意法半導體 (STM) 2018 Q2 法說會逐字稿

Ladies and gentlemen, good morning or good afternoon, welcome to the second quarter 2018 earnings release conference call and live webcast. I'm Myra, the Chorus Call operator. (Operator Instructions) And the conference is being recorded. (Operator Instructions) The conference must not be recorded for publication or broadcast.

女士們、先生們，早上好，下午好，歡迎來到2018年第二季財報電話會議和網路直播。我是合唱呼叫操作員邁拉。（操作員指示）會議正在錄製中。（操作員說明）不得對會議進行錄音以供出版或廣播。

At this time, it's my pleasure to hand over to Mr. Tait Sorensen, Group Vice President, Investor Relations. Please go ahead, sir.

此時此刻，我很高興將工作交給負責投資人關係的集團副總裁 Tait Sorensen 先生。請繼續，先生。

Good morning, everyone. Thank you for joining our second quarter 2018 financial results conference call. Hosting the call today is Jean-Marc Chery, ST's President and Chief Executive Officer. Joining Jean-Marc on the call today are Lorenzo Grandi, President of Finance, Infrastructure and Services, and our Chief Financial Officer; Marco Cassis, President of Sales, Marketing, Communications and Strategy Development.

大家早安。感謝您參加我們的 2018 年第二季財務業績電話會議。今天主持電話會議的是 ST 總裁兼執行長 Jean-Marc Chery。今天與 Jean-Marc 一起參加電話會議的還有財務、基礎設施和服務總裁兼財務長 Lorenzo Grandi； Marco Cassis，銷售、行銷、傳播和策略開發總裁。

This live webcast and presentation materials can be accessed on ST's Investor Relations website. A replay will be available shortly after the conclusion of this call.

您可以在 ST 的投資者關係網站上存取該現場網路廣播和演示資料。本次電話會議結束後不久將進行重播。

This call will include forward-looking statements that involve risk factors that could cause ST's results to differ materially from management's expectations and plans. We encourage you to review the safe harbor statement contained in the press release that was issued with the results this morning and also in ST's most recent regulatory filings for a full description of these risk factors. (Operator Instructions)

這次電話會議將包括前瞻性陳述，這些陳述涉及可能導致 ST 的業績與管理層的預期和計劃存在重大差異的風險因素。我們鼓勵您查看今天早上發布的結果新聞稿中包含的安全港聲明以及 ST 最新的監管文件中包含的安全港聲明，以獲取對這些風險因素的完整描述。（操作員說明）

I'd like to now turn the call over to Jean-Marc Chery, ST's President and CEO.

我現在想把電話轉給 ST 總裁兼執行長 Jean-Marc Chery。

Thank you, Tait. Good morning, everyone. Thank you for joining us on our call today. I am very pleased to be here to talk with you, together with my colleagues, in my first earning results call that's leading ST.

謝謝你，泰特。大家早安。感謝您今天參加我們的電話會議。我很高興能和我的同事們一起參加我的第一次盈利結果電話會議，該電話會議是領先的ST。

So let's begin with an overview of our Q2 performance. Our second quarter results were solid and in line with our expectations. We had another quarter of double-digit year-over-year revenue growth, balanced across all product groups, regions and end markets. And we drove another quarter of improved performance across key financial metrics.

讓我們先概述一下我們第二季的表現。我們第二季的業績穩健，符合我們的預期。我們的收入又實現了兩位數的年增長，在所有產品組、地區和終端市場上保持平衡。我們在關鍵財務指標上又推動了一個季度的績效改善。

Looking at our Q2 business results. Both revenues and gross margin were above the midpoint of the company outlook. We grew revenues 18%, our seventh consecutive quarter of year-over-year double-digit sales growth. The revenue growth was broad and balanced. This is important to achieving sustainable revenue growth. From an end market viewpoint, Industrial was particularly strong during the quarter.

看看我們第二季的業務成果。收入和毛利率均高於公司前景的中點。我們的營收成長了 18%，連續第七個季度銷售額年增兩位數。收入成長廣泛且均衡。這對於實現永續收入成長非常重要。從終端市場的角度來看，工業在本季尤其強勁。

Our gross profit increased substantially, $911 million, up 24% over the year. Our gross margin was 40.2%, increasing 190 basis points year-over-year, largely driven by improved manufacturing efficiency and by a favorable mix shift toward higher-value products.

我們的毛利大幅成長，達到 9.11 億美元，年增 24%。我們的毛利率為 40.2%，年成長 190 個基點，這主要是由於製造效率的提高以及向高價值產品的有利組合轉變。

Operating expenses were $622 million, above our expectations, mainly due to one-time nonrecurrent items that were not embedded in our Q2 expected launch. Importantly, our sales growth translated into operating leverage, driving expansion of our operating income, margin and net income.

營運費用為 6.22 億美元，高於我們的預期，主要是由於我們預計第二季推出的一次性非經常性項目未包含在內。重要的是，我們的銷售成長轉化為經營槓桿，推動了我們營業收入、利潤率和淨利潤的擴大。

ST's operating income increased 60% to $289 million. Our operating margin improved 330 basis points to 12.7%. And our net income increased 73% to $261 million.

ST的營業收入成長了60%，達到2.89億美元。我們的營業利益率提高了 330 個基點，達到 12.7%。我們的淨利潤成長了 73%，達到 2.61 億美元。

Turning to our cash and investments. Our profitable growth is driving improvements in our net cash from operating activities, with an increase of over 36% on a trailing 12-months basis. For the quarter, net cash from operating activities was $360 million.

轉向我們的現金和投資。我們的獲利成長推動了經營活動淨現金的改善，過去 12 個月成長了 36% 以上。本季經營活動產生的淨現金為 3.6 億美元。

Free cash flow was negative $40 million in Q2, mainly to 2 elements: a high level of CapEx in the quarter above the annual run rate of our expected 2018 CapEx range between $1.2 billion to $1.3 billion; a change in working capital, mainly due to inventory increase to support demand in Q3.

第二季自由現金流為負 4,000 萬美元，主要有兩個因素：該季度的資本支出水準高於我們預期 2018 年資本支出範圍 12 億至 13 億美元的年運行率；營運資金的變化，主要是由於庫存增加以支持第三季的需求。

We expect to return to a positive free cash flow for the third and fourth quarter and for 2018 to generate free cash flow well above the dividend paid during the year. Our goal is to exit 2018 with a higher net cash position compared to 2017.

我們預計第三季和第四季以及 2018 年將恢復正的自由現金流，產生遠高於當年支付的股利的自由現金流。我們的目標是在 2018 年結束時擁有比 2017 年更高的淨現金部位。

Let's move to our product groups' performance, starting with Automotive and Discrete. So during the second quarter, ADG revenues increased 15.2% year-over-year on a double-digit growth for both Automotive and Power Discrete. Operating profit increased by 20.8% (sic) [28.8%] to $84 million, and operating margin increased to 9.7% from 8.7%.

讓我們從汽車和離散產品組開始討論我們的產品組的表現。因此，第二季的 ADG 營收年增 15.2%，汽車和功率分立元件業務均達到兩位數成長。營業利潤成長 20.8%（原文如此）[28.8%]，達到 8,400 萬美元，營業利益率從 8.7% 增至 9.7%。

On a sequential basis, ADG revenue increased 6.5%. Revenue growth did not immediately translate into an improvement in operating profit and margin during the second quarter. This is mainly due to some third-party manufacturing efficiencies and extra cost in the supply chain. In terms of ADG's operating margin looking forward, we confirm that this will be in the low teens for the second half of 2018.

ADG 營收季增 6.5%。第二季營收成長並未立即轉化為營業利潤和利潤率的改善。這主要是由於一些第三方製造效率和供應鏈中的額外成本所造成的。就 ADG 的未來營業利潤率而言，我們確認 2018 年下半年的營業利潤率將在十幾歲左右。

Turning to the Microcontrollers and Digital ICs Group. MDG posted a strong year-over-year increase, with revenue up almost 28%. This double-digit sales growth came from both Microcontrollers and Digital ICs. In terms of profitability, MDG's operating margin increased sharply year-over-year to 20.3% from 11.7%.

轉向微控制器和數位 IC 組。MDG 較去年同期強勁成長，營收成長近 28%。這種兩位數的銷售成長來自微控制器和數位 IC。在獲利能力方面，MDG的營業利益率較去年同期大幅成長，從11.7%增至20.3%。

On a sequential basis, MDG's revenue increased 4.3%, and its operating margin also expanded. Our microcontroller business remains the main driver of operating profitability. The digital business contributed to the operating margin improvement on a sequential and year-over-year basis. We confirm that MDG's operating margin will be about 20% for the second half of 2018.

MDG 的營收季增 4.3%，營業利潤率也有所擴大。我們的微控制器業務仍然是營業利潤的主要驅動力。數位業務為營業利潤率環比和同比改善做出了貢獻。我們確認MDG 2018年下半年的營業利潤率約為20%。

Finally, Analog, MEMS and Sensors. AMS revenues increased 10.7% year-over-year on a double-digit growth for both Imaging and Analog. In term of profitability, AMS operating margin increased to 10.5% from 9.4%.

最後是類比、MEMS 和感測器。AMS 營收年增 10.7%，影像和類比業務均達到兩位數成長。在獲利能力方面，AMS營業利益率從9.4%增至10.5%。

On a sequential basis, AMS revenues decreased 6.4%, as anticipated, on lower smartphone activity. Analog and MEMS revenues posted sequential increases. The improved product mix led to a sequential operating margin progression. For AMS, we anticipate second half operating margins to move into the mid-teens as we benefit from revenue leverage, specifically from smartphone applications.

如預期，由於智慧型手機活動減少，AMS 收入較上季下降 6.4%。模擬和 MEMS 收入環比增長。產品組合的改善導致營業利益率持續上升。對於 AMS 來說，我們預計下半年的營業利潤率將達到 15%左右，因為我們受益於收入槓桿，特別是智慧型手機應用程式。

Let's now discuss how this performance translated in new business and product leadership across the end market we sell. In Automotive, we sell most of the electronic applications in the car, with a particular focus on car electrification and autonomous driving. In car electrification, during Q2, we continued to expand the design win pipeline for our silicon carbide products.

現在讓我們討論一下這種績效如何轉化為我們銷售的終端市場的新業務和產品領先地位。在汽車領域，我們銷售汽車中的大部分電子應用，特別關注汽車電氣化和自動駕駛。在汽車電氣化方面，第二季度，我們繼續擴大碳化矽產品的設計贏得管道。

And we achieved an important galvanic isolation technology design win for an electrical vehicle. Galvanic isolation is one of the focus areas for us in expanding our portfolio of differentiated, high-value products for Industrial and for Automotive. We also continue to win business in more traditional automotive application areas, like braking, engine management and body comfort.

我們為電動車贏得了重要的電流隔離技術設計勝利。電流隔離是我們擴展工業和汽車領域差異化高價值產品組合的重點領域之一。我們也繼續在更傳統的汽車應用領域贏得業務，例如煞車、引擎管理和車身舒適度。

Industrial is a very broad area for us with many customers and many different applications. Here, we focus on smart industry where we beat on our leading position in general-purpose 32-bit microcontrollers and on our strong portfolio of power, analog, sensor and connectivity products. We also deploy our system solution expertise to deliver multiple products and complete solutions. Some examples this quarter include our satellite tolling module and the custom power line modem.

