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.

大家好，歡迎參加Microchip 2024財年第三季財務業績電話會議。 （操作員指示）溫馨提示：本次會議正在錄製中。現在，我很高興向大家介紹主持人、財務長Eric Bjornholt先生。謝謝。您可以開始了。

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。謝謝接線生。各位下午好。在本次電話會議中，我們將對公司未來事件或未來財務表現做出預測和其他前瞻性陳述。我們在此提醒您，此類陳述僅為預測，實際事件或結果可能有重大差異。請參閱我們今天的新聞稿以及我們最近向美國證券交易委員會 (SEC) 提交的文件，其中列出了可能影響 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.

今天與我一同出席的嘉賓包括 Microchip 總裁兼執行長 Ganesh Moorthy、Microchip 執行主席 Steve Sanghi 以及 Microchip 投資者關係主管 Sajid Daudi。我將就我們 2024 財年第三季的財務表現發表看法。 Ganesh 隨後將對我們的業績進行評論，並討論當前的業務環境和我們的預期。 Steve 將介紹我們現金回報策略的最新情況。之後，我們將回答投資人和分析師的具體問題。

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.

我們將在新聞稿和本次電話會議中納入各種 GAAP 和非 GAAP 指標的資訊。我們已在公司網站 www.microchip.com 的投資者關係頁面上發布了完整的 GAAP 與非 GAAP 對照表，並在盈利新聞稿中也包含了對照信息，我們相信這些信息在比較 GAAP 和非 GAAP 業績時會對您有所幫助。

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.

我們也在網站上發布了未償債務和槓桿率指標的摘要。現在，我將介紹一些營運業績，包括淨銷售額、毛利率和營運費用。除淨銷售額外，我將以非公認會計準則 (Non-GAAP) 為基礎，該準則基於未計入收購活動、股權激勵以及我們收益新聞稿和網站上對帳表中所述的某些其他調整的影響的費用。

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月當季淨銷售額為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區劃分的淨銷售額摘要，供您參考。以非公認會計準則 (Non-GAAP) 計算，毛利率為63.8%，營運費用為22.5%，營運利潤為41.2%。非公認會計準則淨利為5.927億美元，非公認會計準則每股稀釋收益為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.

依照美國通用會計準則 (GAAP)，12 月季度毛利率為 63.4%。總營運費用為 5.906 億美元，其中包括 1.513 億美元的收購及有形攤銷、110 萬美元的特殊費用、3,880 萬美元的股權激勵費用以及 150 萬美元的其他費用。 GAAP 淨利為 4.192 億美元，每股攤薄收益為 0.77 美元。美國國稅局 (IRS) 的一份通知明確了我們根據合約預提的一家研究服務提供者所產生的成本的處理方式，並於本季度釋放了這些成本，這對 GAAP 稅率產生了積極影響。

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.

12月季度，我們的非公認會計準則現金稅率為13.2%。預計2024財年的非公認會計準則現金稅率略低於14%，此稅率不包含過渡稅以及與前幾財年累計稅款相關的任何稅務審計和解金。 24財年的現金稅率高於23財年的稅率，原因多種多樣，包括可獲得的稅項（例如淨營運虧損和稅收抵免）減少、稅收折舊減少（因為我們預計24財年美國資本支出將減少），以及現行稅法要求將研發費用資本化以用於稅務目的的影響。

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.

我們仍然希望那些要求公司將研發費用資本化的稅收規則能夠被取消或廢除。眾議院昨晚實際上通過了一項旨在實現這一目標的稅收法案，我們將拭​​目以待參議院的進展。如果真的如此，我們預計未來期間微晶片的非公認會計準則稅率將出現約 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月季末，我們的庫存週轉天數為185天，較上一季增加了18天。儘管我們在本季度減少了庫存金額，但由於我們繼續滿足客戶對製造流程尚遠的產品延期交付的要求，我們未能取得預期的進展。在2024年3月季度預期中位數，我們預期庫存金額將小幅上漲，庫存週轉天數將在225至230天之間，原因是收入和銷售成本大幅下降。

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.

我們也持續投資建立庫存，用於那些壽命長、利潤高的產品，這些產品的生產能力正被我們的供應鏈合作夥伴淘汰。截至12月底，這些最後一次採購的庫存相當於10天的庫存量。 12月季度，我們經銷商的庫存為37天，比上一季增加了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，我們的經營活動現金流為8.533億美元。其中，3,040萬美元來自客戶的長期供應保證收入。我們已將這些項目從自由現金流中調整，以確定我們將透過股利和股票回購返還給股東的調整後自由現金流，因為這些供應保證款項將隨著採購承諾的履行而逐步退還。 12月季度，我們的調整後自由現金流為7.634億美元。截至12月31日，我們的合併現金及總投資狀況為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，淨債務在本季減少了4.164億美元。自從我們完成對美高森美的收購以來的22個完整季度中，我們承擔了超過80億美元的債務，目前已償還了其中71億美元的債務，並將繼續將除股息和股票回購之外的絕大部分剩餘現金用於償還債務。

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.

我們12月季的調整後EBITDA為7.962億美元，佔淨銷售額的45.1%。過去12個月的調整後EBITDA為42.6億美元。截至2023年12月31日，我們的淨負債與調整後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5950萬美元。我們預計2024財年的資本支出將在3億至3.1億美元之間，低於上季與投資者分享的3億至3.25億美元，原因是鑑於更具挑戰性的經濟環境，我們推遲了部分資本的投入。

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，在全行業受限的時期，我們的資本投資將繼續增強我們對生產的控制。 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?

