Rambus Inc (RMBS) 2023 Q1 法說會逐字稿

Welcome to the Rambus First Quarter Fiscal Year '23 Earnings Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.

歡迎來到 Rambus 第 23 財年第一季度收益電話會議。 （操作員說明）提醒一下，正在錄製此會議。

I would now like to turn the conference over to Desmond Lynch, Chief Financial Officer. You may begin your conference.

我現在想將會議轉交給首席財務官 Desmond Lynch。你可以開始你的會議。

Thank you, operator, and welcome to the Rambus First Quarter 2023 Results Conference Call. I am Desmond Lynch, Chief Financial Officer at Rambus and on the call with me today is Luc Seraphin, our CEO. The press release for the results that we will be discussing today have been filed with the SEC on Form 8-K. A replay of this call will be available for the next week at (866)813-9403. In addition, we are simultaneously webcasting this call, and along with the audio, we are webcasting slides that we will reference during portions of today's call. A replay of this call can be accessed on our website beginning today at 5:00 p.m. Pacific Time.

謝謝接線員，歡迎參加 Rambus 2023 年第一季度業績電話會議。我是 Rambus 的首席財務官 Desmond Lynch，今天與我通電話的是我們的首席執行官 Luc Seraphin。我們今天將討論的結果新聞稿已通過 8-K 表格提交給美國證券交易委員會。下周可通過 (866)813-9403 重播此電話。此外，我們同時對此次電話會議進行了網絡廣播，除了音頻之外，我們還提供了網絡廣播幻燈片，我們將在今天電話會議的部分內容中引用這些幻燈片。從今天下午 5:00 開始，您可以在我們的網站上觀看此次通話的重播。太平洋時間。

Our discussion today will contain forward-looking statements, including our expectations regarding projected financial results, financial prospects, market growth, demand for our solutions, the company's ability to effectively manage any supply chain shortages and the effects of ASC 606 on reported revenue amongst other items. These statements are subject to risks and uncertainties that may be discussed during this call and are more fully described in the documents we file with the SEC, including our 8-Ks, 10-Qs and 10-Ks. These forward-looking statements may differ materially from our actual results, and we are under no obligation to update these statements.

我們今天的討論將包含前瞻性陳述，包括我們對預計財務業績、財務前景、市場增長、對我們解決方案的需求、公司有效管理任何供應鏈短缺的能力以及 ASC 606 對報告收入的影響等方面的預期項目。這些聲明受本次電話會議期間可能討論的風險和不確定性的影響，我們在向美國證券交易委員會提交的文件中有更全面的描述，包括我們的 8-Ks、10-Qs 和 10-Ks。這些前瞻性陳述可能與我們的實際結果存在重大差異，我們沒有義務更新這些陳述。

In an effort to provide greater clarity in the financials, we are using both GAAP and non-GAAP financial presentations in both our press release and on this call. A reconciliation of these non-GAAP financials to the most directly comparable GAAP measures has been included in our press release, in our slide presentation and on our website at rambus.com on the Investor Relations page under Financial Releases.

為了提供更清晰的財務信息，我們在新聞稿和本次電話會議中同時使用了 GAAP 和非 GAAP 財務報告。這些非 GAAP 財務數據與最直接可比的 GAAP 指標的對賬已包含在我們的新聞稿、幻燈片演示和我們網站 rambus.com 的“財務發布”下的“投資者關係”頁面上。

We adopted ASC 606 in 2018 using the modified retrospective method, which did not restate prior periods but rather than the cumulative effect of the adoption through retained earnings as a beginning balance sheet adjustment. Any comparison between our results under ASC 606 and prior results under ASC 605 is not an accurate way to track the company's progress. We will continue to provide operational metrics such as licensing billings to give our investors better insights into our operational performance.

我們在 2018 年採用了 ASC 606，採用了修改後的追溯法，該方法沒有重述前期，而是通過留存收益作為期初資產負債表調整，而不是重述採用的累積影響。我們在 ASC 606 下的結果與之前在 ASC 605 下的結果之間的任何比較都不是跟踪公司進展的準確方法。我們將繼續提供運營指標，例如許可費用，讓我們的投資者更好地了解我們的運營績效。

The order of our call today will be as follows: Luc will start with an overview of the business, I will discuss the financial results, and then we will end with Q&A. I'll now turn the call over to Luc to provide an overview of the quarter. Luc?

我們今天的電話會議順序如下：Luc 將首先概述業務，我將討論財務結果，然後我們將以問答結束。我現在將電話轉給 Luc，以提供本季度的概述。呂克？

Thank you, Des, and good afternoon, everyone. This was a strong start to the year for the company with Q1 revenue and earnings at the high end of guidance. We delivered $39 million in cash from operations and retired the last of our remaining debt, further strengthening our balance sheet. These results were driven by continued execution and achieved in the context of a challenging macroeconomic environment.

謝謝你，Des，大家下午好。對於公司而言，這是今年的一個良好開端，第一季度的收入和收益處於指導的高端。我們從運營中交付了 3900 萬美元的現金，還清了最後一筆剩餘債務，進一步加強了我們的資產負債表。這些成果是在充滿挑戰的宏觀經濟環境下持續執行和取得的。

In addition to our strong financial performance, we were very pleased to extend our strategic relationship with SK hynix through the middle of 2034, with the early renewal of our comprehensive patent licensing agreement. Similar to our expansion with Samsung announced in Q4, this agreement strengthens our foundation for ongoing investments in product and technology leadership across our portfolio and is a great demonstration of the ongoing value of our innovations to the market.

除了我們強勁的財務業績外，我們很高興能夠將我們與 SK 海力士的戰略關係延長至 2034 年年中，並提前續簽我們的全面專利許可協議。與我們在第四季度宣布的與三星的擴張類似，該協議加強了我們在整個產品組合中對產品和技術領先地位進行持續投資的基礎，並很好地證明了我們創新對市場的持續價值。

Turning to our business results. Memory interface chips performed well, delivering Q1 product revenue of $64 million, up 33% year-over-year despite the challenging market conditions. In the near term, we remain vigilant as we navigate through the dynamics of the industry transition to a new generation of memory.