工業對我們來說是一個非常廣泛的領域，擁有許多客戶和許多不同的應用。在這裡，我們專注於智慧型產業，憑藉我們在通用 32 位元微控制器方面的領先地位以及我們強大的電源、類比、感測器和連接產品組合。我們也利用我們的系統解決方案專業知識來提供多種產品和完整的解決方案。本季度的一些例子包括我們的衛星收費模組和客製化電力線路調變解調器。

Moving to personal electronics. Our main focus here is on smartphones. In Q2, we expanded our reach with customers, in particular in Asia. We have design wins for Time-of-Flight sensors, touchscreen controllers, motion sensors and protection devices. We also won a design win with our STM32 microcontroller at a key Japanese OEM for high-definition televisions. This is an expansion for us into a new market that was traditionally difficult to penetrate.

轉向個人電子產品。我們的主要關注點是智慧型手機。在第二季度，我們擴大了客戶範圍，特別是在亞洲。我們在飛行時間感測器、觸控螢幕控制器、運動感測器和保護設備方面取得了設計成果。我們也憑藉 STM32 微控制器贏得了一家日本主要高清電視 OEM 的設計勝利。這是我們向傳統上難以滲透的新市場的擴張。

In communications equipment, computers and peripherals, we are leveraging our in-house processes in a number of focused application areas. Example this quarter, our design for fiber optics infrastructure with our BiCMOS process that is optimized for high-frequency communication application; and an ASIC design for 5G infrastructure with the silicon or decelerator process that meets the latest cellular RF requirements.

在通訊設備、電腦和周邊設備領域，我們在許多重點應用領域中利用我們的內部流程。以本季為例，我們採用 BiCMOS 製程設計光纖基礎設施，該製程針對高頻通訊應用進行了最佳化；以及適用於 5G 基礎設施的 ASIC 設計，其矽或減速器製程可滿足最新的蜂窩射頻要求。

Let's conclude with our Q3 guidance. We expect revenues to increase about 10% at the midpoint on a sequential basis. This would represent year-over-year growth of about 16.8%.

讓我們以第三季的指導作為結束。我們預計營收將環比中點成長約 10%。這意味著同比增長約 16.8%。

By end market, in Q3, we expect sequential strong growth in personal electronics. We also anticipate solid growth in Automotive, despite the fact that we will normally see some seasonality here. And we are expecting normal seasonality for Industrial.

到第三季終端市場，我們預計個人電子產品將連續強勁成長。我們也預期汽車產業將出現穩健成長，儘管事實上我們通常會看到一些季節性因素。我們預計工業品將出現正常的季節性。

By product, we expect sequential revenue growth to be driven by imaging, automotive and power discretes. We anticipate normal seasonality in analog and microcontrollers.

按產品劃分，我們預期收入連續成長將由成像、汽車和功率分立元件推動。我們預期模擬和微控制器會出現正常的季節性。

We anticipate the third quarter gross margin at about 40%. This is in line with our communication at our Capital Market Day, that in the second half of 2018, we see revenue growth as the main positive driver for the gross margin, substantially offset by the product mix evolution. As a result, we expect to maintain our current level of gross margin, which will drive gross profit increases in line with revenue growth.

我們預計第三季毛利率約為40%。這與我們在資本市場日上的溝通一致，即在 2018 年下半年，我們認為收入成長是毛利率的主要積極驅動力，但產品結構的演變大大抵消了收入成長。因此，我們預計將維持目前的毛利率水平，這將推動毛利隨著收入成長而成長。

Adding together the different ingredients, including OpEx discipline, we expect to continue to make steady year-over-year progress at the gross profit, operating profit and net income levels. So I would like to reconfirm our top priority: deliver our 2018 objective of making another step forward in term of year-over-year revenue growth and profitability.

將包括營運支出紀律在內的不同因素綜合在一起，我們預計毛利、營業利潤和淨利潤水準將繼續取得穩定的年比進展。因此，我想再次確認我們的首要任務：實現 2018 年的目標，在同比收入成長和獲利能力方面再向前邁進一步。

Overall, we are on track with the goals set at our Capital Markets Day in May: grow 2018 revenues between about 14% to 17% versus 2017; and in the second half of 2018, ADG operating margin to be in the low teens; AMS operating margin to be in the mid-teens; MDG operating margin to be about 20%.

整體而言，我們正在實現 5 月資本市場日設定的目標：2018 年營收較 2017 年成長約 14% 至 17%； 2018年下半年，ADG營業利潤率將降至十幾歲； AMS 營運利潤率將達到十幾歲左右； MDG 營業利益率約 20%。

We are also on track with our longer-term goal of sustainable profitable growth to continue to create shareholder value and to make ST an even stronger player in the semiconductor industry.

我們也致力於實現可持續獲利成長的長期目標，持續創造股東價值，並使意法半導體成為半導體產業更強大的參與者。

Now we are happy to answer to your questions. Thank you.

現在我們很高興回答您的問題。謝謝。

(Operator Instructions) The first question is from Achal Sultania from Crédit Suisse.

（操作員說明）第一個問題來自瑞士信貸銀行的 Achal Sultania。

Two questions. First, on gross margins. Jean-Marc, you mentioned that there is some headwind from product mix as we go into Q3. Just, can you give us some color as to -- is it one particular product in high-end smartphone application or is it like multiple products which is impacting gross margin headwind? And then, secondly, on the inventory, we've seen inventory rise for a couple of quarters now by about more than $100 million. So just wanted to understand, like, is it again -- is it driven by just 1 or 2 specific projects? Or is it broad-based in inventory increase across different products?

兩個問題。首先是毛利率。Jean-Marc，當您提到，進入第三季時，產品組合有些阻力。只是，您能否給我們一些解釋——它是高階智慧型手機應用中的一種特定產品，還是像多種產品一樣影響毛利率？其次，在庫存方面，我們已經看到庫存已經連續幾季增加了約 1 億多美元。所以只是想了解一下，是不是又是由 1 或 2 個特定項目驅動的？或者不同產品的庫存增加是否廣泛？

Thank you for the question. So I address it to Lorenzo, and I will make a complement, okay, if needed.

謝謝你的提問。所以我向洛倫佐提出，如果需要的話我會補充一下。

Good morning to everybody. Lorenzo Grandi speaking. About Q3 gross margin, as we said at our Capital Market Day, we have on the gross margin for Q3 definitely impact related to the product mix. In particular, we are growing significantly in Q3 and also in Q4 in personal electronic, in particular in smartphone. This growth, of course, from a point of view of gross margin, is not accretive. Gross margins will be impacted by this ingredient of product mix. On the other side, we will have a positive effect related to improve manufacturing efficiency that will substantially offset this negative impact. So that's why we are guiding in the range of 40%, as was already anticipated on our Capital Market Day. In respect to the inventory, in respect to the inventory, we grew our inventory. You know that we were smoothing somehow our production over Q2 to fulfill the demand in Q3. We have a strong demand definitely in personal electronic, in the smartphone as well as also in automotive. We do expect to see a normalization of inventory in Q3 and in Q4.

大家早安。洛倫佐·格蘭迪發言。關於第三季毛利率，正如我們在資本市場日所說，我們對第三季毛利率的影響肯定與產品組合有關。特別是，我們在第三季和第四季的個人電子產品（特別是智慧型手機）方面成長顯著。當然，從毛利率的角度來看，這種成長並不是增值性的。毛利率將受到產品組合中這一成分的影響。另一方面，我們將在提高製造效率方面產生正面影響，從而大大抵消這種負面影響。這就是為什麼我們將指導價定在 40% 的範圍內，正如我們在資本市場日所預期的那樣。就庫存而言，就庫存而言，我們增加了庫存。您知道，我們以某種方式平滑了第二季的生產以滿足第三季的需求。我們對個人電子產品、智慧型手機以及汽車領域有著強勁的需求。我們確實預計第三季和第四季庫存將正常化。

Did that answer your question, Achal?

阿查爾，這回答了你的問題嗎？

Yes.

是的。

The next question is from Aleksander Peterc from Societe Generale.

下一個問題來自法國興業銀行的 Aleksander Peterc。

I just have 2. The first one would be, if we can go back a little bit on ADG margins that went down despite a sequential revenue growth. So you mentioned some input costs there. Anything else going on in terms of mix and why exactly that is reversing in the second half? And then secondly, more general question on how the current trade war rhetoric coming out of the U.S. could influence your perception of risk for the semi industry as a whole, for yourselves and for some of your key end markets, particularly in automotive.

我只有 2。所以你提到了一些投入成本。混合方面還有其他情況發生嗎？其次，更普遍的問題是，目前來自美國的貿易戰言論可能會如何影響您對整個半導體產業、自己以及一些關鍵終端市場（尤其是汽車領域）風險的看法。

Thank you for the question. So the first one will be answered by Lorenzo, and I will take the second one.

謝謝你的提問。所以第一個問題將由洛倫佐回答，我將回答第二個問題。

About the deterioration in ADG, let's say, not the improvement in ADG, you're right. We actually -- you know that in ADG, both in automotive and power discrete, we are encountering a very, very strong demand. This strong demand, let's say, we -- to follow up this demand, we are investing significantly. And we encounter, during the quarter, some temporary manufacturing inefficiency due to this increase of investment that we have done in order to follow the demand, investments that are not yet at full speed. And on top of that, we encounter also some costs in -- increased costs in the supply chain. This temporary inefficiency will be fully reabsorbed in the course of Q3 and definitely also in the course of Q4. So we do expect actually to recover in terms of profitability for ADG. And we confirm what we have said at the Capital Market Day that we do expect ADG to be in the low teens in the second half of the year in term of operating margin.

可以說，關於日均增重的惡化，而不是日均增重的改善，你是對的。事實上，你知道，在 ADG，無論是汽車領域還是功率分立元件領域，我們都遇到了非常非常強勁的需求。這種強勁的需求，比如說，為了滿足這種需求，我們正在進行大量投資。在本季度，我們遇到了一些暫時的製造效率低下的情況，這是由於我們為了滿足需求而增加的投資，但投資尚未全速進行。最重要的是，我們也遇到了一些成本——供應鏈成本增加。這種暫時的低效率將在第三季期間完全重新吸收，並且肯定也會在第四季度期間被完全吸收。因此，我們確實預計 ADG 的獲利能力實際上會恢復。我們證實了我們在資本市場日所說的，我們確實預計 ADG 在下半年的營業利潤率將達到十幾歲以下。

About the second question, I have to say that, at this moment, okay, the direct impact on our company is really negligible. However, like global companies, we are monitoring the situation. First, we are very attentive about any potential impact on our own customers, which is, let's say, a normal attention. But if the trade war escalates, we are more concerned, I have to say, about the consequences that this can have on the global macro environment. But I guess, okay, this is a common concern well spread across our peers. At this moment, okay, I have no more to add on top of that.

