Thank you, everyone. Welcome to this session. Really delighted to have the team from Skyworks join us, and really delighted to have Liam Griffin, the Chief Executive Officer of Skyworks. What we'll do is we'll go through a few of my questions, but if you have anything you want to bring up, please feel free to raise your hand, or I'll also have some time towards the end for your questions. Welcome to you, Liam.
Great.
[inaudible]
Thank you, Vivek, and appreciate BofA hosting today.
Absolutely.
Looking forward to a nice conversation about the market.
Likewise. Liam, maybe just as a start, give us the the state of play. Lot of macro crosscurrents, but what are you really seeing on the ground in terms of the demand outlook?
Yes. Well, certainly there's been quite a bit of volatility in the equity markets. But if you look behind that, there's incredible work being done right now to advance technology and advance connectivity in all of its forms. T he job for us at Skyworks is to continue to delight and thrill our customers, create solutions that are purpose-built account by account, application by application. We've invested extensively in core technologies, from Bulk Acoustic Wave to Gallium Arsenide, TC-SAW filtering, and the ability to integrate and develop solutions, again, uniquely for each one of our customers and accounts. Another important note is the capital assets that we have.
Over the last several years, we've developed homegrown technologies with our own teams. Investing big dollars for the future. That has been paying incredible dividends. Our customers love to see it. They have a voice and a choice when they work with Skyworks. We can create markets today. We all know it. That's real. We do the best we can to outperform. O ur balance sheet is strong. Our free cash flow is strong. We're investing in technology every day. We've got incredible customers with phenomenal relationships, and we collaborate with those companies to ensure that what we do makes sense. It's what they want. It's not what we want them to buy, it's what they need. Working in that level, I think, has really put us in a position to really lead and outperform across not just mobile, but connectivity at large.
Absolutely. Liam, as you know, it's no surprise that the consumer is under a lot of pressure, because of inflation and other concerns. We heard that the demand for PCs has started to soften because of various reasons. How do you think about the demand outlook for 5G smartphones as they get into the especially important second half of the year?
Sure. Well, the 5G cycle still is very early. Certainly, the higher-end U.S. consumer, I think, has been able to adopt that technology, but there's a great number of subscribers that haven't yet embraced 5G in emerging markets, in China. The other thing about 5G is that it's not just a handset technology. 5G is really think of it as a universal connector. The speeds, the latency, and the performance, it basically can displace so many other connectivity protocols. Wired technologies as well. We look at the opportunity in a way that we just look at the application, we look at the needs of the application, and then address the customer and the opportunity in a way that makes sense. Having said that, we're seeing more and more 5G adoption outside of the classic mobile phone. Outside the mobile phone, right? Factory automation, for example, automotive.
It's going to be an incredible market. Everyone's talking about that. Everybody knows about that. We have to think about the sensors, the connectivity protocols, the reliability. All of that is going to come into play, and I think it's going to be a macro, really sustainable large move for connectivity companies like Skyworks. Those that can invest and those that have their assets and can craft account by account, really, it's going to make a big difference.
Got it. From a near-term perspective, do you think that Skyworks has decent visibility into the next handful of quarters? Do you expect normal seasonality to play out, or is it early to talk about?
Yes. W e have very good visibility with our customers and collaborations. Certainly, there's volatility right now in the equity markets. In terms of the need for the technology and the appetite for growth, we still believe it's there. W e just finished the first half of the year, very solid numbers. W e were at $3.3 billion in 2019. We endured the pandemic and went to $5.1 billion in one year. There's a lot of powder for us to continue to grow. Of course, there's macro trends out there that we're all dealing with. We see the need for our technologies. We see our customers asking for our technologies. There's more scrutiny about the protocols and the performance levels.