談到我們的業務成果。內存接口芯片表現良好，儘管市場環境充滿挑戰，但第一季度產品收入仍達到 6400 萬美元，同比增長 33%。在短期內，我們在行業過渡到新一代內存的動態中保持警惕。

While DDR4 inventories remain high at some end customers, as reflected in our second quarter guidance, we are seeing initial orders come through for DDR5 with shipments starting towards the end of the quarter. We remain focused on execution and are actively working with our customers. We expect a stronger second half as inventories return to more normal levels and demand for DDR5 continues to ramp.

儘管一些終端客戶的 DDR4 庫存仍然很高，正如我們第二季度的指引所反映的那樣，但我們看到 DDR5 的初始訂單已經完成，並在本季度末開始發貨。我們仍然專注於執行，並積極與我們的客戶合作。隨著庫存恢復到更正常的水平並且對 DDR5 的需求繼續增加，我們預計下半年會更加強勁。

As we have said previously, the server memory crossover to DDR5 is projected for the first half of 2024, and we expect our memory interface chip product mix to be lumpy during the transition period. Given our strong leadership position in DDR5 and improving market conditions in the second half, we believe we are well positioned for continued annual growth in 2023.

正如我們之前所說，預計到 2024 年上半年，服務器內存將過渡到 DDR5，我們預計我們的內存接口芯片產品組合在過渡期間會出現波動。鑑於我們在 DDR5 領域的強大領導地位以及下半年市場狀況的改善，我們相信我們有能力在 2023 年實現持續的年度增長。

As we look further out, advancing the performance of data center memory will be critical to address the growing bandwidth and capacity requirements of generative AI and other advanced workloads. We are making good progress on the follow-on generations of DDR5 with our Gen 2 RCD in qualification across the ecosystem and our Gen 3 RCD sampling to all of our customers and partners. In addition to DDR5, close collaboration and developments with the ecosystem continues on CXL, and we are well aligned with the market needs and timing to support the road map of future server generations for years to come.

展望未來，提高數據中心內存的性能對於滿足生成式 AI 和其他高級工作負載不斷增長的帶寬和容量需求至關重要。我們在下一代 DDR5 方面取得了良好進展，我們的第 2 代 RCD 在整個生態系統中都經過了資格認證，我們的第 3 代 RCD 樣品也提供給我們所有的客戶和合作夥伴。除了 DDR5，與生態系統的密切合作和開發也在 CXL 上繼續進行，我們與市場需求和時機保持一致，以支持未來幾年的未來幾代服務器路線圖。

Finally, in silicon IP, our recently announced GDDR6 interface, achieving a best-in-class data rate of 24 gigabit per second is a great illustration of our continued technology leadership. It is the latest addition to our market-leading portfolio, which also includes the industry's fastest HBM3 memory IP subsystem. With these memory solutions, Rambus addresses the needs of both AI training and inference with state-of-the-art offerings. We continue to lead in our areas of focus for both interface and security IP. And in spite of current challenging macro conditions, we remain confident in the long-term growth opportunities.

最後，在矽 IP 方面，我們最近發布的 GDDR6 接口實現了每秒 24 吉比特的一流數據速率，這很好地說明了我們持續的技術領先地位。它是我們市場領先產品組合的最新成員，該產品組合還包括業界最快的 HBM3 內存 IP 子系統。借助這些內存解決方案，Rambus 可以通過最先進的產品滿足 AI 訓練和推理的需求。我們繼續在接口和安全 IP 的重點領域處於領先地位。儘管當前宏觀環境充滿挑戰，但我們對長期增長機會充滿信心。

In closing, this was a strong quarter for the company with results at the high end of guidance and the team executing well. While we navigate the dynamic market conditions in the near term, we continue to see strong secular trends and solid growth opportunities. This is a very exciting time for the industry with a broadening availability of generative AI applications like ChatGPT that have captured the public imagination. These are perfect examples of the advanced workloads that will drive accelerated growth in computing in the data center with the ever-increasing demand for data. And with memory bandwidth as a first-order enabler, Rambus is well positioned to enable the state-of-the-art memory performance required by these advanced applications.

最後，這對公司來說是一個強勁的季度，業績處於指導的高端，團隊執行良好。在我們應對近期動態市場狀況的同時，我們繼續看到強勁的長期趨勢和穩固的增長機會。對於行業來說，這是一個非常激動人心的時刻，因為 ChatGPT 等生成式 AI 應用程序的可用性不斷擴大，吸引了公眾的想像力。這些都是高級工作負載的完美示例，這些工作負載將隨著對數據的需求不斷增長而推動數據中心計算的加速增長。將內存帶寬作為首要推動因素，Rambus 完全有能力實現這些高級應用程序所需的最先進的內存性能。

With our strategic focus in data center, continued execution and diverse portfolio of offerings, we have confidence in the strength of our strategy and ability to drive long-term profitable growth for the company. We are making the right focused investments to deliver differentiated, high-quality products and innovations that address the critical performance bottlenecks between processing and memory.

憑藉我們在數據中心的戰略重點、持續的執行力和多樣化的產品組合，我們對我們的戰略實力和推動公司長期盈利增長的能力充滿信心。我們正在進行正確的重點投資，以提供差異化的高質量產品和創新，以解決處理和內存之間的關鍵性能瓶頸。

As always, I'd like to thank our customers, partners and employees for their ongoing support. And with that, I turn the call over to Des to discuss the quarterly financial results. Des?

一如既往，我要感謝我們的客戶、合作夥伴和員工一直以來的支持。然後，我將電話轉給 Des 討論季度財務結果。德斯？

Thank you, Luc.

謝謝你，呂克。

I'd like to begin with a summary of our financial results for the first quarter on Slide 5. Once again, we delivered a strong quarter, and we are very pleased with the company's ongoing execution in a challenging macroeconomic environment. We delivered financial results at the high end of our revenue and earnings expectations, while continuing to strengthen our balance sheet.

首先，我想在幻燈片 5 上總結我們第一季度的財務業績。我們再次交付了一個強勁的季度，我們對公司在充滿挑戰的宏觀經濟環境中的持續執行感到非常滿意。我們在收入和盈利預期的高端交付了財務業績，同時繼續加強我們的資產負債表。

In April, we were delighted to announce we extended our licensing agreement with SK hynix for an additional 10 years at similar financial terms. This extension becomes effective in Q3 2024, and we expect to recognize revenue quarterly under ASC 606.

