Right. Good morning, everyone. Welcome to this session. I'm Vivek Arya from BofA's Semiconductor and Semicap Equipment team. I'm really happy that you could join us for this session and really excited to introduce the team from GlobalFoundries, Tim Breen, CEO, and Sam Franklin, the Senior Vice President of Finance Operations and Investor Relations. As usual, I'll go through a quick fireside format, my questions. If you have anything you'd like to bring up, please feel free to raise your hand. With that, a very warm welcome to you, Tim and Sam. Tim, four months into the job, I was hoping that maybe you could introduce yourself to our investor audience and what brought you to GlobalFoundries and how you're kind of looking at the strategic direction of the company.
Yeah. No, thank you. Great to be here. As you said, sort of four months since we announced the transition. For me, it's more than seven years with the company in different roles on the strategic and financial side and then more recently on the operations side. I got the chance to know this company very well, which gave me a lot of conviction about why even if our past is good, our future is even better. Very excited for what's to come. The last four months, I've been on the road. I don't think my family recognizes me anymore, but that's the negative. The positive is I've been spending time with customers, with our teams globally and our partners around the world, and a huge level of good support for the future. We'll talk more about that.
I think when we talk about what we're trying to do as GF, focusing on really the differentiated technologies that we've been investing in for now many years, building that deep, rich ecosystem and those partnerships with customers. Lastly, and I'm sure we'll talk more about that, that global footprint that is hard to build, but we have today really resonates. I left a lot of meetings with a lot of opportunity to do more. That's obviously very good for me as a new CEO in the role.
Got it. Excellent. Maybe as a way of kind of level setting, Tim, usually when investors think about the foundry ecosystem, the perception is there is the leading/bleeding edge, mostly in Taiwan, right? Some, a little bit in the U.S. There is a big kind of lagging edge or mature node ecosystem where there's a lot of capacity being put up in China. How should investors put GlobalFoundries on this map? Where do you fit in? What do you differentiate in so we have a better view of how you can grow in this market?
I think what we're seeing is that the singular vector of innovation called the nanometers is no longer the right way to talk about the future of the industry. I think for sure there is a role to play for single-digit nanometer technology. What TSMC is doing in that space is fantastic. Obviously, others are trying to compete in that space, and it's a challenging market. We see a lot of other innovation, which is really going to where semiconductors get used today. Given how broad our end markets are, whether that's in the data center, in the satellite, in automotive, in mobile devices, in the Internet of Things, in medical devices, that breadth of kind of market penetration means the features that our customers need are very different. It's no longer about the fastest compute.
It could be about the lowest power, the best RF connectivity, the best ability to move data quickly at low power consumption. You are seeing many, many different ways to innovate. For us, I think we fall into neither of those two buckets. We are going to fall into something different, which is basically a differentiated provider of technologies for fast-growing end markets delivered from that global footprint, which we will talk more about, but obviously is increasingly a critical priority for those customers.
I see. You mentioned the global footprint. How are you aligning the footprint given the, I guess, by-the-minute evolving nature of all the geopolitics and trade and tariffs?
Yeah. I think for those who do not know the history of GF, GF came together from multiple different companies. We started as AMD in Dresden, actually, was our first fab. AMD, we acquired Chartered Semiconductor in Singapore. We eventually built Greenfield in Malta, New York, not too far from us today geographically. We bought IBM as a business as well, which brought it two fabs, one of which we still have today. We have got a footprint that grew inorganically, and organically a little bit in New York. It was very different when it started. What we have been doing over the last several years now is making more and more of the technologies that we innovate in available in more and more locations. Now the majority of our differentiated technologies are available in two and even in some cases, three fabs.
That gives customers something that I think is the buzzword we hear from all of them. It's optionality. They don't know what their future looks like. They don't know what will happen in terms of trade policy and customer demand, market shifts, and so on. They do know they need choice. When you can do one tape out into two fabs or even three fabs, that gives you that flexibility. To have that, you need that global footprint. More than that, you need the technology across qualifications to make it possible.
Got it. Makes sense. You recently had pretty strong results in the March Quarter, right, and good guidance for Q2. Maybe walk us through what were the drivers behind the upside in March and how you're thinking about the current Quarter.
