Great. Thanks to everybody for joining us today. I'm Rick Schafer, Oppenheimer semiconductor analyst, and I'm joined by Cirrus CEO, John Forsyth. I think most people probably know John. He joined over a decade ago, I believe, through the Wolfson acquisition, as I recall. Been the CEO since 2021. And, you know, again, time flies, so great to see you, John, and really appreciate you being able to make it today.
Yeah, yeah. You too, you too, Rick. And, yeah, you're pretty much exactly on the money. The Cirrus acquisition of Wolfson closed in August of 2014. So we're-
There you go.
... talking a decade, yeah, this month.
Yeah, these decades tick by. So, maybe I'll just kick things off if I could, kind of a, kind of high level, I guess. I mean, you know, Cirrus has been in every iPhone, I think since the beginning. Your largest customer, I think, accounts for about 90% of revenue. And, you know, if you assume handset's a mature market, which I know admittedly is a, is a big assumption, but if you assume that that's sort of a mature market, I mean, can you walk us through sort of your primary strategy for growth? I mean, is it centered on generational content gains there at your top customer? Because obviously you guys have been a practiced hand, very, very adept at that over time.
You know, and maybe as part of your answer, I don't know how much color you want to give, but maybe if you could walk us through a little bit of... or tease us a little bit about sort of where the bigger opportunities are going forward for further content, you know, gains.
Yeah, absolutely. Yeah, thank you. So to be clear, we aim to grow both within our largest customer and outside of our largest customer. So, you know, as we do the former, that obviously means we've gotta keep growing outside of the customer, outside of our largest customer, if we want to kind of balance that concentration. And yeah, to your point, in the quarter we just reported, I think our largest customer was about 88% of revenue. That obviously fluctuates over the course of the year. But we're getting into a kind of big build period now as well. So yeah, it's a chunky number that's right up there.
But that collaboration and that relationship with that largest customer has been, you know, enormously successful over, you know, over a period that's more than, you know, it's approaching 2 decades. It's more than a decade and a half at this point, where we began with 1 audio socket, and we've obviously branched out in many ways from there. So, as I said, we aim to grow both within that customer and outside of that customer, and our strategy for growth is really based around 3 principles. Number 1 is maintaining our leadership in the smartphone audio space in those flagship devices. That's, you know, that's kind of the golden goose. It still represents the biggest single component of our revenues.
We have significant investment that's kind of coming to fruition this year in those areas with some new content we're expecting or a new content that's gonna be in devices that we're expecting to see launch in the back half of the year. The second of those principles is to branch out within staying within the smartphone kind of locus, but branch out in content terms beyond audio into areas that I've referred to as high-performance mixed signal, which encompasses a number of different areas: camera, haptics, and power being the main ones that we've talked about.
And then the third element of our growth strategy is around taking those technologies and IP, that we've developed both in the audio space and the high-performance mixed signal space, and leveraging those to address other markets. And, you know, that, that's, something that we are increasingly doing in the PC space, for example, and I'm sure, I'm sure we'll get onto that, where we're, you know, we've been, we've been seeing some success that we're excited about.
So yeah, in our largest customer, the key kind of growth opportunities for us and the way we think about our growth there is both iterating on content and sockets that we have today in ways that enhance the features and performance, and looking at new areas where we believe we can be a differentiated, innovative supplier, where they would potentially be, you know, I think what you call a generational content gain, like a whole new socket for us. And we've shown our ability to do that, as I said, in the HPMS space, having added, over the past few years, the camera and then power.
We've obviously been shipping haptics for a little longer, but I think we've established now a lot of credibility that we can solve hard mixed-signal problems in areas beyond the audio space and be a really good innovation partner for that. So we have, you know, multiple kind of irons in the fire from that perspective. Maybe just to kind of wrap on this point, as I mentioned, we're particularly excited that this year we have new content coming in the audio domain, and that's both... You know, the audio architecture from our perspective, from a silicon perspective, really consists of a couple of things. It's codec and boosted amplifiers....
