Release Date: April 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you give us an update on any CHIPS Act money that you may have gotten?
A: Rafael R. Lizardi, CFO and Senior VP of Finance & Operations, stated that there is no update on the CHIPS Act grant as they are still processing their application. However, he mentioned that TI has accrued about $1.5 billion from the investment tax credit (ITC), with expectations to receive about $300 million in Q2 and a total of $1 billion throughout 2024.
Q: What are your expectations for factory loadings and inventory levels moving into June?
A: Rafael R. Lizardi explained that factory loadings were adjusted in Q1 as they approached desired inventory levels, with a slight increase in inventory. For Q2, adjustments will be made based on future demand projections.
Q: As revenues begin to recover, how should we think about factory utilization given your current inventory position and additional capacity coming online?
A: Rafael R. Lizardi noted that the response to changing revenue profiles would depend on various factors, including the revenue outlook over a longer horizon. He emphasized the importance of maintaining inventory to keep lead times short and to leverage the upside potential of having inventory and capacity in place.
Q: Can you provide any updates on pricing trends and expectations moving forward?
A: Dave Pahl, Head of IR & VP, indicated that pricing trends are returning to pre-pandemic norms, with low to very low single-digit declines over time, which is consistent with historical trends.
Q: How is the competitive environment evolving in China, especially with local semiconductor suppliers?
A: Dave Pahl addressed that the competitive landscape in China is indeed getting tougher with competent local competitors and subsidized capacity. However, TI continues to compete effectively due to its strong competitive advantages.
Q: What is the outlook for the automotive market, especially considering changes in inventory strategies from just-in-time to just-in-case?
A: Dave Pahl responded that many automotive customers are reevaluating their supply chains and showing interest in TI's capacity, which is seen as geopolitically dependable. This interest is expected to support growth in the sector.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
