Microchip FY 3Q17 Earnings Call Notes

Microchip Technology’s (MCHP) CEO Steve Sanghi On Q3 2017 Results

We continue to see the environment as being pretty good

“Well, I think we have been kind of telling you all along that we see the environment to be pretty good and many of the concerns that Street has shown on the environment or in China in the past a year or so, we have been continuously arguing that we were not seeing those, our results were very good, they were good by month and for the whole quarter. So, true, if you take that 1% away our result would still have been about to flat to the September quarter and we have never had a flat December quarter. It’s always down two percentage points.”

Inwardly focused

“So we have been extremely inward focused lately to make sure all this integration goes flawlessly and while we’re doing all that and basically running two companies. The Microchip core performance is not slip and you have seen that that we have performed miraculously in both end. So there is currently not a company in our funnel, I mean, we have to after we complete the Atmel integration and we have to restart the work of really reenergizing the funnel and look at what is available and start to date and try to find something. So right now we can’t give you any update on next M&A.”

Inventories lighter because orders have outpaced

“Our inventories definitely on the lighter side they are lower than they have been in recent past. But every quarter we have been kind of beating the numbers and honestly not been able to build the inventories we set a target where the inventory would slightly grow and then we ship it all and the inventory does not grow. Last quarter especially we shipped all those product requested by the customers because of the go live shipping out. So that product got shipped otherwise that would have been in the inventory.”

The market is normal

“I mean all this is not strictly speaking about Microchip really nothing to say about the overall semi-industry. We’re finding that demand environment to be normal. Really I mean if you look at the industry numbers for 2015 and 2016, I believe 2015 industry was low single-digit negative and so the numbers I’ve seen for 2016 was plus 1% give or take some. And the numbers for 2017, I’m hearing numbers to be positive. So after two years of really flatter down industry, I’m hitting industry numbers to be positive but not giving any personal view on it. When I look at the Microchip opportunities and we see our markets in U.S., Europe, Asia and Japan, I’m seeing market to be normal.”

Industrial market is true strength of IoT

“So I think we’ve always believe that the industrial market is where the true strength of a IoT fits. It’s where there are very strong business models for the investments that are required in the IoT infrastructure that’s going to be put in. We have many, many designs that I would fit within that category. And we’re optimistic how that growth will be a part of our overall growth going forward.”

Intel 4Q16 Earnings Call Notes

Brian M. Krzanich

An explosion of data

“By 2020, the average person will generate about 1.5 GB of data per day, while smart and connected devices of the future will produce data at many times that rate. Autonomous cars, for example, will generate about 4,000 GB of data each day. The resulting explosion of data is creating tremendous opportunity. But data alone isn’t valuable. It’s the transmission, aggregation and analysis of the data that results in value and impact. Intel will play essential role in those steps because our products are key to turning raw data into high-value insight and information.”

We power 90% of machine learning servers

“Finally, in Artificial Intelligence, we believe we have the industry’s strongest product portfolio. Intel processors power well over 90% of servers deployed to support machine learning workload, and we are winning the vast majority of AI solution based on strong product performance and customer value.”

PC is not back to zero unit or positive growth

” Those two things put us in the PC market in the unit level in the mid-single-digit decline. That’s better than if you went back a year or so ago, we were in the high single-digits, depending on how you looked at it and where you counted from the 2-in-1 devices. So, it is starting to get better, but I don’t think we’re back at a zero unit or a positive unit. But as Bob said, what we’ve really been focusing on in that space is how do you make money, how do you sell up, how do you do a better business performance in that kind of market? ”

Moving to public cloud faster than we expected

“I think that certainly some of that is, that it’s moving to the public cloud, it’s moving to those areas at a faster rate than I think we expected. It’s also been a little bit slow about developing private cloud and we’re working with several partners like Microsoft, Azure and others around the private cloud segments as well for the enterprise. But if you take a look at the long-term, we still see this as the growth engine and still getting into that double-digit regime.”