Boosted amplifiers driving the loudspeakers and what you hear from the phone, and the codec doing a lot of processing of both the audio output and inputs, what's coming from the microphones and so on. And we have new generation versions of both of those components, ramping right now for a device launch that we anticipate, you know, in the coming months. And that represents, you know, a really significant evolution of the devices that we've been shipping for a while now. We do expect those to... Typically, they will ship for quite a while, so the current generation that's shipping today will have been shipping for six years when they get updated.
So from that point of view, we also get the benefit of a lot of leverage from the R&D investment that we make there, and we can apply those resources onto other tricky mixed signal problems, where maybe we see content expansion opportunity with our customer.
Well, thanks for all that detail. Really appreciate it. And a question I've had, and certainly we've gotten from the buy side as well, but just I'm curious, you know, you guys have posted some pretty remarkable upside, the last few quarters. And I don't know if you could just give a little bit of color on your forecasting process or, you know, and just be trying to understand better sort of how some of those surprises came about. You know, again, it's several quarters in a row, and again, kudos for the significant upside, but just trying to sort of understand the process there a little bit better.
Yeah. Thank you. Okay. I mean, kudos, but also... And I appreciate the nice comments, but to be clear, it's not what we're aiming for. Like, you know, if we're gonna surprise people, I'd definitely rather we were surprising on the upside, obviously. But our goal when we guide is to give our best estimate of, you know, the most accurate estimate we can give of where we're gonna land for the quarter. It's not to give, you know, have a kind of a head fake where we give people a range-
Right
... and then plan to surprise them on the upside. That wouldn't help us. Long run, you know what happens, which is people would bake in that assumption. So I don't believe that helps investors, or us at all. So what I'm saying is that we've just been really bad at accurately forecasting. So I do want to at least explain a little bit about the environment that has contributed to that. So, and I guess the other point I should make there is there hasn't been a change in our forecasting philosophy.
You know, as I say, our goal is accuracy, and the kind of factors that we take into account when we're doing our forecasting is obviously the kind of order book from the customer. But we have, as you would expect, our own extensive networks in the supply chain. You know, we talk daily with the contract manufacturers. We have our own information on what their inventory position looks like. And we also look a lot at historical patterns and the historical trends within any given quarter. And so, typically, you know, that process mostly directs you to the right place.
Over the past, over the past kind of 2 quarters to 3 quarters, and I, I guess maybe as we just reported it, the June quarter is, is a really good example to talk about. We normally see, in a typical year, much more movement in the demand picture from the customer than we have this year, or from our customers than we did this year. And it can be movement in both directions, but the typical pattern at this point, you know, when you're, you're in the June quarter, is that you've, you've got past the, the kind of holiday period, then you get past Chinese New Year and so on, and you normally see some tapering of demand, some modulation of demand, some rescheduling, and moving around.
And when I say typically, like, you know, we look back many years at the equivalent quarter and how things shook out and how the backlog kind of got rescheduled and so on. And there really isn't any previous year which looks like this year, where we didn't see that tapering of demand at all. We didn't see that modulation. And that's been a feature, actually, of this cycle, which has been really sustained, really healthy, sustained demand all the way along since the launch, really, to an atypical degree. And then so that's what we've seen, and that's contributed to us coming in, coming in higher than we anticipated in the June quarter and previously.
I would say that, you know, if I were then speculating about contributing factors to that, I do think one of the stories in this cycle has been very proactive use of incentives at retail in the retail environment. I think there are lots of signs that those have been leveraged towards very effective demand creation. And because those have been driving the demand, there's been, you know, obviously some modulation of those incentives in order to keep demand and supply really well-balanced relative to previous years. So I think a lot of people have done an amazing job to deliver that, but that's how it's kind of translated into the picture that we see.