關於第二個問題，我必須說，目前來看，好吧，對我們公司的直接影響確實可以忽略不計。然而，與跨國公司一樣，我們正在監控事態發展。首先，我們非常關注對我們自己的客戶的任何潛在影響，可以說，這是正常的關注。但如果貿易戰升級，我不得不說，我們更擔心這可能對全球宏觀環境造成的影響。但我想，好吧，這是我們同行普遍關心的問題。目前，好吧，我沒有更多要補充的了。

The next question is from Sandeep Deshpande from JPMorgan.

下一個問題來自摩根大通的 Sandeep Deshpande。

My first question is regarding the automotive market and your ramp-up of silicon carbide. Jean-Marc, can you comment on the ramp-up of that revenue -- of silicon carbide revenue in the first half of the year and how you see that progressing in the second half? And secondly, with regard to the margin, can I ask a question on the currency, that whether the currency shift that has taken place year-on-year is impacting your OpEx, which is reducing, to some extent, your leverage associated with the operating margin?

我的第一個問題是關於汽車市場和碳化矽的成長。Jean-Marc，您能否評論一下今年上半年碳化矽收入的成長情況以及您如何看待下半年的進展？其次，關於保證金，我可以問一個關於貨幣的問題嗎，同比發生的貨幣變化是否會影響您的營運支出，這在某種程度上降低了您與營業利潤率？

Well, thank you, Sandeep. So I answer the first question, and Lorenzo will answer second question. So I really confirm that we expect our revenue from silicon carbide to be about, okay, $100 million in 2018, and I have simply to say we are on track. Second point, we are engaged, okay, with the key players in car electrification, supporting carmakers with power modules on a worldwide basis. Today, we have more than 25 projects in discussion, and I have to say that 85% are about silicon carbide. And as the industry, okay, has been adding capacity, so we are securing what is needed to serve our customers in term of substrate for the short term. And we have several silicon carbide substrates. And we are preparing our capital expenditure, okay, for the next quarters and months to support, okay, all the demand we have. So in a nutshell, okay, Sandeep, we are really on track on silicon carbide. And I confirm, I am fully convinced it will be important game-changer for the industry.

好吧，謝謝你，桑迪普。所以我回答第一個問題，洛倫佐回答第二個問題。因此，我確實確認，我們預計 2018 年碳化矽收入約為 1 億美元，我只想說我們正在步入正軌。第二點，我們與汽車電氣化領域的主要參與者合作，在全球範圍內為汽車製造商提供電源模組支援。今天，我們討論的項目超過25個，不得不說85%都是關於碳化矽的。由於該行業一直在增加產能，因此我們正在確保短期內為客戶提供基材服務所需的資源。我們有幾種碳化矽基板。我們正在準備未來幾季和幾個月的資本支出，以支持我們的所有需求。簡而言之，好吧，桑迪普，我們確實在碳化矽方面走上了正軌。我確認，我完全相信這將成為該行業重要的遊戲規則改變者。

I think the second question was about expenses, the impact of the exchange rate in our expenses. If I look at the expenses, yes, indeed, let's say, if I look at on a year-over-year basis, last year, our expenses -- our effective exchange rate in Q2 was $1.09. This year, in Q2, has been $1.19. On the expenses, of course, we have an impact, and this impact is in the range of $30 million, $35 million or something like that. If I look forward, our expected exchange rate moving from Q2 to Q3 is substantially flat because we stay at $1.19, with the current spot rate in the range of $1.17. If I look at Q4, we do expect that with the hedging contract that we have in place to be in the range of $1.18. So I would say that moving forward, there will not be a significant impact on expenses related to the exchange rating if we stay at this level of exchange rate.

我認為第二個問題是關於費用，匯率對我們費用的影響。如果我看一下支出，是的，確實，如果我逐年看的話，去年我們的支出——第二季的有效匯率是 1.09 美元。今年第二季的價格為 1.19 美元。當然，在費用方面，我們會產生影響，這種影響在 3000 萬美元、3500 萬美元或類似的範圍內。如果我展望未來，我們預期匯率從第二季到第三季基本持平，因為我們保持在 1.19 美元，而當前即期匯率在 1.17 美元的範圍內。如果我看一下第四季度，我們確實預計，根據我們現有的對沖合約，價格將在 1.18 美元的範圍內。所以我想說，展望未來，如果我們保持在這個匯率水平，與匯率評級相關的費用不會受到重大影響。

And in absolute amounts, will the OpEx remain at these levels? How do you look at that?

從絕對數量來看，營運支出會維持在這些水準嗎？你怎麼看？

Well, in terms of expenses, in Q2, our expenses came at $622 million net expenses. This was a little bit higher than what we were anticipating, because our range, if you remember, we are more in the range of $610 million and $615 million. Q2 expenses were, I would say, impacted by a couple of one-time events. Actually, we have a loss of credit in one of our jurisdiction, plus some termination benefit costs related to a certain number of our former executives. These 2 impacts were not in our, let's say, guidance at this time. And if I exclude these 2 impacts, I would say that we were in the range that we were communicating. What it will be the evolution of our expenses entering in the Q3 and in Q4? Moving in Q3, the expenses will be impacted by 2 negative effects, let's say, and one positive. The negative -- on the negative side, there will be the impact of annual salary increase, and this was, of course, a factor in us in ['17] in our model; and also by one-time expense related to the social charges, unvested shares that are distributed to our employees that are accounted for the full year in Q3. On the other side, on Q3, we will have the positive impact of the seasonality. You know that in Europe, there are a lot of -- a number of days of vacation. So we do expect in the range, therefore, for the next quarter between $615 million and $620 million. When we move forward in Q4, we expect a similar amount with, on one side, let's say, unfavorable calendar in respect to Q3. That is offsetting by the benefit not to have any longer the social charges. So at the end, we do expect substantially to be in that range at Q3 and Q4.

就費用而言，第二季度，我們的淨費用為 6.22 億美元。這比我們的預期要高一點，因為我們的範圍，如果你還記得的話，我們更多的是在 6.1 億美元到 6.15 億美元之間。我想說，第二季的支出受到了幾起一次性事件的影響。事實上，我們在某個司法管轄區失去了信用，再加上與一定數量的前高階主管相關的一些解僱福利成本。可以說，這兩個影響目前不在我們的指導範圍內。如果我排除這兩種影響，我會說我們處於我們正在溝通的範圍內。第三季和第四季我們的支出會發生什麼變化？進入第三季度，費用將受到 2 個負面影響和一個正面影響。負面的－負面的一面是，會有年薪成長的影響，這當然是我們模型中['17]的因素；還有與社會費用相關的一次性費用，以及分配給我們員工的未歸屬股份，這些股份在第三季佔全年。另一方面，在第三季度，我們將受到季節性的正面影響。你知道，在歐洲，有很多天的假期。因此，我們預計下一季的營收範圍將在 6.15 億美元至 6.2 億美元之間。當我們在第四季度向前邁進時，我們預計會有類似的金額，但一方面，比如說，相對於第三季度不利的日曆。這被不再繳納社會費用的好處所抵消。因此，最終，我們確實預計第三季和第四季將基本處於該範圍內。

The next question is from Anthony Stoss from Craig-Hallum.

下一個問題來自 Craig-Hallum 的 Anthony Stoss。

If you wouldn't mind commenting about your biggest customer in the smartphone side, kind of on a year-over-year basis, your total content, I think in the last quarterly conference call, you talked about expectations of having more content than a year ago. So I just want to confirm that, that's still the case. And then secondly, for Q4, can you confirm that you expect all 3 of your business segments to grow sequentially in the December quarter?

如果您不介意評論您在智慧型手機方面的最大客戶（逐年比較），您的總內容，我想在上一季度的電話會議中，您談到了對擁有比一年前。所以我只是想確認一下，情況仍然如此。其次，對於第四季度，您能否確認您預計所有 3 個業務部門將在 12 月所在季度連續成長？

So Tony, just as a clarification, I think we, on our previous calls with our largest customer at the time, we talked about having increased revenues, not necessarily content. So just a clarification there. And then let's answer that, and we'll come back to your second question, Tony, just as a clarification. So Jean-Marc?

所以托尼，作為澄清，我認為我們在之前與當時最大客戶的通話中，我們談到了收入增加，不一定是滿意。所以這裡只是澄清一下。然後讓我們回答這個問題，然後我們將回到你的第二個問題，托尼，只是為了澄清。那麼讓-馬克？

That's okay. Can you clarify the second question exactly?

沒關係。能具體解釋一下第二個問題嗎？

So Tony was asking in terms of our largest customer and how that is evolving on a year-over-year basis.

因此，托尼詢問我們最大的客戶以及其逐年變化。

On a year-over-year basis? No, we do not comment at this level of detail, okay, with our major customer because, first, we do not comment. However, okay, you know that they will introduce, okay, free phones. Okay, this is well-known everywhere. And they will announce it basically in September, and we will see. And our [organize] in Q3 is encompassing, okay, this acknowledgment. And for the full year, okay, I confirm what I have said during my address. We see a year-over-year growth for ST from 14% to 17% end of 2018 versus 2017, well across end market we address and product group. And we are convinced personal electronics end markets and our sensor will perfectly be in line with this target.

以年計算？不，我們不會對我們的主要客戶進行如此詳細的評論，因為首先，我們不會發表評論。不過，好吧，你知道他們會推出免費電話。好吧，這在任何地方都是眾所周知的。他們基本上會在九月宣布，我們拭目以待。我們在第三季的[組織]包含了這一點。對於全年來說，好吧，我確認我在演講中所說的話。與 2017 年相比，我們預計 ST 的年成長率從 2018 年底的 14% 增加到 17%，無論是我們所涉足的終端市場還是產品組。我們相信個人電子終端市場和我們的感測器將完全符合這一目標。

And Tony, on your second question, you were asking, for Q4, the -- if all the product groups were going to grow sequentially. Is that -- was that your question?

東尼，關於你的第二個問題，你問的是，對於第四季度，所有產品組是否都會依次成長。那是——那是你的問題嗎？

That's correct, Tait. That's correct.

沒錯，泰特。這是正確的。

Okay. That's a Q3 call.

好的。這是第三季的電話。

You have to wait for Q4.

你必須等待第四季。

Just checking to see if you expect a normal seasonality.

只是檢查一下您是否期望正常的季節性。

I would say that, Lorenzo speaking, that our expectation is to have a growth. At the end, what we do expect for the year, it was mentioned by Jean-Marc just a minute ago, was to be balanced across the various groups. So we expect, let's say, to grow in the range of 14%, 17%, with a growth that is quite balanced across our groups. For sure, let's say, now guiding Q4 is a little bit too early.

洛倫佐說，我想說的是，我們的期望是實現成長。最後，讓-馬克在一分鐘前提到，我們對今年的期望是在各個群體之間實現平衡。因此，我們預期成長率將在 14% 至 17% 之間，且我們各集團的成長率相當均衡。可以肯定的是，現在指導第四季還為時過早。

Yes. I think, Tony, as Jean-Marc kind of got the question on the trade war and things of that nature, there's some uncertainty out there, so we'll just talk about Q3 on this call.

是的。東尼，我認為，當讓-馬克提出有關貿易戰和類似性質的問題時，存在一些不確定性，所以我們將在這次電話會議上討論第三季。

No, we simply want to be consistent. And we are on track, again, with what we say at our Capital Market Day in May. We will grow this year, okay, between 14% to 17% year-over-year.