現在我將把時間交給 Ganesh，請他對 12 月季度的業務表現以及 3 月季度的預期做出評論。 Ganesh？

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Eric，大家下午好。我們12月季的業績令人失望，低於預期，淨銷售額較上季下降21.7%，較去年同期下降18.6%。非公認會計準則下的毛利率和營業利潤率分別為63.8%和41.2%，低於近期的強勁表現，但儘管收入環比大幅下降，但仍具有一定的韌性。我們合併的非公認會計準則下稀釋每股收益為每股1.08美元，年減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.

12月季度，調整後EBITDA佔淨銷售額的45.1%，持續展現出一定的韌性。因此，我們在12月季度實現了良好的債務削減，儘管調整後EBITDA有所下降，但我們的淨槓桿率小幅下降至1.27倍。然而，我們預期淨槓桿率在未來幾季將有所上升，因為過去12個月的調整後EBITDA會隨著去年同期業績的強勁成長被疲軟的季度所取代而下降。

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.

我們 3 月季度對股東的資本回報將增至 12 月季度調整後自由現金流的 82.5%，我們將繼續朝著在 2025 年 3 月季度之前將 100% 調整後自由現金流返還給股東的目標邁進。

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.

我感謝我們全球團隊的支持、辛勤工作和勤奮，讓我們度過了艱難的環境，並專注於我們能夠控制的事情，從而讓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.

從產品線角度來看，我們12月季的淨銷售額：混合訊號微控制器淨銷售額季減22.3%，年減18.5%。模擬產品淨銷售額季減30.9%，較去年同期下降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.

現在來回顧一下12月季度和整體商業環境。全球所有地區以及我們大部分終端市場都表現疲軟。由於客戶仍在應對日益加劇的商業不確定性、經濟活動放緩以及由此導致的庫存增加的影響，我們的業務表現弱於預期。此外，許多客戶在12月季度末實施了延長停工期，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.

由於業務環境疲軟以及我們面臨的不確定性增加，客戶試圖重新平衡庫存，我們不斷收到推遲或取消積壓訂單的請求。我們能夠推遲或取消積壓訂單，以幫助許多客戶處理這些庫存。

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，再加上交貨時間非常短以及宏觀環境疲軟，我們認為，我們的直接客戶和從我們這裡購買的分銷商、透過我們的分銷商購買的間接客戶以及在某些情況下我們客戶的客戶，都在多個層面上進行庫存去庫存化。

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.

過去兩三年強勁的上行週期促使我們的許多客戶建立庫存，以便在不確定的供應環境中充分利用強勁的業務狀況。客戶用「以防萬一」而不是「及時」來表達他們應對這些情況的方法。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，最終導致庫存水準居高不下。因此，他們尋求取消或重新安排積壓訂單。

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.

關於我們的PSP計劃的最新進展。在經濟週期上升的早期階段，我們推出了PSP計劃，要求在供應極度緊張的環境下，以不可取消的積壓訂單換取優先供應權。該計劃旨在抑制投機性需求，並促成我們與客戶之間就未來需求達成的共同承諾。該計劃在2021年、2022年全年以及2023年初對許多參與的客戶都產生了極佳的效果，支持了他們的業務強勁增長。

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，促成PSP專案的商業挑戰已不再重要，因此我們決定從今天起停止專案。如果商業環境允許，我們可能會在未來某個時候啟動一個類似的項目，當然，該項目必須根據具體情況進行調整。

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.

受宏觀經濟放緩的影響，我們的分銷庫存在12月季度末增至37天，而9月季度末為35天。我們正與分銷合作夥伴攜手，尋求合適的庫存平衡，以滿足其客戶服務需求，管理現金流需求，並為最終業務狀況的改善做好準備。

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計畫仍處於暫停狀態。鑑於經濟下行週期的嚴重程度，我們全球各地的工廠將以較低的利用率運行，並在3月和6月季度分別停工最多兩週，以控制庫存成長。我們預計，即使我們正在為業務的長期成長做準備，2024財年和2025財年的資本投資仍將保持在低位。

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，我們與美國商務部達成了一項初步協議備忘錄，將為Microchip在美國的兩家晶圓廠的現有項目提供1.62億美元的撥款。這些撥款需經晶片和資訊系統辦公室（CHIPS）的盡職調查，並需由Microchip在未來數年內進行產能投資。我們一直在縮短交付週期，平均交付週期已從2023年初的約52週縮短至2023年底的約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，我們認為縮短交貨週期是幫助客戶成功應對市場環境並提高我們積壓訂單品質的最佳途徑，因為它使我們的客戶和Microchip能夠更靈活、更有效率地應對不確定的環境。然而，交貨週期的大幅縮短也導致訂單量下降，並降低了我們業務的短期可預見性。

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.

我們也在採取措施削減開支。除了浮動薪酬計畫（在生產低迷時期自動減薪以及控制正常的可自由支配開支）外，我們還將實施大規模減薪。未受工廠停工影響的團隊成員將減薪10%。與往常一樣，高階主管團隊的減薪幅度最大，將達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.