... Got it. No, thanks for, thanks for all that. I might pivot if, if I could to PC, just because it's kind of an exciting-
Yeah
... relatively new opportunity for you guys. And, you know, PC power converter, obviously greenfield, a greenfield opportunity for Cirrus. I was hoping you could speak just for a second about, you know, where in the PC Cirrus power, you know, is winning. And maybe even talk about who you're winning against primarily, who you're beating, in that space. And what's the strategy there within PC? Because it's kind of a new channel for you. Correct me if I'm wrong, but it seems-
Yeah
... like a relatively new channel for you, that you've got to sort of green shoot grow. And so is it the same kind of idea that if you go back in time 10 years , 15 years, you did in handset, where you sort of led with audio? In this case, do you lead with sort of power converter, get your foot in the door, land and expand? You know what I mean, and then you start branching out-
Right
... where you're selling codecs, and you're selling, you know, all your other amps or whatever, the rest of the lineup into a, into a PC over time, so, you know, again, as you, as you grow that, that, that new channel?
Yeah, it's an interesting story. So, number one, yes, it's mostly greenfield for us. We're starting from, yeah, more or less zero as the base. So that's always exciting to have that opportunity, where we don't feel especially exposed to the, you know, what's happening in the PC market as a whole. I mean, to some degree, yes, but it's all upside to us, truth be told. We're actually winning in parallel with different components. So I'll break out the components that we have in the PC space. We have power conversion to the point you were making, and then we have audio, which is made up of those two classes of components, again, a codec and boosted amplifiers.
And then we have haptic drivers as well. And we actually got our first initial kind of footholds into some of our PC vendor partners in the audio space. To begin with, this is pre the Lunar Lake reference design. And really it was during that period of the silicon semiconductor crunch, where, you know, we, some people were left hanging, they didn't have audio parts. And we had some off-the-shelf parts, which were not ideal, they're not perfect, but we could supply them. And, you know, at that point, that was, you know, supply was king, as you know. So that certainly opened some doors to us, which might otherwise have been, you know, we might have been knocking on them for quite a long time, otherwise.
But we also knew that there was something important happening in the audio space, which was a transition of the audio architecture and the primary interface used to connect audio components, which was gonna transition away from a legacy interface called HDA. And so we saw. You know, anytime you see that kind of architectural discontinuity or a shift, we saw an opportunity to enter the market with some fit-for-purpose products that supported the new interface, new architecture, new driver architecture on the Windows side. And we developed a made-for-PC specific codec and made-for-PC specific boosted amplifiers. So we've seen, and we saw a really good kind of positive responsiveness to that within our customer base.
In parallel to that, on the power side, we developed a PC-specific power converter, and this is what you were alluding to. This is leveraging IP that came from the Lion acquisition we made a few years ago, and really provides more efficient DC to DC power conversion within the laptop space. So, less waste heat effectively, relative to conventional buck-boost power converter from, yeah, somebody like TI, for example, who supply a lot of those products. It turns out that the key for getting wins on the power side has very much been the Lunar Lake reference design, so we've partnered with Intel and Microsoft on that.
And that's been driving really good uptake, both on the audio side and with the power converter. And I think, you know, as a general rule, it does seem like OEMs and ODMs aren't crazy about unpicking the power architecture of a reference design. You know, if they, of course, they swap some components in and out, but we have something that's relatively unique there compared to the competition, and we're seeing really good design momentum around that. Yeah, so the, you know, that spread of products that we've developed and delivered is. They're really winning in parallel at this point. And we're kind of excited about that, the collective opportunity that that represents for us.
And speaking of that, I mean, I know you, I think, you know, I've heard you say a few times that you hope in the next few years, PC could rival sort of Android in terms of contribution to your top line. And, I didn't know if you wanted to expand on that at all. But just, only because, you know, as you said, relatively greenfield market for Cirrus. It's at least a 250 million unit TAM. I mean, it's a massive market potential, right?
