as well as capacity investments by Microchip over multiple years. We have been driving our lead times down and have reduced average lead times from roughly 52 weeks at the start of 2023 to roughly 8 weeks by the end of 2023 on average.

為此，我們與商務部達成了一份初步條款備忘錄，為我們兩家美國晶圓廠的現有項目提供 1.62 億美元的贈款。這些贈款需要經過 CHIPS 辦公室的盡職調查以及 Microchip 多年來的產能投資。我們一直在縮短交貨時間，並將平均交貨時間從 2023 年初的約 52 週減少到 2023 年底的平均約 8 週。

During a period of macro weakness and business uncertainty, we believe short lead times are the best way to help customers navigate the environment successfully and improve the quality of backlog placed with us as it enables our customers and Microchip to engage an uncertain environment with more agility and effectiveness. However, a significant reduction in lead times is also resulting in lower bookings and reduced near-term visibility for our business.

在宏觀經濟疲軟和業務不確定的時期，我們相信較短的交貨時間是幫助客戶成功應對環境並提高我們積壓訂單品質的最佳方式，因為它使我們的客戶和Microchip 能夠更靈活地應對不確定的環境和有效性。然而，交貨時間的大幅縮短也導致預訂量減少和我們業務的近期能見度降低。

We're also taking steps to reduce our expenses. In addition to the variable compensation programs, which provide automatic reductions during a down cycle and normal containment of discretionary expenses, we will be implementing broad-based pay reductions. Our team members who are not a part of the factory shutdowns will take a 10% pay-cut. And consistent with our normal practice, the executive team will take the largest reduction with a 20% pay-cut.

我們也採取措施減少開支。除了可變薪酬計劃（在經濟下行週期期間自動減薪和正常控制可自由支配開支）之外，我們還將實施廣泛的減薪。未參與工廠關閉的團隊成員將減薪 10%。而且依照我們正常的做法，高階主管團隊將採取最大的減薪，減薪20%。

The shutdowns for manufacturing team members and pay cuts for non-manufacturing team members are consistent with our long-standing culture of shared sacrifices and down cycles and shared rewards and up cycles. That's avoiding layoffs, and in the process protecting manufacturing capability as well as high priority projects, which are important for our customers and us to thrive in the long term. We took similar actions in prior periods of business uncertainty such as the COVID pandemic in 2020 and the global financial crisis in 2008 and 2009, and we believe such actions were quite effective to navigate our business.

製造團隊成員的停工和非製造團隊成員的減薪符合我們共同犧牲和下行週期以及共享獎勵和上升週期的長期文化。這可以避免裁員，並在此過程中保護製造能力以及高優先級項目，這對我們的客戶和我們的長期發展非常重要。我們在先前的業務不確定時期（例如2020年的新冠疫情以及2008年和2009年的全球金融危機）採取了類似的行動，我們相信這些行動對於引導我們的業務非常有效。

Now let's get into our guidance for the March quarter. As our customers take further actions to adjust to a weakening macro environment and uncertain business conditions, we are continuing to support customers and channel partners with inventory position to push out or cancel their backlog. We recognize that our short lead times and increased flexibility with backlog will result in customers reducing inventory aggressively, and that this could result in some degree of overcorrection. However, in response to these conditions, we are continuing to work with our customers to absorb as much of the inventory correction as we can at this time.

現在讓我們來看看我們對三月季度的指導。隨著我們的客戶採取進一步行動來適應疲軟的宏觀環境和不確定的業務狀況，我們將繼續支援有庫存狀況的客戶和通路合作夥伴推出或取消積壓訂單。我們認識到，我們較短的交貨時間和增加的積壓靈活性將導致客戶積極減少庫存，這可能會導致某種程度的過度修正。然而，為了因應這些情況，我們將繼續與客戶合作，盡可能吸收目前的庫存調整。

Taking all the factors we have discussed on the call today into consideration, we expect our net sales for the March quarter to be between $1.225 billion and $1.425 billion. The guidance range is larger than normal to reflect the macro uncertainty and the resultant low business visibility. We expect our non-GAAP gross margin to be between 59% and 61.6% of sales. We expect non-GAAP operating expenses to be between 26.9% and 30.7% of sales. We expect non-GAAP operating profit to be between 28.3% and 34.7% of sales and we expect our non-GAAP diluted earnings per share to be between $0.46 and $0.68.

考慮到我們今天在電話會議上討論的所有因素，我們預計 3 月季度的淨銷售額將在 12.25 億美元至 14.25 億美元之間。指導範圍大於正常範圍，以反映宏觀不確定性以及由此導致的業務能見度較低。我們預計非 GAAP 毛利率將在銷售額的 59% 至 61.6% 之間。我們預計非 GAAP 營運費用將佔銷售額的 26.9% 至 30.7%。我們預計非 GAAP 營業利潤將佔銷售額的 28.3% 至 34.7%，我們預計非 GAAP 攤薄後每股收益將在 0.46 美元至 0.68 美元之間。

To keep things in perspective, while our business results have degraded significantly over the last 2 quarters, as a larger-than-normal inventory correction has played out. Our full fiscal year '24 revenue decline at the midpoint of the March quarter guidance is expected to be roughly 9.5%, comparing favorably with weakness that other industry players have experienced. Our non-GAAP operating margin for full fiscal year '24 at the midpoint of our March quarter guidance is expected to be 43.6% and continuing to be among the best results across other companies in our industry. While we don't know how and when the inevitable up cycle will play out, we believe the fundamental characteristics of our business remain intact.

客觀地說，儘管我們的業務業績在過去兩個季度中大幅下滑，但由於庫存調整幅度超出正常水平，我們的業績已經出現了下滑。以 3 月季度指導的中位數計算，我們 24 財年的整個財年收入預計將下降約 9.5%，與其他行業參與者經歷的疲軟相比，情況較好。以我們 3 月季度指導的中點計算，我們 24 年整個財年的非公認會計原則營運利潤率預計為 43.6%，並且繼續成為業內其他公司中最好的業績之一。雖然我們不知道不可避免的上升週期將如何以及何時結束，但我們相信我們業務的基本特徵保持不變。

Finally, notwithstanding any near-term macro weakness, we are confident that our solutions remain the engine of innovation for the applications and end markets we serve. Our focus on total system solutions and key market megatrends continue to fuel strong design win momentum, which we expect will drive above-market long-term growth.

最後，儘管近期宏觀經濟疲軟，但我們相信我們的解決方案仍然是我們所服務的應用和終端市場的創新引擎。我們對整體系統解決方案和主要市場大趨勢的關注繼續推動強勁的設計獲勝勢頭，我們預計這將推動高於市場的長期成長。

With that, let me pass the baton to Steve to talk more about our cash return to shareholders. Steve?

接下來，讓我將接力棒交給史蒂夫，並多談談我們對股東的現金回報。史蒂夫？

Thank you, Ganesh, and good afternoon, everyone. I would like to provide you with a further update on our cash return strategy. The Board of Directors announced an increase in the dividend of 25.7% from the year ago quarter to $0.45 per share. During the last quarter, we purchased $114.6 million of our stock in the open market. We also paid out $237.4 million in dividends. Thus, the total cash return was $352 million. This amount was 77.5% of our actual adjusted free cash flow of $454.3 million during the September 2023 quarter. Our net leverage at the end of December 2023 quarter was 1.27x.

謝謝你，Ganesh，大家下午好。我想向您提供有關我們現金返還策略的進一步更新。董事會宣布股息較去年同期增加 25.7% 至每股 0.45 美元。上個季度，我們在公開市場購買了 1.146 億美元的股票。我們還支付了 2.374 億美元的股息。因此，現金回報總額為 3.52 億美元。這筆金額佔 2023 年 9 月季度實際調整後自由現金流 4.543 億美元的 77.5%。截至 2023 年 12 月季度末，我們的淨槓桿率為 1.27 倍。

Ever since we achieved an investment-grade rating for our debt in November 2021 and pivoted to increasing our capital return to shareholders, we have returned $3.6 billion to shareholders through December 31, 2023 by a combination of dividends and share buybacks. During this time, we have bought back approximately 26 million shares of our common stock from the open market, representing approximately 4.5% of our shares outstanding.

自從我們在 2021 年 11 月獲得債務投資等級評級並轉向提高股東資本回報以來，截至 2023 年 12 月 31 日，我們已透過股利和股票回購的方式向股東返還了 36 億美元。在此期間，我們從公開市場回購了約 2,600 萬股普通股，約占我們已發行股票的 4.5%。

In the current March quarter, we will use the adjusted free cash flow from the December quarter to target the amount of cash returned to shareholders. The adjusted free cash flow excludes a net $30.4 million that we collected from our customers for long-term supply assurance payments. These payments are refundable when purchase commitments are fulfilled. The adjusted free cash flow for the December quarter was $763.4 million. We plan to return 82.5% or $629.8 million of that amount to our shareholders with the dividend expected to be approximately $243 million and the stock buyback expected to be approximately $386.8 million, which will be a new quarterly record for stock buyback since we initiated our enhanced capital return strategy.