製造團隊成員停工以及非製造團隊成員減薪，符合我們長期以來秉持的「共擔犧牲，共渡低谷期；共享回報，共渡高峰期」的企業文化。這不僅避免了裁員，也保護了製造能力以及高優先級項目，這些對於我們和客戶的長期發展至關重要。在過去的商業不確定時期，例如2020年的新冠疫情以及2008年和2009年的全球金融危機，我們也採取了類似的措施，我們相信這些措施對業務發展非常有效。

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，我們來看看3月季度的業績指引。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商業環境，我們將繼續支持客戶和通路合作夥伴，幫助他們透過庫存管理來推遲或取消積壓訂單。我們意識到，較短的交貨週期和積壓訂單處理靈活性的提升，將導致客戶大幅削減庫存，這可能會導致一定程度的過度調整。然而，為了應對這些情況，我們目前正繼續與客戶合作，盡可能消化庫存調整的損失。

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.

綜合考慮我們今天電話會議上討論的所有因素，我們預計3月當季淨銷售額將在12.25億美元至14.25億美元之間。此指引區間高於正常水平，以反映宏觀不確定性及其導致的業務低可預見性。我們預期非公認會計準則毛利率將介於銷售額的59%至61.6%之間。我們預計非公認會計準則營運費用將介於銷售額的26.9%至30.7%之間。我們預計非公認會計準則營運利潤將介於銷售額的28.3%至34.7%之間，我們預計非公認會計準則稀釋每股收益將介於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.

客觀來看，儘管過去兩個季度，由於庫存調整幅度超過正常水平，我們的業績大幅下滑。但根據3月季指引中位數，我們預期2024財年全年營收下降幅度約9.5%，比其他產業公司經歷的疲軟態勢，表現尚可。根據3月季度指引中位數，我們預計2024財年全年非公認會計準則營業利潤率將達到43.6%，並將繼續在業內其他公司中保持領先地位。雖然我們尚不清楚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仍然完好無損。

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，我們仍堅信我們的解決方案仍將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關鍵市場大趨勢的關注，將繼續推動強勁的設計贏利勢頭，我們預計這將推動我們長期高於市場的成長。

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

說完這些，讓我把接力棒交給史蒂夫，讓他進一步談談我們向股東的現金回報。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Ganesh，大家下午好。我想進一步更新我們的現金回報策略。董事會宣布，股息較去年同期成長25.7%，達到每股0.45美元。上一季度，我們在公開市場回購了1.146億美元的股票。我們還派發了2.374億美元的股息。因此，總現金回報為3.52億美元。這筆款項佔2023年9月當季實際調整後自由現金流4.543億美元的77.5%。截至2023年12月當季末，我們的淨槓桿比率為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2021年11月我們的債務獲得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等方式向股東返還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.

在目前的三月季度，我們將使用去年十二月季度的調整後自由現金流來確定返還股東的現金金額。調整後的自由現金流不包括我們向客戶收取的3,040萬美元的長期供應保證金淨額。這些款項將在採購承諾履行後退還。十二月季度的調整後自由現金流為7.634億美元。我們計劃將其中的82.5%（即6.298億美元）返還給股東，其中股息預計約為2.43億美元，股票回購預計約為3.868億美元，這將創下我們啟動增強資本回報策略以來股票回購的季度新高。

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調整後股東自由現金流提高500個基點，直到達到100%的調整後股東自由現金流。這將需要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?

接線員，請問您可以調查問題嗎？

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

（操作員指示）我們的第一個問題來自瑞銀的 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，分銷環節的庫存壓力仍然有多大？分銷出貨量下降了約30%，實際上下降幅度更大。然而，你們一些最大的分銷商仍然表示，他們在削減庫存方面遇到了困難。所以，您能否提供一些指導意見？例如，3月份的指導意見是否假設分銷出貨量下降幅度會遠超公司指導意見，就像12月份的情況一樣？

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

我們預計三月季度分銷庫存將會減少。

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。太好了。那麼，艾瑞克，您能談談利用率和一些減記的可能性嗎？我們目前還沒有達到您願意減記的水平，您能談談嗎？

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。我們一直在根據員工流動率來調整我們三家大型工廠的營運。截至去年12月季度，我們並沒有因為這三家工廠的產能不足而收取費用。隨著我們持續進行員工流失，這種情況將在本季得到改變。正如Ganesh之前提到的，我們計劃在這三家大型工廠停工兩週。

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，我們不會公佈具體的利用率，但利用率不足確實會影響我們的業務，也就是本季的毛利率。此外，我們看到需求的變化，庫存仍然很高。根據我們現有的會計政策，我們一直在為庫存儲備提列相對較大的費用。所有這些因素都已計入我們提供給華爾街的利潤率指引中。

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

我們的下一個問題來自高盛的 Toshiya Hari。

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，以及您從客戶流失的角度來看的情況。 Ganesh，您是否看到本季的取消率有任何趨於穩定的跡象，或者與去年12月和9月相比，取消率基本上持平？

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。仍然有客戶尋求幫助。我們做了很多這方面的工作，並將其納入我們的指導方針中。艾瑞克，我不知道您對取消率是否有更好的看法？

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.

是的。我想說，正如我們之前提到的，客戶和分銷商都感覺庫存過剩。因此，如果他們有這些產品的積壓訂單，他們要么不安排積壓。但如果有積壓訂單，他們會看看是否有能力至少將這些積壓訂單處理掉。所以我們正在進行這方面的討論。我認為他們的評級仍然相對較高。

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.