Yeah. We framed 2025 as the year of resumption of growth. As those who have observed the industry for a longer term have obviously seen, the cycle has played through from a kind of incredible upcycle in 2021 and 2022 to a not necessarily deep, but relatively long down cycle in 2023 and 2024. I think we start to see the green shoots of, let's say, at the minimum stability and in many pockets also growth. We hear optimism from our customers and from other participants in the market. That is what we are seeing in our business. I think some specific drivers for us that are more GF-specific: one, automotive, despite the market environment not necessarily being extremely strong. Content growth in the car is growing. I think more importantly, GF's growth in the car continues to be strong. We grew 15% last year.
We'll grow meaningfully again this year, even in a flat market. That's mainly because of share we're able to gain on the back of previous design wins we have. We see that continuing with new design wins and new applications in the car. Our franchise today is very much around microcontrollers, in the future going to new areas like battery management, imaging, image sensing, radar, other areas as the car becomes a more complex set of technologies. GF-specific drivers are playing out there. I think it's also worth calling out the data center. Obviously, no one is surprised by the fact there's a lot of raw data center demand given the pace of build-out.
Probably what they do not know so much is that in the data center, technologies that we manufacture, like silicon photonics for pluggable applications today and then future applications like co-packaged optics, but also power applications, silicon germanium playing a critical role in other forms of optical communication, all of that drives incremental data center demand. Actually, that market is growing very well for us. We will grow kind of high teens this year on the back of that. Another market within that area for us is satellite communications. We have historically had an active presence in there given our RF franchise. What we see today is that with the proliferation of satellite connectivity, low Earth orbit satellites, you have a lot more reasons to connect and a lot more ability to connect at high bandwidth that has a lot of RF content tied to it.
Again, we start to see that pull through in that business. On the back of, say, other markets that are relatively flat for the year, like mobile, we see these pockets of growth that are quite meaningful and continue to drive, let's say, growth for us through the course of the year.
I see. I know you are further upstream, but was there any notion of pull-in or other behavior that you saw from your customers over the last one or two Quarters?
I'd say less than people talk about and less than we perhaps thought could happen. We could have thought about push-outs on the back of uncertainty of demand, pull-ins on the back of kind of getting ahead of a regulation. We probably saw less of both of those in the end. I'd say for the current Quarters, limited impact on the current environment.
I see. One of the things I remember, Tim, from the call was wafer pricing was somewhat below the trend line that you guys have established. How do you think about wafer pricing this year? What brought it below trend, and what can help it kind of get back to trend?
I think obviously we report average selling price. A big factor in that is always the impact of mix on our business. It can be the case that you ramp a product with a lower ASP, but a higher profitability that may be less complex to manufacture and so on. There is always a mix dynamic that I think can kind of be mixed up with, is there a constructive pricing environment? Look, for the technologies we compete in, we still see a pretty constructive pricing environment, and largely because the conversation with customers is performance. Performance, time to market, can this application help them win in their market where they compete? Yes, you have to be competitive, but it is much less a kind of commodity-driven discussion than it might be for other parts of the market.
Look, you will see in some technologies slow year-on-year price declines. You do not see any significant change of the environment. I think for more differentiated technologies, actually, you have pretty good pricing power going forward.
I see. On the comms and data center, which you mentioned as a key, is there a way to size what GF's content is in that opportunity? You mentioned you play an important role in pluggable transceivers. Where exactly do you play? As that industry transitions from these optical pluggables to more co-packaged optics, how does the direction of your opportunity and content change?
I think the way to think about that is, again, as you say, today, the transition to optics has mostly been in pluggable transceivers and so on. That is what is powering a lot of data centers today. We have a meaningful share there, and we have technologies that play in that space. Of our overall sort of data center business, maybe a third is kind of that overall space of that market segment. I think the really interesting story is what happens next around the transition to co-package. If you went back two or three years, the industry was a little bit unsure. The industry was saying, well, maybe copper will have a few more generations. I think now the if has become a when.
NVIDIA before OFC here in San Francisco a few months ago talked about co-packaged optics, really for the first time in a broad way for scale-out applications. We see other companies we're working with in scale-up applications. This transition from a device that is improving versus copper versus one that's really integrated in the package, that's the transition point that I think will drive very big content growth for CPO in general. For sure, for GF, that's the area we focused on within photonics. Good inflection point for us. When that's always a debate about when the ramps really start to happen, I think the industry consensus is really that 2027 is the year you start to see significant, let's say, switches to co-packaged optics. Could some happen earlier, some happen later for sure. Everyone's architecture is different.
We definitely see much more pull today than we did even six months ago.
I see. Does your content change, Tim, in this industry transition from 800 gig to 1.60, or that is not a driver of any?