在目前的 3 月季度，我們將使用 12 月季度調整後的自由現金流來確定返還給股東的現金金額。調整後的自由現金流不包括我們向客戶收取的長期供應保證付款淨額 3,040 萬美元。當履行購買承諾時，這些款項可退還。 12 月季度調整後的自由現金流為 7.634 億美元。我們計劃向股東返還其中的82.5%，即6.298 億美元，股息預計約為2.43 億美元，股票回購預計約為3.868 億美元，這將創下自我們啟動增強型股票回購以來的新季度股票回購購記錄。資本回報策略。

Going forward, we plan to continue to increase our adjusted free cash flow returned to shareholders by 500 basis points every quarter until we reach 100% of adjusted free cash flow returned to shareholders. That will take 4 more quarters and we expect that dividends over time will represent approximately 50% of our cash returned.

展望未來，我們計劃繼續每季將返還給股東的調整後自由現金流增加 500 個基點，直到達到 100% 返還給股東的調整後自由現金流。這還需要 4 個季度的時間，我們預計隨著時間的推移，股息將占我們現金回饋的約 50%。

With that, operator, will you please poll for questions?

那麼，接線員，請您投票提問好嗎？

(Operator Instructions) And our first question comes from the line of Timothy Arcuri with UBS.

（操作員說明）我們的第一個問題來自瑞銀集團的蒂莫西·阿庫裡（Timothy Arcuri）。

I wanted to ask about how much of a headwind the inventory inside of distribution still is? Shipments into distribution were down about 30%, well, actually more than that. And yet some of your largest [disty's] are still saying that they're having a hard time working down inventory. So can you provide any guidance like does the March guidance assume that shipments into distribution will be down a lot more than what the corporate guidance is, again, just like it was in December?

我想問一下分銷內部的庫存還有多大的阻力？分銷出貨量下降了約 30%，實際上比這個數字還要多。然而，一些最大的 [disty's] 仍然表示，他們在減少庫存方面遇到了困難。那麼，您能否提供任何指導意見，例如 3 月份指導意見是否假設分銷發貨量將比公司指導意見下降更多，就像 12 月份一樣？

We are expecting that we will drain inventory in distribution in the March quarter.

我們預計我們將在三月季度耗盡分銷庫存。

Okay. Great. And then, Eric, can you talk about utilization rates and the potential for some write-downs? We sort of haven't been at a level yet where you would write things down, but can you talk about that?

好的。偉大的。然後，艾瑞克，您能談談利用率和一些減記的可能性嗎？我們還沒有達到可以把事情寫下來的水平，但是你能談談嗎？

Sure. So we have been kind of working on an employee attrition basis in our 3 large fabs, and through the December quarter, that did not put us in a situation where we were taking under-utilization charges from those 3 fabs. That will change this quarter as we have continued to attrit. And as Ganesh kind of walked through, we've got 2-week shutdowns scheduled in all 3 of those large factories.

當然。因此，我們一直在我們的3 個大型晶圓廠中以員工流失為基礎進行工作，並且在整個12 月份的季度中，這並沒有使我們陷入從這3 個晶圓廠收取利用率不足的費用的情況。隨著我們繼續裁員，這種情況將在本季發生變化。正如 Ganesh 所言，我們所有 3 家大型工廠都計劃停工兩週。

So we aren't going to break out a utilization percentage but under-utilization is absolutely impacting our business, our gross margins in the current quarter. And on top of that, with the change that we've seen in demand and inventory still being high. We have been taking relatively large charges for inventory reserves based on our accounting policies that we have in place. And all those things are really factored into the margin guidance that we've given to the Street.

因此，我們不會透露利用率，但利用率不足絕對會影響我們的業務和本季的毛利率。最重要的是，我們看到需求和庫存的變化仍然很高。根據我們現有的會計政策，我們一直對庫存儲備收取相對較高的費用。所有這些因素都真正納入了我們向華爾街提供的保證金指引中。

Our next question comes from the line of Toshiya Hari with Goldman Sachs.

我們的下一個問題來自 Toshiya Hari 與高盛的對話。

My first question is on cancellation rates and what you're seeing from a customer pushout perspective. Are you seeing any signs of stabilization, Ganesh, in terms of cancellation rates or pretty much the same so far in the quarter relative to December and September of last year?

我的第一個問題是關於取消率以及您從客戶推出的角度看到的情況。 Ganesh，您是否看到任何穩定的跡象，就取消率而言，或者與去年 12 月和 9 月相比，本季迄今的取消率幾乎相同？

We don't have a numerical tracking process. We still have customers that have asked for help. We have done a lot of that and built it into what we have into our guidance. I don't know if you have a better view, Eric, on cancellation rates?

我們沒有數位追蹤流程。我們仍然有客戶尋求幫助。我們已經做了很多這樣的事情，並將其納入我們的指導中。艾瑞克，我不知道您對取消房價是否有更好的看法？

Right. I would say, as we kind of talked about customers and distributors are feeling like they have excess inventory. And with that, if they have backlog in place for those products, they are either not placing backlog. But if they have backlog in place, they're looking to see if there's an ability for them to at least push that out. So we're having those ongoing discussions. And I'd say that they're still at a relatively high rating.

正確的。我想說，正如我們談到的那樣，客戶和分銷商感覺他們的庫存太多。因此，如果他們有這些產品的積壓訂單，那麼他們要么不積壓訂單。但如果他們有積壓的訂單，他們會看看是否有能力至少將其推遲。所以我們正在進行這些持續的討論。我想說他們仍然處於相對較高的評級。

Got it. And as my follow-up, I was hoping to get your comments on pricing. The headwinds you're seeing today, is it mostly volume driven or are you starting to see price erode as well between your Microcontroller business and Analog business? It seems like at the industry level, you've got more supply coming online over the next couple of quarters, several quarters. So curious how you're -- what you're seeing today and how you're thinking about pricing as we progress through calendar '24.

知道了。作為我的後續行動，我希望得到您對定價的評論。您今天看到的逆風，主要是銷售驅動還是您開始看到微控制器業務和模擬業務之間的價格下降？從產業層面來看，未來幾季、幾季的供應量似乎會增加。很好奇您今天看到了什麼，以及隨著我們在 24 日曆年的進展，您如何考慮定價。

Yes. All the revenue declines are really volume declines, they're not pricing related. Pricing is stable. It is not contributing to the revenue change that is in our guidance. Our business is one which is based on design-ins that are done 1, 2, 3 years before and production that takes place for many, many years. It's not an easy substitution that takes place on short-term price adjustments, et cetera. Clearly, at the point of where new designs are taking place, we will be price competitive to what the new design requires. But today's revenue adjustments downward are not happening because of price, price is stable.

是的。所有收入下降其實都是銷量下降，與定價無關。定價穩定。它不會對我們指導中的收入變化做出貢獻。我們的業務是基於 1、2、3 年前完成的設計和持續多年的生產。對於短期價格調整等來說，這並不是一個容易發生的替代。顯然，在進行新設計時，我們將在價格上對新設計的要求具有競爭力。但今天的收入向下調整並不是因為價格而發生的，價格是穩定的。

And our next question comes from the line of Chris Caso with Wolfe Research.

我們的下一個問題來自 Wolfe Research 的 Chris Caso。

My question is -- and it's a difficult question about sort of where you think aggregate inventory levels are and how much progress with some of these lower revenue shipment rates that we'll make in getting those inventories down over time. I know that's difficult to answer for your end customers, your indirect customers, but perhaps you could address it from the distribution channel where you have a little more visibility and where the target inventory levels are and where you expect to get over time?

我的問題是——這是一個很難的問題，你認為總庫存水準在哪裡，以及隨著時間的推移，我們在降低這些庫存方面將在一些較低的收入發貨率方面取得多大進展。我知道這對您的最終客戶和間接客戶來說很難回答，但也許您可以從分銷渠道來解決這個問題，在分銷渠道中您有更多的可見性，目標庫存水平在哪裡，以及您期望隨著時間的推移達到什麼水平？

As you said, inventory in some cases is obscure to us. We have to estimate based on where customers are placing orders, what kind of feedback they're giving us. We know we're going to be substantially under-shipping to where consumption is going to be. But it's very hard to put a number on what that is and how much of the inventory has been taken out. And as I said, in some cases, it is multiple layers of inventory and especially as people are getting to that point where they are less willing to carry inventory, perhaps even take it to the low end of what they might historically do because supply is plentiful.