Why we’re in memory

“Sure. So let’s talk about Memory in kind of a big picture, John, and then I’ll let Bob talk a little bit about how the CapEx lays and what our view on CapEx is in the space. But we are in this space for one reason because I understand it’s a cyclical business that tends to be fairly difficult from a price capacity standpoint. But we believe we’re coming at it with two very unique technologies. Our 3D NAND technology has some of the best performance and best cost in the market. Our current version of 3D NAND has a 15% cost value over the competition, and our next version, second generation, has even a higher when you look at it on a density basis. And so we believe we’re going to be able to bring differential cost and performance in 3D NAND that will give us a unique position, and that, combined with our knowledge of the data center, should allow us to really provide compelling product for data center SSDs. 3D XPoint is very different and that is a unique technology that bridges between memory and storage, and we believe it can re-architect how big data applications, artificial intelligence applications where you want large amounts of data being brought up as close to the compute as you can, will really transform not only the architecture of those systems but the performance of those systems.”

Enterprise/cloud dynamic

“our view is that enterprise will continue to decline. A lot of that is those workloads moving to the cloud. It will get to a point though where it starts to stabilize. And those – because there are still things that – workloads that will want to be in a private cloud. At the same time, we believe as the world becomes connected, cloud will grow at a much, much faster rate. And I made a point in the prepared remarks, where if you look at the cloud of today being mostly based on people, the average person will generate about 1.5 gig of data a day. An autonomous car, when those things start hitting the road – and we’ve started to build these data centers for some of the trials we’re working with – I mean you’re talking about petabytes of data that you’re having to deal with and 4,000 gigabytes a day off is the average autonomous car. You put a couple of those on the road and you need petabytes of storage to handle that. So, we do believe that the cloud will move at a faster rate as these connected devices become basically more available. That said, the cloud is becoming bigger than the enterprise.”

Robert Swan

We’ve taken a more cautious view of PC

“Now, let me turn to guidance. First, some context. First, our guidance assumes a stable macroeconomic environment, but we have taken a more cautious view of PC consumption versus third parties, particularly in our outlook for the emerging markets including Russia, China and Latin America.”

Texas Instruments 4Q16 Earnings Call Notes

Texas Instruments (TXN) Q4 2016 Results

David Pahl – VP and Head of IR

Industrial improvement continued

“Revenue for the fourth quarter increased 7% from a year-ago, as demand for our products remained strong in the automotive market. The improvement we saw in the third quarter in the industrial market continues. Demand in personal electronics market was down slightly from a year-ago. ”

revenue segment overview

“Specifically, in 2016, industrial comprised 33% of our revenue, up 2 points from 2015. Automotive was 18% of our revenue, up 3 points. Personal electronics was 26%, down 4 points. Communications equipment and enterprise systems were 13% and 6% respectively, both year and to last year, while other was about 4%. We did not have a customer that was more than 10% of our revenue in 2016.”

Kevin March – SVP, CFO

We have been intentional about directing investments towards auto and industrial

“Joe, this isn’t — as you know and you have been tracking our revenues inside of that market for some time. It’s not something that is capping this quarter, right. We have been having very strong growth inside of automotive and that is a result of how we allocate capital. We have for some time been directing investments and increases both in automotive and industrial. And that’s because we think that those are the two markets that are going to provide growth, not just for us but in our industry. So — and as you know, these are long tail type of design wins and revenue strength. And we are very intentional as I mentioned earlier trying to direct our investments, so we are not just seeing growth in one sector or at one customer.”

Not a lot has changed in the overall environment

“Yes. So, first Vivek, I’ll just point out that when we look at the overall microenvironment, we really don’t see something that has significantly changed in sometime. So, we continue to believe that we’re operating in a very similar microenvironment that we have, that we haven’t been If you look at inside of the quarter, demand came in stronger, really across most markets in businesses. The only notable exception as I talked about before was personal electronic came in about as we expected. And to your point, we are seeing choppiness in particular markets. Some of that more recently has been driven by one large customer. You can go back to clock not too long ago into last year we saw some choppiness in comps equipment before that we had a PC, XP refresh cycle that came to an end. And none of those were really tighter the overall economy, there was just very specific things going on within specific market. So, that’s really the environment that we thing that we’re operating in now.”