It's one of several drivers. I think the bigger driver is really the transition. Think about optics as optics used to connect data center to data center. Then they moved to rack to rack, and now they're talking about within the rack, those scale-up applications. That's when you're talking about not just kind of one to two to four. You're talking about one to ten to one hundred in terms of content. The big drivers are the applications rather than the bandwidth requirements. Now, the bandwidth requirements are what's making it very difficult to continue with copper. You just cannot do these things with copper at anywhere near the power consumption that you could before. I think those two things are playing out. It is really the architectural change that makes a bigger difference than, for example, the individual spec of a transceiver performance.
I see. The other interesting thing, Tim, you mentioned was the SATCOM opportunity. Give us a sense for how big is that today. Is that kind of exposed or leveled to the same kind of aerospace, defense spending environment that we are seeing? What is it being driven by?
It's growing. It's relatively small today, but we see that as multiple hundreds of millions of dollars of future business opportunity for us and ramping pretty quickly. I think the reason is that there have been really fundamental breakthroughs in the deployment of, I think, particularly low Earth orbit satellites. Right now, you have thousands rather than hundreds that are able to provide internet connectivity. If you're in rural California or if you're in rural Africa, you're going to have that access that consumers are doing. That's where you're seeing global subscriber growth to these kind of services. If you think about what they have to do, you're talking about transmitting a signal from a device that sits on your house or your car to a satellite 300 miles above us, traveling four times the speed of sound.
The amount of kind of precision RF for the phased arrays and so on that are necessary for that is significant. This is a very big application growth that really was not there before. It is a new use of RF connectivity for a front-end module that is much more high-performing than, for example, you would see in a cell phone or a smaller, shorter-range device. That pulls a lot of content for us.
Are you levered to a lot of these Starlink-type programs?
It's those kind of programs. We have good broad engagement in the ecosystem. Yeah, there are plenty out there that are driving that growth. I think more will come as well.
Perhaps just to pick up on one point to build on Tim's comment there, for us, a real focus area is how do we see the design win momentum pulling through on the business? Where do we see that design win momentum from a product perspective within that end market? We talked about this on prior calls as well, but that momentum across the product portfolio into satellite communications has been quite pronounced, whether that's on our 22FDX platform going into beamforming devices. That is an ultra-low power product application, as well as to Tim's point on the explosion of RF content within these devices. Our 130nm NSX has seen good design win momentum as well. It is not just a narrative for us as it relates to satellite communications. It is really seeing those proof points pull through within the design wins.
I see. How's the competitive landscape in that? Is that like where you are one of five or you're one of three? How many people can do this?
I think if I zoom on the RF component, obviously, our RF franchise is one of our longest-standing ones. It predates GF in many ways. I think in those areas, we're one of very few. I think we're comfortably able to say we are ahead and we can stay ahead based on that level of technology. There are obviously others playing in different parts of those architectures. I think that will continue. We have a few advantages, including that technology. I'd say the other piece of it is this is also a sector where geography of sourcing matters. Again, some of these devices are for consumer devices. Some are also for military applications. Sourcing matters. It's not a case of I'll source it from wherever the lowest cost option is.
Got it. Automotive, GF has had an interesting journey in that the company continued to grow even when the automotive industry softened. There has always been this question mark about, well, was it based on a lot of take-or-pay type contracts? Were there pull-ins or other situations? How would you describe what is the utilization of your product with end customers? Are you going to see growth with the market? Your growth is, I mean, your growth is already pretty strong. How do you see the state of the automotive market right now?
I think the drivers of, I'd say, sustained above-market growth are market, I think we can still be bullish on around content increases that everyone reads about and talks about. I think, look, we are still ramping on core platforms like on microcontrollers in 40-nanometer embedded memory technologies that still haven't reached their peak revenue. As you know, these are very long cycles. They take a while to reach peak. They take a while to decline from peak. You've still got a way to go on those areas. Those are areas where these are design wins of several years ago, ramping through. Good visibility for us as well. We have other next-generation MCUs engagements, and those are ongoing and going well. A lot of the content growth in the car is also pretty interesting.
We have had a big effort to make all of our fabs automotive-grade capable. Many of our technology platforms are automotive-grade. We can port an application that could be, for example, an image sensor in a phone, but also could go in a car with a higher spec and so on. Those are easy wins for us to again capture that share and grow ahead of the market. I would say for auto, pretty good conviction to grow ahead of the market for some years to come.