正如您所說，在某些情況下，庫存對我們來說是模糊的。我們必須根據客戶下訂單的地點以及他們給我們的回饋類型進行估計。我們知道，我們的消費量將嚴重不足。但很難具體說明具體是什麼以及有多少庫存已被取出。正如我所說，在某些情況下，庫存是多層的，特別是當人們越來越不願意持有庫存時，甚至可能將庫存降至他們歷史上可能做的低端，因為供應不足。

Not all of this is just inventory reduction as you would normally expect. But it is going to be at multiple levels to our customers, to their customers. And in some cases, if they have an OEM, that goes to the OEM there as well. So we don't have a good way to put a number on what you're asking for.

並非所有這些都像您通常預期的那樣只是庫存減少。但對於我們的客戶以及他們的客戶來說，這將是多個層面的。在某些情況下，如果他們有原始設備製造商，那麼這些資訊也會流向那裡的原始設備製造商。因此，我們沒有一個好的方法來確定您的要求。

Okay. Fair enough. One of the things you've also said in prior downturns is typically, you've seen 3 down quarters before you achieve a bottom, you're kind of at that now, although September quarter was obviously a much smaller magnitude than now. Given where we are right now, do you think that still holds? And perhaps you could characterize this downturn against some of the prior ones that you've been through?

好的。很公平。您在之前的經濟低迷時期也說過的一件事通常是，在觸底之前您已經經歷了3 個季度的下跌，您現在就處於這種情況，儘管9 月份季度的幅度顯然比現在小得多。鑑於我們現在所處的位置，您認為這仍然成立嗎？也許您可以將這次經濟衰退與您之前經歷過的一些經濟衰退進行比較？

Well, there's nothing typical about this downturn. And I don't think that is a good comparison to history. You could say in magnitude, it is on the order of what we have seen in the global financial crisis. I think we were down 36% or so at that point in time. We have very limited visibility in today's market conditions. And so it's difficult to say where exactly this is and as I mentioned, we believe we are significantly under-shipping to end demand, but we're unable to provide any kind of forecast or guidance beyond this quarter.

嗯，這次經濟衰退並沒有什麼典型。我不認為這與歷史是一個很好的比較。可以說，從規模上看，它與我們在全球金融危機中看到的程度相當。我認為當時我們的股價下跌了 36% 左右。我們對當今市場狀況的能見度非​​常有限。因此，很難說具體情況在哪裡，正如我所提到的，我們認為我們的出貨量嚴重低於最終需求，但我們無法在本季度之後提供任何類型的預測或指導。

Our next question comes from the line of Christopher Rolland with SIG.

我們的下一個問題來自 Christopher Rolland 與 SIG 的對話。

So around cycle times and lead times, we have found that some of your products, particularly through distribution, they have lead times that are even below your cycle times. I'm assuming your cycle times are something like 4 weeks or 6 weeks, something like that.

因此，圍繞週期時間和交貨時間，我們發現您的某些產品，特別是透過分銷的產品，其交貨時間甚至低於週期時間。我假設您的週期時間約為 4 週或 6 週，類似的時間。

I guess my question is, how long would you expect this dynamic to last? I think this is -- if you do have big inventory corrections like we're going through, you see that phenomenon occasionally, but how long might this last? And when are you expecting lead times to maybe expand again? Obviously, we have some -- an inventory dynamic we're going through here. But maybe talk about that lead times versus cycle times and when you think those might actually rise again?

我想我的問題是，您預計這種動態會持續多久？我認為這是——如果你確實像我們正在經歷的那樣進行大規模的庫存調整，你偶爾會看到這種現象，但這種情況會持續多久？您預計交貨時間何時會再次延長？顯然，我們正在經歷一些庫存動態。但也許可以談談交貨時間與週期時間，以及您何時認為這些時間實際上可能會再次上升？

Chris, let me just define 2 terms and then we'll walk through it. So cycle time is the time it takes from when you begin with raw material and get to finished goods. That cycle time for semiconductors, depending on which product and what process can be anywhere from 3 to 5 months, sometimes longer, depending on the specialty. So that's the typical production cycle time. We have always been able to manage lead times, which we define as from a -- when a customer places an order on us, when can we ship the product to them, to be a lot shorter than that.

克里斯，讓我定義兩個術語，然後我們將逐步介紹它。因此，週期時間是從原料開始到成品所花費的時間。半導體的周期時間取決於產品和工藝，可能為 3 到 5 個月，有時更長，具體取決於專業。這就是典型的生產週期時間。我們一直能夠管理交貨時間，我們將交貨時間定義為從客戶向我們下訂單到何時可以將產品運送給他們，比這要短得多。

And historically pre-pandemic. That was 4 to 8 weeks, was not an unusual number for 80%, 90% of our line items. Where we have come back to is where those lead times are on average where a customer places an order, they can get in less than 8 weeks. And in some cases, if we have it in finished goods, they can get it much sooner than that as well. So I don't have a good view of when do lead times go back out. And I'm not sure that's a good thing. I think we have to, obviously, work to manage the supply and demand consistent with where demand is going.

歷史上是大流行前的。那是 4 到 8 週，對於我們 80%、90% 的訂單項目來說，這並不是一個不尋常的數字。我們回到了客戶下訂單的平均交貨時間，他們可以在不到 8 週的時間內收到貨。在某些情況下，如果我們將其包含在成品中，他們也可以比這更快地獲得它。所以我不太清楚交貨時間什麼時候會恢復。我不確定這是一件好事。顯然，我認為我們必須努力根據需求的走向來管理供需。

But for years, we ran in that 4 to 8 weeks as a reasonably stable lead time outside of any major increases or decreases in demand in the marketplace. And right now, we think we're going to be at low lead times for quite some time. We have inventory that is high, and we'll be growing into the March quarter. And we're going to position that inventory to be able to take advantage of orders that come in with short cycles because visibility is low, and we need to be able to position and take that as quickly as it comes in. So all of our systems are geared towards having shorter lead times and being able to take orders of the -- that are placed with short lead times, as quickly as we can.

但多年來，除了市場需求大幅增加或減少之外，我們將這 4 到 8 週視為相當穩定的交貨時間。現在，我們認為我們將在相當長的一段時間內處於較低的交貨時間。我們的庫存很高，並且我們將在三月季度繼續成長。我們將定位庫存，以便能夠利用周期短的訂單，因為可見性較低，我們需要能夠在訂單到達時盡快定位和接收訂單。因此，我們所有的系統旨在縮短交貨時間，並能夠盡快接受交貨時間短的訂單。

Maybe just one thing. I think, Chris, maybe what you were getting at is when we have product that is staged in die bank, so it's through the wafer fab, that in many cases, we can turn that through assembly and test in the 4 to 6 weeks that you're talking about. And so if that's the case, if it's in die bank, that would be the case. But we've got finished goods today, we're staging the products that are high runners in die banks so our lead times are quite short across the board.

也許只是一件事。我想，克里斯，也許你的意思是，當我們有在晶片庫中上演的產品時，所以它是通過晶圓廠進行的，在很多情況下，我們可以在4 到6 週內通過組裝和測試來實現它你說的是。所以如果是這樣的話，如果它在銀行里，那就是這樣。但我們今天已經有了成品，我們正在將那些在模具庫中表現出色的產品進行展示，因此我們的交貨時間全面縮短。

There were some good stuff there. Eric, while I have you, gross margin, just for kind of simplicity sake, my model is roughly like 300 basis points below for next quarter where I was previously. I don't know if you can kind of walk us through that, what's mix versus under-utilization versus inventory write-down? It sounds like pricing is not an issue here. like-for-like, but would love to know how those kind of various things contribute.

那裡有一些好東西。艾瑞克（Eric），雖然我有你的毛利率，但為了簡單起見，我的模型大約比我之前的下個季度低了 300 個基點。我不知道您是否可以向我們介紹一下，混合、利用率不足和庫存減記是什麼？聽起來定價在這裡不是問題。類似的，但很想知道這些不同的事情是如何做出貢獻的。

Yes. So I would say the biggest change quarter-to-quarter is going to be in the factory utilization, and that's a combination of the continued attrition and lower production rates on a steady-state weekly basis, and then we're having these 2 weeks shutdown on top of that. And what we're having time off in some of our back-end factories too, which is larger than the previous quarter. So all those things impacted, I'd say, the inventory reserve piece is a part of it, but we had relatively significant charges last quarter on that, and I wouldn't expect those to be significantly more this quarter. They'll probably be larger, but the biggest piece is going to be what we're doing on utilization.

是的。因此，我想說，季度與季度之間最大的變化將是工廠利用率，這是持續的人員流失和穩定的每週生產力下降的結合，然後我們將度過這兩週最重要的是關閉。我們的一些後端工廠也有休假，比上一季多。因此，所有這些因素都會產生影響，我想說，庫存儲備部分是其中的一部分，但我們上個季度對此產生了相對較大的費用，我預計本季度這些費用不會顯著增加。它們可能會更大，但最大的部分將是我們在利用率方面所做的事情。

Our next question comes from the line of Gary Mobley with Wells Fargo.