明白了。接下來，我想問您對定價的看法。您今天看到的阻力主要是銷售驅動的，還是微控制器業務和類比業務之間的價格也開始下滑？從行業層面來看，未來幾個季度，甚至幾個季度，您的供應量似乎會增加。所以，我很好奇您今天看到的情況，以及隨著24年的發展，您對定價有何看法？

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。所有收入的下降其實都是產量下降，與定價無關。定價穩定。它不會影響我們預期的收入變化。我們的業務基於1、2、3年前完成的設計，以及持續多年的生產。這不是透過短期價格調整等就能輕易實現的替代。顯然，在新設計推出時，我們的價格將具有競爭力，以滿足新設計的要求。但今天的收入下調並非因為價格，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——這是一個很難回答的問題，您認為總庫存水準在哪裡，以及在較低的收入出貨率下，我們將在多大程度上降低這些庫存。我知道這個問題對於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回答，這樣您可以更清楚地了解目標庫存水平在哪裡，以及您預計隨著時間的推移庫存水平會達到什麼水平？

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。我們必須根據客戶的訂單來源和他們給我們的回饋來估算。我們知道，我們向消費地區出貨量將大幅不足。但很難確切知道到底有多少庫存不足，以及已經清空了多少庫存。正如我所說，在某些情況下，庫存是多層級的，尤其是在人們越來越不願意持有庫存，甚至可能因為供應充足而將庫存量降至歷史最低水平的情況下。

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.

並非所有這些措施都只是像您通常預期的那樣減少庫存。但這將涉及多個層面，惠及我們的客戶以及客戶的客戶。在某些情況下，如果他們有原始設備製造商 (OEM)，這些措施也會惠及當地的原始設備製造商。因此，我們無法準確量化您的需求。

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。說得對。您之前也說過，在以往的經濟衰退中，通常會經歷三個季度的下滑，然後才會觸底。現在也差不多是這種情況，儘管九月季度的下滑幅度顯然比現在小得多。考慮到我們目前的狀況，您認為這種情況仍然成立嗎？或許您可以將這次經濟衰退與您之前經歷過的一些衰退做比較？

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，這次的低迷沒有什麼典型。而且我認為與歷史情況相比，這次的低迷並不恰當。你可以說，就規模而言，它與我們在全球金融危機期間所見的規模相當。我認為當時我們的銷售額下降了36%左右。在當今的市場環境下，我們的可預見性非常有限。因此，很難確切地說出具體情況。正如我所提到的，我們認為我們嚴重缺乏對終端需求的出貨量，但我們無法提供本季之後的任何預測或指引。

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

我們的下一個問題來自 SIG 的 Christopher Rolland。

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.

關於週期和交付週期，我們發現你們的一些產品，尤其是透過分銷管道，交付週期甚至比你們的週期還要短。我估計你們的周期大概是4週或6週左右。

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?

我的問題是，您預計這種動態會持續多久？我認為——如果像我們正在經歷的這樣出現大規模庫存調整，您偶爾會看到這種現象，但這會持續多久？您預計交付週期什麼時候會再次延長？顯然，我們正在經歷庫存動態。但能否談談交付週期與週期之間的關係，以及您認為它們何時會再次延長？

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，我先定義兩個術語，然後我們再詳細講解。週期時間是指從原料開始到最終成品所需的時間。對於半導體來說，週期時間取決於產品和工藝，可能在3到5個月之間，有時甚至更長，這取決於產品特性。這就是典型的生產週期。我們一直能夠控制交貨週期，我們將其定義為從客戶下訂單到我們何時能將產品發貨給客戶的時間，這個週期比這個時間要短得多。

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.

從歷史上看，疫情前的情況是4到8週，對於我們80%到90%的產品來說，這個數字並不罕見。現在的情況是，客戶下單後，平均交貨週期不到8週。在某些情況下，如果我們有成品，他們也能更快拿到貨。所以我對交貨週期何時會縮短沒有把握。我不確定這是不是好事。我認為，我們顯然必須努力管理供需，使其與需求走向一致。

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，除非市場需求大幅成長或下降，否則我們將 4 到 8 週視為一個相當穩定的交付週期。目前，我們認為在相當長的時間內，我們的交付週期還會很短。我們的庫存很高，而且到 3 月季度還會繼續成長。我們將合理安排庫存，以便能夠利用短週期訂單，因為訂單可見度較低，我們需要能夠在訂單到達時盡快安排和處理這些訂單。因此，我們所有的系統都致力於縮短交付週期，並能夠盡快處理短交付週期的訂單。

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.

也許只有一件事。克里斯，我想，也許你指的是，當我們的產品在晶片庫中準備就緒時，也就是透過晶圓廠生產時，在很多情況下，我們可以在你所說的4到6週內完成組裝和測試。如果是這樣，如果產品在晶片庫中，情況確實如此。但是我們今天已經有成品了，我們正在晶片庫中準備高產量的產品，所以我們的交貨時間總體來說相當短。

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，順便說一下，毛利率，為了簡單起見，我的模型預測下個季度的毛利率大約比之前的低300個基點。我不知道你能否詳細解釋一下，產品組合、利用不足和庫存減記分別是什麼？聽起來定價在這裡不是問題。但我很想知道這些因素對業績的影響。

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。所以我認為季度環比最大的變化將是工廠利用率，這是持續的人員流失和每週穩定狀態下的生產率下降共同作用的結果，此外，我們還要在此基礎上停工兩週。此外，我們的一些後端工廠也暫停營業，停工時間比上一季更長。所以，我認為所有這些因素都影響了庫存儲備，庫存儲備是其中的一部分，但上個季度我們在這方面產生了相對較大的費用，我預計本季度這些費用不會大幅增加。實際費用可能會更大，但最大的影響在於我們對利用率的改善。

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‧莫布利 (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?