Got it. I think this year expectations were like mid-teens, plus-minus growth in auto.
That's right. We did about $1.2 billion of revenue in automotive last year. That was a 15% growth year over year. Expectation for all the reasons Tim's outlined, particularly on the content growth side, is for a similar rate of growth in 2025.
I think, again, like the satellite sector, automotive has been pretty vocal about supply security. Manufacturing in Europe for the European automotive, the OEMs, the tier ones, and then the IDMs, that matters a lot to them. Obviously here in the U.S., partnerships like the one we announced with GM a couple of years back, these are good examples of how automotive companies think about local sourcing.
Got it. Are you also seeing some improvement on the industrial side, like many of the traditional industrial vendors are starting to see? Some have called it an inflection. Are you starting to notice that?
Yes. Industrial is actually a bit smaller for us, leaving aside kind of aerospace defense, pure kind of industrial, a little bit smaller for us. I think actually it's a growth opportunity longer term because a lot of the same dynamics that play through to auto play through to industrial, especially as you get to more complex microcontrollers, more complex sensors that need low-power applications that are difficult, for example, for IDMs to do in-house. I think there's good longer-term potential. I think short-term, I would measure it more in engagement. We have a lot more people coming to engage on future platforms for a general-purpose microcontroller with certain features than we had in the past. There's green shoots, let's say, in the overall market. We're not seeing it today in tactical revenue that much.
Got it. One other thing about microcontrollers, Tim, that often comes up is we have a vendor such as Texas Instruments who is deploying a lot of capacity in the U.S. In the past, they used to outsource a lot of their embedded products. Now they're saying they will insource a lot of them. Does that create incremental competition for GF even within the U.S. market going forward?
Look, I think we take every part of the industry as a relevant consideration. I think, look, in automotive, not so much as far as we're seeing. I think TI's strength is very much in general-purpose microcontrollers. I think they're doing well there. Again, as those technologies move to more complex process technologies, it's harder for them to do that in-house. They do not have a 22-nanometer fully depleted silicon-on-insulator platform. They do not have a FinFET platform. When you think about what those applications will do today, if they do just a simple control device, that's one thing. What about an AI accelerator for a motor control application? That's a lot harder to do. Again, with that, process technology leadership is more important. I'd say there's plenty of opportunity for us to grow.
All right. So one should essentially think of GF as more as a specialized fab that just happens to do trailing edge geometries as opposed to just a trailing edge.
We do not compete on the geometries, if you think about it. We think much more about what does this allow us to do from an application point of view. By that, that also goes to where we invest our money in design, in IP, because we have also learned that when you have specialized technologies, you need to help customers get the full value of that technology. That includes building reference designs and building kind of basically a lot of tools to enable that. We spend a lot of time investing in that now so customers can go faster, go cheaper in some cases too, but then get more performance out of technologies. I think the 22FDX, great example. There are companies who are using all of the features of that technology for things like body bias, where they can modulate the power consumption for different workloads. That's not easy to do the first time. Once you build up a set of libraries and capabilities, you can do with that then what you couldn't do with any other platform, which obviously is very sticky for us.
Got it. And then finally, on the segment side, smart mobile and IoT, so a lot more consumer exposed and consumer is being subject to a lot of noise and macro issues. How are you thinking about the market in the back half of the year? And just smart mobile and IoT as a broad category for 2025, can it grow?
I'd say if you kind of put consumer IoT and smart mobile together, you'd sort of talk about a flattish profile for the year. I think why is that? As you said, consumer demand, not terrible, but equally not super bullish. We haven't yet seen the replacement cycle that we I think still may see in the future when your device can do a lot more in terms of edge AI applications. New devices like smart glasses, promising, but early. We have significant design wins in that space. I think we're a year or two out of that form factor becoming well adopted. I'm actually personally very bullish about that. I'd say the short term, like we said, more flat. I still have a longer-term view that the content will grow and the device proliferation will be there. We haven't seen the last device that we're going to use. OpenAI would let you believe that. Others wouldn't let you believe it. Meta wouldn't let you believe that. I think we haven't yet seen that inflection point where we take the hunk of glass and plastic and replace it with something else.
Do you see content growth opportunities in those markets?
Yeah, because you have, for example, when you switch to new bands for RF connectivity, you need to find a way to basically, without more space, connect to more bands with FR3 transition. That is an end-of-decade type transition. Again, the work will start to happen at some point. Haptics, audio, there is still plenty of content growth.
