CFO of Semtech, and Sandy, who most of you guys know as the head of IR and Biz Dev. With that, I'm going to turn it over to Sandy for some forward-looking disclosures and some other legal stuff.
Yeah. Thank you, Harsh. As always, we appreciate you hosting the call. Before we get started, I want to quickly mention today's call will include forward-looking statements that include risks and uncertainties that could cause actual results to differ materially from the results anticipated in these statements. For a more detailed discussion of these risks and uncertainties, please review the safe harbor statement included in the Other Risk Factors section in our most recent reports filed with the Securities and Exchange Commission. As a reminder, comments made on today's call are current as of today only, and Semtech undertakes no obligation to update the information from this call should facts or circumstances change. Also, during the call, we may refer to non-GAAP financial measures that are not prepared in accordance with generally accepted accounting principles.
Discussion of why the management team considers such non-GAAP measures useful, along with the reconciliation of these to GAAP measures, can also be found on our website. With that, I'll now turn the call over to Mohan for some of his opening comments. Mohan?
Thank you, Sandy. Thank you, Harsh. Good morning, everyone. Good afternoon, everyone. Thank you for taking the time to listen to Semtech's story. Let me start by just saying that, at a high level, I would say that this is the best position we've ever been in, with all of our exciting growth engines really starting to hit on all cylinders. Those of you who know us and know the story will know that we've invested in a number of platforms for quite some years, and a lot of these growth engines have been in the pipeline for many years. I would say that today, what's really exciting for us is we're finally starting to see those investments really starting to drive real value for the company, and very excited about where we are and the situation that we're in.
I would say over the last few years, we've had some major headwinds, including bans on Huawei and China trade issues and some of the pandemic-related issues. It feels like there's a lot of tailwinds for the company now, and I feel good about the next few years. Let me focus my introduction on two main areas. I would say there's a lot of things we can talk about, but with the time limits, what I'd like to do is just focus on the two areas of infrastructure and IoT. Let me spend a couple of minutes on each of those, and then we'll go into Q&A. With regard to infrastructure, our investments are largely focused on bandwidth expansion, and they have been for a while.
That's been one of the trends that we've been, as a company, focused on for quite some time, and specifically data center connectivity, 5G wireless connectivity, and 10G-PON connectivity. Those investments are all starting to yield very positive results globally at a time when clearly there's a need for more bandwidth. Not just more bandwidth, but more bandwidth at lower power, lower latency, and lower cost. I sense, and we sense that those segments now are all accelerating their investments in those areas, and we are starting to see the benefit of that. From a platform standpoint, we've invested in a number of platforms. We call them ClearEdge, Tri-Edge, which is our new PAM4 platform, FiberEdge, and PON-X, which is our 10G-PON platform. They all have tremendous design win momentum.
We believe that the market really is starting to adopt now these high bandwidth platforms that we think will continue to increase our global market share in all of our target segments going forward. We don't really think that will change. The need for high performance infrastructure is going to continue. As bandwidth expansion need continues, we can only see that continuing. We're very pleased that we have these platforms and the momentum is clearly behind us. The second area that obviously I want to spend a little bit of time on is IoT and really our investments there are focused on creating a smarter planet. That's been kind of the trend that we focused on. How do we help create a smarter planet?
What are the initiatives that we can put together to drive that business with that goal in mind? Our focus has been on IoT and specifically on the low-power IoT market and the low-power wide area networking market, which is a longer range area segment of the market. Specifically, our LoRa platform, which has now really become established as the leading low-power wide area network technology in the industry. We're very pleased with that. Obviously, that's been a key goal for us. We've been investing heavily in LoRa for quite some years. It's been making great progress. I think now is really starting to gain the tremendous momentum that we have been anticipating for a while, but we're really starting to see that now.