That's where I think there is going to be somewhat of a have and have-not market in some of these areas. W e've invested substantially, and yet we still have tremendous free cash flow margins. There's a lot of demand that we haven't yet captured in some of these new markets. One of the acquisition that we did with Silicon Labs, I&A business is going extremely well, opening up new paths for revenue. Creating new customer relationships, where we've had s ome of these wonderful technologies that have never been introduced to big, big accounts.
We're able to take some of that scale and bring a lot of really positive things. As you and I spoke of before, the fundamentals of our company are very solid. Again, strong balance sheet, own our assets , steady performance on the top line, and now seeing, despite some of the volatility in the market, the ability to endure and outperform.
I see. How is China shaping up I suppose from a demand perspective, and then we can talk about the supply issues as well. Because whether it is the lockdowns, whether it is the fact that, they were very early to adopt, 5G, right? But at the same time, there was also the disruption as Huawei left, right? It created a void. Many companies trying to fill it with their own strategy.
Yes.
How is China shaping up from a demand perspective for Skyworks?
Yes. W e've gone through a number of cycles. Huawei was substantial for everybody in the industry if you're playing. Over time, that started to unravel and move towards the OPPO, Vivo, Xiaomi players, which I would call mid-tier. What we're also seeing in China, and you called it. China is a market that develops assembly and test capabilities and is a feeder for some of the most important companies on the planet c oming out of China. There's also the consumer of China. You could be in China buying a Huawei phone or buying an OPPO, Vivo phone, but you could also be in China and buying a very, very high-end U.S. made phone, right? A U.S. brand. What we have seen is the appetite for the higher-end U.S. based brand actually go u f you look at the data on that.
Share gains there, the OPPO, Vivo players are actually kind of falling behind a bit, but they want to catch up, and they're looking for companies like Skyworks. How can we catch up? How can we make our product better, faster? It may not be the highest price, but what can you do to help us, Skyworks, to make it more competitive? That's what we're able to do. The OPPO, Vivo, Xiaomi player right now, they need to step up. They need to invest a little bit more. To get closer to a mid or a higher-end play, and we're working with them to do that. We certainly have the know-how because we're addressing the most compelling, most challenging devices on the planet, and so those markets is really interesting. Fo r us, some of the smaller players in China have kind of rolled off a little bit.
The mid to the higher tier, we're continuing to gain. That's our strategy. Again, back to the building block approach, having the elements that you need to create the device. It's not going to be the same for everybody, but we have the tool set to create something that's going to work for everybody.
Got it. T here's been a concern among, you know, investors that there is perhaps excess RF component inventory among the Chinese smartphone makers because they are facing not just the macro impact in their own domestic arena. A lot of their export orders to Europe, which is also going through a lot of turmoil as we know. What's your assessment of that inventory among Chinese smartphone makers today, and can that prevent the industry from having a seasonal Q3?
Yes. It's a bit of a challenge because back to your earlier comments, there's still a supply chain issue. I think what we've seen is the smaller accounts, the smaller players are going to underperform in a supply chain constrained environment where the larger players have the scale and the capability, a lot of it's in-house, to continue to grow. I think there's a bit of a challenge with the smaller players getting fed. You have the players in the middle doing a little bit of both. You have the players, the higher end. The demand is compelling and that is not going away. Actually, the premium players are doing much better right now than the smaller players.
We're talking smartphones. You have the assembly and test often in China and becoming the hub for the world in many cases. Not so much for us, but for some of our customers. You have that headwind too around supply chain. There's a lot of things happening. We are acutely aware of all of it, by the way. We're looking at it all the time. It's what we do. We also understand the nuances and some of the loopholes and some of the strategies that we can do to help our customers do well in the global market.
Got it. Just to kind of nail it down, do you feel that from an industry perspective, China has been adequately de-risked, or is it still an evolving situation?