不，我們只是想保持一致。我們再次步入正軌，正如我們在五月資本市場日所說的那樣。今年我們將年增 14% 至 17%。

The next question is from Janardan Menon from Liberum.

下一個問題來自 Liberum 的 Janardan Menon。

Just back on the gross margin side. If I remember at your Capital Markets Day, you had pulled out both smartphone as well as the discretes as having a mix impact on your gross margin into the second half. And you were talking mainly about smartphones just now. So I was just wondering, is discrete also still having a negative impact from a mix point of view in the second half? And on those product segments, I was just wondering what the outlook is for gross margins going, let's say, over the next 12, 18 months or so. Is it likely that, gradually, you will be able to achieve some cost reduction in those product areas which is having the lower gross margin and, therefore, you could bring those gross margins up? Or is it that you would be facing, let's say, price pressure there, and the gross margins in those kind of segments are going to be sort of structurally lower than some of your other businesses even on the longer term? And as a follow-up, you said you pulled out industrial as being specifically strong in Q2. I was just wondering what part of the industrial market that refers to. Was it broad or was it predominately sort of IoT products from the distribution channel? Or was it something from the larger industrial companies, et cetera?

回到毛利率方面。如果我記得在你的資本市場日，你已經撤出了智慧型手機和離散產品，因為這對你下半年的毛利率產生了混合影響。您剛才主要談論的是智慧型手機。所以我只是想知道，從下半年的混合角度來看，離散技術是否仍然會產生負面影響？在這些產品領域，我只是想知道未來 12、18 個月左右的毛利率前景如何。您是否有可能逐漸在毛利率較低的產品領域實現一定程度的成本降低，從而提高這些毛利率？或者說，您是否會面臨那裡的價格壓力，即使從長遠來看，這些細分市場的毛利率在結構上也會低於您的其他一些業務？作為後續行動，您說您退出了第二季度特別強勁的工業。我只是想知道工業市場指的是哪一部分。它是廣泛的還是主要是來自分銷管道的物聯網產品？還是來自較大的工業公司等的東西？

So thank you for the questions. So Lorenzo will answer the first one, I will take the second one.

謝謝你的提問。所以洛倫佐會回答第一個，我會回答第二個。

About gross margin, you are right, when we were at Capital Market Day, actually, we underlined the fact that the gross margin for our personal electronic, specialized image sensor and also power discrete are in average below -- are below the average of the company. The Q3 revenues, let me debrief, have strong contribution coming from these 2 product family. And as I said, in term of gross margin, these are not accretive on the other side as there are the other products that are improving their product mix inside the various family, contributing, let's say, to mitigate the gross margin impact. On top, we have also improvement in term of manufacturing. The gross margin of the company was enjoying, if you look, quite a significant growth moving from last year to this year, mainly driven by manufacturing that now is running at full speed, fully saturated. Moving forward, of course, we will work in order to have some improvement that will, for sure, not a big step, but it will be a continuous improvement as well as we will work on the product mix. Today, the market condition, as such, that we may, let's say, really work on the product mix. We may work in order to optimize that. And so we think that we can somehow to have a mitigation related to maybe the growth of some product family that are not at the average gross margin of the company. Anyway, as we said, the progression in terms of operating margin will come in short and medium term, more from the leverage on the revenues than improvement in the gross margin.

關於毛利率，你是對的，當我們在資本市場日時，實際上，我們強調了這樣一個事實，即我們的個人電子、專業圖像感測器和功率分立器件的毛利率平均低於- 低於平均水平公司。讓我報告一下，第三季的營收主要來自這兩個產品系列。正如我所說，就毛利率而言，這些產品在另一方面並沒有增值，因為其他產品正在改善各個系列內的產品組合，有助於減輕毛利率的影響。最重要的是，我們在製造方面也取得了進展。從去年到今年，該公司的毛利率成長相當顯著，這主要是由現在全速運轉、完全飽和的製造業所推動的。當然，展望未來，我們將努力進行一些改進，這肯定不是一個很大的進步，但這將是一個持續的改進，我們將致力於產品組合。今天，就市場狀況而言，我們可以說，真正致力於產品組合。我們可能會努力優化這一點。因此，我們認為，我們可以以某種方式緩解與某些不達到公司平均毛利率的產品系列的成長有關的情況。無論如何，正如我們所說，營業利潤率的進步將在短期和中期出現，更多來自於收入的槓桿作用，而不是毛利率的改善。

So just to paraphrase what you said. If I look forward, can we assume, let's say, into 2019 that your higher gross -- you would expect or try to achieve a situation where your higher gross margin products are growing faster than your lower gross margin products?

所以只是解釋一下你所說的。如果我展望未來，我們是否可以假設，到 2019 年，您的毛利率較高，您會期望或嘗試實現毛利率較高的產品比毛利率較低的產品增長更快的情況？

No. As I said, let's say, what we see in the short and medium term is to stay in the range of the 40% share, let's say, in terms of gross margin.

不。正如我所說，就毛利率而言，我們在中短期內看到的是保持在 40% 份額的範圍內。

So about your second question, I would like to say that from a sales channel side, it is really a broad launch. Okay. Whatever our distribution channel or key OEMs, so we don't see a specific point to mention. As far as for the group are concerned, this is the same because, of course, I guess you take note our MDG, okay, gross year-over-year, so our STM32 contribute a lot, okay, to this industrial end market growth, but I have to say analog as well. And it's exactly happening what we expect, okay, leveraging our STM32, but our analog, strong portfolio in analog, strong portfolio in power discretes and sensor as well. So simply to say that it's a really broad launch from both side channel distribution and our key OEM and end product as well.

那麼關於你的第二個問題，我想說，從銷售管道的角度來看，這確實是一個廣泛的推出。好的。無論我們的分銷管道或主要原始設備製造商是什麼，所以我們沒有看到具體的提及點。就集團而言，這是相同的，因為當然，我想您注意到了我們的 MDG，好吧，同比毛利率，所以我們的 STM32 對這個工業終端市場的成長做出了很大的貢獻，好吧，但我也不得不說模擬。這完全符合我們的預期，好吧，利用我們的 STM32，還有我們的模擬、強大的模擬產品組合、強大的功率分立元件和感測器產品組合。簡而言之，這是從側面通路分銷以及我們的關鍵 OEM 和最終產品方面真正廣泛的推出。

The next question is from Jerome Ramel from Exane BNP.

下一個問題來自 Exane BNP 的 Jerome Ramel。

Two questions. The first one is, Lorenzo, how should we model the depreciation and amortization going forward? I saw the increase in Q2. And with your strong CapEx, you already spent in Q1 and Q2, how should we model for the rest of this year and maybe for the full year? And maybe one question for Jean-Marc. Could you update us on your manufacturing capabilities with the new fabs you have qualified with your foundries and the ramp-up in Singapore?

兩個問題。第一個是，Lorenzo，我們應該如何對未來的折舊和攤銷進行建模？我看到第二季的成長。憑藉強勁的資本支出，您已經在第一季和第二季支出，我們應該如何為今年剩餘時間甚至全年建模？也許還有一個問題要問讓-馬克。您能否向我們介紹一下您已通過代工廠認證的新工廠以及在新加坡的產能擴張的製造能力？

I take the question about the depreciation, amortization, Jerome. Yes, there will be an increase. This year, we model in the range -- for the full year, we see this amortization and depreciation in the range of $780 million, $785 million. That is definitely an increase in respect to last year. And for the second half, it should be in the range around $200 million, $210 million per quarter. Does it answer your question?

我問關於折舊、攤提的問題，傑羅姆。是的，會有增加。今年，我們在這個範圍內進行建模——全年，我們看到攤銷和折舊在 7.8 億美元到 7.85 億美元之間。與去年相比，這絕對是成長。下半年，每季應該在 2 億至 2.1 億美元左右。它回答了你的問題嗎？

Yes.

是的。

So about your second question, well, first, about your technology transfer...

關於你的第二個問題，首先，關於你的技術轉移......

Singapore.

新加坡。

Singapore, yes, sorry. Singapore, Ang Mo Kio is the name of -- where the fab is located. Well, clearly, they're on track. They are really doing a fantastic job. Of course, we know very well this fab, so there is absolutely no [longing], care, okay, from ST, okay, to take back, okay, this fab in our industrial footprint. So they will be perfectly on track to continue to support us on our growth, both for STM32 low-power microcontroller and STM8 microcontroller. So this is really a good news. They are supporting us as well on some power discrete and Vertical Intelligent Power. And this fab will be really instrumental, starting to support the overall revenue growth of ST starting Q4. About our strategy to increase our, let's say, outsourcing for wafer fab, which currently are 20%. Now as you know, we have decided to outsource now technologies for embedded flash. 180-nanometer is already done and engaged. And we have decided 40-nanometer as well. So let's say, all the program are agreed and the transfer have started. And that will support ST medium-term growth in order to mitigate our capital expenditure. And as I told you during my various address, again, to support our next 3-year growth, ST is not intent to add any additional infrastructures on top of the pilot line in Agrate. And of course, I would also mention that we can add an additional capacity in Crolles, but within the current infrastructure. So really, I am pleased to say that we are totally on track with our strategy to say ST internal manufacturing focus on proprietary processes, standard processes or advanced CMOS processes are totally outsourced. And mixed processes, derivative processes from CMOS or power will be outsourced 50-50, with the flexibility to go up to 80 or to go down 30 according to the market situation. So we are totally on track with this strategy.

新加坡，是的，抱歉。新加坡，Ang Mo Kio 是晶圓廠所在地的名稱。嗯，很明顯，他們正在步入正軌。他們確實做得非常出色。當然，我們非常了解這個晶圓廠，所以絕對沒有[渴望]，關心，好吧，從ST，好吧，收回，好吧，我們工業足跡中的這個晶圓廠。因此，他們將完全有能力繼續支援我們的發展，無論是 STM32 低功耗微控制器還是 STM8 微控制器。所以這確實是一個好消息。他們也在一些功率分立元件和垂直智慧功率方面為我們提供支援。該工廠將發揮真正的作用，從第四季度開始支持 ST 的整體收入成長。關於我們增加晶圓廠外包的策略，目前為 20%。如您所知，我們決定外包嵌入式快閃記憶體技術。180 奈米已經完成並投入使用。我們也決定採用 40 奈米。這麼說吧，所有的計劃都已達成一致並且轉移已經開始。這將支持 ST 的中期成長，以減輕我們的資本支出。正如我在多次演講中告訴您的那樣，為了支持我們未來 3 年的成長，ST 無意在 Agrate 的試點線路之上添加任何額外的基礎設施。當然，我還要提到，我們可以在克羅爾斯增加額外的容量，但要在目前的基礎設施內。所以，我真的很高興地說，我們完全按照我們的策略走上正軌，即 ST 內部製造專注於專有工藝、標準工藝或先進 CMOS 工藝，完全外包。混合製程、CMOS或電源的衍生製程將外包50-50個，並根據市場情況靈活增加80個或減少30個。所以我們完全按照這個策略走上了正軌。

The next question is from Andrew Gardiner from Barclays.