Rafael Lizardi – Co-CFO

Taiwan Semiconductor 4Q16 Earnings Call Notes

Morris Chang

We have created 100s of thousands of jobs by creating the fabless industry

“But having said all that, I will say that Mr. Trump, President-Elect Trump, has said many times that he wants to create jobs in the United States. And we highly applaud that. TSMC actually has created, we believe, hundreds of thousands of jobs in the United States in the last 20-30 years of our existence. We for all practical purposes, we have created an industry, the fabless industry, in the United States, and we have grown it, and the fabless industry, I believe, employs hundreds of thousands of people in the United States. And we have done that by being here ourselves. So I think that we’ll continue to create more jobs in the United States by helping the fabless industry in the United States. And the IDMs, the users, there are many IDMs in the United States that use us. And by using us, they have grown faster. And they create jobs too.”

We wont rule out setting up a fab in the US but that would come with sacrifices

“I do not rule it out, but I see a lot of sacrifices that we and our customers will have to make if we do that. Keep in mind that we earned our business in the United States, not by lower labor costs in Taiwan. In fact, on the whole, our labor costs in Taiwan – our labor costs in Taiwan are not lower than the United States.

Now, we earn our business by being good. Let’s give you an example. Every year we send thousands of engineers from one location to another, and we have three locations in Taiwan, Taichung, Hsinchu and Tainan. Now Taichung and Hsinchu are within daily commuting distance…every year we send literally over a 1000, 2000 engineers from one location to another who’ll be there for months and that allows us to ramp up things quickly and to solve problems quickly also where one location, one fab has got a problem then another fab – engineers from another fab can go ahead and help them. Literally thousands, thousands of engineers do that every year. Now if we have a plant in the U.S. we won’t be able to do that anymore.

Second point, we have thousands of vendor people here. Actually they’re already in Hsinchu – already in Hsinchu, Tainan and some in Taichung also. Thousands of engineers from our partners located here. These are things that are not low labor cost. These are things that we’re going to lose if we set up a plant in the U.S. And if we lose these things our customers will lose too.

Yes, I don’t rule it out and actually I would never rule that out but year–after-year time and again we consider the subject and we have not made the decision to go there.”

Mark Liu

AI discussion

I think AI is coming a killer application for the industry and people are excited. And one of the reason is there is a tremendous progress in the algorithms that makes the machine into much more than traditional programming – programmable machine. This is the machine can think and do things. So for the application side it’s immense, as many of you must have read on these growing opportunities. All the cloud provider are in this field.

Now, in AI, for us, I think it’s also an important opportunity for us. Let me just talk about the computing side of AI. AI needs a deep learning [ph] and collecting a lot of data, therefore it requires very massive computation. And in the past years our technology development is collecting apace and we now can provide the world’s most competitive technology for those artificial intelligence computing purposes. That’s number one. So the people who can get into this field is across the industry, using our technologies.

Secondly is this AI is – this is new, so the all the algorithm or the architecture, they are all new. So the computing…basically it’s the playing field is level. It’s not as before, where the high component is computing. It has to be a certain architecture to get into this field. This is a leveling playing field, so many players are into this field. That is where the massive innovation can come. So we are very excited. Also because of this we see the application will include many segments.”

Intel at Credit Suisse Conference Notes

Intel (INTC) Presents at Credit Suisse 20th Annual TMT Conference

Stacy Smith – EVP, Manufacturing, Sales & Operations

New role after CFO

“So, my new role is leading Intel’s sales, manufacturing and operations. And when I think about that portion of the Company, I think that it has been a big part of our competitive advantage over the last decade. Our manufacturing advantage, the ability to drive Moore’s Law faster than anybody else, the ability to bring the complex products into high value manufacturing at high yields and good margins, and then our relationship across the ecosystem and in particular our deep relationship with customers that are doing innovative work.”