I think the other aspect of LoRa that's exciting, the technology was always developed and targeted at the wide area network segment. What we're starting to see is the emergence of LoRa in local area networks, again, low-power local area networks and campus-based networks and even smart home networks. That's a very exciting phenomenon for us, so we'll see how that emerges over the next few years. The exciting aspect of that is that it really presents a much larger SAM and a much faster time to revenue opportunity for LoRa. Both of which I think are very important for us and very exciting for us. As with our infrastructure business, our IoT business has tremendous design win momentum globally. Our latest LoRa platform called LoRa Edge is our first device to cloud platform that really enables our first cloud services initiative.
This is a new initiative that we've recently announced. This is an incredibly exciting initiative for us as cloud services revenues are expected to be recurring, high margin, and grow very fast as the need for asset management, asset provisioning, asset locationing start to grow. I think those are the kind of two areas, the infrastructure and IoT areas are the two areas that are the most exciting. We have other exciting areas in the company, and we could spend a lot of time on it, but I'm going to hand it over to Harsh now, and then we can start to go into Q&A. Harsh, you want to come off mute?
Sorry, I was on mute. Yeah. Thank you, Mohan, for that informative overview. Guys, if you have any questions during the presentation, feel free to email me. That's harsh.kumar@psc.com. With that, Mohan, you kind of highlighted on a couple of the key products that you're very excited about for this year. I want to hit on one of the products you mentioned. You had your earnings call. I could sense the enthusiasm. I've covered you guys now for 15-something years. I've never felt that Emeka, Sandy, and yourself have been this excited about the business prospects. Just stepping aside from a product, what do you feel is so well lined up? I hear you on LoRa, I hear you on infrastructure, but the enthusiasm is just kind of pretty high compared to historical trends. You mentioned that as-
Harsh, you-
Maybe you could just talk about.
I missed the question because you froze there, but let me tell you why we're excited. I kind of will summarize a very simple way. We've invested in some of these platforms for many years. As many of you know, LoRa is a 14-year investment where you invest in transceiver technology and transceiver low power transceiver platform. We invested in algorithms, we've invested in systems and the structure. We invested in cloud. A very large investment over a long period of time. Having the patience to see those technology investments now kind of starting to yield real results for us in terms of the number of sensors being deployed, the number of gateways being deployed, and now starting to attract really significant ecosystem players like Amazon and Cisco and others into the LoRa world, I think for us is extremely exciting.
That's going to yield very positive results, we think, as we go forward. That's one aspect of it. I think on the infrastructure side, as I mentioned, it's not just one area, what we're seeing, and obviously this is something triggered maybe by work from home and the need for more bandwidth, but what we've seen now is across the board from the core of the networks in the hyperscale data centers to base stations, to the access networks and access enterprise to the home, fiber to the home, fiber to the enterprise. All of these areas, we're starting to see a demand increase for higher bandwidth connectivity. When you see that higher bandwidth connectivity need, we know that's where we shine. We want the higher bandwidth.
We need customers to come to us and say they want more performance, because that's what we do, that's what we focus on, and our goal is always to develop the highest performance at the lowest power and the lowest cost. When you see that need coming out and being driven by customers, that's exciting. I think the other aspect of the infrastructure you kind of touched on is the globalization of what we're seeing. If I go back a few years, certain regions of the world kind of dominate the demand profile, and that's not by design, it's just the way the world has been. What we're seeing now is definitely a globalization of that infrastructure demand. That is also exciting because it starts to bring out new players, new customers, new partners, and brings balance across the world geographically.
I think that is also a nice, exciting thing for us. To give you an example, 10G PON is an area where Semtech invested in many years ago. We had technology many years ago, but no one was really pulling from the market. Now everybody is pulling. We feel we have a very strong technology portfolio in that segment, and I think that for us now means we can start to deploy the technology and start to talk to the market about the technologies we've invested in for many years. Finally, the bandwidth story is playing out. The smarter planet story is playing out. As you know, we've also been a very big investor in the mobile world, in mobility. Not just mobile devices, but mobility in general. Our technologies are extremely small.