Yeah
... to be sort of, you know, growing into. And especially when you start thinking about this lineup of potential SKUs that you can be selling into a PC. So I didn't know if you could just touch on, you know, why you don't think that it could be bigger than Android for you guys, given the relative size of Android in your model right now versus iOS? And, and then I was just curious if you could just kind of go out there on, either talk about the PC TAM or, or talk about what your actual versus potential content per PC-
Yeah
... could be, something like that.
... Yeah, great. Actually, great questions. Let me, let me talk about comparison with Android first, and then, and then talk about how we see-
Okay
The market opportunity for us. Yeah, on the comparison with Android, a great point. Yes, I think it could exceed our Android business. I actually think, you know, on the Android business, I mean, I've mentioned elsewhere, like, we love the business we have there. We love the customers. We don't put a lot of R&D into that, for multiple reasons. But one of them is, you know, a lot of that business is wrapped up in China-based smartphone OEMs. They're great partners and customers of ours, but the fact is, there's a geopolitical cloud over that which nobody can ignore. They never know what export control change they're gonna wake up and read about.
They need domestic suppliers for any silicon they're buying from, from somebody from the U.S., I believe. And that, that's just gonna limit the opportunity and probably mean there's a lot of cultivation of local, lower-cost competitors in the long run. So, so for us, that's, you know, that's, that's something we regard opportunistically, not, not, bullish about it long run, and, you know, we, we definitely don't build our strategy around it. So I think the PC business, yeah, it should certainly get level with Android, and then there's really no reason why, it can't, it can't, exceed that. It should, for us, especially given that range of content that I talked about.
So when we look at the overall market opportunity, yeah, so 250 million units, we are not going to be relevant in a reasonable chunk of that. I think the way that we think about it, very broad strokes, is similar to the smartphone world, which is that, you know, the higher tier, you know, the kind of premium tier, we should be all over that. And then when you look at the mid-tier, there's gonna be a good chunk of that where we're highly relevant as well. And then once you get more into stuff that is really built to a budget and where they're making a lot of compromises on user experience or physical size or whatever, then we're gonna be less relevant.
But we believe there's a lot of value to capture in that kind of upper half of the market, to the tune of it's a $1 billion-plus SAM in four years from now. That's the estimate that we have, and you know, we're certainly looking at ways that we can continue to expand that, you know, where we're relevant within the entire TAM. And that's gonna be distributed across those different components that I talked about. We see a lot of factors that are driving demand. So in audio, and you asked about who we are winning against. I mean, the typical audio supplier for PC world is Realtek.
What we saw coming out of COVID was a desire, almost universally across PC OEMs, for a better audio experience as part of a better audio-visual experience, because so many people were having so many more conversations through, through the screen. That, that demand and that, the importance of that remains the case today. It's really not, it's really not a marginal benefit as well, when you, you compare an A/B. In fact, we, we did this many times with, with OEMs of, you know, wiring out, or replacing on a design that they had, replacing the existing components with our amplifiers, and it, it just blew them away every time. So we can, we can provide a hugely better experience and help, help our customers do that, and that's great.
On haptics, PC world's been very slow to catch up, where I think the non-PC laptop manufacturer of note shipped haptics trackpad about 10 years ago for the first time. But so it's been slow to catch up. I think Windows was actually slow to deliver what was required for a really good haptic trackpad experience. But there's zero doubt that the user experience is considerably better with haptics. You've got better force sensing, better feedback. It works perfectly across the entirety of the trackpad. You know, when you have a mechanical trackpad, it's a lever basically, so there's hinges somewhere, and so if you press it in the corners, you don't get that good click experience.
Haptic trackpads solve all of that, and you can make them as big as you want. So, you know, without that mechanical trade-off. They also have a lower, a smaller Z height. Typically, you can make them thinner when you look at the stackup. So again, as you wanted to make these devices thinner, lighter, better user experience, it's gonna drive demand for haptics drivers. And then on the power side, as I said, we've got an increasing need for efficient power conversion. To the extent that you're doing local or device-side AI tasks on these devices, that's only gonna increase the need for getting everything you can, every joule out of the battery that you can, without wasting it in power conversion.