Moving towards a sales force aligned by vertical markets

“That said, our sales force has been designed over the years to be a very efficient functional model. And what we’re toggling towards is a sales force that’s actually aligned by vertical markets. And so, we will have a dedicated sales force, for example for automotive that has very deep skills in that space and can go in to a customer like a BMW or a Delphi which was announced [ph] this morning, and do a solution sale that touches all of the different parts of Intel. ”

Returned almost $100b to shareholders over 10 years

“Over this ten-year horizon, we’ve returned almost a $100 billion to shareholders in terms of cash generated to the model, and that’s cash generated after we spend on CapEx, after we spend on R&D, and it’s broken out about half between the dividend and half between buyback. The average buyback price over that time period is in the low 20s. So, we’ve also benefited from the fact that the stock price has been appreciating. So, when you when you zoom out, you can see in the financial model the impacts of the investments that we make.”

We’re one of the last companies standing that invests in factories and products

” we do a lot of benchmarking. Now, it’s hard for a company like Intel because we’re kind of the last Company standing that still invests in technology development factories and products. And those products range from kinds of things as Rich [ph] was talking about earlier to high-end data centers Xeons and Xeon Phi and Silicon Photonics. So, it’s difficult for us to find two or three companies that make a benchmark for us. Specifically we would create some [ph] benchmark that would include like a TSMC and companies that we compete with”

Areas of investment

When you look at where our big investments are going right now, we’re going down in SOCs for things like phones; we’re going down in the PC segment of the business; we’re going up in the data center; we’re going up in IoT specifically and automotive which is a long-term investment for us that will we believe payoff but will take some time. And we’re going up in places like through the cross point memory where we believe we have a disruptive memory that has some tight ties to our server platform and alternatively to other platforms in the Company where we can get a very good return on that investment.”

We win by providing great performance per watt per dollar

“The way that we then work with our customers to ensure the growth of the businesses, first and foremost and coming back to my new role, we have to deliver just overwhelming performance per watt per dollar equation to the customers. At the end of the day, in every market that we serve, if we can do things that are higher performance, lower cost, more energy efficient than what anybody else on the planet can do, we win. That’s how we win in the high end of the PC market, that’s how we win in the automotive space, that’s how we win in low end IoT applications and that’s how we win in the data center.”

The last 12 months have been a bad part of the cycle for memory but moving into the sunshine more

“the last 12 months have been kind of a — it’s the bad part of the cycle for memory in general. It looks like we are moving a bit more into the sunshine as we go forward. But, certainly we’ve seen prices coming down; that’s been a part of it. But the bigger Intel specific issue is that downturn hit us at the time that we were investing and bringing Dalian up, so significant start up cost in a factory that wasn’t in production”

It’s clearly getting harder to advance Moore’s Law

“It clearly is getting harder to advance Moore’s Law, there is no question about it. If we get into the world of multi-patterning lithography, it becomes really complex. I think everyone is struggling with the yields in the early phase of a ramp for everybody or a little less than what they’ve historically been. But that’s okay as far as we saw that relative leadership because that ultimately translates into leadership product.”

The company has changed from just PC

“I was reflecting after the dinner last night. I’m not sure we had a single PC question at dinner. And again, relative to 10 years ago at my first conference, it all would have been what’s happening in Taiwan, what’s happening in the channel, how’s the PC market? It was just remarkably different and it does show that how different we are as a company today. In terms of the PC market, the napkin math that are shown in a couple of different investor meetings is even in a market where the PC market’s down in that kind of mid single digits, if we’re doing a good job of segmenting the market, a good job on our cost and OpEx side, we can grow the company.”

Micron at Credit Suisse Conference Notes

Micron Technology’s (MU) Management Presents at Credit Suisse

Ernie Maddock

Overall demand environment healthy

“Relative to the market as we see it, the overall demand environment continues to be healthy. We do continue to see supply growth flowing with technology transition, and of course that’s predicated on no incremental wafers being added. ”

3D Xpoint markets will take time to develop

“And then of course 3D Xpoint, the first new emerging — first new memory technology in 20 or so years. I know that folks are very anxious to see that move into a level of maturity that the other two products are. I would stress DRAM has been around for what 30 years, and NAND has been around for at least 15, and this is two years old. So there is still some market development that’s left to go. And we’re excited to see how that market progresses.”