Yes, great question. For our company, it is substantially de-risked. From a macro global, I think there's probably a little bit of bumpiness still hanging around. If look at our revenue streams, we've mitigated a lot of that potential. We still think China's going to be a growth market. There's no question about it. I think it's been more volatile than normal. A dding the pandemic situation and COVID situations, which I think is starting to roll over now, but that created a really wild card effect, more cyclical thing. This is a red herring that comes over the top and really impacted China with lockdowns and the free flow of goods. We see that abating. In terms of inventory, I don't really see gluts of inventory at all, at least in the view that we have.
You mean Skyworks specifically?
W e still have many, many customers that are pounding the table for product that just can't get it. It may not just be product from us, but just in general through the supply chain. We see a lot of unmet demand because products are not available. If you miss two, three or four parts in a bill of material, that product doesn't ship. Whether it's a smartphone, whether it's an infrastructure product, whether it's Wi-Fi, that kind of stuff still it's getting better, but we've had to endure a lot of volatility and mismatching of componentry to deliver finished goods. A lot of bumpiness there, but it feels like it's starting to get better.
Got it. Maybe, Liam, taking a step back, help us contrast the 5G from the 4G cycle. Because what we saw in 4G was a number of years where units were accelerating, content was accelerating. We went through this 2016-2019 or 2020 period where units started to decline and content started to flatten out, right? The stocks also behaved t hat way.
Right.
Starting to flatten out somehow. They're certainly not growing at the same pace. You still think there is content growth opportunity in 5G?
Yes, absolutely. Th is is the pivotal question. When you think about these devices, we don't need to even call them smartphones. People live, breathe, educate, communicate. Y ou cannot take away the use case and the value in the conversation for 10-15 years around mobile devices. This is a whole different world we're in now. People are using these technologies to do things that we never thought we could do. A utonomous vehicles, incredible IoT devices, factory automation, the companies like Amazon that are using basically glasses in the factory to do automation so the human eye can be better, right?
In fact, all these great technologies that are coming through that we never expected, but they're all based on core wireless engines, 5G-like engines that can take that signal from here to 100 miles away, potentially. Think less about the form factor. Think of 5G as a universal connector that can connect anything and basically take out wireless installations, for example, new buildings are made, factory automation. There's so many places where high speed, low latency, high-performing connectivity can be a provider for an application. That's where we're going with it. We don't want to get ourselves caught up in this handheld device, which, by the way, we cannot live without today, right?
Don't think so much about the form factor. Think about the use cases. The difference between FY 2016 to FY 2020 is there really wasn't a big use case. There really wasn't. It was more just t he phone itself and some cool features. Now you're living and breathing on this thing, and it's being used for so many different applications. The performance levels of 5G versus 4G are substantially higher, and that allows us to get into markets that are far beyond the handheld phone. You're going to see more and more from Skyworks in that area as we move out.
Got it. Your point is that we could still have very strong unit growth also, just TAM growth in units because it's going into many other form factors.
Yes.
If you focus on the content, piece itself, what are the areas of expansion? Because if one were to just do a simple teardown of a flagship device, at least from the outside, it seems like it has every possible 5G band, right? What other areas of innovation are there in an existing- 5G phone?
Yes. Well, there's a lot of new technologies that are coming in. S ensing technologies, filtering. W e don't have it in our slides here today, but if you looked at 4G phone and the filtering topologies versus what we see in 5G today, it's night and day. Those features in 5G with all the filtering, from mid-band to low band to high band, hitting the spectrum right down the middle of the fairway in every combination, that's extremely hard. If you look at the teardown of what a 5G engine's going to look like, forget about whether it's a handheld or not, the complexity within that device is daunting.
W hat we do is we play across the entire field. We're not just saying, "Okay, we're going to be great at Bulk Acoustic Wave," or "We're a SAW filter company." It's not that. We have all of the elements, and that's what makes us a great partner. We can go into the mid-tier and provide a solution that works optimally for that account or that customer. We can go into the lower end of the market if we need to. Emerging markets. There's a lot of volume in emerging markets, and it's the ASPs can be lower, but the margins can be just fine. You can go to the premium brand where they really demand the best- in- class, and we're clearly the leader there.