下一個問題來自巴克萊銀行的安德魯·加德納。

Just 2 quick ones. Firstly, just some -- to try and address some of the cycle concerns a bit more. I was wondering if you could make a comment on inventory levels you see through the channel, particularly at distribution, whether there's any change there. And also, on the silicon carbide wins, you mentioned in Asia and Europe. Can you explain where in the car these wins are? Is it just charging? Is it inverter? Is it both? Just a bit of detail around that would be helpful, if you can.

就2個快的。首先，只是一些——嘗試更多地解決一些週期問題。我想知道您是否可以對透過管道看到的庫存水準發表評論，特別是在分銷方面，那裡是否有任何變化。此外，關於碳化矽的勝利，您提到在亞洲和歐洲。您能解釋一下這些勝利在汽車的哪些地方嗎？是不是只要充電就可以了？是逆變器嗎？兩者都是嗎？如果可以的話，稍微詳細一點就會有所幫助。

So thank you for your question. So I am pleased to address the question to Marco Cassis.

謝謝你的提問。我很高興向 Marco Cassis 提出這個問題。

So on the first question about the level of inventory in the channel, I have to say that, first of all, in Q2, we had high record level of sales through the distribution channel. And this means that our level of inventory now is very healthy, less than 3 months. And so we do not see any increase or a dangerous increase of inventory at distribution level. For the silicon carbide, we cannot go too much in detail, but it is...

因此，關於關於通路庫存水準的第一個問題，我不得不說，首先，在第二季度，我們透過分銷管道的銷售水準創下了歷史新高。這意味著我們現在的庫存水準非常健康，不到 3 個月。因此，我們沒有看到分銷層面的庫存有任何增加或危險的增加。對於碳化矽，我們不能說得太詳細，但它......

So usual subsystem. Okay, you know that silicon carbide to power MOSFETs are instrumental between inverters and onboard charger, okay. And at ST, we address all the subsystem of the electrical car.

所以通常的子系統。好吧，您知道用於功率 MOSFET 的碳化矽在逆變器和車載充電器之間發揮著重要作用，好吧。在意法半導體，我們致力於解決電動車的所有子系統問題。

The next question is from David Mulholland from UBS.

下一個問題來自瑞銀集團 (UBS) 的大衛‧穆赫蘭 (David Mulholland)。

Just 2 quick questions. Firstly, as you look into Q3, you made the comment that you expect sequential growth in automotive. And I guess, typically, it can sometimes be a slightly softer quarter. And in the last couple of months, given what's happening with new testing cycles and the tariffs, potentially, there have been some concerns what would happen from production. So can you maybe just drill in a little bit to what's giving you the comfort that, sequentially, the Automotive business can grow? And then, secondly, on the -- can you possibly comment on your bookings performance in Q2? What was the book-to-bill in the quarter and how that broke down by division -- by product area, if possible?

只是兩個簡單的問題。首先，當您展望第三季時，您表示預計汽車產業將會較上季成長。我想，通常情況下，這個季度有時會稍微疲軟。在過去的幾個月裡，考慮到新的測試週期和關稅的情況，人們可能擔心生產會發生什麼。那麼，您是否可以稍微深入了解是什麼讓您感到放心，汽車業務可以繼續成長？其次，您能否對第二季的預訂表現發表評論？本季的訂單出貨量是多少？

So I take the first one, about automotive confidence level, and you take the second part?

所以我選擇第一部分，關於汽車信心水平，你選擇第二部分？

Yes, okay.

是的，好的。

Okay. No, about the first one, we are really confident. The demand is really strong on automotive, and again, whatever is the legacy part of the automotive application, so body, engine controls, braking, lighting, this kind of stuff. And electrification of the car, as you know, is really booming and pushing, and connected car and ADAS as well. As Lorenzo said a few minutes ago, we have prepared ourselves, okay, second half last year and first half this year, to support, okay, the growth with our capital expenditure. So that's the reason why our capital expenditure, I confirm, will be in the range of $1.2 billion to $1.3 billion, but it's a bit front-loaded in order to prepare this growth of H2 on automotive. So our confidence level is very high, okay, to see this end market and our ADG group to achieve a growth consistently, okay, with the overall objective of the company.

好的。不，對於第一個，我們非常有信心。汽車領域的需求確實很強勁，而且無論汽車應用的遺留部分是什麼，例如車身、引擎控制、煞車、照明等。如您所知，汽車的電氣化確實正在蓬勃發展和推動，汽車和 ADAS 的連網也是如此。正如洛倫佐幾分鐘前所說，我們已經做好準備，去年下半年和今年上半年，用我們的資本支出支持成長。我確認，這就是為什麼我們的資本支出將在 12 億至 13 億美元之間，但為了為汽車行業的下半年成長做好準備，這有點提前了。因此，我們的信心非常高，可以看到這個終端市場和我們的 ADG 團隊能夠實現持續成長，可以實現公司的整體目標。

And coming to your question about book-to-bill. This confidence is confirmed also from the order entry that we see in -- during the quarter, and we continue to see. Our book-to-bill is above parity, it's quite above parity, 1.1. So it is quite strong, I would say, definitely, in the area of ADG, in the area of power and discrete. So we see actually a quite strong and healthy demand that has underlined that make us confident that in the third quarter, against the normal seasonality, we should see automotive really grow.

談到你關於訂單到帳單的問題。這種信心也從我們在本季看到的訂單輸入中得到了證實，而且我們將繼續看到。我們的訂單出貨比高於平價，遠高於平價 1.1。所以我想說，在 ADG 領域、在功率和離散領域，它絕對是相當強大的。因此，我們實際上看到了相當強勁和健康的需求，這使我們有信心在第三季度，相對於正常的季節性，我們應該看到汽車業真正成長。

Can I maybe just follow up, and just specifically on the seasonality in the Q3, because guiding for growth sequentially in a quarter when normally a lot of the European customers' facilities take a bit of a break. I know last year, you saw the ADG group up sequentially; but the 2 years prior, it's normally down. So just specifically on Q3, what's different this year, and what's driving that? Is it just the structural growth drivers coming through? Or what's driving the adverse seasonality, as such, in Q3?

我是否可以跟進一下，特別是第三季的季節性，因為在通常許多歐洲客戶的設施會稍作休息的情況下，指導季度的連續增長。我知道去年，你看到 ADG 小組依序上升；但兩年前，它通常會下降。那麼，具體到第三季度，今年有什麼不同，是什麼推動了這種變化？只是結構性成長動力的出現嗎？或者是什麼導致了第三季的不利季節性？

So it is clear that the fast growing and innovative application, the seasonality effect do not play, okay, because you are growing so fast that absolutely, okay, the carmaker and the Tier 1, they do not slow down their demand. And then again, on the legacy, okay, we are really seeing, okay, a strong growth in the legacy because also simply, the pervasion of the semiconductor and electronic systems, so the content of semiconductor, especially, okay, with the smart switch, okay, enabled by our vertical integration power technology, are really moving. So this year, we see a clear effect that, first, the silicon content increasing in the legacy offset a lot the seasonality effect. And the fast-growing application definitively are totally offsetting the seasonality effect. So that's the reason why we are in this position to confirm that, okay, on Q3 and H2 overall, we will see sequential growth on automotive, and the year-over-year growth for automotive completely align with the overall objective of the company.

因此，很明顯，快速增長和創新的應用程序，季節性效應不會發揮作用，好吧，因為你的增長速度如此之快，以至於汽車製造商和一級供應商絕對不會放慢他們的需求。再說一次，在遺產方面，好吧，我們確實看到，好吧，遺產的強勁增長，因為也很簡單，半導體和電子系統的普及，所以半導體的內容，特別是，好吧，智能開關好吧，透過我們的垂直整​​合電源技術實現，確實令人感動。所以今年，我們看到了一個明顯的影響，首先，遺留物中矽含量的增加抵消了許多季節性影響。快速增長的應用程式絕對完全抵消了季節性影響。因此，這就是為什麼我們現在可以確認，在第三季度和第二季度，我們將看到汽車業務的連續成長，並且汽車業務的同比增長完全符合公司的整體目標。

The next question is from Stephane Houri from ODDO.

下一個問題來自 ODDO 的 Stephane Houri。

This is Stephane Houri from ODDO. So I have 2 questions, if I may. The first one is about the full year guidance that you have reiterated, from 14% to 17%. I know it's a call for Q3, but when you look at what it can make for Q4, it gives you anywhere between 1% to 11% of sequential growth in Q4. So if you could give us some more clarity on what you're seeing at the moment for Q4 would be very helpful. And also, I have a question about the tax rate, which is particularly low at this moment. So is there any explanation? And what should we be looking at going forward?

我是 ODDO 的 Stephane Houri。如果可以的話，我有兩個問題。第一個是關於您重申的全年指導，從 14% 到 17%。我知道這是對第三季的呼籲，但當你看到它能為第四季帶來什麼時，你會發現第四季的環比成長在 1% 到 11% 之間。因此，如果您能讓我們更清楚地了解您目前在第四季度看到的情況，將會非常有幫助。另外，我還有一個關於稅率的問題，目前稅率特別低。那麼有什麼解釋嗎？未來我們該關注什麼？

So Lorenzo, you can address the tax rate.

洛倫佐，你可以解決稅率問題。

Yes. So maybe I take the one on the tax rate. You know that you are right, our tax rate is quite low, but you have to consider that we have the use of the NOL. That is substantially reducing significantly our tax rate. This probably -- if you consider, let's say, our level of tax rate, ETR, once this NOL will be, let's say, exhausted, completely used, and this will be, looking forward, probably in the next year, it will be more in the range of 15%, 17%, our tax rate, the ETR.

是的。所以也許我會選擇稅率。你知道你是對的，我們的稅率相當低，但你必須考慮到我們有NOL的使用。這大大降低了我們的稅率。這可能——如果你考慮一下，比如說，我們的稅率水平，ETR，一旦這個NOL，比如說，耗盡，完全使用，這將是，展望未來，可能在明年，它將是更多的範圍是15%、17%、我們的稅率、ETR。

For next year?

明年？

Next year, yes, probably yes, sometime next year, one that we will have.

明年，是的，可能是的，明年的某個時候，我們將會有一個。

And about the year-over-year growth guidance, now we confirm this guidance up to -- about 14% up to 17%. Clearly, it is a result of the variable we control and variable, okay, we do not control. Okay, I have a question a few minutes ago about the overall trade war and so on. So today, we simply confirm that, okay, we don't see, okay, a weak signal for the market. We are very confident to grow on automotive. As anticipated, our personal electronic will grow in the second half. We already show a strong growth on industrial. We will have simply a seasonal effect on Q3. But at this moment, okay, there is, let's say, no reason, okay, to lower this guidance. And we confirm -- but we strongly confirm the guidance, okay, to grow the company year-over-year about 14% to 17%.

關於同比增長指導，現在我們確認這項指導高達約 14% 至 17%。顯然，這是我們控制的變數的結果，而變數是我們無法控制的。好的，幾分鐘前我有一個關於整體貿易戰等議題。所以今天，我們只是確認，好吧，我們沒有看到市場發出疲軟的訊號。我們對在汽車領域的發展充滿信心。如預期，我們的個人電子產品將在下半年成長。我們已經顯示出工業的強勁成長。我們只會對第三季產生季節性影響。但目前，好吧，可以說，沒有理由降低這項指導。我們確認——但我們強烈確認指導，好吧，公司同比增長約 14% 至 17%。

Okay. And about the operating margin guidance improvement of 300 basis points, you talked about steady improvement. But are you confirming the number, the 300 basis points?