我們的下一個問題來自富國銀行的加里‧莫布里 (Gary Mobley)。

Looking at the March quarter guidance, that's basically a peak to trough in revenue terms of more than 40%, all within the same fiscal year. And so clearly, the rate of the decay has been extreme -- and I'm calling on your experience here, given that you've all been through a lot of cycles in the past and you hinted to in your prepared remarks, maybe some overcorrection on your customer's part in terms of inventory depletion. So calling on your experience, how would you say the slope of the recovery may look given your lead times? Is it a gradual one? Or are we going to see just sharper rebound as we saw in terms of this correction?

從 3 月季度指導來看，這基本上是收入從高峰到低谷的 40% 以上，而且全部發生在同一財年。很明顯，衰退的速度是極端的——我在這裡呼籲你們的經驗，因為你們過去都經歷過很多周期，而且你們在準備好的發言中暗示過，也許有些客戶在庫存消耗方面的修正過度。因此，根據您的經驗，考慮到您的交貨時間，您認為復甦的斜率可能會如何？是循序漸進的嗎？或者我們會看到像我們在這次調整中看到的那樣更劇烈的反彈嗎？

So I'll start and Ganesh or Steve can add to this. I think it is unknown at this point in time, right? We have limited backlog visibility as we look out in time, which you're asking about beyond this quarter, lead times are really short and customers are sitting on a certain level of inventory beyond what they think is necessary for their business today. So until we start getting short-term orders kind of at our lead times and we see that backlog start to build. It's hard for us to really imagine what it's going to do.

我先開始，Ganesh 或 Steve 可以補充。我認為目前還未知，對嗎？當我們及時觀察時，我們的積壓可見度有限，您在本季度之後會詢問這一點，交貨時間非常短，客戶的庫存水平超出了他們認為對其當前業務所需的水平。因此，直到我們開始在交貨時間內收到短期訂單，我們就會看到積壓訂單開始增加。我們很難真正想像它會做什麼。

As Ganesh said before, clearly in this quarter with our revenue guidance, we are shipping below what the end consumption for our products are, and we think that's relatively material. But giving you any guidance in terms of what the slope of the recovery is, I think, it's hard for us to do at this point.

正如加內什之前所說，顯然在本季度我們的收入指引中，我們的出貨量低於我們產品的最終消耗量，我們認為這是相對重要的。但我認為，目前我們很難就復甦的斜率向您提供任何指導。

I think the recovery has many components to it, right? One is just if you assume business is flat and as the inventory drains, people will, at some point, just have to order enough to get back to flat consumption. Then there is also what does the macro do and what happens in actual consumption over time. And that depends on many things, where is GDP at, what our interest rate is doing, et cetera. And I think those are all variables which you can't, at least we're not able to plug in and say, this is out the next 3, 4 quarters, the shape of the recovery will look. And we don't have the visibility and backlog to give us any insight into that today.

我認為復甦有很多組成部分，對嗎？其一是，如果您假設業務持平，並且隨著庫存耗盡，人們將在某個時候只需要訂購足夠的訂單即可恢復消費持平。然後還有巨集的作用以及隨著時間的推移實際消耗會發生什麼。這取決於許多因素，例如 GDP 的水平、我們的利率水平等等。我認為這些都是你無法改變的變量，至少我們無法插入並說，這是未來三、四個季度，復甦的形狀將會出現。今天我們沒有可見性和積壓的數據來深入了解這一點。

I know I was asking us for a lot there, but I appreciate the color. So it sounds like your OpEx management is more so variable versus structural. And you've obviously done this in the past. In this recent round when you've asked employees to take a 10% pay reduction, what was communicated to them in terms of when that might be recouped based on some sort of revenue or performance metrics?

我知道我在那裡向我們提出了很多要求，但我很欣賞它的顏色。因此，聽起來您的營運支出管理更多是可變的，而不是結構化的。顯然你過去已經這樣做過。在最近一輪中，當您要求員工減薪 10% 時，就何時可以根據某種收入或績效指標收回減薪向他們傳達了什麼訊息？

I have not been able to speak to the entire Microchip community until I do that on Monday morning. I did write them all a message today after the market closed and before this call to let them know what we were doing. So those are details that I would prefer to first speak to our employees and give them all of that. But this is not new to us. We have done this multiple times. Our culture allows people to understand how shared sacrifice and shared rewards go hand in hand and how that creates excellent outcomes for the company and for the individuals in the process of doing that. And so I'm confident that our team, especially the team that has been through many cycles with us, will see it, will help us with it and pull everybody else along as well.

直到週一早上我才能夠與整個 Microchip 社群進行對話。今天市場收盤後和這次電話會議之前，我確實給他們所有人寫了一條訊息，讓他們知道我們在做什麼。因此，我希望首先與我們的員工討論這些細節，並向他們提供所有這些資訊。但這對我們來說並不新鮮。我們已經這樣做過很多次了。我們的文化讓人們了解共同犧牲和共同回報如何齊頭並進，以及如何在這過程中為公司和個人創造卓越的成果。因此，我相信我們的團隊，尤其是與我們一起經歷了許多周期的團隊，將會看到這一點，將幫助我們實現這一目標，並帶動其他所有人一起前進。

Our next question comes from the line of Vivek Arya with Bank of America.

我們的下一個問題來自 Vivek Arya 與美國銀行的聯繫。

Ganesh, I appreciate you're not going beyond the quarter, but I still wanted to get some help in getting some directional sense of whether June could be flat, up or down because you do have some shutdowns in June, right? You are already planning for that. So that's not a great data point. But then June tends to also be seasonally up for you historically. So just give us some more color, what is true demand right now? And if you were sitting in our shoes, would you think about June being kind of up, down, flat, even if you don't have an absolute sense of where June might check out?

Ganesh，我很高興您不會超出本季度，但我仍然想獲得一些幫助，以了解 6 月是否會持平、上升或下降，因為您在 6 月確實有一些停工，對嗎？你已經在計劃了。所以這不是一個很好的數據點。但從歷史上看，六月對你來說往往也是季節性的。那請給我們更多的色彩，現在真正的需求是什麼？如果你站在我們的角度，你會認為 June 是向上、向下、平坦的，即使你對 June 可能會走向何方沒有絕對的感覺？

I think the shutdowns that we communicated based on the days of inventory that we closed December and what we have indicated are going to be at the end of March are required steps we need to take. Those are not necessarily trying to provide an indication of where the June business is going to be at. In fact, the real answer is I don't know. And I think the world is not falling apart. So we know that consumption is taking place. We know that inventory needs to drain.

我認為我們根據 12 月關閉的庫存天數傳達的關閉以及我們表示將在 3 月底關閉的情況是我們需要採取的必要步驟。這些不一定是試圖提供 6 月業務狀況的指示。事實上，真正的答案是我不知道。我認為世界並沒有崩潰。所以我們知道消費正在發生。我們知道庫存需要消耗。

We're trying to gauge between the environment in the market, the inventory at multiple levels and how all that will drain. We know this business will come back, right? It has -- in every previous cycle, done that. But I think what you're asking for is a level of precision, which we don't have any empirical data to be able to say, yes, this is what's going to happen and when.

我們正在嘗試衡量市場環境、多個層面的庫存以及所有這些將如何消耗。我們知道這項業務會回來，對嗎？在之前的每個週期中，它都做到了這一點。但我認為你要求的是一定程度的精確度，我們沒有任何經驗數據可以說，是的，這就是將要發生的事情以及何時發生。

And then my bigger question, Ganesh, is that how would you contrast your strategy of maintaining kind of a hybrid manufacturing model, right, where lead times can suddenly get extended, but your CapEx is low, your profitability is high? To say your other U.S. competitor who has high CapEx, they can usually keep lead times very low, and they have managed to avoid, right, these kind of very, very large swings. How would you kind of contrast the 2 strategies? And do you think what you're going through could make you change your strategy about maybe having higher CapEx in the future and always trying to maintain lower lead times?

然後我更大的問題，Ganesh，是你如何對比維持混合製造模式的策略，對吧，交貨時間可能突然延長，但你的資本支出很低，你的盈利能力很高？比如說你的另一個擁有高資本支出的美國競爭對手，他們通常可以將交貨時間保持在非常低的水平，並且他們已經成功地避免了這種非常非常大的波動。您如何對比這兩種策略？您認為您正在經歷的事情是否會讓您改變您的策略，即未來可能擁有更高的資本支出並始終努力保持較短的交付時間？

Again, there are many people that fit into what you described. I'll describe our strategy, which is we run inside of Microchip, the products that we know how to run cost effectively and consistently within our manufacturing footprint. That includes both our front-end as well as our back-end. We have grown that front-end footprint over time, but also our foundry products have grown over time. And that balance has been roughly 40% plus or minus internal, 60% external. We don't try to guide where that percentage needs to go. The market demand drives is it higher or lower from there.

