And we have Frank Stewart, who's the SVP and President of the ACG, the Advanced Cellular Group. And we have Dave Fullwood, who is the SVP of Sales and Marketing, and of course, we have Doug DeLieto, who runs IR. So, maybe we'll just start. Frank, maybe you can just give a general overview of sort of some of the dynamics driving, you know, your business. You've done pretty well with a large customer this year. Maybe you can talk to some of the dynamics happening in Android. There's some improvement, but yet I think a lot of investors are questioning how sustainable that improvement can be. So if you can talk through all that, that'd be great.
Yeah, yeah, sure. To jump in, I would say yes, we are excited looking into next year. It's nice to finally see some rays of optimism in the market. And I would say, as we look into next year, we do expect some modest growth in the handset space, which is a nice change from some of the pessimism we've gone through the last couple of years, especially in 5G, which is a big driver for Qorvo. As far as positioning, Qorvo is very well positioned at both Android and iOS. On the Android side, we've been able to successfully and largely work through the channel inventory headwinds that we've had, and those are now turning into nice tailwinds for us.
Because over the past year, while we've worked through channel inventories, we've actually grown our share in the Android space, and that's thanks to the products and technologies that we've leveraged, and we put that together with our customer relationships, which span multiple years of consistent engagement with these Android players. So, we've talked about the products that we're developing that come out of that, so we're excited about some of the most innovative and highly integrated products that we've ever delivered, that are... We're gonna be able to leverage that as part of our growth next year.
And what do you think? So, obviously you did your content this year with a, you know, major smartphone, you know, vendor was up nicely. Do you think that's a sustained trend, or do you think there were some dynamics around the, you know, product launch that maybe helped you gain that share? I'm just kind of wondering whether you think that that share can be sustained.
Yeah, definitely. So, just like all of our customers, we work for multiple years, usually 3+ years, on the architectures and products that we bring forward to our customers, this one included. So, it's never a situation where it's something new or different or changed at the last minute. It's pretty well known. The areas where we've enjoyed some nice growth in content this year have been areas where Qorvo is strong, so we've been able to leverage areas of strength. We've been able to leverage areas where we've got multiple generations of success. So yeah, I do feel good about our sustainability there.
But I would also add that even in spite of our increase in content this year, I would say, and we've, we've said publicly, that we even after the gains this year, we are still underrepresented at that customer, and, and we're excited about what we can do and how we can grow going forward.
And so you don't. There's sort of some narrative that because there wasn't a modem change, that that somehow caused more reuse of some older of some older, or it didn't cause as much change in the, you know, RF configuration, and so there's some implication, you know, going around that, well, maybe this was like a one-off, but it, you know, sounds like that's not your view at all.
Yeah, that doesn't resonate for how we see the world. I would just say that is a very performance-driven customer that is going to drive us and everyone in the value chain to deliver good-performing products year after year. And what we were able to do and what we were able to capture this year is the result of years of technology development and product development for them.
If I look at your Android business, at least by our math, back in the peak of the last cycle, in just, you know, just in China Android, you were doing $400 million-$500 million, you know, a quarter back then. And now you're, you know, very low, probably less than, you know, $100 million a quarter by our math. What's the right... I mean, how much of that's inventory burn? So, like, what's the right normalized number? Do you think it's conceivable that we could get back to that number? I mean, it seems like that was a pretty heady period, but I'm just kind of wondering how much you think that your current revenue is understated because of channel burn.
Yeah, it's a good question, and we don't break it out as a specific number. But what I would say is that we are comfortable that we've finally largely gotten through the channel inventory correction. And something that I did want to also highlight, as we work through the channel inventory correction throughout this year, we've actually grown our revenue on a sequential basis over multiple quarters in China, and we've actually gained share through that period as well, which positions us very well for next year. 'Cause that share we've gained is technology, product, and relationships, and we feel confident that we're gonna hold that position.
And I think there was a question about this on the last earnings call, but I would be remiss if I didn't ask about Huawei and the risk-
Sure
... that at least optically, them gaining share would pose to the, not just you, but everyone really. Do you see that as a risk? I think some of your peers have bought the phone, and they've torn it down, and they say: Well, this is actually like four-five-year-old technology. So the risk of share, you know, shifting is minimal. So sort of how do you come out on all that?
Yeah, that's a good question. I mean, it is correct to summarize that there are some significant performance challenges with that phone. We would agree with the summary that our peers have talked about there. But even past that, if you just look at the data, the most recent data that's publicly available and that most people use as data sources, indicates that it's past the peak. From everything we see and what the data shows, it appears to be a normal phone launch. We've since seen that all of our customers, we've seen Xiaomi have a fantastic flagship phone launch. We've seen Vivo doing really well with the new smartphone they brought out. The data shows that Apple is doing well in China in the most recent weeks.