從三月季度的業績指引來看，這基本上意味著營收從高峰到谷底的跌幅超過40%，而且都發生在同一個財年內。因此，很明顯，衰退的速度非常快——鑑於你們過去都經歷過很多周期，而且你們在準備好的發言中也暗示過，我在這裡要引用你們的經驗，或許是你們客戶在庫存消耗方面做出了一些過度修正。那麼，結合你們的經驗，考慮到你們的交貨週期，你們認為復甦的斜率會是怎樣的呢？是漸進的嗎？還是我們會看到像這次回檔一樣，出現更強勁的反彈？

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.

所以我先開始說，Ganesh 或 Steve 可以補充。我覺得目前還不清楚，對吧？從時間角度來看，我們對積壓訂單的可預見性有限，正如您問到的，在本季度之後，交貨週期非常短，客戶的庫存水平超出了他們認為當前業務所需的水平。所以，在我們開始收到類似交貨週期的短期訂單，並且看到積壓訂單開始增加之前，我們很難想像接下來會發生什麼。

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Ganesh之前所說，根據我們本季的收入預期，我們的出貨量顯然低於我們產品的最終消費量，我們認為這相對較大。但我認為，目前我們很難給出復甦斜率的預測。

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.

我認為復甦包含很多因素，對吧？首先，假設經濟平穩，隨著庫存減少，人們在某個時候只需訂購足夠的商品，就能恢復到平穩的消費水準。其次，宏觀經濟如何運作，以及實際消費隨時間推移會發生什麼變化。這取決於許多因素，例如GDP水準、利率走勢等等。我認為這些都是變量，你無法，至少我們無法代入這些變量，然後預測未來3、4個季度的復甦情況。而且，我們目前還沒有足夠的可視性和積壓數據來洞察這些情況。

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?

我知道我問了我們很多問題，但我很欣賞你使用的顏色。聽起來你們的營運支出管理更具可變性，而非結構性。你們過去顯然也這樣做過。最近一輪，你們要求員工減薪10%，當時是如何告知他們的，關於這些減薪何時可以根據某種收入或績效指標收回？

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與整個Microchip社區溝通。今天收盤後，也就是這次電話會議之前，我給他們所有人寫了一條訊息，告訴他們我們正在做什麼。所以，我希望先和我們的員工溝通這些細節，並把所有資訊告訴他們。但這對我們來說並不新鮮。我們已經多次這樣做了。我們的文化讓人們理解共同的犧牲和共同的回報是如何相輔相成的，以及如何在這樣做的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，會看到這一點，並幫助我們，同時也激勵其他人。

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

我們的下一個問題來自美國銀行的 Vivek Arya。

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，我很感激您沒有透露季度以外的數據，但我仍然想請您幫忙，了解一下6月份的市場行情是持平、上漲還是下跌，因為你們6月份確實有一些工廠停工，對吧？您已經為此做好了準備。所以這不是一個很好的數據點。不過，從歷史上看，6月的市場行情也往往是季節性上漲。請您再多說一些，現在的真實需求是多少？如果您站在我們的角度，即使您沒有完全確定6月份的行情走向，您認為6月份的市場行情是上漲、下跌還是持平？

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，根據我們12月關閉庫存的天數以及我們預計3月底的關閉情況，我們傳達的停工訊息是我們需要採取的必要措施。這些措施並不一定能預示6月的業務狀況。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進行中。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.

我們正在努力評估市場環境、多個層面的庫存以及所有這些庫存將如何消耗。我們知道這項業務會復甦，對吧？在之前的每一個週期中，它都做到了這一點。但我認為你要求的是精確度，我們沒有任何經驗數據可以確定，是的，這將會發生，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?

然後我更大的問題是，Ganesh，您如何對比維持混合製造模式的策略？在混合製造模式中，交付週期可能會突然延長，但您的資本支出較低，獲利能力較高。您的另一個美國競爭對手擁有較高的資本支出，他們通常可以將交付週期保持在很短的水平，並且設法避免了這種非常大的波動。您如何對比這兩種策略？您認為目前的經驗是否會導致您改變策略，在未來可能提高資本支出，並始終努力維持較短的交付週期？

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.

再說一次，有很多人符合你所描述的情況。我來描述我們的策略：我們在Microchip內部運作那些我們知道如何在我們的製造範圍內以成本效益和一致性運作的產品。這包括我們的前端和後端。隨著時間的推移，我們的前端業務不斷擴大，我們的代工產品也一直在成長。這種平衡大約是內部佔比40%上下浮動，外部佔60%。我們不會試圖控制這個比例應該達到多少。市場需求決定了它會更高還是更低。

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在我們的業務範圍內是合理的，哪些產品和技術值得與合作夥伴共同推動。我們就是這樣思考的。總體而言，除非出現像上季和本季那樣的短期變化，否則就毛利率的長期成長以及在多個週期中不斷攀升的業績而言，這是一個非常成功的策略。因此，我們對目前的策略非常滿意，至於其他公司如何發展，留給他們自己去評判吧。

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

我們的下一個問題來自 Stifel 的 Tore Svanberg。

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計劃的。它顯然是為了避免市場波動而設立的，但看起來並沒有起到作用。也許這只是疫情週期的本質，我不知道。但您認為PSP計劃為什麼沒能緩衝我們實際看到的市場波動呢？

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.