So we, we've seen, you know, really, really positive response to what we're, what we're providing there. So yeah, when you take all that together, you know, we see a billion-dollar-plus opportunity, and, and obviously, we want to capture as much of that as we can.
Well, thanks for all the detail, and I, I should have asked as part of my question. Are you relatively agnostic, whether it's an Arm-based PC or whether it's x86? Does that move the needle materially for you guys? Or is, or is, you know, I'm just curious?
That's a-
... in terms of your potential content? Yes.
Yeah, that's a great question. That's a great question. From a potential point of view, we're totally agnostic. I think, you know, that's one of a number of factors that's kind of making the PC world interesting again as well. I think that just that we'll see a lot of gains in power efficiency, a lot of competitive pressure to do that, it's great. Now we're kind of further along with x86 stuff, by virtue of working closely with Intel and Microsoft around Lunar Lake. And that is still obviously the bulk of what our customers think about when they think about laptops.
But we definitely see a lot going on in the other architectures, Arm-based architectures, and we're very engaged on those fronts as well. And it probably doesn't need to be pointed out, but as you get to an architecture that's kind of Arm-based and it's got boosted amplifiers and so on, you're talking about something that looks even more like a smartphone from an architectural perspective. So that gives us an additional kind of leverage and familiarity.
Thanks, John. I'll pivot again, that's all right, to AI, kind of stealing a lot of the sunshine this year, in particular for the group. You know, I know there's a lot of talk about, you know, moving compute more to the edge, you know, i.e., PC, handset, whatever. And, you know, your largest customer's been a leader, in AI assistance, you know, forever now, deploying their own gen AI. So I'm just curious from your perspective, you know, do you think AI is gonna drive a meaningful, you know, either TAM increase or refresh cycle or anything, you know, that's gonna help, Cirrus Logic? And I don't know if you can talk about sort of your quote-unquote, "AI play," you know, like, how do you guys-
Right
... how do you guys benefit?
Yeah, thanks for asking. I guess, you know, a couple of caveats up front. One, you know our style, we are not hype merchants. So, you know, we have not attached AI to everything we're doing and, you know, kind of-
No, no, I brought it up.
You're riding that wave. You know, so, so there's that. And then secondly, I think, I think it's important for the investor community to know that when, when we guide, we're not baking in some assumptions about a super cycle or whatever, you know, just going back to the earlier conversation about guidance. But I think it, I think it, it, it intersects with us really in three ways and kind of like in, in increasing levels of specificity. So yeah, I, I'm a big believer in on-device AI. I think, you know, we, we just thought there's just no way of addressing privacy and latency concerns otherwise, so it's gonna be a feature of mobile devices.
So, yeah, of course, to the extent it drives an increased upgrade cycle, we'll benefit from that. Somewhat more specifically to the degree it creates increased pressure on the battery and power resources within the device and board space, I believe we stand to benefit from that. Most of the investment that we do is in comparatively advanced geometries for the kinds of devices that we deliver. That means we typically deliver products which are smaller and more power efficient to our customers.
So if you need more board space, freed up so that you can have, more room for battery, more room for memory, 'cause there's zero doubt that you need a lot of storage and RAM to run an effective Gen AI model, then, you know, we can help solve the problems associated with that. We also, of course, in the power conversion and control space, so this is somewhat more sophisticated than what we're doing on the PC side so far. We are, so we've been shipping that product in, with, with, our, our largest customer for, for a little while now, and it sits between the battery and the rest of the device, and is especially relevant in situations where you're making...
where you have big spikes in demand, for power from the battery. Even more so when those occur, when the battery is in a diminished state of charge. And those are, without our technology, those are the kind of situations where either you risk damaging the battery or you get some kind of user experience degradation. So, you know, you start dropping frames and video, the system starts slowing down or even worse, browning out, and you actually lose functionality. So we can provide solutions that address that. We have that IP today. That makes us very, very relevant, in a space where people are more concerned about power efficiency and handling kind of peak demand.