Got it. Anything, Tim, you are doing different because of tariffs?
I mean, first of all, paying very close attention, not just to the direct effects, which are relatively easy to measure. I think it's making sure that the strategic conversations with customers are kind of well thought through. What we're seeing for sure in the last two months, three months or so is customers are thinking much more about supply strategy. For them, they're saying, what could I be developing in the U.S. that today perhaps I manufacture somewhere else? For us, if it's coming out of Taiwan, that's good news, new business coming to us. Even could it be growing with GF to say, I manufacture that in Singapore today. Could I manufacture that also in the U.S.? I think lining up the technology portfolio to the locations, maximizing the flexibility, obviously in a prudent way.
You don't want to double up everything everywhere all at once with the investment that come with that. You do enough to make flexibility kind of your strength. That's the big strategic change that we have to keep doing. To do that, it's not just conversations with customers. It's also with big end customers who control a lot more of the demand to say, think three, five years out, what do you need? Where do you need it? Do you have a strong view? I think what we're hearing, and I think you'll hear more about that in the weeks to come, more and more companies trying to set a more strategic view on where they want to source product. I think they have no choice. The world is too complex for them to say. Betting on one path, they need that optionality.
I see. There is nothing in your cost structure that is impacted by the tariff situation.
Very limited. I mean, there are some things that are now tariffed coming to the U.S. The majority of categories are exempt. There's a few things that are not exempt. They do not make a large share of our cost structure. Obviously, we'll do our work to swap out something if there's something we can source from somewhere else. I mean, we've had a pretty good supply base globally. We have 7,000 suppliers globally. We work through to think through where do we source most efficiently. I'd say on the cost side, pretty limited so far.
Okay. In terms of some of your customers are also starting to develop what they call a China for China strategy. Because China is the one market that continues to grow for them, they think that it would be more advantageous to partner with foundries that are in China for that strategy. Have you seen that effect as you deal with customers over a multi-year contract basis that they are starting to diversify?
The way we think about China, and maybe it's good to level set kind of where our starting point, we have pretty low direct revenues in China today. GF is less than 10%. If anything, my framing of China for us as a company is more of an opportunity than a risk given that low base today. There are a few sort of, let's say, points to cover. One is the technologies we're focusing on and not the technology that China capacity buildouts are largely focused on. China imports about $380 billion of semiconductors, 2024 numbers. The majority is bulk semiconductors, things we wouldn't necessarily invest on and focus on. Let's say the direct competition is between that and potentially also chasing a DUV equivalent of a leading edge node and things like that. Again, areas that we're not exposed to.
Technology-wise, the supply is not matching our supply very much. That's a really good first point. I think the point you raise is a good one about what are non-China customers doing, but then also what are China customers doing. Maybe non-China customers first. For sure, for those customers who sell, our customers, who sell a lot into China, like take the EV industry as a good example. They want to have a local supply option. What we've said publicly we're doing and we're in the process of making happen is picking a local foundry partner, enabling specific technologies that already run in a GF fab today for a portion of that demand to be manufactured in China. We maintain the customer relationship, the quality. By the way, it's still one tape out to manufacturing locations.
That is our way of providing that local sourcing option, primarily initially for those foreign, let's say, non-China customers who want to have a portion manufactured locally. What we are learning through that process is that China customers are also looking for the reverse. They are saying, listen, I have local demand. I need a China for China strategy. Actually, I also have an export market. You can name 5-10 Chinese companies with big export ambitions, whether it is an automotive OEM that is kind of 60%-70% external, or even some of the fabless companies in the middle, they want to export. They know to do that, they cannot have 100% manufactured locally. They also like the idea of one tape out, two fabs. We are seeing a very good pickup of China interest in non-China, non-Taiwan demand.
This is the interesting inflection point. They started saying non-Taiwan demand. It was always, I get it that it can't be in China. Now they said, listen, Taiwan is not a diversification as far as our end customers are concerned. We need it in Singapore, particularly Singapore benefits a lot. Guangzhou is four hours from Singapore and four hours from Beijing. We are not talking about a very big distance to cover. We think that that upside on China customers is also pretty good. I think for all those reasons, we watch it carefully, but we do not see a significant downside risk. If anything, we see some good upside opportunities for GF.
Makes sense. On my favorite topic of gross margins, 24% in Q1, expanding in Q2, and then I think you said exiting this year at closer to 30%. What are the drivers this year? Expanding that into your longer-term targets, which have a four handle in gross margins.