We're also creating innovation in those areas that take us, again, further from just traditional 5G. T here's a lot going on. The difference between the last five years or so, still a lot of use cases, but we're seeing much more prevalent and impactful use cases today that we just weren't around a few years ago. A lot of good stuff there. Another market that is just really growing fast is Wi-Fi and high-end Wi-Fi, Wi-Fi 6, 6E. There's a mini super cycle there following almost the same curve that you would see in classic mobile from 3G to 4G to 5G. Wi-Fi is becoming an incredible growth story. Leverages a lot of our know-how and classic 5G and mobile and wireless. The demand for Wi-Fi has really been strong. There's a lot of room in that market as well. We're excited about that.
Got it. What kind of content growth trajectory do you think Skyworks is on this year versus last year?
Yes. I would say it's 10% content roughly, could be higher. The other thing is pulling those sockets or those devices that are lighter in content today, we want to pull those folks up as well. We're doing very, very well on the high end. We've always been. It's much, much better to hit the 100-mile-an-hour pitch early then go downhill from there, right?
Get it right with the most discerning, most challenging accounts, and everything else is downhill. That's where we are. We're uplifting a lot of applications that hadn't really embraced 5G or wireless connectivity the way that we do. With our scale and our internal assets, we can skew the technology account by account. We know how much bandwidth this application's going to require versus this one, and we can price it and manage it in such a way that it's great for the customer, and it's great for us. Having that flexibility, it's not cheap. It requires your own capital assets. We put a lot of investment in to make this happen, and that's a really important point when we talk about supply chain volatility.
The fact that we were early in investing, in bringing to scale very, very high volume core assets, and I think that's been a real differentiator. That's a differentiator in te ch, by the way. There's not many companies that are doing what we're doing, with in terms of capital investment that's targeted specifically for certain areas of technology. It isn't a foundry play.
Because with the large flagship customers you have, usually it's the year starts with a lot of excitement that they're going to do a ton of units, and then there is an article in the paper somewhere that, the number of units has been revised down by 10%, 20%, and then there's another article in August or September. This is not your first rodeo, right? How do you p lan for that every year, just conceptually?
Well, we don't have the financials here. If we did, you would see a line from here to here with our business, okay? Through that sort, there's going to be many cycles here and there. If you look at the growth in our business, and it's now a $5.5 billion-$6 billion company. If you look at the CAGR, it's 13%, 14%. Broad markets right now, we've talked about the broad markets is the non-mobile part of our company. Last quarter, we delivered over $500 million in broad markets in the quarter. $500 million. That's a $2 billion run rate. That's bigger than Skyworks five years ago, the whole company.
W e're not getting the appreciation, so to speak, for that, but it is real. Not only is it real, it's diversified, it's growing, and it's leveraging. There's not many companies out there that have the infrastructure and the capacity and actually the brick and mortar in developing the technology, and then also having the absolute top line. Growing that level. It's an interesting. That's not like anyone in our peer group in mobile. I know oftentimes the industry gets bundled together. We have our own unique story. It's tested by customers. That's the way we measure. It' s great. We want our valuation to be strong. We want all of that to be great, but we want our customers to love our technology. I think that's really the fundamental thing.
That is what drives us, in many cases, to create a new site, a new greenfield location to develop high-end BAW or TC-SAW or some combination that is proprietary. That we've learned from. It's really important for us to do that.
How do you manage the unit volatility in flagship smartphones? Do you just p lan for the most conservative case? If something better happens or how do you manage that?
Yes. I t takes a lot of experience. It's not easy. I'll be honest with you. It's not easy. We've been working in that vein for years, and it has a lot to do with trust, great technology, leading, having capacity, right? Investing in capacity is important. It is not easy. We have really smart people that work on it, and we're all over that. A ctually, for us, we enjoy it w e enjoy the opportunity to do amazing things that other companies can't do. You know, you can't underestimate some of the logistics and you know, how you manage your inventory and how you scale for peaks and valleys. We know how to do that. But again, it takes time, effort, and great partnerships, you know, to make it work.