So yeah, the three ways that I think we stand to benefit are, number one, the accelerated upgrade cycle to the extent that that's something we see. Secondly, just all the demands on board space and power efficiency. And then thirdly, I think really the interface for a lot of AI is, to the extent that there is more done photographically through the camera and through audio, through voice and so on, I believe we can enhance that experience. Because those areas, you know, the interfaces with the real world, what you hear from the device, what the device hears from you and the environment, and then the camera itself.
These are areas where we are providing critical, innovative silicon to our customers today. So, you know, we believe there are kind of more interesting problems that will come over the horizon that we can help address.
Just since you mentioned camera at the end there, I mean, there's a lot of talk about, you know, your largest customer potentially switching vendors for their camera. Are you—does that matter to Cirrus Logic? I mean, are you gonna support Samsung, Sony? Does it matter to you guys?
We're pretty agnostic on that front.
Okay.
I guess, you know, our camera controllers drive. They do, they do a bunch of things, but they, they, you know, stabilization, focus, lens moving, and so on are the, are the main things. A lot of those are not connected with the sensor at all. So if we're moving optical elements for, for stabilization or, or autofocus, or some kind of, exotic or elaborate, lens assembly, then that's completely decoupled from the sensor. We do also provide functionality, which is, which, enables the sensor shift stabilization. But that, again, should be pretty agnostic about the sensor, unless the, the weight of the sensor changes radically or something, which I, which I doubt.
Okay. Yeah, thanks. I just thought of it when, since you were on cameras.
Yeah.
Another question I had. I keep asking you these random questions, but you know, your largest customer, there's a lot of stuff in the press about them potentially beginning to insource their own modem, their own baseband next year. And I didn't know for Cirrus Logic, you know, does that in any way, shape, or maybe a dumb question even, but does it impact potentially a positive, negative, any impact at all, potentially to Cirrus Logic if that happened?
I don't think it's a dumb question, Rick. I have been asked it quite a lot, I will say. So which means I'm very glad you asked it, because that is probably on a bunch of other people's minds as well. I can't think of any way that. I think it's completely orthogonal. I can't think of any way that makes a difference to us. Certainly, you know, the modem is just a completely separate subsystem, and as far as we're concerned, I don't think it has a material impact on anything we're doing in audio, power, haptics, or camera.
Okay. No, thanks. I just wanted to check that box-
Yeah
... since we're going through this. And then, you know, something I haven't heard you mention. I, again, I did hear you clearly say you're not hype merchants, and I think, I don't think anybody would accuse you of that. But, you know, some of the bigger names in the supply chain for your biggest customer, the folks that actually make a lot of their devices, have told us repeatedly, you know, firsthand that haptics, you know, for the side of the phone, you know, replacing the mechanical power, mechanical volume buttons, that's not a dead project, and that could come back.
I haven't heard a timeline or anything on that, and I don't know how much you're willing—I know you guys have said as far as you're concerned, it doesn't happen. And again, maybe it goes back to your MO as not being hype machines. But, what can—if anything, what can you say about the potential there?
Uh-
It seems like it's alive in some time in the future.
Yeah, I would— Well, yeah, I mean, not hype merchants, but I also don't like— I mean, if we thought there was something coming for us, I would, I would try to breadcrumb that. I, you know, I'm not looking to kind of jump out of a cake with some surprise for our investors. I don't, like, I don't think that serves anybody super well. Yeah, and, you know, just in case there's anybody from my largest customer listening, we've never commented on the, on what functionality was involved in the piece of silicon that we developed, and then, which didn't ship last year, which we talked about. And everything around that that we've been associated with, that remains completely zeroed out in our model.
So we make no assumptions. And I really don't know. I mean, I hear the same rumors that you do. But that could mean any number of things and, you know, there's plenty ways of addressing some, at least some of what's in those rumors without using any silicon from us. So yeah, I've got nothing, no exciting news or teasers around that. And you know, there's nothing baked into our assumptions or expectations in a, you know, for the future around that either.