4 月，我們很高興地宣布，我們以類似的財務條款將與 SK 海力士的許可協議再延長 10 年。此延期將於 2024 年第三季度生效，我們預計將根據 ASC 606 每季度確認一次收入。

In the last 6 months, we've extended our 2 largest patent licenses, both for 10-year terms, which demonstrates the continued strength and relevance of our patent portfolio and innovation engine. Additionally, in Q1, we continue to strengthen our balance sheet. We repaid the final balance of our convertible notes and settled the associated underlying hedge agreements. We've utilized that existing cash on hand to retire the debt, while continuing to generate strong cash flows and drive shareholder value.

在過去的 6 個月裡，我們延長了 2 項最大的專利許可，均為 10 年，這證明了我們的專利組合和創新引擎的持續實力和相關性。此外，在第一季度，我們繼續加強資產負債表。我們償還了可轉換票據的最終餘額並結算了相關的基礎對沖協議。我們利用手頭的現有現金償還債務，同時繼續產生強勁的現金流並推動股東價值。

Let me walk you through our non-GAAP income statement on Slide 6. With our continued focus on execution, revenue for the first quarter was $113.8 million, at the high end of our expectations. Royalty revenue was $28.2 million, while licensing billings was $63.4 million. The difference between licensing billings and royalty revenue primarily relates to timing as we do not always recognize revenue in the same quarter as we bill our customers.

讓我向您介紹我們在幻燈片 6 上的非 GAAP 損益表。由於我們繼續關注執行，第一季度的收入為 1.138 億美元，處於我們預期的高端。版稅收入為 2820 萬美元，而許可費用為 6340 萬美元。許可費用和特許權使用費收入之間的差異主要與時間有關，因為我們並不總是在向客戶開賬單的同一季度確認收入。

Product revenue was $63.8 million, consisting primarily of memory interface chips. Contract and other revenue was $21.8 million, consisting primarily of silicon IP. As a reminder, only a portion of our silicon IP revenue is reflected in contract and other revenue and the remaining portion is reported in royalty revenue as well as in licensing billings.

產品收入為 6380 萬美元，主要包括內存接口芯片。合同和其他收入為 2180 萬美元，主要包括矽 IP。提醒一下，我們的矽 IP 收入中只有一部分反映在合同和其他收入中，其餘部分反映在特許權使用費收入和許可費用中。

Total operating costs, including cost of goods sold for the quarter was $86.3 million. Operating expenses of $58.3 million were in line with our expectations as we continued to be vigilant in our expense management, and we ended the quarter with total headcount of 762 employees.

本季度總運營成本（包括銷售成本）為 8630 萬美元。 5830 萬美元的運營支出符合我們的預期，因為我們繼續對我們的支出管理保持警惕，並且我們在本季度末的員工總數為 762 人。

Non-GAAP interest and other income for the first quarter was $1.8 million. This included $900,000 of ASC 606 interest income related to the financing component of fixed fee licensing agreements for which we have recognized revenue but not yet received payment. Excluding the financing interest income related to ASC 606, this would have been $900,000 of net interest income. Using an assumed flat tax rate of 24% for non-GAAP pretax income, non-GAAP net income for the quarter was $22.3 million.

第一季度的非 GAAP 利息和其他收入為 180 萬美元。這包括與我們已確認收入但尚未收到付款的固定費用許可協議的融資部分相關的 ASC 606 利息收入中的 900,000 美元。排除與 ASC 606 相關的融資利息收入，這將是 900,000 美元的淨利息收入。假設非 GAAP 稅前收入的統一稅率為 24%，本季度的非 GAAP 淨收入為 2230 萬美元。

Now let me turn to the balance sheet details on Slide 7. We ended the quarter with cash equivalents and marketable securities totaling $292.1 million, a decrease from the prior quarter, mainly driven by the convertible note repayment and the settlement of the underlying hedge agreements. Cash from operations for the quarter was $38.9 million.

現在讓我轉到幻燈片 7 的資產負債表細節。我們在本季度末的現金等價物和有價證券總額為 2.921 億美元，比上一季度有所減少，這主要是由於可轉換票據的償還和相關對沖協議的結算。本季度的運營現金為 3890 萬美元。

At the end of Q1, we had contract assets worth $113 million, which reflects the net present value of unbilled accounts receivable related to licensing agreements for which the company has no future performance obligations. We expect this number to continue to trend down as we bill and collect for these contracts. It is important to note that this metric does not represent the entire value of our existing licensing agreements as each renewal opportunity, we restructured our patent agreements in a manner which still allows us to recognize revenue each quarter during the life of each agreement.

第一季度末，我們擁有價值 1.13 億美元的合同資產，這反映了與公司沒有未來履約義務的許可協議相關的未開票應收賬款的淨現值。我們預計隨著我們為這些合同計費和收款，這個數字將繼續呈下降趨勢。重要的是要注意，這個指標並不代表我們現有許可協議的全部價值，因為每個續約機會，我們重組我們的專利協議的方式仍然允許我們在每個協議的有效期內每個季度確認收入。

First quarter CapEx was $11 million, while depreciation expense was $7.4 million. We delivered $28 million of free cash flow in the quarter.

第一季度資本支出為 1100 萬美元，折舊費用為 740 萬美元。我們在本季度交付了 2800 萬美元的自由現金流。

Now let me turn to our guidance for the second quarter on Slide 8. As a reminder, the forward-looking guidance reflects our current best estimates at this time. We continue to actively monitor the macro environment, and our actual results could differ materially from what I'm about to review. In addition to the financial outlook under ASC 606, we also provide information on licensing billings, which is an operational metric that reflects amounts invoiced to our licensing customers during the period adjusted for certain differences.

現在讓我轉向幻燈片 8 對第二季度的指導。提醒一下，前瞻性指導反映了我們目前的最佳估計。我們繼續積極監測宏觀環境，我們的實際結果可能與我即將審查的結果存在重大差異。除了 ASC 606 下的財務展望外，我們還提供有關許可賬單的信息，這是一項運營指標，反映了在針對某些差異調整的期間內向我們的許可客戶開具發票的金額。

As we have reported historically, licensing billings closely correlates with what we had historically reported as royalty revenue under ASC 605. Under ASC 606, we expect revenue in the second quarter between $111 million and $117 million. We expect royalty revenue between $37 million and $43 million, and licensing billings between $61 million and $67 million. We expect Q2 non-GAAP total operating costs, which includes COGS, to be between $82 million and $78 million. We expect Q2 CapEx to be approximately $10 million.