這個問題問得很好。雖然PSP計劃旨在透過NCNR訂單來抑制投機性需求，從而增強我們投資的信心。但我認為，這其中有多種因素共同作用：強勁的OEM市場需求、我們的客戶以及他們的客戶所見的情況。長期持續的缺貨和極長的交貨週期。我認為，綜合考慮所有這些因素，OEM客戶最終積壓了更多訂單，因為他們認為自己的業務比預想的要強勁得多，而且他們試圖比平時下訂單的時間更長。

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.

在我們看來，事情就是這樣發展的。在2021年和2022年期間，該專案為他們帶來了驚人的業績，我們幫助那些參與該專案的客戶維持業務發展，搶佔市場份額，並推動業務發展。但歸根結底，交貨週期越長，人們就越難以預測他們的業務未來走向。我認為，在某個時間點，問題在於你無法高度確定1年或18個月後的需求，然而人們卻把這些訂單設定為不可取消，認為需求強勁，並認為這種風險對他們來說是值得承擔的。

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。接下來我想問一下，我意識到所有終端市場在3月份季度都會表現疲軟。請問您對終端市場有什麼相對評論嗎？有哪些市場表現比其他市場略好？

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，你會發現它們都有優勢。商用航空依然強勁，國防依然強勁。航太領域一直以來都處於不穩定的狀態。我們資料中心的部分，也就是圍繞人工智慧平台的部分，表現非常出色。雖然這部分業務規模不足以推動微晶片的整體發展，但我們肯定也看到了其中的一個優勢。

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?

我想稍微解釋一下下滑的原因。您對終端需求有什麼看法？能否談談哪些終端市場表現最差？另外，鑑於貴公司的營收下滑幅度明顯高於一些同行，您認為為什麼貴公司受到的打擊比一些競爭對手更大？

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

抱歉，你問題的最後一部分是什麼？為什麼認為什麼？

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

為什麼你們的收入下降幅度比一些競爭對手更大？

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。關於你的第二個問題，正如我所說，如果你從一年的時間跨度來看，你會發現我們24財年的預期中位數比23財年下降了約9.5%。我認為這並沒有超出正常水平。在兩個季度的時間內，絕對是如此。我們正在以比以前更快的速度進行調整。但我認為，我們必須關注收入曲線下的面積，而不僅僅是峰值到谷底的曲線。

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

就終端市場而言，我們——抱歉，還有問題嗎？

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，正如我之前提到的，整體市場表現疲軟。我們並沒有按季度追蹤所有終端市場的表現，但我們掌握了足夠的軼事數據。我想，早在兩三個季度前，我們就預測汽車市場將開始走弱並出現下滑，工業市場和資料中心市場也是如此。我們已經看到這種情況一段時間了。目前來看，我認為市場整體疲軟。或許有些客戶的表現比我們平均看到的強或弱，但除了我提到的兩個例外，即航空航太和國防市場仍然保持強勁之外，沒有什麼值得大書特書的。此外，我們提供解決方案的那部分AI伺服器市場也表現良好。

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?

然後簡單解釋一下利用率。你們預計6月季度的使用率會比3月再次下降嗎？還是會從3月到6月維持平穩？

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。我們得看看未來幾個月業務如何發展。

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

我們的下一個問題來自瑞穗的 Vijay Rakesh。

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?

我有個簡短的問題。我想知道，在資本支出和Microchip獲得的資金之間，考慮到24年，你們將在前端或後端增加多少產能？

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.

我們已為您規劃了2024財年的資本支出，金額介於3億至3.1億美元之間。我們尚未公佈下一財年的具體數字。我預計會低於這個數字。實際上，我們今年已經接收了相當多的設備，這些設備尚未真正投入生產使用。因此，隨著市場恢復正常，我們支付了資金，並已部署到我們的設施中，這些設施可以投入使用。我們需要這些產能，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.

Vijay，我是這樣想的──我們如何從產能角度成長。隨著情況的變化，我們的初步應對措施是利用我們現有的庫存，並能夠利用現有庫存進行出貨。下一步，我們將提高工廠的利用率。目前，我們的工廠利用率還不夠。

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.

我們的第三個應對措施是，將已經訂購併收到的設備投入生產。最後，根據具體情況，增加更多設備或瓶頸設備。因此，我們相信，透過這四個措施的結合，我們有足夠的火力來應對上升週期。

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?

明白了。如果把所有這些因素結合起來，你提到你的通路庫存（分銷）為37天，而最佳庫存週期為20多天，我想你之前也提到過。你的內部庫存，也就是DOI（庫存完成率）在進入3月時可能會略有上升。你覺得什麼時候才能真正看到庫存開始調整、開始穩定或開始下降？這更像是下半年的事嗎？我猜你什麼時候才能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清楚的了解，我就能給你更好的答案。所以我們正在做的是針對我們能夠控制的事情採取行動，也就是我們的內部產能，例如停工天數、降低利用率以及我們正在做的所有其他事情。這一切都是為了預期市場會在某個時候復甦，並在那個時候逆轉週期。首先，我們會減少產量，我們正在為此採取措施；其次，市場會增加消費，但目前還不清楚具體情況。

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?

明白了。最後一個問題是關於3月季度利潤率走勢的。您說這全是因為利用率低嗎？我們是否應該預期這種利用率低的狀況會持續到6月？或者您對此有何看法？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.