同樣，有很多人符合您所描述的情況。我將描述我們的策略，即我們在 Microchip 內部運行，我們知道如何在我們的製造足跡內以成本有效且一致的方式運行這些產品。這包括我們的前端和後端。隨著時間的推移，我們的前端足跡不斷擴大，而且我們的代工產品也隨著時間的推移而成長。這種平衡大約是內部正負 40%，外部正負 60%。我們不會嘗試指導該百分比的走向。市場需求驅動它是更高還是更低。

But we know what products and technologies make sense within our footprint and what makes sense to drive with our partners. And that's the way we think about it. And in the aggregate, barring any near-term changes like we've had last quarter and this quarter, it's been a very successful strategy in terms of how gross margins over time have accreted and how over many cycles, we've got higher highs and higher lows. So we're very happy with the strategy we have, and I leave others with their strategy to speak for themselves.

但我們知道哪些產品和技術對我們的足跡有意義，以及哪些產品和技術對我們的合作夥伴有意義。這就是我們的想法。總的來說，除非出現像上個季度和本季度那樣的任何近期變化，否則就毛利率如何隨著時間的推移而增加以及在多個週期中如何達到更高的高點而言，這是一個非常成功的策略和更高的低點。所以我們對我們的策略非常滿意，我讓其他人用他們的策略來為自己說話。

Our next question comes from the line of Tore Svanberg with Stifel.

我們的下一個問題來自 Tore Svanberg 和 Stifel。

So my first question is on the PSP program. It was obviously put in place to try and avoid volatility and doesn't look like that happened. Maybe it was just the nature of the pandemic cycle, I don't know. But why do you think the PSP program did not sort of buffer the volatility that we're actually seeing?

我的第一個問題是關於PSP 程式的。顯然，這樣做是為了避免波動，但看起來並沒有發生這種情況。我不知道，也許這只是大流行週期的本質。但您認為為什麼 PSP 計劃沒有緩衝我們實際看到的波動性？

It's a great question. Although the PSP program was aimed at discouraging speculative demand by making orders NCNR and then giving us confidence to make investments on it. I think there was a combination of very strong OEM market demand, our customers and their customers and what they were seeing. They were persistent shortages over a long period of time and very long lead times. And I think when you put all that together, OEM customers ended up placing more backlog because they believe their business was a lot stronger than they thought, and they were trying to place orders for a lot longer than they normally would in that.

這是一個很好的問題。儘管 PSP 計劃的目的是透過使訂單 NCNR 來抑制投機需求，然後讓我們有信心對其進行投資。我認為這是非常強勁的 OEM 市場需求、我們的客戶和他們的客戶以及他們所看到的東西結合在一起的。它們在很長一段時間內持續短缺，交貨時間很長。我認為，當你把所有這些放在一起時，OEM 客戶最終會積壓更多訂單，因為他們相信自己的業務比他們想像的要強大得多，並且他們試圖下訂單的時間比通常情況下要長得多。

So that's the way it, in our perspective, played out. How it did phenomenally for them in the 2021, 2022 timeframe where those that were in the program, we were able to keep their business going, take market share away and driving. But at the end of the day, the longer lead times get the further out someone is trying to predict where their business is going to be. And I think that's the issue at some point in time is you don't know what your demand is with any kind of high confidence, 1 year or 18 months out, yet people were placing those orders as noncancelable, thinking that the demand was strong and assuming that the risk was a good risk for them to take.

從我們的角度來看，這就是事情的發展方式。在 2021 年和 2022 年的時間範圍內，我們能夠讓參與該計劃的人保持業務持續發展，奪取市場份額並推動發展。但歸根結底，交付週期越長，人們試圖預測其業務發展方向的時間就越長。我認為，在某個時間點，問題是你不知道你的需求是什麼，有任何高度的信心，1年或18個月後，但人們將這些訂單視為不可取消，認為需求很強勁並假設這個風險對他們來說是一個很好的風險。

No, that's very fair. And then as my follow-up, I recognize that all end markets are going to be weak in the March quarter. But any sort of relative comment on the end markets? Anything holding up a little bit relatively better than others?

不，這很公平。然後，作為我的後續行動，我認識到所有終端市場在三月季度都將疲軟。但對終端市場有什麼相對的評論嗎？有什麼比其他方面相對更好的嗎？

Yes. I would say if you look at our aerospace and defense market, there are strengths in those. The commercial aviation remains strong. The defense remains strong. Space has always been very lumpy in where it's at. Our portion of the data center, which is around AI platforms, those are doing extremely well. It's not big enough to move the Microchip needle overall, but it's certainly a pocket of strength that we see as well.

是的。我想說，如果你看看我們的航空航太和國防市場，你會發現這些市場都有優勢。商業航空依然強勁。防守依然強勁。太空在其所在的地方總是非常凹凸不平。我們的資料中心部分圍繞著人工智慧平台，這些都表現得非常好。它的規模還不足以推動 Microchip 整體發展，但我們也看到了它的強大。

Our next question comes from the line of Chris Danely with Citi.

我們的下一個問題來自花旗銀行的 Chris Danely。

I guess just a little clarification on the decline here. Any comments on just your sense of end demand, maybe talk about the end markets that have been the worst? And then also, given your revenue decline is notably more than some of your peers, why do you think it's hitting you more than some of the competition?

我想這裡只是對下降進行一些澄清。關於您對最終需求的感覺有何評論，也許談談最糟糕的終端市場？另外，鑑於您的收入下降幅度明顯超過一些同行，為什麼您認為這對您的打擊比某些競爭對手更大？

Sorry, what was the last part of your question? Why do you think what?

抱歉，您問題的最後一部分是什麼？為什麼你覺得什麼？

Why is your revenue declining much more than some of your competitors?

為什麼您的營收下降幅度比某些競爭對手大得多？

Okay. So on your second question, as I said, if you look at it over a year's period of time, you're going to find that the fiscal '24 at the midpoint of our guidance is about 9.5% down from fiscal '23. I don't think that's outside of where the normal is at. Within a 2-quarter period of time, absolutely. We are correcting and correcting at a faster rate than where we were at. But I think we have to look at area under the curve for revenue rather than just peak to trough alone in terms of what you're going to look at.

好的。因此，關於你的第二個問題，正如我所說，如果你觀察一年的時間，你會發現 24 財年我們指導方針的中點比 23 財年下降了約 9.5%。我不認為這超出了正常範圍。絕對是在兩個季度的時間內。我們正在以比原來更快的速度糾正和糾正。但我認為我們必須考慮收入曲線下的區域，而不是僅根據您要查看的內容來考慮從峰值到谷的情況。

In terms of end markets, we -- sorry, was there a question?

就終端市場而言，我們——抱歉，有問題嗎？

No, I said thanks.

不，我說了謝謝。

Okay. In terms of end markets, as I mentioned, it's weak across the board. We don't track at a quarterly level kind of how they're all moving. But we have enough anecdotal data. I think we were among the earliest people as early as 2 or 3 quarters ago saying automotive is starting to weaken and roll over and -- industrial did and data center had been. So we have seen this for some time. And at this point in time, I would say that they're all week. There might be individual customers who are stronger or weaker than what -- on average that we see, but nothing to write home about, other than the 2 exceptions I spoke about, which is Aerospace and Defense is still holding up. And our portion of the AI servers that we provide solutions to.

好的。就終端市場而言，正如我所提到的，它全面疲軟。我們不會按季度追蹤它們的動向。但我們有足夠的軼事數據。我認為，早在兩三個季度前，我們就是最早說汽車業開始疲軟和翻車的人之一——工業和數據中心都是如此。我們已經看到這種情況有一段時間了。在這個時間點上，我想說他們都在一週。可能有個別客戶比我們所看到的平均水平更強或更弱，但除了我談到的兩個例外（航空航天和國防仍然堅挺）之外，沒有什麼值得大書特書的。以及我們提供解決方案的部分人工智慧伺服器。

And then just a quick clarification on the utilization rates. Do you guys anticipate utilization rates declining again in the June quarter from March? Or will they stay flattish from March to June?

然後快速澄清利用率。你們預計六月季度的使用率會比三月再次下降嗎？或者從三月到六月他們會保持穩定嗎？

We don't know yet. We will have to see how kind of the business evolves over the coming months.

我們還不知道。我們必須看看未來幾個月業務的發展。

Our next question comes from the line of Vijay Rakesh with Mizuho.

我們的下一個問題來自 Vijay Rakesh 和 Mizuho 的對話。

I had a quick question. And I was wondering between the CapEx and the funding that Microchip was getting, how much capacity you would be adding on the front-end or the back-end as you look at calendar '24, I guess?