正如我們以往報導的那樣，許可費用與我們以往根據 ASC 605 報告的特許權使用費收入密切相關。根據 ASC 606，我們預計第二季度的收入在 1.11 億美元至 1.17 億美元之間。我們預計特許權使用費收入在 3700 萬至 4300 萬美元之間，許可費用在 6100 萬至 6700 萬美元之間。我們預計第二季度非 GAAP 總運營成本（包括 COGS）將在 8200 萬美元至 7800 萬美元之間。我們預計第二季度資本支出約為 1000 萬美元。

Under ASC 606, non-GAAP operating results for the second quarter is expected to be between a profit of $29 million and $39 million. For non-GAAP interest and other income and expense, which excludes interest income related to ASC 606, we expect 0 interest expense. We expect the pro forma tax rate to remain approximately 24%. The 24% is higher than the statutory tax rate of 21%, primarily due to higher tax rates in our foreign jurisdictions.

根據 ASC 606，第二季度的非 GAAP 經營業績預計將在 2900 萬美元至 3900 萬美元之間。對於非 GAAP 利息和其他收入和支出，不包括與 ASC 606 相關的利息收入，我們預計利息支出為 0。我們預計備考稅率將保持在 24% 左右。 24% 高於 21% 的法定稅率，這主要是由於我們的外國司法管轄區的稅率較高。

As a reminder, we pay approximately $20 million of cash taxes each year, driven primarily by licensing agreements with our partners in Korea. We expect non-GAAP taxes to be between an expense of $7 million and $9 million in Q2. We expect Q2 share count to be 112 million basic and diluted shares outstanding. Overall, we anticipate our non-GAAP earnings per share range between $0.20 and $0.26 for the quarter.

提醒一下，我們每年支付大約 2000 萬美元的現金稅，這主要是由於與我們在韓國的合作夥伴達成的許可協議。我們預計第二季度的非 GAAP 稅收支出將在 700 萬美元至 900 萬美元之間。我們預計第二季度已發行基本股和稀釋股為 1.12 億股。總體而言，我們預計本季度的非 GAAP 每股收益在 0.20 美元至 0.26 美元之間。

Let me finish with a summary on Slide 9. I'm pleased with our strong results and the team's execution in this challenging macroeconomic environment. We have a diversified portfolio with a stable and predictable backbone from our patent licensing business. We remain disciplined in our investments to support our long-term growth strategy. We continue to deliver value to our shareholders with our strong innovation, a robust balance sheet and strong cash generation.

讓我以幻燈片 9 的總結作為結束。我對我們在這個充滿挑戰的宏觀經濟環境中的強勁業績和團隊的執行感到滿意。我們擁有多元化的產品組合，我們的專利許可業務具有穩定且可預測的支柱。我們在投資方面保持紀律，以支持我們的長期增長戰略。我們通過強大的創新能力、穩健的資產負債表和強大的現金生成能力，繼續為股東創造價值。

Before I open the call up to Q&A, I would like to thank our employees for their continued teamwork and execution. With that, I'll turn the call back to our operator to begin Q&A. Could we have our first question?

在開始進行問答之前，我要感謝我們的員工持續的團隊合作和執行力。有了這個，我會把電話轉回我們的接線員開始問答。我們可以提出我們的第一個問題嗎？

(Operator Instructions) Our first question is from the line of Gary Mobley with Wells Fargo.

（操作員說明）我們的第一個問題來自富國銀行的 Gary Mobley。

Congratulations on a good start to the year. I understand the second quarter is a transitional quarter for the product revenue. But I appreciate the comments giving us color as to when you can see some resurgence in DDR5-related revenue. And related to that, I was hoping that maybe you can give us a preview into product revenue for the second half of the year, considering the selling price uplift for the Register Clock Driver and your market share position in DDR5 and the expectation of industry crossover for DDR5, all those different things. Is it possible to see a new revenue high in product revenue by the time we exit calendar year 2023?

祝賀你今年有個好的開始。我知道第二季度是產品收入的過渡季度。但我很欣賞這些評論，讓我們知道何時可以看到 DDR5 相關收入的複蘇。與此相關的是，考慮到 Register Clock Driver 的售價提升以及您在 DDR5 中的市場份額地位以及行業交叉的預期，我希望您可以給我們預覽下半年的產品收入對於 DDR5，所有這些不同的東西。到 2023 日曆年結束時，是否有可能看到產品收入的新高？

Gary, thank you for your question. Yes, we had a good first quarter in terms of product revenue, with good execution at $64 million. $64 million was actually 33% higher than the same quarter last quarter, so we continued to grow in that business despite the challenging environment. This is also the second highest quarter in terms of product revenue for the company.

加里，謝謝你的問題。是的，就產品收入而言，我們第一季度表現不錯，執行良好，達到 6400 萬美元。 6400 萬美元實際上比上一季度的同一季度高出 33%，因此儘管環境充滿挑戰，我們仍在該業務中繼續增長。這也是公司產品收入第二高的季度。

As we previously said, the product transition between DDR4 and DDR5 will be lumpy, and that's reflected in our Q2 guidance for products. Given the softness in the data center outlook, there will be a period of inventory digestion for DDR4 in advance for the DDR5 product transition. But we are very encouraged by the fact that we have received orders for DDR5, which will start to ship in late Q2. And our view is that the second half of the year would be a year -- a half of growth compared to the first half of this year. So we expect the second quarter -- the second half of this year to be stronger compared to the first half, driven precisely by the ramp of DDR5. This being said, as we said, it's lumpy. That transition is lumpy, and we're watching the overall timing and dynamics every week.

正如我們之前所說，DDR4 和 DDR5 之間的產品過渡將是顛簸的，這反映在我們的第二季度產品指南中。鑑於數據中心前景疲軟，DDR5 產品過渡將提前一段 DDR4 庫存消化期。但令我們感到非常鼓舞的是，我們已經收到 DDR5 訂單，它將在第二季度末開始發貨。我們的觀點是，今年下半年將是一年 - 與今年上半年相比增長一半。因此，我們預計第二季度 - 今年下半年將比上半年更強勁，這正是 DDR5 的增長所推動的。話雖這麼說，正如我們所說，它是塊狀的。這種轉變是崎嶇不平的，我們每週都在關注整體時間和動態。

Okay. I appreciate that, Luc.