好的。關於營業利益率指引提高 300 個基點，您談到了穩定改善。但您是否確認這個數字，即 300 個基點？

Yes. What we said at the Capital Market Day is that moving from H1 to H2, we -- and these are just something in the range of 360 basis point improvement in the operating margin. Still, we are on track. We work in order to get there. And I think, at this stage, we still have this in our view. So at the end, we confirm what we said a couple of months ago.

是的。我們在資本市場日所說的是，從上半年到下半年，我們的營業利潤率只提高了 360 個基點。儘管如此，我們仍步入正軌。我們努力是為了到達那裡。我認為，在現階段，我們仍然持有這個觀點。所以最後，我們確認了幾個月前所說的話。

The next question is from Amit Harchandani from Citigroup.

下一個問題來自花旗集團的 Amit Harchandani。

Amit Harchandani from Citi. Two, if I may. My first question, again, comes back to the topic of near-term demand trend. Could you maybe help us understand how the lead times have shaped up across different segments over the quarter? Have they stabilized? Are they coming down or they continue to stretch? And in that context, I would appreciate your thoughts on how are you thinking about where we are in the semiconductor cycle. What are the key variables you are looking at to gauge the sustainability of the demand, for example, on the industrial side or any of the end market? So that would be my first question, and I have a follow-up.

來自花旗銀行的阿米特·哈昌達尼 (Amit Harchandani)。如果可以的話，兩個。我的第一個問題再次回到近期需求趨勢的話題。您能否幫助我們了解本季不同細分市場的交貨時間是如何變化的？他們穩定了嗎？它們會下降還是繼續伸展？在這種情況下，我希望了解您如何看待我們在半導體週期中的位置。您正在考慮哪些關鍵變數來衡量需求的可持續性，例如工業方面或任何終端市場？這是我的第一個問題，我還有一個後續問題。

Okay. So thank you for your question. So I am pleased to address to Marco Cassis.

好的。謝謝你的提問。我很高興向 Marco Cassis 致詞。

So on the question about the lead time, what we see is that lead times are now stable, and our effort is in giving a good service to our end customers. For the second part of the question, can you repeat?

因此，關於交貨時間的問題，我們看到的是，交貨時間現在已經穩定，我們的努力是為我們的最終客戶提供良好的服務。對於問題的第二部分，你能再說一次嗎？

It was on the variables of the cycle. Is that correct, Amit?

這是關於週期的變數。這是正確的嗎，阿米特？

Just in terms of how do you internally look at where we are in the cycle, the key variables you look at and what -- how does that give you confidence on sustainability of demand?

就您內部如何看待我們在週期中的位置、您關注的關鍵變數以及什麼而言——這如何讓您對需求的可持續性充滿信心？

Today, the visibility that we have on our market in term of growth of the market is in the range of 7%, about 7% of the growth of our market in year 2018. Next year, let's say, the last forecast in terms of growth of the market is at 5%. Where we stand in the cycle? We think that we -- so far, what we see is that we have a good and healthy demand, then difficult to say. The projection are what I said, and we don't see signs for the time being of a really slowdown of the market.

如今，我們市場成長的可見度在 7% 左右，大約是 2018 年市場成長的 7%。比如說，明年市場成長的最新預測是 5%。我們在周期中處於什麼位置？我們認為，到目前為止，我們看到的是我們有良好且健康的需求，但這很難說。預測就是我所說的，我們暫時沒有看到市場真正放緩的跡象。

So there is absolutely no weak signal about semiconductor market, at least on the end market we address. So automotive, industrial, personal electronics, okay, this is a specific case with smartphone, showing us that something has happened. So today, we are really fully concentrated, okay, to serve our customer at the best of their demand for automotive, which is -- where the demand is very, very strong; and for industrial where the demand is strong as well, driven by secular demand with the initiative, okay, for a better process control, better methods control, better facilities control. So we confirm that automotive and industrial are showing secular demand in electronics. And at this moment, we don't see any weak signals.

因此，半導體市場絕對沒有疲軟的訊號，至少在我們所關注的終端市場上是如此。所以汽車、工業、個人電子產品，好吧，這是智慧型手機的一個具體案例，向我們展示了一些事情已經發生了。所以今天，我們真的完全集中精力，最大限度地滿足客戶對汽車的需求，即需求非常非常強勁的地方；對於需求也強勁的工業來說，在長期需求的推動下，主動進行更好的製程控制、更好的方法控制、更好的設施控制。因此，我們確認汽車和工業對電子產品顯示出長期需求。而此時此刻，我們沒有看到任何微弱的訊號。

And just a, very quickly, unrelated follow-up. Could you share your latest thoughts on M&A, please? During, I think, earlier this month, you made a move for Draupner Graphics. Just understanding how you're thinking about M&A at this stage.

這只是一個非常快速、不相關的後續行動。能分享一下您對併購的最新想法嗎？我想，本月早些時候，您對 Draupner Graphics 採取了行動。只需了解您現階段如何考慮併購即可。

Well, about M&A, well, clearly, okay, for the call, for this call, today, ST plan of record to drive the company in a sustainable, profitable growth, okay, our strategy is organic growth. And we already said that we will make acquisition, a small acquisition in order to complete our strengths in STM32, in analog mainly. And any of the results acquisition is exactly, okay, fitting with this strategy. But about other M&A, well, as I told you, okay, during the Capital Market Day, the team of ST, myself, we are engaged, let's say, a strategic plan elaboration. Okay. And as I told you during the Capital Market Day, we will come back early next year. And of course, M&A, okay, will be a subject we will cover. But today, I would simply to confirm, we are totally focused on H2 execution, organic growth. And definitively, we have acquired and we could acquire specific small IPs or companies in order to make us stronger.

嗯，關於併購，嗯，很明顯，好吧，對於這次電話會議，對於今天的這次電話會議，ST 記錄的計劃將推動公司實現可持續的盈利增長，好吧，我們的戰略是有機增長。我們已經說過，我們將進行收購，一次小型收購，以完善我們在 STM32 方面的優勢，主要是在模擬方面。任何結果的取得都完全符合此策略。但關於其他併購，嗯，正如我告訴過你的，好吧，在資本市場日期間，ST 團隊，我本人，我們正在參與，比如說，戰略計劃的製定。好的。正如我在資本市場日期間告訴你們的那樣，我們將在明年初回來。當然，併購，好吧，將是我們將討論的主題。但今天，我想簡單地確認一下，我們完全專注於下半年的執行和有機成長。當然，我們已經收購並且可以收購特定的小型智慧財產權或公司，以使我們變得更強大。

The next question is from Francesco Previtera from Akros.

下一個問題來自 Akros 的 Francesco Previtera。

A question more general on [yields] and the possible tariff that can be imposed and distort the trade. Can you have a general comment on this issue in respect with the position of STM?

一個更普遍的問題是關於[產量]以及可能徵收並扭曲貿易的關稅。您能否就STM的立場就此議題發表整體看法？

The tariff.

關稅。

In respect to this, I think Jean-Marc already touched this point in one of the answers before. As we said, there are twofold. One, on one side, the direct impact for our company about the tariffs. This is, of course, something this is not nice to have because there is some impact even if this impact is quite -- the materiality of this impact is quite low because it's not really something that is significantly impacting us directly. Of course, there is some concern, as I think everybody has, in a situation in which, let's say, there is this uncertainty. So far, as we said, notwithstanding this uncertainty related to these, let's say, commercial wars, these kind of things, we don't see in our reference market any significant sign of -- but definitely, it's something that is not welcome in the sense that, at the end, that may create a turbulence in the business. But so far, I confirm what was said since now. For the moment, we don't see really any significant impact. Demand in automotive is still stronger. And for what concern our company, yes, there is some impact, but really, the materiality of this impact is very, very low.

對此，我想Jean-Marc在先前的一個回答中已經觸及了這一點。正如我們所說，有雙重性。一，一方面，關稅對我們公司的直接影響。當然，這是不好的事情，因為即使這種影響相當大，也會產生一些影響——這種影響的實質相當低，因為它並不是真正直接對我們產生重大影響的東西。當然，正如我認為每個人都會擔心的那樣，在存在這種不確定性的情況下。到目前為止，正如我們所說，儘管存在與商業戰爭等相關的不確定性，但我們在參考市場中沒有看到任何明顯的跡象——但毫無疑問，這是不受歡迎的事情。這最終可能會導致業務動盪。但到目前為止，我確認了從現在開始所說的話。目前，我們還沒有看到任何重大影響。汽車需求依然強勁。對於我們公司而言，是的，存在一些影響，但實際上，這種影響的重要性非常非常低。

The next question is from Guenther Hollfelder from Baader-Helvea.

下一個問題來自 Baader-Helvea 的 Guenther Hollfelder。

Just one follow-up question on the automotive market and the seasonal -- above normal seasonality you're seeing in the quarter. In Germany, there are some issues in car production with Volkswagen, Audi, also Mercedes-Benz, due to this WLTP new test process. So I understand that you're not seeing any signs here for production cuts or postponements, or did you -- are you saying the net impact is positive as you have other growth which is offsetting this weakness, or aren't you seeing any weakness at all?

只是一個關於汽車市場和季節性的後續問題——高於本季正常的季節性。在德國，由於WLTP新測試流程，福斯、奧迪以及賓士的汽車生產出現了一些問題。因此，我知道您沒有看到任何減產或推遲的跡象，或者您是否認為淨影響是積極的，因為您有其他增長抵消了這一弱點，或者您沒有看到任何弱點根本嗎？

Marco will take this. Again, we confirm that we do not see any slowdown or sign of weakness in automotive. Actually, it's exactly the opposite. The demand is extremely strong, and we are doing our best in order to cope with the requirements from the market. So we confirm again that, absolutely, there is no sign of slowdown during Q3 in automotive.

馬可會接受這個。我們再次確認，我們沒有看到汽車行業出現任何放緩或疲軟的跡象。事實上，事實恰恰相反。需求非常旺盛，我們正在盡最大努力應對市場的要求。因此，我們再次確認，第三季汽車產業絕對沒有放緩的跡象。

Okay. And maybe one follow-up question on silicon carbide. You mentioned earlier or confirmed the $100 million sales level for 2018. Can you help us to understand the breakdown of this business? Can you say what's approximately automotive, what is renewables, what is industrial, including EV infrastructure, to get an idea?

好的。也許還有一個關於碳化矽的後續問題。您之前提到或確認了 2018 年 1 億美元的銷售額水準。您能幫助我們了解該業務的細分情況嗎？您能說出什麼是汽車、什麼是再生能源、什麼是工業（包括電動車基礎設施）？

For this year, it's fully automotive.

今年，它完全是汽車化的。

The next question is from Robert Sanders from Deutsche Bank.

下一個問題來自德意志銀行的羅伯特‧桑德斯。

Sorry to come back to the 2018 full year guide again. But if you hit the midpoint of that guide, your year-on-year growth rate would come down to 7% in Q4. Is there something about last year's Q4 that was unusually strong, for example, in automotive or industrial, that makes that quarter a tough comp? And I have a follow-up.