我有一個簡短的問題。我想知道，在資本支出和 Microchip 獲得的資金之間，當你查看日曆 '24 時，你會在前端或後端添加多少容量，我猜？

So our capital expenditures for fiscal '24, we laid out for you, and that's $300 million to $310 million. We have not given a number for next fiscal year. I expect it to be lower than that. We've actually taken in quite a bit of equipment this year that we have not essentially released and placed in service for production purposes. So we've got capital that's paid for and at our facilities that we can deploy as the market returns to a more normalized level, and we need that capacity, but I expect CapEx to be quite low in our fiscal year 2025.

我們為您列出了 24 財年的資本支出，即 3 億至 3.1 億美元。我們尚未給出下一財年的具體數字。我預計它會低於這個數字。實際上，今年我們已經接收了相當多的設備，但我們基本上尚未將這些設備釋放並投入使用以用於生產目的。因此，隨著市場恢復到更正常化的水平，我們可以在我們的設施中部署已支付的資本，並且我們需要這種能力，但我預計 2025 財年的資本支出將相當低。

Vijay, here's how I would think about it from a -- how are we positioned for growth from our capacity. Our initial response as this thing changes is going to be utilizing the inventory that we have built and being able to ship using the inventory we have. Our next response will be around getting our factories to more full utilization. We are under-utilizing them at this point in time.

維傑，這是我的想法——我們如何定位以實現我們的能力成長。隨著事情發生變化，我們最初的反應將是利用我們已經建立的庫存，並能夠使用我們擁有的庫存進行運輸。我們的下一個應對措施將是讓我們的工廠得到更充分的利用。目前我們還沒有充分利用它們。

Our third response would be taking equipment that we have already ordered and received which we will begin to place into production. And then finally, into adding more equipment or bottleneck equipment as the case might be. So we believe we have plenty of firepower for being able to respond to an upcycle through a combination of those 4 things.

我們的第三個回應是採取我們已經訂購並收到的設備，我們將開始投入生產。最後，根據情況添加更多設備或瓶頸設備。因此，我們相信我們有足夠的火力能夠透過這四件事的結合來應對升級週期。

Got it. And if you were to combine all of that, you mentioned your channel [disty] inventory was at 37 days versus an optimal high 20s, I guess that you mentioned before. And your in-house inventory, DOI probably goes up a little bit as you go into March. Any thoughts on when you actually see that starting to realign or start to stabilize or start to come down? Is that more of a second half? When do you actually see that happening, I guess?

知道了。如果你把所有這些結合起來，你提到你的頻道 [disty] 庫存是 37 天，而不是最佳的高 20 天，我想你之前提到過。進入 3 月份，您的內部庫存 DOI 可能會略有上升。當你真正看到這種情況開始重新調整、開始穩定或開始下降時，你有什麼想法嗎？下半場還多嗎？我猜你什麼時候真正看到這種情況發生？

If I had a better picture on the demand environment, I could give you a better answer. So what we're doing is we're taking action on the things we can control, which is our internal capacity, and those are the shutdown days, the lowering of the utilization factors and all that other stuff that we're doing. And that is all in anticipation that at some point, the market will return, and it will reverse cycle at that point in time, first, by us producing less, which we're taking steps for; and second, by the market consuming more, which is what is unknown.

如果我對需求環境有更好的了解，我可以給你更好的答案。因此，我們正在做的是，我們正在對我們可以控制的事情採取行動，這就是我們的內部產能，這些是停工日、降低利用率以及我們正在做的所有其他事情。這一切都是基於預期，在某個時候，市場將會回歸，並且在那個時間點它將逆轉週期，首先，我們的產量減少，我們正在採取措施；第二，市場消費較多，這是未知的。

Got it. And last question on the margin trajectory for March quarter. Did you say that all of it was because of utilization and -- should we expect that under-utilization to continue into June? Or how do you see that? Or do you expect utilization to pick back up again?

知道了。最後一個問題是關於三月季度的利潤軌跡。您是否說過這一切都是因為利用率造成的？我們是否應該預期利用率不足會持續到 6 月？或者你怎麼看？或者您預計利用率會再次回升嗎？

So we didn't say it was all of it. There's a large portion of the change that is utilization driven. There's always product mix and inventory reserves and other things that impact that. I think it will be probably difficult for capacity utilization to increase in the June quarter just because we are running on an attrition basis, and that is continuing each week as some people leave, and then it just takes a while to ramp that back up even if the market dynamics are better. And so that's something that we'll watch very closely and make sure that we're making the appropriate investments in people, but it tends to be like moving a battleship down the ocean, it turns relatively slow.

所以我們並沒有說這就是全部。很大一部分變化是由利用率驅動的。總有產品組合和庫存儲備以及其他因素會影響這一點。我認為，在六月季度，產能利用率可能很難增加，因為我們是在自然損耗的基礎上運行的，而且隨著一些人離開，這種情況每週都會持續，然後只需要一段時間就可以恢復，甚至如果市場動態更好的話。因此，我們將非常密切地關注這一點，並確保我們對人員進行適當的投資，但這往往就像在海洋中移動一艘戰艦，它的速度相對較慢。

Our next question comes from the line of Joe Moore with Morgan Stanley.

我們的下一個問題來自喬摩爾與摩根士丹利的對話。

Great. I guess I wonder if you could address a couple of the bear cases that I hear. One, you've sort of talked about PSP and what it accomplished and what it didn't. Do you think that having more flexibility about customer cancellations when they started to slow down, would that have sort of made the issue less bad now? Is the PSP part of the reason why the hole is a little bit deeper, maybe?

偉大的。我想我想知道你是否可以解決我聽到的一些悲觀案例。第一，您談到了 PSP 及其所取得的成就和未取得的成就。您認為，當客戶取消訂單的速度開始放緩時，擁有更大的彈性，是否會讓現在的問題變得不那麼嚴重？也許 PSP 是這個洞更深一點的原因之一？

Perhaps. And I think, again, in retrospect, as a Monday morning quarterback, I know exactly what I would have done. But we were under for many, many, many quarters and even as recently as last March and June quarters, right, there were CEO-level calls that we're pushing and driving for getting more product than we had. If you remember, we would provide the statistic about how much of unsupported, which is what customers wanted and we couldn't ship was there.

也許。我想，回想起來，作為一個週一早上的四分衛，我確切地知道我會做什麼。但我們已經陷入了很多很多個季度，甚至最近的三月和六月季度，對，有首席執行官級別的呼籲，我們正在推動和推動獲得比我們擁有的更多的產品。如果您還記得的話，我們會提供有關有多少不受支援的統計數據，即客戶想要但我們無法發貨的數量。

So in the throes of all of that, where there parts of it where perhaps we should have taken our foot off the accelerator perhaps. But it isn't something that was knowable as we went through it. And if we ever were to do a PSP program again, those are some lessons learned we'll take, and we'll look at how would we adjust the program so that the intended outcomes are available and as many of the unintended outcomes are avoided.

因此，在這一切的痛苦之中，我們也許應該把腳從油門上移開。但這並不是我們經歷過的事。如果我們再次進行 PSP 計劃，這些是我們將學到的一些經驗教訓，我們將研究如何調整該計劃，以便達到預期結果並避免許多意外結果。

Great. And then the other kind of negative question that I get, China obviously building significant amount of trailing edge capacity. Can you talk about what types -- I don't think you see a lot of direct competition from sovereign China today, but can you talk about how much of your business might see competition from that direction over the next few years? I think you've talked about that being single digits, but maybe if you could just update us on your thinking there.

偉大的。然後我得到的另一個負面問題是，中國顯然正在建造大量的後緣產能。您能談談哪些類型嗎？我認為您今天沒有看到很多來自主權中國的直接競爭，但您能否談談未來幾年您的企業有多少可能會面臨來自該方向的競爭？我想你已經談到這個數字是個位數，但也許你可以告訴我們你的最新想法。

Sure. So Mainland China today is about 20-ish percent of our revenue. About half of it, we estimate is designed elsewhere and just happens to be manufactured in Mainland China. And some of that is, frankly, moving out of China as people diversify other things. So it doesn't -- the point of design is outside of China, and we're comfortable with that. So the other 10% of our business that's in China that is designed in China has another half of that, which is very complex designs, and these are not the ones that are easy to dislodge and would have a significant amount of knowledge about systems, the software that goes with it, the hardware and software interaction and all that.

當然。所以今天中國大陸約占我們收入的 20% 左右。我們估計其中大約一半是在其他地方設計的，而恰好是在中國大陸製造的。坦白說，其中一些是隨著人們在其他方面的多元化而撤離中國。所以事實並非如此——設計的重點是在中國之外，我們對此感到滿意。因此，我們在中國的另外 10% 的業務是在中國設計的，還有一半是非常複雜的設計，這些設計不容易被驅逐，並且需要大量的系統知識，與之配套的軟體、硬體和軟體交互等等。

So that means about 5% of our business, about 1/4 of the business in Mainland China that is our more broad-based Microcontrollers and Analog and those type of products. And there, fragmentation is our friend. It is a very, very fragmented market. Any one opportunity is a small percentage of revenue, and it is not easy to go to place. But theoretically, you could say if somebody had an identical offering. And by the way, a lot of that business is not just about having silicon. It's about having silicon, having tools, having design guides, having software that we make available. There's a lot of help and self-help that we provide for our customers as well that is there.