We put an emphasis on form factor as well as performance, very low power. When we start to get momentum, again, partly driven by work from home environment, but it's been coming. We've sensed it's been coming as regulations come out on high performance radios, for example. We start to see momentum. Everything seems to be going positively from those standpoints, from a trend standpoint, from a demand standpoint. That's backed up obviously by bookings and our strength in demand. All of that's good. What we really, I think, are excited about is that we're just seeing the beginning. This is just the beginning.
If I go through all of the list of growth engines we have, including AptoVision and some other areas that we've invested in the video space and things like that, we have a portfolio of what I'll call startups that are emerging and growing now and starting to hit the market at the right time. In general, that's where the excitement's coming from. I just think we've hit the right time, and fortunately for us now, there is a strong demand outlook, and I think we sense with customers that there's a real need for continued investments in these areas.
Thanks, Mohan. One of the questions that I got after your very positive earnings call was, what is it that you guys are doing in the 5G infrastructure, the base station side of the business? What exactly, how do you participate in there? You cited strength when a lot of others are citing weakness, so it was sort of counterintuitive to what the other semi guys are seeing. Maybe you could explain what you do and then maybe why you're seeing strength versus some of the other peers.
First of all, on the base station side, essentially we are providing physical media devices. These are amplifiers, drivers, as well as CDR functions, clock data recovery circuits into optical modules, and these provide the connectivity for front-haul connectivity, mid-haul, and backhaul. We focus mostly on the front-haul and some mid-haul connectivity on those base stations. The key things to remember in the base station market is as 4G transitions to 5G, many of the 4G links were at 10 gig, and we only sold PMD content into those. At 5G, it's PMD and CDR content because most of the links are going to be 25 gig or above, and therefore we have more content. We have more content per base station. In addition to that, typically with a 5G base station versus a 4G base station, you have more optical links, so more modules.
In a 4G base station, it may be six optical links. In a 5G, it may be 12. We have more content, we have more modules, and therefore, more devices going in there. As I mentioned on the same aspect on the globalization, a lot of the demand historically has been driven by China, I think, and what we are seeing now is that the rest of the world is starting to wake up, and starting to also become active in 5G system developments. That also is opening up opportunities. I would say all of those combined are driving stronger growth for us. I'd anticipate actually growth for the rest of this year. We expect this to be a very good year for base station infrastructure. As with all infrastructure, it's lumpy, right?
You get CapEx going in, you get deployment, and then you have to absorb that, and then it starts again, right? That's the nature of the infrastructure business. One of the things I know, and it's very clear, is there's pent-up demand for it. For sure that's going to happen, and it's going to keep going up and to the right for the next 3-5 years. There's no question about that. It's just, it is a bit lumpy, but it'll go up. It'll continue to grow. Hey, Harsh, you're on mute.
Yeah, I keep doing that. I apologize. I wanted to ask you a very similar question on the data center market. There are a lot of upgrades happening in the data center market. You guys are players there. Maybe give us an overview of what you guys make and perhaps what you're seeing in the marketplace and how that benefits you, Mohan.
Yep. Similar story. We have obviously a very strong position in the data center space in optical modules that connect between server racks and within server racks, and again, get high-speed optical components. We've really done very well in the 100G node, active optical cables, and the modules connecting those cables. Increasingly now we're seeing 200G and 400G. We have a number of platforms. Our ClearEdge has really been focused on 100G. We have now Tri-Edge, which is a PAM4-based analog platform targeted at both 200G, 400G, and beyond. It's gaining great traction. We are very pleased, and again, it's the excitement factor you are hearing because before it was just a technology that we brought to market. We now have design wins, we have revenues, we have customers, and we're seeing more momentum.