So, we think that's a past dynamic. Dave and I happened to... We were in China last month, and we were able to meet directly with all of our customers. We were able to sit around the table with CTOs and CEOs. We were able to hold the different phones we talked about. We feel really good about our position there. And like I said, throughout this time, we've actually grown our revenue in China. We're gonna do that again this quarter, and we've gained share. So, I think that all speaks for itself.
Tim, I'd add two things. One, just I forgot to say that our statements today, like, the Safe Harbor language that applies to our press releases, also applies to today's presentation. Our revenue, I think, got lost on the call, that we were doing so well, even as we were burning down the channel inventory, growing. Like, December would be about 2x March, right? There's been good growth all year. We had some peers talking about, like, you know, more near-term growth. We've been growing throughout the year. We feel good about that. Like, you know, to your earlier question, a lot of investors ask: What's normal? There is no normal to us. There's seasonality, but there's no normal.
Right.
Like, a two handle on China Android is not inconceivable, right? At all.
Great. Maybe one more data point. All of our customers that I talked about, the Xiaomis and the Oppos and the Apples of the world, they're all doing really well in other geographies as well. That same data source I talked about showed some nice strength in India as well, by the way.
I don't know, Frank or, you know, Dave, if you want to take this one, but when you win on the cellular side, when you win, I mean, obviously, at the large U.S. customer, it's technology, technology, technology. That's it. Cost is not a big piece of it. But in Android, how much is cost a piece of it? Or is it all- or is it a technology discussion also in Android?
You want to take that one?
Yeah, and it's so performance and size are two critical parameters. You know, the innovation never stops, right? And this is true, even our largest customer, there's many other things that matter in their decision-making: quality, supply, how well we support them year in and year out. And that's especially true, I think, in our Android customers. You can't just show up with a good part and a good price and expect to win meaningful share, right? And so we've been that trusted supplier for all of our customers for many, many years, right? Like Frank mentioned, we were just in China, sitting across the table, talking about roadmap three years out, right? And so we've been doing that and providing that kind of support to our customers.
So that's, that's meaningful, and that's why we're, we're the, the global strategic supplier to all of those customers. So it doesn't always come down to, to just the performance. The performance always matters, but all these other things add up and matter as well in their decision-making. It's very hard to say in any one socket that we won for one individual reason. It's usually a culmination of all those things. That's true in our other markets as well. You take defense, for example. We've been a trusted supplier to the U.S. government and the defense primes for years for, you know, technologies like gallium nitride and gallium arsenide, as well as foundry services. And more recently, we're a trusted assembler with our advanced packaging technology, which is U.S.-based in our Texas location. So that's, that's a great opportunity for us there as well.
And so the same theme plays out really across all of our leading customers and end markets.
Maybe a couple additions to that real quick. Our Android suppliers care deeply about performance and quality, as Dave said. Just in the last few weeks, we've received two awards that we're pretty proud of. One is a quality award that we got from one of our China customers as their number one quality RF supplier. A second one, one of our China customers did a broad supply chain award ceremony. One RF supplier was selected as the top innovation award winner, and that was Qorvo.
Great. So I don't know if you saw these news articles today, but there's some speculation that the top smartphone customer who's been pursuing their own modem is ending that pursuit. I can neither confirm or deny that, but if in theory that was the case, does that at all change your, you know, outlook for being able to keep your content at that customer or not keep the content? And I guess, asked a different way, are you agnostic to whether to the modem itself?
Yeah. So obviously, we can't comment on any rumors related to any of our customers, especially that one. To your question, on what we're doing in our developments, in our roadmaps with them for multiple years, I would say yes, we're confident and excited in our opportunity and dollar content available to us, independent of how that ebbs and flows.
You know, I mean, even if you took MediaTek versus Qualcomm, you're pretty agnostic in your attach to a MediaTek modem or a Qualcomm modem?
Yeah, I mean, just in general, when we develop RF products, almost all the time, almost anytime we develop a product, for our customer base, we make sure it's compatible with any and all chipset providers.
Great. Can you talk about where we stand on millimeter wave? Sort of what's your outlook, and do you think that it ever really becomes broadly commercialized?