因此，這意味著我們業務的 5% 左右，即中國大陸業務的 1/4 左右，即我們更廣泛的微控制器和模擬產品以及此類產品。在那裡，碎片化是我們的朋友。這是一個非常非常分散的市場。任何一個機會都只佔收入的一小部分，要獲得位置並不容易。但從理論上講，你可以說是否有人提供了相同的產品。順便說一句，很多業務不僅與矽有關。這涉及到擁有晶片、工具、設計指南和我們提供的軟體。我們也為客戶提供許多幫助和自助。

So yes, there is more going on in China with trailing edge, both technologies and capacity. And we will pay attention, and we will, through our product line and innovation, cost reduction be continuing to work to go head-to-head against that. But it's the portion of the business that you might think about is more broad-based where they would come after that business is less than 5% and is very, very fragmented and difficult to get at. Does that help?

所以，是的，中國在技術和產能方面都處於領先地位。我們會關注，我們將透過我們的產品線和創新，繼續努力降低成本，以對抗這一點。但你可能會認為這部分業務的基礎更為廣泛，在該業務佔比低於 5% 且非常非常分散且難以獲取的情況下，他們會來。這樣有幫助嗎？

Yes, so much.

是的，就這麼多。

Our next question comes from the line of Joshua Buchalter with TD Cowen.

我們的下一個問題來自 Joshua Buchalter 和 TD Cowen 的對話。

I wanted to ask about utilization rates and sort of the strategic decisions you're making to shut down the fabs for 2 weeks in March and June and also keep utilization rates lower over those 2 quarters. I guess, why start and stop the fabs but also why not just take the utilization rates much lower in the March quarter then see where things play out and given you're trying to get inventory down, but expectations are that it will still go up in March?

我想詢問利用率以及您為在 3 月和 6 月關閉晶圓廠兩週並在這兩個季度保持較低利用率而做出的戰略決策。我想，為什麼要啟動和停止晶圓廠，為什麼不把三月季度的利用率大幅降低，然後看看情況如何，考慮到你正試圖降低庫存，但預期庫存仍會上升三月？

It's a balanced decision that we had to think through and make. But as inventories climbed, there is a point at which the pain gets high enough. And as we looked at that, we felt on balance and we don't know what other supply-demand dynamics may take place. But on balance, this is a way in which we could navigate to different scenarios that might play themselves out.

這是一個我們必須經過深思熟慮並做出的平衡決定。但隨著庫存攀升，到了某個點，痛苦就會變得夠高。當我們看到這一點時，我們感到平衡，我們不知道可能會發生什麼其他供需動態。但總的來說，這是我們可以導航到可能自行發揮作用的不同場景的一種方式。

And in the meanwhile, the inventory is high enough that we're comfortable that if the recovery would accelerate, we're in a good place. And we are -- if the recovery were something different, that were ahead of us and we have options on what we can do in the June quarter. But right now, we need to prepare for where March and June to the best of our ability to call it is going to be, and that includes the running at a lower utilization and taking a 2-week shutdown in the -- in our fabs in each of the 2 quarters.

同時，庫存足夠高，我們確信如果復甦加速，我們就處於有利地位。我們是 - 如果復甦有所不同，那就在我們前面，我們可以選擇在六月季度可以做什麼。但現在，我們需要盡最大努力為 3 月和 6 月的情況做好準備，其中包括以較低的利用率運行以及在我們的晶圓廠中關閉兩週在 2 個季度的每個季度中。

And then as my follow-up, and I know you have a formulaic approach to your capital return program, but you've also in the past talked about opportunistically potentially going above the rates that you've outlined, as we go through this period where you're going through the digestion and free cash flow is depressed versus where it was the last few quarters, any thought to using the balance sheet or returning more than you would have been returned under the formula that you've outlined?

然後，作為我的後續行動，我知道您對資本回報計劃有一個公式化的方法，但您過去也談過，當我們經歷這段時期時，機會主義可能會高於您概述的利率您正在經歷消化過程，自由現金流與過去幾個季度相比受到抑制，是否考慮使用資產負債表或返回比您根據您概述的公式本應返回的更多？

So maybe I'll start. So I mean, we actually have a very healthy cash return this quarter, right? We increased from 77.5% to 82.5%. The adjusted free cash flow in the December quarter was quite high. And even though the dividend is going up again, we are going to have kind of record share buyback in the quarter based on that formula that you spoke to. So we think it's appropriate. We're glad that we're going to be buying back a bunch of shares this quarter. Stephen can ask and give commentary if the Board would think of doing anything different, but I think that program is kind of in place as it is. And if the market changed and the stock price decline significantly, it would be a discussion with the Board.

所以也許我會開始。所以我的意思是，本季我們實際上有非常健康的現金回報，對嗎？我們從 77.5% 增加到 82.5%。 12月季度調整後的自由現金流相當高。儘管股息再次上升，但根據您所說的公式，我們將在本季進行創紀錄的股票回購。所以我們認為這是合適的。我們很高興本季將回購大量股票。史蒂芬可以詢問董事會是否會考慮做任何不同的事情並發表評論，但我認為該計劃已經就位。如果市場發生變化，股價大幅下跌，就會與董事會討論。

I think it just came out naturally that our cash flow was extremely healthy last quarter. And with returning 82.5% back to shareholders with dividend increasing, it still creates a record stock buyback in a quarter, record that we have ever done before, $386.8 million. So it's a very, very healthy buyback. If there was not to be the case, where the cash flow wasn't as healthy as last quarter, then the question would be valid, should we do an extraordinary stock buyback this quarter, if the stock were to become weak. But I think we just formulate -- by formula is a very, very healthy amount of cash reserved for stock buyback this quarter.

我認為上個季度我們的現金流非常健康是很自然的事。隨著股息增加，將82.5%的回報返還給股東，它仍然創造了一個季度股票回購的紀錄，這是我們以前做過的記錄，3.868億美元。所以這是一次非常非常健康的回購。如果沒有現金流不如上季那麼健康的情況，那麼問題就成立了，如果股票變得疲軟，我們是否應該在本季進行特別股票回購。但我認為我們只是製定了一個非常非常健康的現金儲備，用於本季的股票回購。

For the last many quarters, we've been steady as she goes. I think having a program that doesn't try to have quarter-to-quarter major variations has been a way in which to establish consistency of the capital return program. And I think Steve and myself and the rest of the Board see that as a way that we should continue with this thing.

在過去的幾個季度裡，我們一直保持穩定。我認為制定一個不試圖出現季度與季度重大變化的計劃是建立資本回報計劃一致性的一種方式。我認為史蒂夫和我本人以及董事會其他成員都認為這是我們應該繼續這件事的一種方式。

Our next question comes from the line of Quinn Bolton with Needham.

我們的下一個問題來自奎因·博爾頓和李約瑟的對話。

I guess first one is for Eric. You talked about the lower utilization, you're shutting down factories for 2 weeks in both March and June. I'm just kind of wondering if you could walk us through the accounting. How much of that hits you in the current period? How much of those lower utilization charges flow-through inventory? And given how much inventory you have could be something that hits gross margin for a longer period of time as that flows through inventory and then the income statement? Then I've got a quick follow-up.

我想第一個是給艾瑞克的。您談到了利用率較低，您將在三月和六月關閉工廠兩週。我只是想知道你能否指導我們完成會計工作。在當前時期，其中有多少對您造成了影響？這些較低的使用費用中有多少是流通庫存？考慮到您有多少庫存，當它流經庫存，然後流向損益表時，可能會在較長一段時間內影響毛利率？然後我會進行快速跟進。

Yes. So our 3 large wafer fabs will even without the shutdowns, with the attrition that we've had, be running below what we would call normal utilization. And so these 2-week shutdowns will be period costs in the quarter and not capitalized to inventory. Now we are running at lower utilization rates than we were at the peak. So the costs that are being capitalized to inventory on a per unit basis are higher than what they were when we were running at full board. But I think that answers your question. Essentially, the 2-week shutdowns will be an impact to the current period and not capitalized into inventory.

是的。因此，即使沒有關閉，我們的 3 座大型晶圓廠也將在我們所經歷的損耗下運行，低於我們所說的正常利用率。因此，這兩週的停工將成為本季的期間成本，不會資本化為庫存。現在我們的利用率比高峰時低。因此，按單位計入庫存的成本高於我們全包運行時的成本。但我認為這回答了你的問題。本質上，兩週的停產將對本期產生影響，但不會計入庫存。

That's very, very clear. And then I guess just for Ganesh, you mentioned you're ending the PSP program. And so I'm curious, does that just mean you're not signing anyone to new PSP? Does that mean that existing PSPs have now been canceled and folks have greater rights to cancel the existing backlog? Just what happens with the current PSP participants?