We could do everything wonderfully. We think it's great, but if the customer's not happy, it doesn't work. We try to think that way first. We try to think, how do we create amazing things for our customers? These are the recipes, and this is the toolbox that we can work with you to make your stuff really sing and have your business take share in your markets. That's kind of the way we partner. I think, you know, we love to be in that kind of environment. You know, we're a really, you know, hard-charging company. You guys may not see it all the time, but, you know, if you were to have a day at Skyworks and the way, you know, we run our business, it's all about our customers. How do we make it better? How do we make it amazing?
We create a lot of wonderful ideas and we collaborate with some incredibly smart people to work with us as we go forward. That's kind of the cool stuff. The logistics, you know, managing supply chain and, I mean, that's also really important. We have great people that know how to do that and owning our asset base. It is an important skill, but all those elements together. It's kind of back to what we were saying before. There are a number of companies in tech that are fabulous, and that's a strategy. There's not as many that, you know, are doing their own brick and mortar stuff. If they do, it's kind of, you know, down the middle of the fairway in one asset class or one technology class.
With Skyworks, it's truly end to end, you know, from filtering to assembly and test, to high skill factories diversified through the globe. A lot of interesting things and putting all those devices together or those elements together to create very unique end solutions for the customer. The supply chain part is very important, and we have, you know, a lot of energy on that.
Got it. You know, there's a very large customer right in the RF industry, right? That has the ability to bundle a lot of other components, right? Modems and transceivers and then so forth. Do you think that has become a much bigger threat for Skyworks than in the past?
No, it's the same threat. I mean, in fact, I think less of a threat because the complexity right now. I mean, the modem is the modem. There's one modem in every device, and there's not six, okay? What we're seeing in advanced 5G and moving to the next nodes, more complexity, more challenge, current consumption budgets that are scaring the engineers, customer side, and they're looking for help. Skyworks, man, you guys need to help us. This is different than it was last year. This is a different node. We actually thrive on that. We thrive on that. We thrive on the challenge, and it inspires our teams to work with our customers, as I said.
I know I've said it a lot in this discussion to really learn about it. There's always been the modem, but like I said, what wraps around the modem, the amount of content that's wrapping around that right now continues to grow and grow and grow. The reason is because the use cases that I talked about. The use cases in 2022 and 2025 are very different than 2020 or 2016. Very different. We want to do all of that work. We want to integrate all of those use cases. We want to create devices that can do amazing things that, you know, we never anticipated, right? So many things that we're doing right now, five or 10 years ago, we wouldn't even imagine. We're doing those today.
You know, if you look long, you know, autonomous vehicles I think is going to be a huge market for Skyworks and some of our other competitors too, honestly. 'Cause it's all about connectivity, but it's truly wireless, right? You know, latency has to be incredibly fast. It just, there's so many daunting challenges to do it right. It's going to happen. I mean, this is 100% going to happen, right? We see so many companies that are investing in it, including us. Adjacent to that, there's other, you know, microcycles that are going on in the industry that require wireless in the technologies. We're continuing to work on that. It's our bread and butter. Having the core assets and the core technology gives us the ability to play in each and every one of those markets as we go forward, so.
All right. If I were to kind of push you a little bit on that, so if you look at their growth rates, right?
Yes.
Over the last year, they have been 30%, 40%, 50%, so a lot higher, right, than the other players in the industry. Doesn't that mathematically say that they are gaining a lot of share in the market?
We're talking about Qualcomm?
Yes.