所以我們並沒有說所有因素都影響了產能利用率。很大一部分的變化是由產能利用率驅動的。產品組合、庫存儲備等因素都會影響產能利用率。我認為6月季度的產能利用率可能很難提升，因為我們目前處於自然減員狀態，而且每週都會有人離開，這種情況持續不斷。即使市場動態好轉，產能利用率也需要一段時間才能恢復。因此，我們會密切注意這一點，確保對人才進行適當的投資。但這就像在大海中航行，戰艦的轉向速度相對較慢。

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

我們的下一個問題來自摩根士丹利的喬·摩爾。

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?

太好了。我想請問您能否談談我聽到的幾個悲觀論調。首先，您談到了PSP，以及它取得了哪些成就，哪些沒有實現。您認為，當PSP業務開始放緩時，如果在客戶取消預訂方面提供更大的彈性，現在的問題會不會有所緩解？ PSP是否是導致問題進一步加深的原因之一？

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.

或許吧。現在回想起來，身為一個事事都早早下班的四分衛，我很清楚自己會怎麼做。但我們很多很多季度都處於虧損狀態，甚至就在最近的3月和6月季度，CEO級別的電話都打來，要求我們加強生產更多產品。如果你還記得的話，我們會提供統計數據，說明有多少產品得不到支持，也就是客戶想要的，而我們卻無法出貨。

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.

所以，在這一切的痛苦中，我們或許應該放鬆警戒。但這並不是我們所經歷的過程所能預知的。如果我們再次進行PSP項目，我們會吸取這些經驗教訓，並研究如何調整項目，以實現預期結果，並盡可能避免意外結果。

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.

太好了。然後我經常聽到另一個負面問題，中國顯然正在建造大量的後緣產能。能談談具體類型嗎？我認為目前您沒有看到太多來自主權國家的直接競爭，但您能否談談未來幾年貴公司業務中有多少可能會面臨來自中國的競爭？我想您剛才提到這個數字是個位數，但您能否更新一下您的想法？

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。目前，中國大陸約占我們總收入的20%左右。我們估計其中大約一半是在其他地方設計的，只是碰巧在中國大陸製造。坦白說，隨著人們轉向其他業務，其中一些正在遷出中國。所以，設計的核心並不在中國，我們對此感到滿意。我們在中國業務的另外10%是在中國設計的，這其中還有一半是非常複雜的設計，這些設計不容易被取代，而且需要大量的系統知識、配套軟體、軟硬體互動等等。

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.

這意味著我們大約5%的業務，也就是大約1/4的業務在中國大陸，這些業務是我們更廣泛的微控制器、類比產品以及諸如此類的產品。而碎片化正是我們的優勢。這是一個非常非常碎片化的市場。任何一個機會都只佔收入的一小部分，而且很難抓住。但理論上，如果有人能提供完全相同的產品，你就可以這麼說。順便說一句，很多業務不僅僅是關於晶片。我們也關乎晶片、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服務。

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?

是的，中國在技術和產能方面都處於領先地位，而且正在發生更多變化。我們會密切關注，並透過我們的產品線和創新，降低成本，繼續努力與之抗衡。但你可能會想到，他們接下來的業務佔比可能更廣，而且不到5%，而且非常分散，很難觸及。這樣有幫助嗎？

Yes, so much.

是的，很多。

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

我們的下一個問題來自 TD Cowen 的 Joshua Buchalter。

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?

我想問利用率的問題，以及你們所做的策略決策，例如在3月和6月關閉晶圓廠兩週，並在這兩個季度保持較低的利用率。我想，為什麼要啟動和關閉晶圓廠？為什麼不先在3月季度大幅降低利用率，然後再看看情況如何？考慮到你們正在努力降低庫存，但預計3月份庫存仍會上升，你們對此有何看法？

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.

這是一個我們必須深思熟慮後做出的平衡決定。但隨著庫存攀升，總有一個臨界點，痛苦會變得夠強烈。考慮到這一點，我們感到很平衡，不知道接下來還會發生什麼供需動態。但總的來說，這是一種應對各種可能情況的方法。

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，我們相信，如果經濟復甦加速，我們的處境會很好。如果復甦情況有所不同，我們就能提前做好準備，而且我們也有選擇在6月季度採取哪些措施。但現在，我們需要盡最大努力為3月和6月的狀況做好準備，這包括降低產能利用率，並在兩個季度分別關閉工廠兩週。

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?

然後作為我的後續問題，我知道您對資本回報計劃有一個公式化的方法，但您過去也曾談到機會主義地可能超過您所概述的利率，因為我們正經歷這個時期，您正在經歷消化，自由現金流與前幾個季度相比處於低迷狀態，有沒有想過使用資產負債表或返回比您概述的公式下更多的回報？

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.

也許我先說。我的意思是，我們本季的現金回報率確實非常健康，對吧？我們從77.5%成長到了82.5%。 12月季度的調整後自由現金流相當高。即使股利再次上漲，根據您提到的公式，我們本季的股票回購規模也將創下紀錄。所以我們認為這是合理的。我們很高興本季將回購大量股票。 Stephen可以詢問董事會是否考慮採取其他措施，並發表意見，但我認為該計劃目前已經實施。如果市場發生變化，股價大幅下跌，我們將與董事會進行討論。

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，上季度我們的現金流非常健康，這很自然。股東回報率高達82.5%，股息也隨之增加，這仍然創造了單季股票回購的紀錄，創下了3.868億美元的歷史記錄，創下了歷史新高。所以，這是一次非常非常健康的股票回購。如果不是因為現金流不如上季健康，那麼我們是否應該在本季進行特別股票回購，如果股價下跌，這個問題就變得合理了。但我認為，我們只是製定了——根據公式，我們為本季股票回購預留了非常非常健康的現金。

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.