Yeah, it's interesting. I would say maybe just from our exposure on the ACG side, so, millimeter wave in phones, it's not relevant to our revenue base today. It's not an area where a differentiated RF is used today. So maybe just to clarify that. As far as in market, millimeter wave is still in phones, in use in a small percentage. I think the prevailing wisdom is that it has maybe a niche place in some highly concentrated population environments like, you know, ballgames and concerts per se. If it ever becomes broader and something that gets more substantial usage and thus drives the need for a better RF solution, we've got great technologies that would be available.
You're not investing dollars per se, in millimeter wave solutions. It's just that if it happens, sure, it's great for you, but-
Yeah, I would agree with that summary.
Okay, um-
Yeah, and keep in mind, we have a lot of other product areas that we're investing in the technology, in defense and other areas, for example. It's just we're not applying that technology right now to smartphones.
Right. Got it. I guess for CSG and HPA, Dave, can you just talk about some of the things that are driving those businesses from a, you know, sales perspective? You know, what are the key growth vectors upcoming in those businesses? And maybe based on what you see on the sales side, are these, are you, you know, not to put you on the spot, but are you kind of more or less excited about the growth in those markets versus in ACS?
Yeah, and maybe I'll start first with the reiterate the growth targets for each of those segments. So, you know, Frank's kind of mid- to high-single-digit growth, HPA double-digit growth, and, and CSG in the high double-digit growth. But I think the one thing that excites me is all of our end markets, including the smartphones, are enjoying multiple growth drivers, including technology as well as generational upgrade cycles. So Frank talked a lot about the smartphone space and what's going on there in 4G and 5G, 5G Advanced, etc. But if you look at our other businesses, you know, I talked a little bit about defense, but we've got increasing defense budgets there, increasing funding for onshoring. That benefits us because the technologies I mentioned around GaN and GaAs and, and our advanced packaging.
We've talked on our calls about this trend of one to many. So if you think about one GEO satellite going to many LEO satellites, Low-Earth Orbit satellites, or you think about one plane going to many drones, right? So you have to really shrink all the electronics. And so that means more semiconductor content, more challenges for us to solve for our defense customers. And our next generation platforms, as a result of that, are heavily focused on size, weight, and power, right? And so there's lots of opportunities there, and they're moving towards disaggregated and highly networked architectures. So that puts more pressure to have smaller sensors and more functionality that we can go target there.
So, defense business has been a strong business for us over the last couple of years for obvious reasons, but we continue to see a great outlook for that business. In infrastructure, it's been challenging for the near term, for sure, with all the inventory correction that we're still working through. But there is an underlying upgrade cycle going there. If you look at the base station market outside of China, there's still a lot of room to grow in terms of 4G to 5G transition, just like in the Android ecosystem for smartphones. And in broadband, we're the leading supplier there, and there is a transition going from DOCSIS 3.1 to 4.0. So we're getting a lot of orders coming in now as that transition is starting to occur.
So once we get through this, you know, macro environment and the inventory is behind us, we still believe there's good growth drivers for those businesses. And then our power businesses, there's a massive trend towards electrification. Critical need for improving efficiency across many of our end markets, so that's going to increase our content opportunity. Battery management systems are another area that we're investing in, and we see a ton of opportunities across a lot of our end markets there. And then the SAM for our silicon carbide GaN FET architecture is enormous. And so we're quite small today, but we have the lowest RDS(on) in the industry. That's a key performance parameter. And with that, we're delivering improved performance, and we're getting good traction in automotive, data center, energy storage, and other markets.
CSG, you know, the biggest business we have right there is right now the Wi-Fi front end, and that's also undergoing a transition from Wi-Fi 5 to 6 to 7. And so as you move through that, that means more RF content, more challenging modulation schemes, MIMO, and so there's nice content growth there for us in Wi-Fi. Connected home, Matter is gonna you know standardize the protocol interfaces in the home. We think that's gonna accelerate the smart home adoption, and we've got a great solution there and a portfolio of products and system solutions to support BLE, Thread, Zigbee, and Matter. So we feel good about that. And then ultra-wideband is a really exciting area for us, and it's been slow. The adoption's been much slower than we thought.
It's kind of stayed in the very premium tier of the smartphone space so far, but more recently, we see automotive as the key driver there. So all of our automotive customers now are starting to integrate ultra-wideband into the vehicle, and it's not just for secure access. It's for presence detection inside the car. It's for ranging and for radar, lots of other applications. So you could have multiple anchors of ultra-wideband inside the car, and if it's in the car, you're gonna need it in your phone. So we think that that's gonna drive the adoption in the phone as the automobile starts to adopt more and more ultra-wideband. So we feel really good about that.