The primary advantage of the analog PAM4 platforms we have are power really essentially is the key thing, then latency. Lower power, lower latency, and lower cost. We believe there's significant reduction in all three of those with an analog solution. We have first adopters that have been kind of using this and testing it out, and we are seeing very positive feedback from most customers. Yeah, it's quite an exciting journey for us. It's global. I think that's another aspect of it. It's not just one region. We feel good about that. Data centers are a little bit lumpy, right? You see last year, the first half was very strong, second half was weak.
We anticipate that the trend is going to be up and to the right and we are projecting a pretty strong year for data center this year as well.
Mohan, you touched on my next question, actually, with that, the analog PAM4 product set. I was curious, it's new for you, it's new for the industry, it's new for the world. What kind of feedback are you getting? Is it mostly the cloud guys that you are working with, or mostly the enterprise guys? Could you maybe just give us an example of how much money do they expect to save, or what kind of deployments are you seeing? Also 2021 is the year, because we were pretty excited about it last year, and you always maintained that 2021 would be the year when you might start to see some revenue. Would this be the year when we expect this product to start to generate some revenues?
Yeah, it's starting now. We are excited about the momentum and the design wins, and obviously we have to see that transition to revenues. I would say, there's a number of different segments. The segments where power is important and latency is important, and cost are the areas where we're most likely to see success. I think that's quite a large chunk of opportunity in both cloud and enterprise. I think it's less likely to be hyperscale data centers, guys using active optical cables, and high-performance computing applications where latency is important. Those are the areas that kind of stand out for us and likely we are going to do quite well there. We already have traction across different regions of the world, as I mentioned.
It's difficult to quantify exactly the benefit for the customer, I think because it depends on their architecture and how many modules they're using, what type of systems they are putting in place. From a cost standpoint, there's clearly an advantage over current incumbent solutions. It's really dependent also on the power equation and those other aspects there. To me, I think the key thing is it's new for us. It's a new platform for us. It's just come out. It's got momentum. I think for the rest of this year, the question is, okay, can we turn that initial momentum into something really big? I think we can.
Got it. Now coming to the other product that you mentioned, the IoT side of the house, LoRa. Maybe I was hoping, Mohan, you could talk about some of the recent sort of killer wins that you've had in LoRa, some exciting wins that you feel are worth mentioning. With that, I also wanted to ask you, LoRa's been very China heavy last couple of years. China obviously is doing better than most other countries coming out of COVID. What do you think the revenue split will be between North America and China, or call it the West, U.S. and Europe versus China over the next two to three years? Then also any kind of meaningful design wins that you think you want to mention.
LoRa historically, the revenue has been 50% China, 30% Europe, and then North Americas and the Americas have been 10%-ish, something like that. A lot of the opportunities, the pipeline opportunities, a lot of the asset tracking and a lot of the logistics and a lot of the smart home initiatives are in the Americas. We're anticipating a little bit of a shift to, I would say closer to probably over the next few years, 40% China, maybe 35% North America and 15% Europe. Something like that. It'll be some mix that'll change a little bit. We're not stopping the momentum in China, by the way. We expect that to continue. I think the main thing is that we are expecting the Americas to start really accelerating its growth.
Part of the reason is obviously the relationship we have with Amazon and the things that are going on there. There are some new initiatives, as I mentioned, the smart home initiative with Sidewalk is exciting. It's something that when we developed LoRa, it wasn't targeted at the smart home or the campus networks. What we're seeing is there's a real clear value proposition for LoRa in these low power local area networks, campus networks, and smart home networks. That's exciting. Because the volume is much higher, because the time to revenue is faster, see, I think LoRa can be a technology that essentially replaces Zigbee and replaces Z-Wave and replaces many of the technologies out there that weren't really designed for this extremely low power and long range.