過去幾個季度，我們一直保持穩定。我認為，制定一個不會出現季度間重大差異的計劃，是確保資本回報計劃一致性的一種方法。我認為史蒂夫、我以及董事會其他成員都認為，我們應該繼續這樣做。

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

我們的下一個問題來自 Needham 的 Quinn Bolton。

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.

我想第一個問題是問Eric的。您提到了較低的利用率，你們在3月和6月都關閉了工廠兩週。我想知道您能否跟我們講一下會計方面的情況。這部分影響了你們當期的支出嗎？這些較低的利用率中有多少是流轉庫存造成的？考慮到你們的庫存量，這些影響是否會在更長的時間內影響毛利率，因為這些影響會流轉庫存，然後計入損益表？然後我有一個簡短的後續問題。

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。即使沒有停工，考慮到我們之前的員工流失，我們三家大型晶圓廠的營運效率也會低於我們所謂的正常利用率。因此，這兩週的停工將計入本季的期間成本，而不計入庫存。現在我們的利用率低於峰值。因此，以單位計算，計入庫存的成本高於我們滿載運轉時的水準。我想這回答了你的問題。本質上，兩週的停工將對當期產生影響，而不計入庫存。

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。然後我想就 Ganesh 來說，你提到要結束 PSP 計畫。所以我很好奇，這是否意味著你們不會再與任何人簽約新的 PSP？這是否意味著現有的 PSP 計劃已被取消，玩家擁有更大的權利取消現有的積壓計劃？那麼，現有的 PSP 參與者會怎麼樣呢？

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.

積壓訂單已經減少了一段時間。實際上，我們告訴客戶的是，我們不再接受PSP訂單——客戶已經看到交貨週期很短，產能充足。正如我所說，我們啟動這項服務的初衷已經不復存在。因此，它很快就會自然結束，我們只是停止接受任何人可能接受的更多訂單——如果他們還不明白的話，我們用PSP來代替。

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

我們的下一個問題來自 Truist 的 William Stein。

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?

太好了。我還想問一下PSP以及它如何處理積壓訂單的機制。我想您剛才已經回答了，但我其實也想問一些財務上的問題。我相信很多訂單都是客戶預付的，而且您可能也預付了代工廠的產能費用。您能否解釋一下這些訂單是如何從公司的財務活動中剝離出來的，以及您預計它們何時會完成？這完成了嗎？大概在3月底這個季度結束之前？

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。對於PSP來說，通常客戶不會提前支付現金。我們有一些長期供應協議，其中包含現金預付款。這些協議仍然有效。這些計劃與PSP的取消沒有任何關係。所以這些計劃仍然有效，而且通常是3到5年的協議，大多數是5年期的協議，這些協議會隨著時間的推移而到期。

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，如果客戶的需求不如最初預期那麼強勁，我們會與他們合作，找到一個雙方都能接受的解決方案，例如延長計劃，讓他們在計劃中增加一些其他內容來滿足他們的批量承諾。但我們不會因為這個計劃而懲罰客戶。

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.

在供應商方面，我們有一些預付款和合約義務。這些都是一樣的。我們與供應商進行談判，他們也在與我們合作，我認為這些談判不會為我們帶來任何重大的財務損失。但在某些情況下，我們採購的庫存，例如原料，比原本應該採購的還要多。

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

我們的下一個問題來自 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?

你們能不能跟我們講講設計活動的近況？我知道你們已經看到了這種大幅削減，而且你們說實際需求方面其實並沒有太大的缺口。你們現在的情況和以前一樣，是有所預見，還是有所下降？能否請你們跟我們講目前的情況，以便我們更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，不用了，謝謝。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。我認為這是因為出於多種原因，客戶在處理短缺問題時一度處於「分診」狀態。隨著所有問題逐漸解決，他們又重新開始專注於創新。我們的產品和技術正在推動許多新領域的創新。從許多指標來看，包括我們內部衡量的設計訂單和設計漏斗等指標，以及我們一些更注重設計的合作夥伴，特別是目錄分銷商，就是一個很好的例子，他們開展的大量種子期活動也達到了非常高的水平。

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非常強大。庫存調整將會過去，最終，正如您所說，業務的長期成長將取決於這種創新如何發揮作用，以及半導體在最終產品上如何實現這種創新。

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?

這很有幫助。最後一個問題，如果我可以偷偷補充的話。您覺得哪個特定地區或細分市場的下滑速度較快？我從補充幻燈片中註意到，工業佔比有所下降。能具體介紹一下哪些地區或終端市場表現最為疲軟嗎？

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.

我認為它們都很疲軟。我沒有具體的數字可以告訴你。我可以告訴你，例如中國，已經疲軟了很長一段時間。回溯到2022年，當時他們實施了封鎖，從那時起就一直沒有恢復。但我認為，除了航空航太和國防以及部分專注於人工智慧的資料中心領域外，所有地區和幾乎所有終端市場都出現了疲軟。

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最終市場數據仍然參考的是上一個完整財年的數據，而且尚未更新。我們每年都會進行一次更新。因此，我們會檢查幻燈片，確保它不會造成混淆，但我認為情況確實如此。

Okay. Thanks, guys. Appreciate it.

好的。謝謝大家。非常感謝。

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

目前沒有其他問題了。我想把發言權交還給Ganesh Moorthy，請他發表最後評論。

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。感謝大家抽空參加本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。至此，本次電話會議就此結束。

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。您可以掛斷電話了。感謝您的參與。