Our MEMS-based sensors, we believe they're a disruptive alternative to touch user interface, and so we see a lot of great opportunities there. Automotive smart interiors, we've talked a lot about on our earnings calls, true wireless stereo headsets, smartphones, wearables, trackpads, and many other devices. So we see that as a good long-term growth opportunity for us. And then in automotive, we've got a complete portfolio of RF connectivity devices, from vehicle-to-everything, 4G, 5G, Wi-Fi, and I talked about the ultra-wideband. So a lot of good growth drivers, a lot of upgrades going on across all those markets. So we feel good about the underlying growth potential in all those businesses. We just gotta get through the macro environment.
We feel good about the fact that in Wi-Fi and smartphones, most of the inventory correction is now behind us. Still some challenges to go on some of the other, markets like infrastructure.
So just, so just on that point, I mean, if you listen to some of the other peers in your HPA business, they don't, they still don't sound very good. So would, so would you agree that that probably, out of all the segments, that probably takes the longest to recover?
Yeah. Yeah, definitely. And, the biggest challenge for us there is probably in the, in the infrastructure space. That, that one's gonna take the longest to recover. I mean, our, our power business, you know, some of that inventory correction is behind us, some of it's still in front of us. You know, if you think about appliances and power tools, that, those kind of spaces, there's probably still some inventory out there to be worked through. But, yeah, it's gonna take longer, certainly. Smartphones move much faster. Wi-Fi is more similar to smartphones than a lot of these other markets.
Put a finer point on it, our base station revenue the last four quarters has been down more than 50% YoY. We've already absorbed those headwinds, so it's, we're just, you know, waiting on the inventory consumption.
Great. And I guess, can you kind of, double-click on your opportunity in autos? I don't know.
Yeah, no, automotive is a really exciting market for us, and we're pretty small today in automotive when you look across all of our businesses. But we have a lot of content opportunity there. So if you start with power, we've got the silicon carbide JFET solutions, think DC-to-DC converters, onboard charging, or even the charging stations. The traction inverter is an opportunity for us longer term, but we don't have a you know a lot of a product focus for that today. Ultra-wideband is seeing broad adoption, I talked about in the car, and that's a great opportunity for us.
We talked in our latest earnings call about a win we have in Europe with a Tier One, and that's lifetime value for just that one opportunity is over $250 million lifetime. But we expect that platform to move to other OEMs as well, so it'll grow from there. So that's a great opportunity for us. I talked a little bit about automotive connectivity. We announced for our V2X portfolio, we've got another marquee win and another Tier One in Germany that'll be ramping this year. So that's an exciting growth opportunity for us. And then we've got many design wins with our force-sensing touch solutions in the automotive cabin, whether that's on the steering wheel or the dashboard or controls for the door.
You know, especially in EVs, everybody wants this more futuristic interior in the car, and so our force touch solutions really help to enable that. So like I said, the revenue's relatively small today, but the opportunity is pretty big. Takes a little bit longer because it's automotive, but we're excited about that opportunity.
Frank, back to you. So, Dave, you mentioned the, you know, 4G to 5G transition, and there's still actually, you know, quite a bit of opportunity. I think we, in the investment community, we think, well, the conversion to, you know, 5G has already happened. But, you know, you still have quite a bit of opportunity out there, you know, particularly in China, the 4G to 5G conversion. So can you talk about that?
Yeah, definitely. And I, I would first say, even in the flagship space, that is, quote, "already 5G," the level of innovation has not slowed down. What our customers are asking us to do in the RF space, in flagship, and the new content we're bringing to the table, is on the same rapid curve that we've been on for a number of years. So we're super excited about the flagship space and what we get to deliver there and our opportunities and what that growth means to us. Additionally, and maybe to your point, in the mid and entry tiers, we're going from a place where, especially in the Android space, less than half of the phones in Android are 5G today.
Going forward, we see that increasing double-digit volumes every year for the foreseeable future. For Qorvo, that means going from 4G, where we have very little content, to 5G, where we have a significant content opportunity. If I could, maybe a couple product examples of why we're so excited about this. I mentioned in the flagship space, we see the innovation engine continuing at the same pace that we've been at in past years. Next year, we're gonna bring out a mid-high band product. So this is one of the major product categories for us in cellular, where it's gonna have the most content we've ever put in an MHB. So a global mid-high band, able to support every frequency band in the world, plus a secondary RX path.