LoRa is very complementary to 5G, it's very complementary to Wi-Fi, we see it as a really good fit for that segment of the market. We have numerous design wins, to be honest with you. Many different use cases from tracking of animals to the tracking or monitoring of natural resources, to climate control sensors, to pollution control and management of sensors, to smart home initiatives, as I mentioned. I can go on. The list is just endless. I would say that there's really a lot of excitement around our cloud services, because of the ability to provide added value around device provisioning, device management. Device provisioning is essentially setting up a sensor on a network and being able to update it in software, for example. Device management or managing your battery on a sensor.
If you think about how many sensors there are and how difficult it is once the battery starts to get low, how people have to go out and change the batteries and things like that, device management is quite important. Geolocation, where is the asset that you're tracking? Is it indoors? Is it outdoors? What is it close to? Is it moving? All of these type of things, I think, are value-added capabilities that our cloud services can bring to the table. As I mentioned in my intro, we're very unique with this ability because we have a device to cloud platform. Obviously, we are unique in our ability to provide this capability and to bring it to the marketplace and generate value, and then generate and monetize that through cloud services.
It's a new initiative for us, but what's exciting about it, obviously, it's recurring revenues, it's high margins, and it's built on the foundation of a growing LoRa ecosystem and growing LoRa sensors. One of the things I do every earnings call, I tell you about how many gateways are out there and how many sensors that are out there and how the ecosystem is growing. If you can imagine, three to five years from now, as we continue to expand that and the ecosystem becomes bigger, the opportunity for us to be able to generate cloud services revenue should be quite exciting for the company and for everyone.
Mohan, I remember the sort of living room wars from the late 90s, I want to say early 2000s, Cisco, Scientific Atlanta, trying to control the living room through the, what was then the cable box. That was the mode. Would you call this the battle for control of the IoT within the house, that Amazon's taking the first shot and actually trying to sell kind of tangible devices to an American household or a U.S. household or a Chinese household that we can use, and then, and that would be sort of the foothold, and from there they could expand, ultimately having, for example, my house having 30, 40 such monitoring devices. Is that kind of the goal that-
I think it's more than that, Harsh. I don't think it's necessarily just control. I think it's more providing the capability to manage resources, natural resources like water, for example, smart irrigation, to manage assets that are outside the home. For example, like lighting control outside your home, to manage security away from the home. For example, probably your sensors, or most of them are on your doors and windows and around the house itself. Increasingly, I think we're seeing the opportunity and the market is seeing the opportunity to provide safety around the periphery of your property line, and things like that. Knowing when someone's coming up your driveway, knowing when someone opens up your mailbox, as an example. Knowing when your neighbor is having challenges or distress, or knowing when your pet has gone outside a safe zone or your child is outside a safe zone.
These type of things are all going to change, I think, the way the smart home is conceived and really kind of brings a new concept to the smart home initiative. LoRa provides that capability. You can do it with other technologies, but it's cumbersome, it's battery heavy. It requires a lot of batteries to be changed. It's expensive. Some technologies they may do the job, but they use licensed spectrum, for example, if you're using a cellular connectivity, and it's just cumbersome and it's expensive. LoRa is kind of a natural fit for these low power systems, and that's what we're banking on.
Mohan, two more last questions on the hardware side, then I want to switch over to the exciting services side. Is there anything you can tell us about the timing of Sidewalk, your products, their products, whatever you can mention? Are there any other major players that are worthwhile mentioning that you're allowed to talk about on this call?
I would say that the Amazon Sidewalk program is very exciting. It's moving ahead. From my perspective, I see the type of things that are going on. I think it's extremely encouraging. It's not really in Semtech's hands. It's obviously in Amazon's hands. Yeah, I would say it's just extremely exciting. We just want to wait and see as it rolls out, see the momentum and the approach and those type of things. Yeah, I would say it's very positive. Everything's going to plan according to what their plans are, we'll wait and see how that plays out. Obviously, Amazon's a big player. There are other big players in the marketplace. LoRa now is established. I think that's the one big difference between now and a year ago or even three years ago. Everybody knows about LoRa now.