好的。我很感激，呂克。

The -- I think the second part of your question was the transition. Yes, the transition between DDR4 and DDR5 with the crossover, we still see this happening in the first half of 2024.

我認為你問題的第二部分是過渡。是的，DDR4 和 DDR5 之間的交叉過渡，我們仍然會在 2024 年上半年看到這種情況發生。

Got it. I want to ask about your SK hynix license renewal. In your 8-K, you described the average royalty rate at $11 million a quarter, with the first 5 years being higher than the second 5 years. So to put that to the form of a question, when you start to recognize revenue from the new license deal in the second half of next year, will you see a step-up in your patent licenses specific to SK hynix?

知道了。我想問一下你們的 SK hynix license renewal。在您的 8-K 中，您描述的平均特許權使用費率為每季度 1100 萬美元，前 5 年高於後 5 年。因此，以問題的形式提出這個問題，當您在明年下半年開始確認新許可交易的收入時，您是否會看到 SK 海力士特定的專利許可有所增加？

Gary, thanks for your question. We were very happy to renew the licensing agreement with SK hynix for 10 years. You are correct that this is a variable structure that we have with SK hynix, which will allow us to recognize revenue under ASC 606. If you look at the way that the contract is written, in the first couple of years of the contract, we will see a step-up, a slight step-up the royalty rate, which will then even off on the sort of back end. This will not change our overall estimates on the patent revenue for the year, we've consistently talked about being $200 million to $220 million, was $210 million at the midpoint. But there is a sort of small sort of step up on sort of the first part of the contract from there. But overall, we're very happy that we're able to renew the contract with SK hynix, which really speaks volumes to our patent portfolio and innovation.

加里，謝謝你的問題。我們很高興與 SK 海力士續簽 10 年的許可協議。你是對的，這是我們與 SK 海力士的可變結構，這將使我們能夠根據 ASC 606 確認收入。如果你看一下合同的書寫方式，在合同的頭幾年，我們將會看到一個提升，一個輕微的提升版稅率，然後在某種後端甚至會下降。這不會改變我們對今年專利收入的總體估計，我們一直在談論 2 億至 2.2 億美元，中點為 2.1 億美元。但是從那裡開始，在合同的第一部分有一些小的進步。但總的來說，我們很高興能夠與 SK 海力士續簽合同，這對我們的專利組合和創新意義重大。

Our next question is from the line of Mehdi Hosseini with Susquehanna.

我們的下一個問題來自 Mehdi Hosseini 和 Susquehanna 的台詞。

I want to go back to 2 items. Can you give us an update on how we should think about the gross margin traction outside of licensing and royalty? I think in the last earnings call, you talked about hitting that 60% to 65% for product margin in the second half of the year. Are you feeling comfortable, especially given Luc's commentary that second half revenue should be higher than the first half? And the same margin question about silicon IP, would that continue to improve above 92%? And I have a follow-up.

我想回到 2 項。您能否向我們介紹一下我們應該如何考慮許可和特許權使用費之外的毛利率牽引力的最新情況？我想在上次財報電話會議上，你談到了下半年產品利潤率達到 60% 到 65% 的情況。你感覺舒服嗎，特別是考慮到 Luc 的評論，下半年收入應該高於上半年？關於矽 IP 的利潤率問題是否會繼續提高到 92% 以上？我有一個後續行動。

Mehdi, thanks for your question. On the product gross margins, I think both our revenue growth and gross margin performance has been strong. And if you look back at 2022 for the full year, our product gross margins were around 61%, which was in line with our long-term gross margin target of 60% to 65%. What we've consistently said is that this transition could be lumpy. And depending upon what products are shipping in any given quarter, you could see some fluctuations in the product gross margin.

邁赫迪，謝謝你的問題。在產品毛利率方面，我認為我們的收入增長和毛利率表現都很強勁。如果回顧 2022 年全年，我們的產品毛利率約為 61%，這符合我們 60% 至 65% 的長期毛利率目標。我們一直在說的是，這種轉變可能是崎嶇不平的。根據任何給定季度出貨的產品，您可能會看到產品毛利率出現一些波動。

In Q1, our product gross margins were around 59% for the quarter, which was up about 1% compared to Q4. And looking into sort of Q2, we do expect to see a slight improvement in product gross margins, mainly driven by favorable product mix. As Luc mentioned that we do expect to grow in the second half of the year. And with that, we do expect to see a more favorable product mix from a margin perspective. And we do expect that our gross margins will improve based upon that.

第一季度，我們的產品毛利率約為 59%，與第四季度相比增長了約 1%。展望第二季度，我們確實預計產品毛利率會略有改善，這主要是受有利的產品組合推動。正如 Luc 提到的那樣，我們確實希望在今年下半年實現增長。因此，我們確實希望從利潤率的角度看到更有利的產品組合。我們確實希望我們的毛利率會因此而提高。

As a company, we've been very disciplined in our ASP management and will continue to drive our product cost reductions, Mehdi. And for the full year of 2023, we do expect our product gross margins to be in line with our long-term target of 60% to 65% from there.

作為一家公司，我們在 ASP 管理方面一直非常嚴格，並將繼續推動我們降低產品成本，Mehdi。對於 2023 年全年，我們確實預計我們的產品毛利率將符合我們 60% 至 65% 的長期目標。

I think the second part of your question related to our silicon IP gross margins, they were just over 90% in Q1. And we do expect a similar sort of mix being around that sort of 90% gross margin on a sort of go-forward basis. So you can see that we have a fairly rich and healthy gross margin profile on silicon IP.

我認為你問題的第二部分與我們的矽 IP 毛利率有關，它們在第一季度剛剛超過 90%。我們確實預計在某種程度上，類似的組合會在 90% 左右的毛利率左右。因此，您可以看到我們在矽 IP 方面擁有相當豐厚且健康的毛利率狀況。

Got it. And then one question for Luc. Talking about or referencing a parity between DDR4 and DDR5 in the first half of '24, so that's a 50-50. Should I assume that like Q2 this year, the reference point is like 20, so that over the next 3 quarters, the mix increases by like around 10 points of incremental increase with 10 points of increase on a quarterly basis?

