Release Date: February 10, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you clarify the impact of the lower content in the iPhone on your communications business and your confidence in regaining that content in 2025? A: The impact was significant, with the Q4 impact being more about the build pattern than the socket gap. We are confident in regaining the SIP socket in the next generation iOS phones due to our longstanding relationship with the customer and clear milestones for mass production in Q3 2025.
Q: How should we think about the gross margin trajectory throughout 2025, considering the Q1 guidance of 10% to 13%? A: For Q1, we expect a traditional incremental flow-through. For the rest of 2025, our financial model supports a 30% to 40% incremental flow-through due to increased material content. By the end of 2025, we expect the Vietnam facility to reach break-even operating income.
Q: What gives you confidence in the automotive market's growth in 2025 despite recent declines? A: We have a strong project pipeline in advanced packaging for automotive, particularly in ADS devices, in-car networking, and infotainment. Although mainstream product visibility is unclear, we believe we've reached a trough and expect gradual improvement.
Q: How are you planning to backfill the potential decline in business from your marquee customer in the compute market? A: We are confident in our project pipeline and customer base. We are ramping with a second customer in 2.5D and expanding our technology portfolio to RDL-based technologies. We are also working on next-generation GPU devices with several customers for production in 2026.
Q: Can you provide more details on your CapEx allocation for 2025, given the conservative outlook? A: Our target is $850 million, with 70% for capacity and capability in high-performance computing, advanced SIP, and test. About 25% is for facilities and construction, including 5% to 10% for our Arizona facility, and 5% for quality and R&D.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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