So a bunch of RX content that's never been in an MHB before. So it's gonna, it's gonna have more BAW content than we've ever had in an MHB product. So we're really excited about that one. It's an example of what I'm saying, of in the flagship space, innovation is not slowing down. And then in the entry tier, a highlight for you on a product we're really excited about, we've taken the MHB that we do for the mid and entry tiers, and we've integrated all of the low-band content needed into a phone into that MHB. Same footprint. It saves over 40% board space for our customers, and we think that product is going to help in this 4G to 5G transition that we're enjoying in that mid-entry space.
Just on that point, how much... I think we all worry about competition from China. And how much of a factor is that, I mean, for discrete solutions, I mean, not so much for integrated solutions, but how often do you see, you know, China being competitive for anything that you're trying to compete for?
Yeah, I would say just in general, the competitive landscape, including any competition from local China-based suppliers, has been pretty stable, not just over the last few years, I would say over the last 15-20 years. There's always competition in our space. We enjoy a position as the preferred strategic RF supplier at all of the customers we serve across in the Android space, and especially when you think of Honor and Vivo and Oppo and Xiaomi and Samsung, the players we really know well. As we were mentioning, we were sitting next to CTOs last month in China talking about roadmaps for CY 2026. I mean, it's a pretty special seat at the table we have to do that.
And just to add, I'm sorry, just a data point to add on, like, appreciation for the migration to 5G within the Android ecosystem, it's still 42%, maybe, of all total Android units, 5G, and it'll be maybe 48%. So even next year, right, fewer than half, right? So it's calendar 2027, 2028 before it's 75%-80% of Android units, 5G. So a lot of opportunity. So even next year, that's 50 million-ish new units entering our SAM, and then a bigger number the next year entering our SAM.
Is there some way to think, just a totally, you know, rule of thumb way for each of those units that converts, what's the, you know, not that you win everything, but, like, what's the incremental content for you?
We tend to get, you know, for 30%-40%, you know, like, not 50%, but north of 30% share on average on, you know, $10, $12, $14 of content.
And that's. Yeah.
That's the Android opportunity, yeah.
Yeah.
We're not, you know, a major player in 4G, so it's not like-
Yeah, right.
It's an incremental move. It's new content.
Coming from zero, yeah.
Right.
One other thing to keep in mind is, you know, our China customers, they all have global brands and global businesses, and they have aspirations to continue growing globally. So they don't look at the supply base, or they don't look at us as a supplier relative to whether we're, you know, different from a competitive landscape versus a local China player. In fact, they count on us, right? We're their chosen global strategic supplier, right? So you have to remember, they also have global businesses, and they wanna, they wanna grow in Europe, they wanna grow in Southeast Asia, India, everywhere else as well.
So maybe just-
Yeah. So, yeah, I mean, GaN is a great technology. I mentioned the importance of that in our defense business. And so that's a critical technology going forward for us, that's gonna help us continue to grow that defense business. It's also important for our base station business. So we've talked in, you know, a few press releases and earnings calls recently about our GaN PAMs, which is a more highly integrated module for the base station market. And so we had some early design wins with our newest products there. And so we used to be a major player in GaN for Huawei when it was discrete, prior to the ban, right?
And so that business has gone away, and so now we have opportunity to start replacing that business with some of the more global players, with our new GaNs. And it also plays out in some of our other markets across infrastructure and other areas as well. So it's a really important technology.
Right, like DOCSIS 4.0, in that business.
Maybe just to give you one last chance here, Doug.
Mm-hmm.
So, what, what's the single thing as you talk to investors—I mean, your stock trades at a very, very low multiple. So, so what is the factor, sitting here, you know, you talk to investors all the time, what's the thing that you think people are really missing? Like, what's the single biggest opportunity that when you talk to investors, people don't fully understand?
So we've got great representation across all the OEMs and on smartphones, great representation in our other markets. We're bringing specialized technology that really does improve the end market, right, on efficiency and form factor and throughput, no matter what you're measuring, right? I don't think it's grasped the opportunity that is available to us, given that skill set and the underlying market growth that we see in the markets we're targeting, right? Again, like, great content opportunity, accounts that aren't growing and great opportunity in the accounts that, you know, where you are seeing great growth, in the markets where you're seeing growth, like Android versus, you know, other areas.
And then, outside of that, the investment businesses, just the opportunities we have in ultra-wideband and all the markets that are developing, like sensing, like the, silicon carbide, automotive, where we're pretty much sub-scale in a lot of these businesses with great, great growth opportunity. But fundamentally, smartphones being ex-growth, yeah, we, we concede, right? It's been five, six years we've been talking about that, but 5G units and Android, great opportunity.
Well, again, thank you to all of you.
Thanks, Tim.