知道了。然後有一個問題要問 Luc。在 24 世紀上半年談論或引用 DDR4 和 DDR5 之間的奇偶校驗，所以這是 50-50。我是否應該假設像今年第二季度一樣，參考點是 20，以便在接下來的 3 個季度中，組合增加大約 10 個增量增量，每季度增加 10 個百分點？

Thank you, Mehdi. Yes, we expect the crossover point to happen in the first half of 2024. As I indicated earlier, we are starting to see orders for DDR5 that will start shipping at the end of this quarter, so this is really encouraging. As we said also earlier, the transition between DDR4 and DDR5 is going to be lumpy in nature. So it's difficult to say whether it's going to be linear or not, over the period that stretches from now to the first half of 2024. But what we can say is that the trend is going to be in favor of DDR5 over DDR4 as customers digest the inventories of DDR4 and start to ramp DDR5, but it's going to be lumpy in nature.

謝謝你，邁赫迪。是的，我們預計交叉點將在 2024 年上半年出現。正如我之前所指出的，我們開始看到 DDR5 訂單將在本季度末開始發貨，所以這確實令人鼓舞。正如我們之前所說，DDR4 和 DDR5 之間的過渡在本質上是不穩定的。因此，很難說在從現在到 2024 年上半年的這段時間裡它是否會是線性的。但我們可以說的是，隨著客戶消化，趨勢將有利於 DDR5 而不是 DDR4 DDR4 的庫存並開始增加 DDR5，但它本質上是塊狀的。

The next question is from Kevin Cassidy with Rosenblatt Securities.

下一個問題來自 Rosenblatt Securities 的 Kevin Cassidy。

Congratulations on the good results. Maybe just to follow on with that, with DDR4, inventories getting worked down this quarter, can you see DDR4 revenue growth in the second half of the year? Or will that just continue to decline?

祝賀取得好成績。也許只是跟進，隨著 DDR4 庫存在本季度減少，你能看到下半年 DDR4 收入增長嗎？還是會繼續下降？

So as we said, there's still some high level of inventories of DDR4, but these inventories are being digested or burned. I think it's going to take a couple of quarters for these inventories to burn. This being said, there's still demand for DDR4. And we expect that we should receive more orders for DDR4 towards the second half of the year.

因此，正如我們所說，DDR4 的庫存仍然很高，但這些庫存正在被消化或銷毀。我認為這些庫存需要幾個季度才能燃燒殆盡。話雖這麼說，但仍然存在對 DDR4 的需求。我們預計我們應該在今年下半年收到更多 DDR4 訂單。

DDR4 still has a life. As we said, we expect the crossover point to happen in the second -- in the first half of 2024. We have good backlog, but obviously, that backlog doesn't cover us until that period. So at some point in time, our customers are going to replenish their backlog to cover the demand for DDR4 as we move through the transition. So we expect more orders from DDR4 in the second half of the year.

DDR4 還是有生命的。正如我們所說，我們預計交叉點將在 2024 年上半年出現。我們有很好的積壓，但顯然，直到那個時期，積壓才覆蓋我們。因此，在某個時間點，我們的客戶將補充他們的積壓訂單，以滿足我們在過渡期間對 DDR4 的需求。所以我們預計下半年會有更多的 DDR4 訂單。

Okay. Great. And maybe on a different subject, the market has been -- I see a lot of activity around the CXL developments. I think you've said in the past, you're expecting second half of '24. But can you give us any data points or any feel around your licensing activity for CXL? Maybe if you could compare it to any other type of licensing ramps that you've seen in the past. Is it an aggressive ramp? Or do you have plenty of customers? Maybe just some type of feel of how the CXL licensing activity is.

好的。偉大的。也許在不同的主題上，市場已經——我看到圍繞 CXL 開發的很多活動。我想你過去說過，你期待 24 年的下半年。但是你能給我們任何數據點或者你對 CXL 許可活動的任何感覺嗎？也許如果您可以將它與您過去見過的任何其他類型的許可坡道進行比較。這是一個激進的斜坡嗎？或者你有很多客戶嗎？也許只是對 CXL 許可活動的某種感覺。

Thank you, Kevin. Yes, CXL has been a strong driver to our silicon IP growth last year on the controller side as well as on the PHY side. A lot of our end applications had to do with PCIe or CXL. That explains the record revenues that we reached last year on the silicon IP revenue, the $130 million for the year.

謝謝你，凱文。是的，CXL 一直是我們去年在控制器端和 PHY 端矽 IP 增長的強大驅動力。我們的很多終端應用都與 PCIe 或 CXL 有關。這解釋了我們去年在矽 IP 收入方面創下的創紀錄收入，全年 1.3 億美元。

We do see now some headwind in the market that are not coming from CXL, per se, it's just the macroeconomic environment is less favorable. But CXL continues to drive some sales for our silicon IP business. These silicon IP sales are going into systems, silicon systems that our customers are deploying in the first generation of CXL, and that's how we play in that first generation of CXL. Our products are going to reach the market later down the road when CXL 2.0 comes into play in a couple of years from now.

我們現在確實看到市場上的一些逆風不是來自 CXL，本身，只是宏觀經濟環境不太有利。但 CXL 繼續推動我們的矽 IP 業務的一些銷售。這些矽 IP 銷售將進入系統，我們的客戶在第一代 CXL 中部署的矽系統，這就是我們在第一代 CXL 中的表現。幾年後，當 CXL 2.0 開始發揮作用時，我們的產品將進入市場。

The next question is from Nam Kim with Arete Research.

下一個問題來自 Arete Research 的 Nam Kim。

I have a couple of questions. Just curious, DDR5 RCD chip price premium. I know you don't comment on chip pricing, however, do you expect the DDR5 to carry RCD chip price premium over DDR4? I know chip price are usually very high initially and come down over time when product mature. But I'm just curious, if you see DDR5 chip price will continue to carry premium over DDR4 based over lifetime.

我有一些問題。只是好奇，DDR5 RCD 芯片價格溢價。我知道您不會對芯片定價發表評論，但是，您是否期望 DDR5 的 RCD 芯片價格高於 DDR4？我知道芯片價格最初通常非常高，並且隨著產品成熟而逐漸下降。但我很好奇，如果你看到 DDR5 芯片的價格將在整個生命週期內繼續高於 DDR4。

And then second question about PMIC. I think you are developing PMIC on DDR5 module. Are you developing your own chip? Or you have any partnership with an existing PMIC supplier? And when should we expect the ramp of this product?