Fair, fair enough. And, maybe I'll pivot to, you mentioned a couple times some of the new products you've got coming out. And, obviously, the new 22-nanometer codec. I mean, I'm curious there, I know there's obviously some start-up costs and associated with that, and you're probably improving yields, and everything's still in the normal cycle of things, new products. But, you know, in the past, we've seen when you guys, like, when you guys moved to 55-nanometer, you know, like you said, was it, I've lost track now, 6 years ago, whenever that was, you did benefit on the gross margin line. It definitely showed up. You guys kind of ticked up into the mid-fifties.
I'm just trying to understand the puts and takes this time on this transition, and could we see a similar benefit for a while in the model or... I don't know how much you can share on that, but I'd be curious your thoughts.
... Yeah, I mean, there's a lot, there's a lot to unpack there. First of all, yeah, like, everything is more expensive on 22 and with the new product. You know, it's our first 22 product, so we're not yet driving volume on that node. But really, everything is more expensive. The entire design process, simulation, mask sets, wafers, and so on. So, you know, you can think of that from a couple of ways. One is that, you know, of course, of course, we wanna get paid for that. It’s, you know, there's a lot of benefits that come from 22. We believe we're delivering a lot of, a lot of value to our customer there.
But, but I also think the reality of, of a situation for most companies like us, but maybe even more, more us because, because of the customer concentration, is gross margin improvement is gonna, come, mostly from working very hard on the supply chain side. So we've got, you know, we've got a lot of work to do to get, get down that curve. I, I, you know, we guided gross margin a bit more positively this, quarter for the September quarter because we had, you know, we, we, we took a lot of the, the initial kind of bootstrap costs in the June quarter that we just, that we just reported.
You know, as we go forward, we're gonna continue to work really, really hard on the supply chain side. We believe there's, you know, opportunity to improve yield, improve wafer price as we drive volume on that node. And hopefully, we see some benefit, but there's no reason in our view to update the long-term model, the kind of 49-51 model at this point. I think, you know, to the extent that we can move that needle over the very long term, I think it's gonna be driven primarily by business outside of our largest customer.
Oh, perfect. And I know we've got about a minute left, so I'll sneak one in just 'cause, you know, I'm gonna use every second of the time I get with you. But I think your new boosted amp is, I believe, 55-nanometer. I'm sure you'll correct me if I'm right. I'm just curious, what was the thinking there as you were moving codec to 22, like, like, like, you know, why the lag, I guess, on that transition for boosted amp?
And by the way, second part of that, it's just, and you may not be able to answer this, but what's a general rule of thumb when, you know, gen-to-gen with ASPs, when you make a leap like this, you know, and maybe it doesn't apply, or maybe it does apply to boosted amps, even though you stayed on 55-nanometer. And just, is there a rule of thumb on ASP improvement?
It's actually that that's been all over the map in the past, so I wouldn't talk in terms of rule of thumb. There's been some, some-
Okay
... ASP. The benefit, we don't need to, or we didn't believe we needed to jump from 55 to 22, for example, with boosted amp, because the calculus around that depends on the ratio between analog and digital circuits. Analog doesn't shrink very effectively, in fact, often grows to maintain the same performance as you go down. But that's not to... I mean, just to be clear, the 55-nanometer boosted amplifiers that we're bringing to market are, it's a radical new architecture that's really significantly more efficient, and it also incorporates a lot of stuff that used to sit around the amplifier on the board. So you end up with major board space savings, major increased efficiency, and actually potentially lower system cost for the customer.
So to the extent that we can get an ASP accretion there, it's driven by the fact that we're taking other costs off the table and improving the system view from the customer's perspective. And we're very, very excited about the architecture that's instantiated here, as is the customer.
Great. Well, that's, that's very clear. So, anyway, John, I may have taken you a minute or so over, but I, I really appreciate it. It's always fun catching up, and great to see you, and, and thanks so much for, for your time.