這非常非常清楚。然後我想只是針對 Ganesh，您提到您將結束 PSP 計劃。所以我很好奇，這是否意味著你們不會與任何人簽約新的 PSP？這是否意味著現有的 PSP 現已被取消，人們有更大的權利取消現有的積壓訂單？目前的 PSP 參與者會發生什麼事？

The backlog has been shrinking for some time. And really, what we're telling customers is that no more orders get accepted that are PSP orders -- and customers have seen that lead times are short, capacity is available. As I said, the premise of why we kicked it off no longer exists. And therefore, it will come to a natural end here fairly quickly, and we just stopped taking more orders that anyone may -- if they didn't already understand, replacing as PSP.

一段時間以來，積壓訂單一直在減少。實際上，我們要告訴客戶的是，不再接受 PSP 訂單 - 並且客戶已經看到交貨時間很短，產能充足。正如我所說，我們啟動它的前提已經不存在。因此，它很快就會自然結束，我們只是停止接受任何人都可能接受的更多訂單——如果他們還不明白的話，取而代之的是 PSP。

Our next question comes from the line of William Stein with Truist.

我們的下一個問題來自威廉史坦與真理主義者的台詞。

Great. I was also going to ask about PSP and the mechanics of how it rolls out of backlog. But I think you just answered that but I do have a sort of financial question around it. I believe for many of these orders, you were getting prepaid by customers and you might have been likewise prepaying for capacity at foundry. Can you walk through how those roll off of the financial activity of the company and when you expect them to be sort of in the rearview mirror? Is that done -- think by the end of the March quarter?

偉大的。我還想詢問 PSP 以及它如何處理積壓工作的機制。但我想你剛剛回答了這個問題，但我確實有一個財務問題。我相信，對於其中許多訂單，您將收到客戶的預付款，您可能同樣會預付代工廠的產能費用。您能否介紹一下這些因素如何影響公司的財務活動以及您預計它們何時會出現在後視鏡中？到三月季度結束時，這件事完成了嗎？

Okay. So with PSP, those were not typically customer paying cash in advance for any of that. We have certain long-term supply agreements and those had a cash prepayment element to them. Those are still in place. Those aren't -- there's nothing that's happening with those programs related to the cancellation of PSP. So those programs are still in place, and those tend to be 3- to 5-year agreements, most of them 5-year agreements, and those will just kind of run out over time.

好的。因此，對於 PSP，這些客戶通常不會提前支付現金。我們有某些長期供應協議，其中包含現金預付款部分。這些仍然存在。這些都不是——那些與 PSP 取消相關的計劃沒有發生任何事情。因此，這些計劃仍然存在，而且往往是 3 到 5 年的協議，其中大多數是 5 年的協議，這些協議會隨著時間的推移而耗盡。

In some cases where customers' demand is not as strong as originally anticipated. We work with them to find a mutually workable answer on that, maybe to extend the program longer, they can add something else into the program for their volume commitments. But we're not looking to penalize customers with that program.

在某些情況下，客戶的需求並不像最初預期的那麼強烈。我們與他們合作，找到一個共同可行的答案，也許為了延長該計劃的時間，他們可以在計劃中添加其他內容來實現其數量承諾。但我們並不打算透過該計劃來懲罰客戶。

And then on the supplier side, we have had certain prepayments that are made and contractual obligations that we have. That's the same thing there. It's a negotiation with our suppliers, and they're working with us, and I don't see that there's any significant financial disadvantage to us coming from those. But in some cases, we have taken on more inventory, maybe raw materials than what we would have otherwise.

然後在供應商方面，我們已經支付了一定的預付款以及我們所承擔的合約義務。那裡也是同樣的事情。這是與我們的供應商的談判，他們正在與我們合作，我認為這些不會為我們帶來任何重大的財務劣勢。但在某些情況下，我們的庫存（可能是原料）比我們原本擁有的庫存更多。

And our next question will come from the line of Janet Ramkissoon with Quadra Capital.

我們的下一個問題將來自 Quadra Capital 的 Janet Ramkissoon。

Can you guys give us a sense of what's going on with design activity? I know you've seen this real cutback and you're saying that there is really not much of a shortfall in terms of actual demand. Do you have any visibility, less visibility, the same as before? Could you give us some sense on what's going on to give us a better sense of the long-term outlook beyond the June quarter?

可以為我們介紹一下設計活動的進度嗎？我知道您已經看到了這種真正的削減，並且您說實際需求實際上並沒有太大的缺口。你有沒有能見度，能見度較低，跟以前一樣嗎？您能否告訴我們一些正在發生的事情，以便我們更好地了解六月季度之後的長期前景？

Yes. No, thank you. So design activity, as I said in my prepared remarks, is at very high levels. And I think it is because for a number of reasons, customers were in triage for some time as they were dealing with shortages. And as all that went behind, they went back to focusing on innovation. Our products and technologies are enabling innovation in many new fields. And so by many measures, both what we measure internally in terms of design wins and design funnel and all that and what some of our partners who are more design-in focused particularly, the catalog distributors are a good example where much of the seeding activity that takes place are also seeing very high levels of that.

是的。不，謝謝。因此，正如我在準備好的發言中所說，設計活動處於非常高的水平。我認為這是因為由於多種原因，客戶在處理短缺問題時進行了分類一段時間。當這一切都過去後，他們又重新專注於創新。我們的產品和技術正在推動許多新領域的創新。因此，透過許多衡量標準，無論是我們在設計獲勝和設計漏斗方面的內部衡量標準以及所有這些，還是我們的一些更注重設計的合作夥伴，尤其是目錄分銷商，都是一個很好的例子，其中大部分播種活動發生的事情也看到了非常高的水平。

So I think the innovation machine is strong. And the inventory correction will pass and go and ultimately, the long-term growth of the business, as you noted, will come from how this innovation plays out and how the overall role and content that semiconductors will play in that innovation being delivered on end products.

所以我認為創新機器很強大。庫存調整將過去並過去，最終，正如您所指出的，業務的長期成長將來自於這種創新的發揮方式以及半導體將如何在最終交付的創新中發揮整體作用和內容產品。

That's very helpful. And just one last one, if I could sneak it in. Is there any particular geography or a particular segment that you saw sort of a faster rate of decline. I noticed that industrial as a percent of total was down just from the supplemental slides. Is there any color that you could give us in terms of geography or end markets where you saw most of the weakness?

這非常有幫助。最後一個，如果我可以偷偷地講一下。是否有任何特定的地理位置或特定的細分市場，您看到下降速度更快。我注意到工業佔總量的百分比僅在補充幻燈片中有所下降。您能從地理或終端市場方面提供我們一些您認為最疲軟的地方嗎？

I think they're all weak. I don't have a numerical way to give you. I can tell you that China, for example, has been weak for an extended period of time. So back -- going back all the way to 2022 when they had the shutdowns, and it really hasn't recovered from there. But I think we've seen weakness in all geographies and pretty much all end markets with the exception of the Aerospace and Defense and a bit of the data center that was all AI focused.

我認為他們都很弱。我沒有具體的數字可以給你。我可以告訴你，例如中國，在很長一段時間內都是處於弱勢的。回溯到 2022 年，當時他們停工了，但情況確實還沒有從那裡恢復。但我認為我們已經看到了所有地區和幾乎所有終端市場的疲軟，除了航空航天和國防以及一些完全專注於人工智慧的資料中心。

And I believe the end market data that was posted on our website still references last full fiscal year, and that hasn't been updated. That's a process that we do once a year. So we'll take a look at the slide to make sure it's not confusing, but that's what I believe to be the case.

我相信我們網站上發布的終端市場數據仍然參考上一個完整財年，並且尚未更新。這是我們每年進行一次的過程。因此，我們將看一下幻燈片，以確保它不會令人困惑，但我認為情況就是如此。

Okay. Thanks, guys. Appreciate it.

好的。多謝你們。欣賞它。

There are no further questions at this time. And I would like to turn the floor back over to Ganesh Moorthy for closing comments.

目前沒有其他問題。我想將發言權交還給 Ganesh Moorthy 發表最後評論。

Okay. I want to thank everyone for taking the time to be on this call and all of your questions. We look forward to having further discussions during some of the conferences coming up this year. And on that note, we are closing this call.

好的。我要感謝大家抽出時間參加這次電話會議並提出所有問題。我們期待在今年即將舉行的一些會議上進行進一步的討論。就此而言，我們將結束本次電話會議。

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

今天的電話會議到此結束。此時您可以斷開線路。感謝您的參與。