We don't have to explain the technology that much. I mean, it's still new, and it's still emerging. It's still new for a lot of people. There is just generally now, people are starting to understand what it does and how it works, and I don't get the question anymore, what is LoRa? I get more the question as to, "Okay, why is this beneficial in this use case, and how is this going to help me with cloud services?" These type of questions now, which is great. It used to be, I can go back four years ago, the only question I would have to answer was, "Well, what is LoRa? What does it stand for? Why does it work? What's different about it? How does it operate relative to other wireless technologies? What's special about it? What's the proprietary position you have?" Blah, blah.
Now that's kind of shifted to, "Okay, how many sensors are you going to get out there, and why are there not more sensors?" These type of things, which is great. I like that because we're starting to see the proliferation of the technology globally, by the way. I would say I've never I've been in semis for 40 years. I have never seen a technology that's so global. Every country in the world, you name it. Part of it is because of the value of LoRa to Third World countries and to countries that have a need for managing natural resources and countries that have a need for managing climate and pollution, and those type of things. LoRa is perfect because it's a low cost, it's unlicensed spectrum, it's very easy to use, it's very long range, so infrastructure investment is low.
We see a massive proliferation across the globe, and that is also very exciting. Of course, some of those regions don't generate as much revenue for us today. I think as the technology is established in those regions, it becomes a real foundation for future revenue growth, as use cases emerge and as things like cloud services emerge.
Mohan, shifting gears to the services potential and congratulations, I think you announced in the earnings call not that far back, like two, three weeks ago, that you either had your first one, services contract, or it was close to being locked in. With that, I was curious, how do you think about pricing these kind of LoRa services? I remember Emeka's analyst day or your analyst day, Semtech's analyst day a couple of years ago when it was supposed to be like, if I lost my dog, it'd be $0.05 or whatever the number was per click for GPS. The question really is, how do you price these LoRa services contract? Are they per usage, per device, or just a service contract on a monthly basis? How does it work?
Part of this, Harsh, is being developed as we speak. We don't really have a very thorough idea of what's the best approach. We're trying a little bit of everything. Obviously, we would like to monetize based on usage. As every time the algorithm is accessed, for example, it would be nice to be able to monetize. I think in the early days, we're very flexible, and part of the reason for that flexibility is our customers don't know either what's going to work, and they have to see the value. They have to see, "Hey, with LoRa, I can get this. And with the Semtech's LoRa cloud services, I can achieve this. I can't do this any other way." The onus is on us to demonstrate that.
I think we are quite confident we have a number of contracts in place and agreements in place and with customers with real use cases, with real problems to solve. There's a real opportunity, and I think that's the key for us. We have an aggressive goal, of course, to grow this to around $100 million in five years. We're very focused on getting customers in, engaging with them, getting to use our LoRa Edge platform. As we expand on the LoRa Edge platform, and offer valued services around that platform, that bring value to them as a customer, I think the economics are going to work to our advantage because they work today for other companies, and we see that it's a model. Our model should work if we bring value to customers because they're already doing it.
They're paying other companies for that type of thing. We're not doing anything different than that. We're just kind of providing a new technology that provides more advantage to them. We think we will be able to do it. Yeah, to get to the specifics now, I would say it's still early.
Sure. I'm going to move on to a different topic now. A couple of years ago, before the U.S. cell phone company had put out their OLED-based screen, I think Semtech was one of the leaders in the OLED screen-based protection. I think you guys were at the top of the charts as far as protecting the OLED screen. How is your positioning in that market as that technology has absolutely gone mainstream? Also with that, I think there was also a side angle on automotive protection because the consoles are getting in the car, the screens are getting bigger, and people's hands are all over that, so there's a pretty tremendous opportunity for that. I was wondering if you could talk about both those opportunities and where they are, what they mean to you.