然後是關於 PMIC 的第二個問題。我認為您正在 DDR5 模塊上開發 PMIC。你在開發自己的芯片嗎？或者您與現有的 PMIC 供應商有任何合作關係？我們什麼時候可以期待這款產品的量產？

Hi, Nam, and welcome. The first question for DDR5, yes, you're right, we do see an ASP premium associated with the DDR4 to DDR5 transition. And the DDR4 products have been in the market for 6 to 7 years now. And as expected, we have seen some erosion over time and by seeing the pricing is stabilizing, as we speak, on DDR4.

嗨，Nam，歡迎光臨。 DDR5 的第一個問題，是的，你是對的，我們確實看到與 DDR4 到 DDR5 過渡相關的 ASP 溢價。而DDR4產品已經上市6到7年了。正如預期的那樣，隨著時間的推移，我們看到了一些侵蝕，並且正如我們所說，DDR4 的定價正在穩定。

In DDR5, today, the ASP are higher. It is expected in new product launch. They are higher now, but we expect to see some erosion over time. But if we take the DDR4 example, it takes -- it took 6 to 7 years to be at the price we are now. Price really erodes as volumes grow, and that's something we're going to monitor quarter-over-quarter.

在 DDR5 中，今天的 ASP 更高。預計在新品發布會上。它們現在更高，但我們預計隨著時間的推移會出現一些侵蝕。但如果我們以 DDR4 為例，它需要 6 到 7 年才能達到我們現在的價格。隨著銷量的增長，價格確實會下降，這是我們將逐季監控的事情。

To your question regarding PMIC or PMIC devices, we are developing our own PMIC devices, and we're developing this on our own, not in a partnership. And we expect to hit the market with the PMIC devices next year.

對於您關於 PMIC 或 PMIC 設備的問題，我們正在開發我們自己的 PMIC 設備，而且我們正在自行開發，而不是合作開發。我們預計明年 PMIC 設備將投放市場。

Okay. One more question, if I can. Silicon IP revenue, last time, you guided low to mid-single-digit percent. This year, you said it's a macro headwind. But in the meantime, there are a lot of activities going on with AI in cloud and some AR solution in edge. Do you still keep your -- all your guidance, like low to mid-single-digit growth this year or any change?

好的。還有一個問題，如果可以的話。矽 IP 收入，上次，你指導了低到中個位數的百分比。今年，你說這是一個宏觀逆風。但與此同時，雲中的 AI 和邊緣中的一些 AR 解決方案正在進行很多活動。你是否仍然保持你所有的指導，比如今年的中低個位數增長或任何變化？

Yes, there are a lot of end applications for our controllers, our PHYs as well as our security IP, it's just that the macro environment is a bit challenging these days with a lot of headwinds. We do see the number of designs are just slowing down. We see some start-ups taking a little more time to make decisions. So yes, we maintain our guidance of low single-digit growth year-over-year, remembering that last year was an exceptionally high growth year. But in the long run, we expect that business to grow between 10% and 15%. I think we just have to deal with the current headwinds this year.

是的，我們的控制器、我們的 PHY 以及我們的安全 IP 有很多終端應用程序，只是這些天宏觀環境有點挑戰，有很多逆風。我們確實看到設計的數量正在放緩。我們看到一些初創企業需要更多的時間來做決定。所以是的，我們維持我們的同比低個位數增長的指導，記住去年是一個異常高的增長年。但從長遠來看，我們預計該業務將增長 10% 至 15%。我認為我們今年只需要應對當前的不利因素。

Our next question is from Sidney Ho with Deutsche Bank.

我們的下一個問題來自德意志銀行的 Sidney Ho。

I have 2 questions. The first question is, in the past, you talked about the memory chipset TAM is somewhere when -- or last year was $800 million to $900 million. Can you remind us what the split between DDR4 and DDR5 was? And as you think about the order trends you're seeing year-to-date, DDR4 still coming down, DDR5 start picking up, how do you expect that TAM to change this year? And what do you think your revenue mix would look like?

我有兩個問題。第一個問題是，過去，你談到內存芯片組 TAM 是什麼時候——或者說去年是 8 億到 9 億美元。您能提醒我們 DDR4 和 DDR5 之間的區別是什麼嗎？當您考慮今年迄今看到的訂單趨勢時，DDR4 仍在下降，DDR5 開始回升，您預計 TAM 今年會發生什麼變化？您認為您的收入組合會是什麼樣子？

So I would say that when we talk about the RCD chip, we don't see the TAM changing much year-over-year, if we talk about the RCD chip alone. As we said earlier regarding revenue, the TAM split between DDR4 and DDR5 is also lumpy. It depends on how fast our customers and our customers' customers are going to digest their inventory on DDR4, number one, and ramps their DDR5-based products. But again, I think we have to be very agile this year for total TAM that would remain about the same. And if we assume that the TAM for RCD remains the same, it means that we are expecting to continue to grow our share in the combined time of RCD as we look at 2023. The companionships can add $200 million to $300 million of TAM to that when it's in -- when DDR5 is ramping in earnest on an annual basis.

所以我想說，當我們談論 RCD 芯片時，如果我們單獨談論 RCD 芯片，我們不會看到 TAM 同比發生太大變化。正如我們之前關於收入所說的那樣，DDR4 和 DDR5 之間的 TAM 分配也是起伏不定的。這取決於我們的客戶和我們客戶的客戶將以多快的速度消化他們在 DDR4 上的庫存，並增加他們基於 DDR5 的產品。但同樣，我認為今年我們必須非常敏捷，以使總 TAM 保持不變。如果我們假設 RCD 的 TAM 保持不變，這意味著我們預計到 2023 年我們將繼續增加我們在 RCD 合併時間中的份額。夥伴關係可以增加 2 億至 3 億美元的 TAM什麼時候——什麼時候 DDR5 每年都在認真地增加。

Great. And then maybe a follow-up question. I know there's a lot of excitement around the generative AI, and that uses a lot of memory in the form of high-bandwidth memory and high-density DRAM modules. Can you walk us through maybe qualitatively or quantitatively, how you are benefiting from this, both from an IP and a product revenue point of view?