No, I don't see them as gaining a lot of share. I think they have a, you know, a strong beachhead in modems. They've had, you know, some technology partnerships with some customers, but they've been around. There isn't, you know. We have respect for the company. They have some excellent technology, again, largely baseband-driven. But, you know, there hasn't been anything that has taken away our ability to execute and grow. I mean, if you look at our numbers right now, we're having. You know, we've had a really good set of numbers in the last few years. You talked about, you know, $3.3 billion-$5.1 billion. We're on a run rate right now to $5.5 billion or higher. You know, we're not guiding right now, but we would expect to be double-digit, 10% year-over-year. We did 14% year-over-year in the last quarter.
You know, there isn't anything. The company in San Diego is there, right? That's fine. They're doing fine. We don't feel like we're being, you know, impeded in terms of our opportunity. I also say that our purview of demand is actually getting wider. It's getting wider because again, more use cases. The more the consumer wants to engage, you know, leveraging wireless technology, we're seeing it happen now, and the pandemic has actually accelerated a lot of that. The use, the essential nature of these devices and the connectivity protocols are really going to move. We've got many cycles across the board. You've got 4G to 5G. 5G still has tremendous room to move.
You've got a Wi-Fi cycle that we have great position in, and that is scaling quite a bit. We're entering new markets in a meaningful way. You know, part of this too is just scale. Like, if you look at some companies, and I'm not taking a shot at anybody, but making a big deal about design wins, and it's $5 million a year. The thing with Skyworks is we've been big game hunters for years, and it's been great, and we're not going to stop that. There's still a tremendous amount of opportunity in other markets. The Silicon Labs deal I talked about a little bit, it's been great for us because they have a tremendous breadth of diversified technologies, but lower scale in terms of volume.
There's no reason why there might be 50,000 units a year. There's no reason why it couldn't be 2 million. It's about addressing the right customer. We're doing a lot of really good work with key products, key technologies that we at Skyworks core know how to move and know where to take it. We're accelerating with that relationship. They have great technology. You take that great technology, and you take the relationships that we have and the scale that we have, it's a very powerful combination. You're going to start to hear and see more about that, but so far that has been moving in the right direction. We're really, really excited about it.
Got it. I wanted to revisit the broad markets because I think that's been a very strong success for Skyworks. How much of that is what you would call exposure to, you know, white goods, you know, home electronics, which were seen as "[COVID] beneficiaries," which might, you know, face a slowdown, right, as the economy start to reopen?
Well, I mean, it's diversified across many protocols. I wouldn't think, you know, the Wi-Fi cycle is, you know, one and done kinda thing. I mean, the technology. I'll just say this, when the Wi-Fi goes down at my house, it's calamity, right? I mean, it's really important. You're seeing more and more value and content and dollars in high-end Wi-Fi. You have enterprise Wi-Fi. You have consumer level. You know, there's some really high content and complexity in that cycle. So that's becoming, you know, another place where, you know, you're seeing linear TV fall out. Direct to home, you know, you can go 5G direct to home. Wi-Fi itself in some of the nodes right now are great, that you just pop in. There's so much flexibility. If you look at the demographics, the under 30, under 40, that's what they're doing. They're not screwing around with cables.
No offense, they're not doing Comcast. They're doing everything wireless. Everything's wireless. They want to have super fast, super fast Wi-Fi technology popping up on a screen or two or three screens, and it's a totally different situation. That's an opportunity. That wasn't around three or four years ago. Wi-Fi was okay. It was no big deal. Now the demand, the demand for data, for applications, you know, think of the interesting little companies that are popping up like Roblox. Kids are on there all day sucking down bandwidth, right? All of that stuff is still, you know, data-driven and technology-driven, and the kinda things that Skyworks can invest in. There's just a lot there, and these are shifts that are taking years and years to move, but it's an acceleration. You're just going to see less wires everywhere is just changing.
Makes sense. Liam, Skyworks has a, you know, very strong, balance sheet, right? You're generating very good c ash flows. What is a higher priority for cash, right? Given you know the valuation of where the stock is buybacks a higher priority? Or do you think given that valuations across the industry have come down, that it gives you a chance to look at M&A opportunities?