很抱歉再次回到2018年全年指南。但如果達到該指南的中點，第四季的年成長率將降至 7%。去年第四季是否存在某些異常強勁的因素，例如在汽車或工業領域，使得該季度的業績表現非常強勁？我有一個後續行動。

Will you take it, Lorenzo?

你願意接受嗎，洛倫佐？

Okay. Yes, okay. As we said, our guidance for the year is 14% -- between 14% and 17%. If we will have this, let's say, amount is 9 quarters substantially, so at the end, the amount -- you have to remember that the last quarter -- the last -- in Q4 last year was a quite stronger quarter. So at the end, I think that we will have in next quarter still a growth, still a significant growth. You remember also that we said that we are struggling, let's say, with the level of CapEx between $1.2 billion and $1.3 billion to target somehow the high range of our -- the high end of our range, but fine, yes, at the end. In Q4, we will see growth and we will see sequential growth, quite significant sequential growth. And at the end, for the year, we confirm, we will be between 14%, 17%, and with the ambition to be maybe a little bit higher than the midpoint.

好的。是的，好的。正如我們所說，我們今年的指導是 14%——在 14% 到 17% 之間。如果我們有這個，比方說，金額基本上是 9 個季度，所以最後，您必須記住，去年第四季度的最後一個季度——最後一個季度是一個相當強勁的季度。所以最後，我認為我們在下個季度仍將實現成長，仍然是顯著的成長。您還記得我們說過，我們正在苦苦掙扎，資本支出水平在 12 億美元到 13 億美元之間，以某種方式瞄準我們的上限——我們範圍的高端，但好吧，是的，最後。在第四季度，我們將看到成長，我們將看到環比成長，非常顯著的環比成長。最後，我們確認，今年的成長率將在 14% 到 17% 之間，目標可能比中點略高一點。

Great. And just on microcontrollers, it looks like you're doing about mid-20s EBIT margins in that group, which is a great performance, substantially up year-on-year. And this group now represents 40% of profits. How do you see this -- the opportunity to grow your profitability further in microcontrollers maybe as the 32-bit mix rises or through production changes or die shrink?

偉大的。僅就微控制器而言，該組的息稅前利潤率似乎約為 20 多歲，這是一個很好的表現，同比大幅增長。現在這個群體佔利潤的40%。您如何看待這一點——隨著 32 位元混合的增加或透過生產變化或晶片縮小，微控制器領域有機會進一步提高獲利能力？

No, I don't want to comment too much, okay, for sales, okay, 2018, okay. What I can say, clearly, our microcontroller business is addressing a mix of industrial applications which are, let's say, for sure, based on our STM32. But we address as well some personal electronic application. So overall, clearly, the gross margin is a result of the manufacturing efficiency and this end market and product mix. But then you know that microcontroller supply chain is based on the well-balanced internal and external manufacturing. Okay? Today, we are clearly close to 50-50, 50% internal, 50% external. So 50% internal, as Lorenzo said, we have already done great achievement. We have still opportunity of continuous improvement, but certainly, not at the same pace than in the past few quarters because now, our manufacturing is fully loaded. And then, okay, for the external manufacturing, definitively, it is a link, okay, to the wafer price cost decrease, okay, we will have. So overall, this is the key ingredient mix between industrial, which are very strong where we want to focus both, okay, addressing OEM and through strong distribution channel; personal electronics as well, but being very selective; and manufacturing will continuously improve both internal and external. But certainly, internal, not okay achieving breakthrough, as we have done during the past few quarters. So this is a level, okay, we are considering to foresee our gross margin improvement on microcontroller. Also, definitively, you know that we are today completing our portfolio of STM32 with industrial microprocessor. And clearly, okay, for the future, it will also be a booster consideration, okay, for our gross margin.

不，我不想過多評論，好吧，對於銷售，好吧，2018年，好吧。我可以明確地說，我們的微控制器業務正在解決各種工業應用，可以肯定的是，這些應用是基於我們的 STM32。但我們也解決一些個人電子應用程式。因此，總的來說，毛利率顯然是製造效率以及終端市場和產品組合的結果。但你知道微控制器供應鏈是基於均衡的內部和外部製造。好的？今天，我們顯然接近 50-50，50% 內部，50% 外部。所以50%內部，正如洛倫佐所說，我們已經取得了巨大的成就。我們仍然有持續改進的機會，但當然，速度不會與過去幾季相同，因為現在我們的製造已滿負荷。然後，好吧，對於外部製造來說，毫無疑問，這是一個與晶圓價格成本下降的聯繫，好吧，我們將會有。總的來說，這是工業之間的關鍵成分組合，工業非常強大，我們希望同時關注 OEM 和強大的分銷管道；個人電子產品也是如此，但非常有選擇性；製造業將不斷提升內在和外在。但當然，在內部，無法實現突破，就像我們在過去幾季所做的那樣。所以這是一個水平，好吧，我們正在考慮預見我們在微控制器上的毛利率的改善。另外，您肯定知道，我們今天正在完善 STM32 與工業微處理器的產品組合。顯然，對於未來，這也將是我們毛利率的一個助推器。

The next question is from Lee Simpson from Stifel.

下一個問題來自 Stifel 的 Lee Simpson。

Three quick ones, if I could. Just trying to get a handle on the importance of packaging or packaging advantages you may have in silicon carbide, particularly for autos, as rivals seem to be dismissing the need for any new packaging technologies. Second question, I just want to clarify, did you say that the inventories reduce in absolute terms in Q3 and Q4, or we just see the [DIOs] come in a little? And then the third question, it looks -- when you certainly scanned the CdS space in smartphones that the market is now pivoting much more to stereo vision. And we just wondered if that's a trend that you could play into, or if that was running counter to your normal Time-of-Flight focus?

如果可以的話，快點三個。只是想了解碳化矽中封裝的重要性或封裝優勢，特別是對於汽車而言，因為競爭對手似乎忽略了對任何新封裝技術的需求。第二個問題，我只是想澄清一下，你是說第三季和第四季庫存的絕對值減少了，還是我們只是看到[DIO]進來了一點？然後是第三個問題，當你確實掃描了智慧型手機中的 CdS 空間時，你會發現市場現在正在更多地轉向立體視覺。我們只是想知道這是否是您可以參與的趨勢，或者這是否與您通常關注的飛行時間背道而馳？

So thank you for your 3 questions. So Lorenzo will answer the inventory one, and I will answer silicon carbide and the 3D depth of field.

謝謝你提出的 3 個問題。因此，Lorenzo 將回答庫存問題，我將回答碳化矽和 3D 景深。

I go straight on the inventory then. I assume that you are referring to our inventory, right, and not in the channel, the inventory -- ST inventory? Correct?

然後我就直接去清點庫存。我假設你指的是我們的庫存，對吧，而不是渠道中的庫存——ST庫存？正確的？

That's right.

這是正確的。

Yes. What we see that -- as we said, we prepare the growth for the second half. So in Q1 and, in particular, in Q3, there was quite significant increase in inventory. What we do expect is that we will increase in Q3 definitely the turns, so reduce significantly the number of days of inventory. We do not foresee significantly a -- significant reduction, let's say, in the absolute value of the inventory in Q3. While in Q4, we do expect to have some reduction.

是的。我們看到的是——正如我們所說，我們為下半年的成長做好了準備。所以第一季度，特別是第三季度，庫存有相當大的成長。我們預計第三季的周轉率肯定會增加，因此庫存天數將大幅減少。我們預計第三季的庫存絕對值不會大幅減少。而在第四季度，我們確實預期會有一些減少。

So coming back to silicon carbide, it is clear that for the application we address, so inverters and on more charger, the module -- the package is a critical enabler. But simply ST, we apply our strategy. We have the capability to design by ourself custom-design power modules and to enable, let's say, competitive silicon carbide power MOSFET. So this is what we have done, and we are going now with the success, okay, I shared with you a few minutes ago. Then if we address other application, and I repeat today, we have 25 projects, and 85 -- 55% are on silicon carbide. And here, you have various situation. It's either custom-designed module or solar package, solar module. If it is solar package and module, we use OSAT. So generally speaking, [we ourself]. If it is custom-design power module, we are doing by ourself. So you have all kinds of configuration, and this is simply, okay, our strategy. About 3D sensing, about 3D sensing, okay, clearly, we follow what we consider, let's say, our roadmap. So you know that ST, we address proximity ranging sensor. But clearly, Time-of-Flight technology, which is based on what we call SPAD, so single-photon avalanche diode, okay, clearly, the area of focus of ourself. And here, we have accumulated millions and millions of PCs, and we will continue to address successfully this market. Then on depth 3D sensing. You know and it is not a secret that ST has been a key supplier or pathfinder of the structured light. We have a roadmap. We have all the technology blocks. We have all the capability to continue to sustain successfully a customer who would like to continue on structured light or to adopt structured light. And here, again, in structured light or part of the structured light is a component using Time-of-Flight. So there is a total synergy between the structured light and the Time-of-Flight of proximity imaging sensor. Now, okay, still on front-facing. We know that in the near future, some solution could encompass Time-of-Flight, part of the subsystem, taking place of subcomponent of the structured light. ST is ready. So we will address this market as well, whatever is on the weight-base smartphone or other operating system. And then for [war spacing], we know that the critical enabler is Time-of-Flight. And again here, we are adequate for that to support. So we are convinced about that, and we are following our conviction. And we will be and we are already successful on this format.

回到碳化矽，很明顯，對於我們所解決的應用，逆變器和更多充電器、模組——封裝是關鍵的推動因素。但只是ST，我們應用我們的策略。我們有能力自行設計客製化設計的功率模組，並實現具有競爭力的碳化矽功率 MOSFET。這就是我們所做的，我們現在正在走向成功，好吧，我幾分鐘前與你們分享了。然後，如果我們解決其他應用，我今天再說一遍，我們有 25 個項目，其中 85 - 55% 是碳化矽。在這裡，你有各種各樣的情況。它可以是客製化設計的模組，也可以是太陽能封裝、太陽能模組。如果是太陽能封裝和模組，我們使用OSAT。一般來說，[我們自己]。如果是客製化設計的電源模組，我們是自己做的。所以你有各種各樣的配置，這就是我們的策略。關於 3D 感測，關於 3D 感測，好吧，很明顯，我們遵循我們所考慮的，比如說我們的路線圖。所以你知道 ST，我們致力於接近測距感測器。但顯然，飛行時間技術是基於我們所說的 SPAD，即單光子雪崩二極管，好吧，顯然，這是我們自己的焦點區域。在這裡，我們已經累積了數百萬的個人電腦，我們將繼續成功地佔領這個市場。然後是深度 3D 感測。您知道，ST 一直是結構光的主要供應商或探路者，這已不是什麼秘密。我們有一個路線圖。我們擁有所有的技術塊。我們完全有能力繼續成功地維持希望繼續使用結構光或採用結構光的客戶。在這裡，結構光或結構光的一部分是使用飛行時間的組件。因此，結構光和接近成像感測器的飛行時間之間存在完全的協同作用。現在，好吧，仍然是正面。我們知道，在不久的將來，某些解決方案可能會包含飛行時間，它是子系統的一部分，取代結構光的子組件。ST已經準備好了。因此，我們也將針對這個市場，無論是基於重量的智慧型手機還是其他作業系統。然後對於[戰爭間隔]，我們知道關鍵的推動因素是飛行時間。再次強調，我們有足夠的能力來提供支援。所以我們對此深信不疑，並且正在遵循我們的信念。我們將會並且已經在這種形式上取得了成功。

The next question is from Adithya Metuku from Bank of America.