偉大的。然後可能是一個後續問題。我知道圍繞生成式 AI 有很多令人興奮的地方，它以高帶寬內存和高密度 DRAM 模塊的形式使用了大量內存。您能否從 IP 和產品收入的角度從定性或定量的角度向我們介紹一下您如何從中受益？

Sure. Great question. On the IP side, generative AI and high workload type of applications were a catalyst to our IP sales, especially on the memory side. As part of our offering, we do have HBM and GDDR6 memory subsystems that we're going into for silicon products from our customers that are addressing those type of applications. And again, that explain the growth that we saw in the silicon IP business last year.

當然。很好的問題。在 IP 方面，生成式 AI 和高工作負載類型的應用程序是我們 IP 銷售的催化劑，尤其是在內存方面。作為我們產品的一部分，我們確實有 HBM 和 GDDR6 內存子系統，我們將針對這些子系統從我們的客戶那裡獲得用於解決這些類型應用程序的矽產品。再一次，這解釋了我們去年在矽 IP 業務中看到的增長。

On the product side, generative AI does not necessarily increase the TAM, but it's a proof point that the trends underlying our strategy in terms of need for more capacity and more bandwidth are very strong strength. And I think we're very pleased with that. And we do see the development of GPUs and specialized products around generative AI type of applications to be a catalyst for standard modules as well. So I think it affected, in a positive way, our silicon IP business and continues to. And it's also a proof point that bandwidth and capacity are critical factors in our strategy.

在產品方面，生成式 AI 不一定會增加 TAM，但它證明了我們在需要更多容量和帶寬方面的戰略趨勢是非常強大的力量。我認為我們對此非常滿意。我們確實看到圍繞生成式 AI 類型的應用程序開發 GPU 和專用產品，這也將成為標準模塊的催化劑。所以我認為它以積極的方式影響了我們的矽 IP 業務，並將繼續影響。這也證明帶寬和容量是我們戰略中的關鍵因素。

The next question is a follow-up question from Gary Mobley with Wells Fargo.

下一個問題是 Gary Mobley 與 Wells Fargo 的後續問題。

Hey, Gary, are you there?

嘿，加里，你在嗎？

Hey, guys, sorry about that. I just had a multipart follow-up question as it relates to the companionship opportunity. Looking specifically at the SPD Hub and the 2 temperature sensors that may be located on each DDR5 DIMM, when would you expect to ship your specific companionship products? Is that Gen 2 or Gen 3 of DDR5? And then I have a follow-up related to that.

嘿，伙計們，對不起。我剛剛有一個多部分的跟進問題，因為它與陪伴機會有關。具體查看可能位於每個 DDR5 DIMM 上的 SPD 集線器和 2 個溫度傳感器，您預計何時發貨您的特定配套產品？ DDR5 是第 2 代還是第 3 代？然後我有一個與此相關的後續行動。

So in the first generation of DDR5, we'll ship modest volumes of those chips, as we indicated in earlier calls of the temperature sensor and SPD Hub, our modest volumes towards the end of 2023 and in 2024. We're also working on follow-on generations of all of the companionships to hit the follow-on generations of DDR5. DDR5 is going to be on the market for a long time, like we have many generations of DDR4, and therefore, we are -- we're acting on follow-on generations of those products or the follow-on generation of DDR5 RCD chips.

因此，在第一代 DDR5 中，我們將適度出貨這些芯片，正如我們在之前對溫度傳感器和 SPD Hub 的電話會議中所指出的那樣，我們將在 2023 年底和 2024 年實現適度出貨。我們還在努力所有陪伴的後代都將成為 DDR5 的後代。 DDR5 將在市場上銷售很長時間，就像我們有許多代 DDR4，因此，我們正在對這些產品的後續幾代或 DDR5 RCD 芯片的後續一代採取行動.

Okay. I guess related to that, a common question that I get is trying to understand who is shipping SPD Hubs and temperature sensors for your products today for DDR5, and what compels your customers to eventually start to take your SPD Hub, your temperature sensors. And what do you think the attach rate for those companion chips can be for your RCD sales?

好的。我想與此相關，我得到的一個常見問題是試圖了解今天誰在為您的 DDR5 產品運送 SPD 集線器和溫度傳感器，以及是什麼迫使您的客戶最終開始採用您的 SPD 集線器和溫度傳感器。您認為這些配套芯片的附加率對您的 RCD 銷售有何影響？

So there are multiple vendors of companionships, be there the temperature sensor, SPD Hubs or power management chips. And our customers are using different combinations of different suppliers and RCD suppliers in the first generation of products, the goal being to ramp up in the market. I think what's going to be compelling for future generations is that the qualification and validation process becomes more and more challenging and difficult as you increase the speed of the RCD and you roll out new generations of DDR5. And that's why we're working on the follow-on generation of those products. And at some point in time, it will be compelling for customers to work with the people who will be able to go through the validation process the fastest.

所以有多個廠商的合作夥伴，無論是溫度傳感器、SPD Hubs還是電源管理芯片。我們的客戶在第一代產品中使用不同供應商和 RCD 供應商的不同組合，目標是擴大市場。我認為，隨著 RCD 速度的提高和新一代 DDR5 的推出，資格和驗證過程變得越來越具有挑戰性和難度，這對後代來說將是引人注目的。這就是我們致力於開發這些產品的下一代產品的原因。在某個時間點，客戶與能夠以最快的速度完成驗證過程的人員合作將很有吸引力。

So I think the first generation of DDR5 is going to see a lot of suppliers in that space. And over time, that number of suppliers may reduce as the complexity of the DDR5 systems increase over the years to come.

所以我認為第一代 DDR5 將會在該領域看到很多供應商。隨著時間的推移，隨著 DDR5 系統在未來幾年的複雜性增加，供應商的數量可能會減少。

(Operator Instructions) At this time, there are no further questions. This concludes the question-and-answer session. I would now like to turn the conference back over to the company.

（操作員說明）此時，沒有進一步的問題。問答環節到此結束。我現在想把會議轉回給公司。

Thank you to everyone who has joined us today, for your continued interest and time. We look forward to speaking with you again soon. Have a very good day.

感謝今天加入我們的每一個人，感謝你們一直以來的興趣和時間。我們期待很快再次與您交談。祝你有美好的一天。

Thank you. This now concludes today's conference.

謝謝。今天的會議到此結束。