Yes. Great question. Both are great options.
Both.
Both are great options. You know, we've been buying back stock, of course, and, you know, we certainly look at strategic opportunities as well. You know, again, we had that recent deal with Silicon Labs. It's turned out to be great. You know, we have the power. We have the financial strength. I mean, that's one of the things, you know, you know about this business. I mean, this is a very solid company. We have tremendous power. You know, EBITDA, we're going to generate $2.4 billion-$2.5 billion of EBITDA this year. We're trading at 8x-9x earnings, which is just ridiculous, honestly.
Why do you think that is? What are people missing?
I think people are afraid. I think they're just worried about the industry or worried about the markets, the financials and the balance sheet. If you looked at that, they're even if it's flat, and it's not. It's a rock solid business. That's not the same for everybody. I mean, look, you could have the same headwinds and be impacted in different ways. We're raising dividends. We're buying back stock. You know, our EPS this year is going to be $11+. I mean, this is it is you know really you know deeply undervalued right now, and that's our job to turn that around. There's no question.
Got it. Right, you mentioned, you know, one of the differentiators for Skyworks is that you own a large part of the manufacturing base. I think BAW is a place where you have invested a lot.
Yep.
The question I would have there is if I look at the large flagship phones, right, Broadcom has a ton of, you know, BAW capability there. So the incremental investments in BAW, does that push you more towards, you know, China Inc., or do you think that there is just going to be a greater need for BAW, right, across the board at every customer?
BAW is a higher or it's at the top of the food chain in filtering. Bulk Acoustic Wave. It's a very, very difficult filtering topology. Not easy to do. Companies can do it in different ways. It's not a cookie cutter. It's not like a classic semiconductor device that you can just bang out, i t's crafted. And everything from the packaging to the lithography, it's a deep dive scientific approach to get there. The recipe that we use is different than some other companies would use. It makes the performance levels much higher. It improves the efficiency of the solution because it is a discerning level of filtering where you're really able to block out the noise and provide a pure signal. As the technologies get higher and higher in complexity, you need filtering that can match that level of complexity.
You know, people don't talk about it that much, but it really is important. It's a key element in delivering that high speed performance. You could do it in—like, we have other filtering topologies. We have temperature compensated SAW, TC SAW, and we have standard SAW. They can be used as well. When you get into the more compressed and more difficult spectrum, mid-band spectrum, high-band spectrum. The technology of choice is Bulk Acoustic Wave. There can be different ways that players do it. We have our own way of doing it, and again, crafting it with the solutions that we have already and leveraging the capital and the scale that we already have in-house.
You should see and hear more about that from us. We're already winning business in Bulk Acoustic Wave. It doesn't have to just be in handset. I mean, the BAW is applicable for some of the really high-end Wi-Fi solutions as well. It's another, like I said earlier, it's another cycle in the technology node. You've got the Bulk Acoustic Wave cycle. You have the applications around the use case on that. Wi-Fi is one. Lots of other things, even high-end, you know, 5G plus solutions that require that. Higher spectrum leans into Bulk Acoustic Wave. There's a lot there. Now, some of those technologies we have, but a lot of these are just now really coming to scale, and can drive some of the incremental growth from the current levels.
Right. Just the last question. Is the bulk of the investment cycle over in BAW? Like, can CapEx start to essentially normalize from here? You still think you are in a period of extended CapEx?
Yes.
For the next two, three years?
I think it's stabilizing. We have, if you look at our numbers, I mean, we've made quite a bit of investment in the bulk acoustic wave side. A lot of that now is going out to the market. It's been going to the market and the CapEx level should mitigate from there. You know, again, it's about the financial powder. If you don't have that financial powder, you're not going to be able to put those assets in place and curate the right solutions for the customer.
Makes sense. Terrific. Thank you so much, Liam.
Okay.
Really appreciate your time.
Enjoyed the conversation. Thank you.
Thanks, everyone.
Yes.