下一個問題來自美國銀行的 Adithya Metuku。

I have 3 questions. Firstly, just on the Automotive group revenues across the board, can you confirm what was the growth rate in the quarter, not just in ADG, but across the group as a whole? Then secondly, on silicon carbide, there've been some news flow that Tesla is asking for price cut to their suppliers. So how do you see this impacting you going forward? And more generally, when you look at the silicon carbide market, can you give us some color on any pricing changes that you're seeing in this market? And finally, just on -- as a follow-up to a question on modules earlier. You said that you're working with partners on standard modules and you're designing your own custom modules. So how is this different to your -- to what happened with high-g modules? I remember 4 or 5 years ago, you were trying to get into this space. You didn't really have a lot of traction there. So why do you think this time it will be different?

我有 3 個問題。首先，就汽車集團的整體收入而言，您能否確認本季的成長率是多少，不僅是 ADG 的成長率，而是整個集團的成長率？其次，關於碳化矽，有消息指出特斯拉正在要求其供應商降價。那麼您認為這對您的未來有何影響？更一般地說，當您觀察碳化矽市場時，您能給我們一些您在這個市場看到的價格變化的資訊嗎？最後，作為之前關於模組的問題的後續。您說您正在與合作夥伴合作開發標準模組，並且正在設計自己的自訂模組。那麼這與高重力模組發生的情況有什麼不同呢？我記得四、五年前，你試著進入這個領域。你在那裡並沒有太多的吸引力。那為什麼你認為這次會有所不同呢？

Well, I take some questions, and Lorenzo will take the question about the growth.

好吧，我回答一些問題，洛倫佐將回答有關成長的問題。

Growth?

生長？

Yes, yes. Well, on module, for the -- your last question, okay, well, clearly, here, we have a key differentiating factor in the silicon carbide because I repeat today, ST is a unique supplier, able to produce mass production on silicon carbide. So we consume, okay, about 60% of the worldwide supply chain of raw material silicon carbide. Clearly, the key enabler in our success with a power module using silicon carbide is the silicon carbide technology. And as we have the capability to make modules, custom-designed, okay, both of them make our success. So -- and in the future, we aim to continue with the same determination. But then, I am very sorry, but I absolutely cannot and does not want to comment any commercial discussion or transaction, okay, about price with our customers. Okay? It's totally out of our, let's say, habit to do it. And then, okay, on the silicon carbide price. More than, let's say, a general statement, okay, you know this technology is an innovative one. You know this technology is growing very fast. All the actors worldwide have to invest important amount of CapEx to support the growth. And clearly, all the actors worldwide will participate to this huge market because, again, we are -- I am convinced it will be a game-changer. We have our mind that, okay, the price will be -- go down according the usual roadmap to support automotive and industrial market. So there is nothing new here. It is clearly in a world, let's say, medium, long-term roadmap for silicon carbide. About the short term, okay, I do not want to comment.

是的，是的。好吧，在模組上，對於你的最後一個問題，好吧，好吧，顯然，在這裡，我們在碳化矽方面有一個關鍵的差異化因素，因為我今天重複一遍，ST 是一家獨特的供應商，能夠在碳化矽上進行大規模生產。因此，我們消耗了全球碳化矽原料供應鏈的約 60%。顯然，我們使用碳化矽的電源模組成功的關鍵因素是碳化矽技術。由於我們有能力製造客製化設計的模組，好吧，它們都使我們取得了成功。因此，在未來，我們的目標是繼續保持同樣的決心。但是，我非常抱歉，但我絕對不能也不想評論任何與我們客戶有關價格的商業討論或交易。好的？可以說，這完全不符合我們的習慣。然後，好吧，關於碳化矽的價格。比方說，這不僅僅是一個一般性的陳述，好吧，你知道這項技術是一項創新技術。你知道這項技術發展得非常快。全球所有參與者都必須投入大量資本支出來支持成長。顯然，世界各地的所有參與者都將參與這個巨大的市場，因為我們——我相信這將改變遊戲規則。我們的想法是，好吧，價格將根據通常的路線圖下降，以支持汽車和工業市場。所以這裡沒有什麼新的。可以說，這顯然是碳化矽的中長期路線圖。關於短期，好吧，我不想發表評論。

In respect to the last question, if I well understood that the question was about our trend of sales in automotive overall. As you know, we have revenues in automotive, not only in ADG group, but is across other groups inside the company, both in AMS and in MDG. What we saw -- when we see, let's say, today, in the first half of the year, our growth was in the range of 17% year-over-year, H1 2018 compared to H1 2017. What we expect is to be substantially the same level for H2, even slightly improving. So it means that for the full year, we see a growth that will be higher than the average of the growth of the company. Definitely, we'll be on the high side of our range, 17%, slightly above. Automotive is strong.

關於最後一個問題，如果我理解的話，這個問題是關於我們汽車整體銷售趨勢的。如您所知，我們在汽車領域有收入，不僅在 ADG 集團，而且在公司內部的其他部門，包括 AMS 和 MDG。我們所看到的——比如說，今天，在今年上半年，我們的 2018 年上半年與 2017 年上半年相比，年增了 17%。我們預計下半年將達到基本相同的水平，甚至略有改善。因此，這意味著全年的成長將高於公司的平均成長。當然，我們會處於我們範圍的高端，17%，略高一些。汽車產業實力雄厚。

17% in automotive, did I hear you correctly?

17% 汽車業，我沒聽錯吧？

Yes. Overall, let's say, including all the sale in automotive in all the groups.

是的。總體來說，包括所有組中汽車領域的所有銷售。

Yes, understood. And just a quick follow-up to Jean-Marc. So on SiC MOSFET, you said that is the main advantage for you at this point. Can you give us some idea as to where your advantages are coming in the MOSFET space? Is it -- just any color there would be helpful.

是的，明白了。這是讓-馬克的快速跟進。對於 SiC MOSFET，您說這是您目前的主要優勢。您能否告訴我們您在 MOSFET 領域的優勢在哪裡？是嗎——任何顏色都會有幫助。

For silicon carbide?

對於碳化矽？

Yes.

是的。

Well, for silicon carbide, today, in production, it is, let's say, we start with diodes, then we have MOSFET, so this is a second generation. So we have adopted, okay, a technology architecture which, let's say, help us to go very fast on the market. And we have cooperated, okay, with an important partner in order to introduce the technology very fast. So clearly, now we're accumulating a know-how and a learning curve, which definitively is providing a competitive advantage of ST, first, to develop the third generation, okay, with trench and to be able to introduce soon, okay, this third generation in production. So I say our, let's say, main competitive advantage is based on the fact that we have taken -- we have developed and worked on innovation since a long time on silicon carbide. We have taken the risk to introduce very early in the market, thanks to our cooperation with an important partner. And now we are ramping up successfully because you know ST's at the AGM, okay, so we have manufacturing capability well-recognized. We have the capability to fix very fast, okay, all the extrinsic or intrinsic issues we can face. And now, okay, our control of the technology is really state-of-the-art, so we are pushing. And this, let's say, early adopter and pathfinder attitude make ST now in the stronger position compared to the competition.

嗯，對於碳化矽，今天，在生產中，我們從二極體開始，然後我們有了 MOSFET，所以這是第二代。因此，我們採用了技術架構，可以說，它可以幫助我們快速進入市場。我們已經與一個重要的合作夥伴進行了合作，以便非常快速地引入該技術。很明顯，現在我們正在累積專有技術和學習曲線，這無疑為 ST 提供了競爭優勢，首先，開發第三代，好吧，有溝槽，並且能夠很快推出，好吧，這個第三代已投入生產。所以我說，我們的主要競爭優勢是基於我們長期以來在碳化矽方面的開發和創新。由於我們與重要合作夥伴的合作，我們很早就冒險將其引入市場。現在我們正在成功地加速發展，因為你知道意法半導體在年度股東大會上的表現，所以我們的製造能力得到了廣泛認可。我們有能力非常快速地解決我們可能面臨的所有外部或內部問題。現在，好吧，我們對技術的控制確實是最先進的，所以我們正在推動。可以說，早期採用者和探路者的態度使ST現在比競爭對手處於更有利的地位。

Today's last question is from Gianmarco Bonacina from Equita.

今天的最後一個問題來自 Equita 的 Gianmarco Bonacina。

Just a quick final question. In terms of the OpEx, just to confirm if I understood correctly. So you will have about 10 -- you had about $10 million of one-off cost in Q2, and you will also have about $10 million one-off OpEx cost in Q3. So for the year, when we model for 2019, we should consider, I think, 2018, you had about $20 million of costs which are kind of nonrecurring in nature. Is that right?

只是一個快速的最後一個問題。就營運支出而言，只是為了確認我的理解是否正確。因此，您將在第二季度獲得大約 10 - 大約 1000 萬美元的一次性成本，並且在第三季度您還將獲得大約 1000 萬美元的一次性營運支出成本。因此，當我們為 2019 年建模時，我認為 2018 年我們應該考慮到大約 2000 萬美元的成本，這些成本本質上是一次性的。是這樣嗎？

Just to clarify. When I was commenting Q2 net expenses, yes, we have something in the range of $10 million, so that is not recurrent. When I was commenting Q3, I said that in Q3, we have, let's say, salary increase. That, of course, is -- every year, it happens. We have, let's say, a one-time expense related to the social charges, so unvested share. It means that these are the yearly expenses that happen in Q3. So it's something that is recurrent every year, but in Q3, let's say, and this is significant. And what I said is that we expect to have expenses in Q3 in the range of $615 million, $620 million, similar expenses in Q4.

只是為了澄清。當我評論第二季淨支出時，是的，我們有 1000 萬美元左右的支出，所以這不是經常性的。當我評論第三季度時，我說在第三季度，我們可以說是加薪了。當然，這種情況每年都會發生。比方說，我們有一項與社會費用相關的一次性費用，因此未歸屬的份額。這意味著這些是第三季發生的年度費用。所以這種情況每年都會發生，但在第三季度，比如說，這很重要。我所說的是，我們預計第三季的支出將在 6.15 億美元至 6.2 億美元之間，第四季的支出也類似。

Okay. So this should be considered a kind of run rate?

好的。那麼這應該被認為是一種運行率？

Yes, we will agree in that.

是的，我們會同意這一點。

Thank you, Gianmarco. At this point, we'll go ahead and conclude our Q2 2018 earnings. Thank you.

謝謝你，吉安馬科。至此，我們將繼續總結 2018 年第二季的收益。謝謝。

Thank you.

謝謝。

Thank you.

謝謝。

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.

女士們、先生們，會議現在結束了。感謝您選擇 Chorus Call，也感謝您參加本次會議。現在您可以斷開線路。再見。