Yeah, I think it's a simple set of drivers. We're starting to see those start to play out this year. I think that the obvious one is that we need utilization to pick up. The good news, bad news story. The bad news story is we took a bold decision in the pandemic to invest. You can never perfectly time this. We therefore have landed with more capacity today than we have revenue to fill it. That's the bad news, good news story. Good news is we can expand quickly with limited additional CapEx and very limited additional fixed costs. That's the important part that any dollar you bring of revenue means it will flow through at 60%-70%, depending on the product, maybe even more incremental. Any new business is incremental to current gross margin. That footprint makes a big difference.
Roll-up of depreciation we've talked about in earnings. Some of that is time-based. Some of that is driven just by the nature of the footprint. We're seeing around a $250 million year-on-year, 2024 to 2025 decrease in depreciation. That will continue in a modest way in future as well. The last piece of this is product mix and looking for those more accretive products that we're bringing into the mix. I think that's more of a longer-term story into 2026 and beyond with things like photonics, where there's a lot of different content coming there. That does play a role in kind of that story, especially to get to that 40% target that we still maintain is very achievable for us. Obviously, to get to 40%, you need to start by getting to 30%. Assuming that we continue on the same demand trajectory we have today, we're confident that in the back half of this year, we'll hit the 30% gross margin.
I see. You do not need any extraordinary recovery in the smart mobile or consumer IoT to get towards those targets.
I think the road says modest demand increase gets us there. You don't need a hockey stick profile.
Got it. Okay, makes sense. Finally, on capital management, still strong balance sheet. You guys have been generating very good cash flow. What do you do with that cash? At what point do you start doing more buybacks? Do you think industry consolidation is still on the table?
Yeah. So obviously, we've been focusing a lot on free cash flow generation the last couple of years. I mean, the fact that free cash flow in 2024 was more than net income tells you a little bit about the quality of the earnings that we have. I think that will continue this year with a good momentum. I think we can continue that flywheel still growing and creating free cash flow. That's a very good position to be in. In terms of use of cash, look, M&A is the first topic people ask us about. I'd say that our M&A will be targeted at increasing our differentiation. The three kind of pillars I talked about at the beginning, the more I can bring differentiated technology to market, the more I can win my customer's business.
Our acquisition of Tagore Technologies last year in GaN, small but very good example of kind of adding differentiation to the mix. We'll do many more of those. They're small, but that's why you can do many of them. They will always be lined up against, does this add differentiation by the way, process technology, design, IP, these kind of areas that can enrich my platform. I may do other partnerships in the ecosystem. Those are less likely to be M&A deals, more likely partnerships that I might do. Again, that's all about creating a better environment for my customer. I don't think on the footprint side, I have a lot of inorganic in my future. I don't need it. I need organic investment at the right time, at the right pace here in the U.S. and around the world.
Look, I think the industry will always speculate on consolidation. I think at the moment, you do not see a lot of things moving from speculation to action for good reason. Every company is facing its own set of challenges. The good thing for us is we have optionality with our balance sheet. We have areas we can invest with very good return for that differentiation. Later on in the year, we will be more sort of outgoing about what we do with excess cash beyond inorganic opportunities. I think we are not at a point yet to completely declare a policy there. Given that we will be generating some excess cash going forward, we will obviously come with a plan for that.
I see. Which final question, Tim, which end market excites you the most? If you could have a magic wand and say, look, in the next five years, this is what I really want GF to mark, which end market excites you the most right now?
This is like asking me which of my children I like the most with X. I have to say they're all really good. I love the one in college.
You always have a favorite.
Yeah, you always have a favorite. Look, I'll pick two as well. I'll cheat a little bit. Look, I think the data center is really exciting. It provides unique challenges. I think we don't understand that a modern rack uses more power than my house. The data center is no longer one rack. It's many, many racks. Anything you can do to dent that power consumption, to improve data flow, to improve latency. These are technologies we've worked on. Like I said, we were early, but I'm finally seeing those inflection points. That for me is super exciting. I think the satellite one, I'll do it too much. The reason I like it is not just that it's technologically interesting. The able to deploy this RF capability is amazing. Other applications that support it. It also does a really good thing for humanity. We can connect people who previously could not access technology, could not access the internet, could not access AI. What an incredible thing to contribute to. I know our team is excited about that.
Excellent.
These are my two children.
Very nice. Both good ones. Great. Thank you so much, Tim.
Thank you, Sam.
Really appreciate you joining us. Thanks everyone.