Yeah. I would say mobility in general, we tend to focus on infrastructure a lot and IoT a lot. Mobility also, particularly again, from what due to the work from home environment, is turning out to be really a nice investment for us, and we continue to do that. There's two areas. There's protection and our proximity sensing. On the protection side, the key thing that always drives our protection is the use of advanced lithography devices in the system. As the customers move towards more 10nm , 7nm , 5nm . Those transistors become extremely sensitive, very easy to blow up, and they're very expensive devices. Where you have interfaces going into those chips, either through a display or through some other port, it's extremely difficult to protect. That's what Semtech does.
We are leaders in most of the display areas and will continue to be. It's an area that we think is a very good one for Semtech. In addition to that, I think all of the high-speed interfaces like, Ethernet ports, HDMI ports, USB-C port interfaces, are all good areas for Semtech's protection. Increasingly, one of the things that's really quite exciting for us is that the industrial arena, including automotive, is starting to deploy more high-speed ports, more displays, more interfaces, and generally more electronics and more sensors in the vehicles. It's kind of a hostile environment. The vehicle is a very hostile environment, so very lots of high voltages and currents floating around. I think that also is another very nice opportunity for us.
As we have started to focus a little bit more on the broader market, not just on consumer devices, we're starting to see that area expand in many different areas. The other area I'll touch on with mobility is proximity sensing, because proximity sensing for us has always been, the reason why we focused on it and decided to build these platforms was we saw it really correlating to a trend. The trend is regulatory drivers, which is driving the need for managing radio power. As your radio increases in power, the regulations say you have to manage that radio power to ensure it's not a hazard to the human body. That's what our proximity sensing does.
I would say those two areas, combination of proximity sensing and the combination of our protection devices in mobile devices, gives us a really nice long-term play in mobile devices. What we're seeing is in protection particularly, is the expansion into industrial and automotive as well, which is also exciting.
Got it, Mohan. We've got about five minutes left. Right at the end of the calendar year, there was a Semtech press release on AWS, some kind of agreement that Semtech had. I know that I, for one, didn't catch the significance of it till you and I spoke. I think I could tell that you were very excited about it. It was basically the acceptance of LoRa or sort of like LoRa just getting really tight within the AWS so that the enterprise wouldn't have to do much to deploy LoRa. Could you maybe just talk about that, Mohan, for the benefit of the people that we have on today's call?
Yeah. I think it is the most significant announcement that has gone out on LoRa. Not so much from a revenue standpoint. Obviously, Sidewalk will probably drive more shorter-term revenues. From a longer-term strategic standpoint, it's a very important initiative. Essentially, prior to the announcement, prior to AWS's IoT Core, any enterprise customer would have to build their own software platform to bridge from the gateway input, so all the packets coming in to their system, to a cloud backend. What AWS has essentially done is allowed and enable enterprises to connect directly from those gateway now into their cloud backend. Why that's important is they've already invested a lot in IoT kind of software platform. As an example, a customer who says, "Hey, I wanna do predictive maintenance." Well, okay, add the sensors. You connect the gateways.
They have all the data that tells them when a machine needs to be maintained. Then they have to develop all the backend software. Well, AWS has now provided that channel so that, just by connecting through AWS IoT Core, you get access to AWS's predictive maintenance software. That is a time-to-market advantage. It's a cost savings. It's a value add in the sense that if you don't have that, you need to have somebody who understands how predictive maintenance works, all of these things. It's really a nice addition. We're very happy about it. Obviously, it's gonna take time to roll out to all the different companies, but I think it's another one of those elements in the ecosystem that's going to potentially take LoRa from being just a nice LPWAN technology to a global low-power initiative and standard.
Mohan, with that, I think we're out of time. I really appreciate, Mohan, your time, and Emeka, Sandy, all you guys making time for us and the investors of Semtech. We really appreciate it and we will connect again soon, hopefully in person.
All right. Thank you, Harsh. Thanks, guys.
Thanks, guys.
Thanks everybody for joining in. Thank you.
Thanks, Harsh. Take care now.
Take care.