Thoughtfully analyzing EUV but not going to replace all the edge equipment at once

“We’re thoughtfully analyzing it. At present, I wouldn’t say it has as much prominence in our thinking process might be the case for Samsung or Hynix. But we’re still not fully developed on those subsequent technology nodes. So we’ll have to see. But certainly I think it’s reasonable to think that if it used, it’s used in fairly case-specific requirement. So you’re not going to replace all the edge equipments or anything else you used to get the double patterning that supported you when you didn’t have it, you are not going to bundle that up and throw it out the door and move into UV tool as it becomes a much different discussion as you think greenfield capacity.”

Mobileye 3Q16 Earnings Call Notes

Mobileye’s (MBLY) CEO Ziv Aviram on Q3 2016 Results

Don’t anticipate any regulatory change

“No, we think that autonomous driving has a very, very big economical value going into the future and the regulators and any administration the next thing that they want to do is to impede technological developments and impede economical development, so we don’t anticipate any change.”

Amnon Shashua

Nvidia isn’t really a competitor

“Okay. This is Amnon. Let me be clear, we have launched deep learning algorithms like in free space, like in holistic planning. A year and a half ago all our code today is all around the deep learning. I think that we are the – we launched the first deep learning algorithms on embedded systems, not only in autonomous, but I think of many industry. So saying that we are a conservative approach algorithms and somebody else is doing Eye [ph] this all what we do, we do artificial intelligence.

I find sometimes it’s hard to grasp Nvidia’s statement. I think Nvidia is not a competitor to the Mobileye. Nvidia their competition is Intel, its Samsung, it is NXpedia, Qualcomm, they provide high-performance computing, autonomous driving is not about the computing its about the software, its about the algorithm, there in Nvidia is not a player and I don’t think that ever mentioned that they are a player there.

So high performance computing is nice, but what is – what you need to put there is the content and those are the algorithms and this is what we do for living.’

NVIDIA 3Q16 Earnings Call Notes

Jen Hsun Hwang

Gaming is no longer just about gaming

“And then the third is gaming is no longer just about gaming. Gaming is part sports – part gaming, part sports and part social. There are a lot of people who play games just so they can hang out with their other friends who are playing games. And so it’s a social phenomenon and then, of course, because games are – the quality of games, the complexity of games in some such as League of Legends, such as StarCraft, the real-time simulation, the real-time strategy component of it, the agility – the hand-eye coordination part of it, the incredible teamwork part of it is so great that it has become sport. And because there are so many people in gaming, because there is – it’s a fun thing to do and it’s hard to do, so it’s hard to master, and the size of the industry is large, it’s become a real sporting event.”

The only way we’re going to be able to discern IoT is through AI

“And then the third – so hyperscale, enterprise computing, and then the third is something very, very new, it’s called IoT. IoT, we’re going have a trillion things. We’re going to have a trillion things connected to the Internet over time, and they’re going be measuring things from vibration to sound to images to temperature to air pressure to you name it. Okay? And so these things are going be all over the world and we’re going to measure – we’re going to be constantly measuring and monitoring their activity. And using the only thing that we can imagine that can help to add value to that and find insight from that is really AI. Using deep learning, we could have these new types of computers. And they will likely be on premise or near the location of the cluster of things that you have. And monitor all of these devices and prevent them from failing, or adding intelligence to it so that they add more value to what it is that people have them do.”

Tesla is 5 years ahead of the competition in self driving

“Yeah, that’s – I don’t know that I have really granular breakdowns for you, Craig, partly because I’m just not sure. But I think the dynamics are that self-driving cars is probably the most single most disruptive event – the most disruptive dynamic that’s happening in the automotive industry. It’s almost impossible for me to imagine that in five years’ time, a reasonably capable car will not have autonomous capability at some level, and a very significant level at that. And I think what Tesla has done by launching and having on the road in the very near-future here, a full autonomous driving capability using AI, that has sent a shock wave through the automotive industry. It’s basically five years ahead. Anybody who’s talking about 2021 and that’s just a non-starter anymore. And I think that that’s probably the most significant bit in the automotive industry. I just don’t – anybody who is talking about autonomous capabilities in 2020 and 2021 is at the moment re-evaluating in a very significant way.”

Colette Kress

Datacenter up 59%, driven by AI

“Cloud GPU computing has shown explosive growth. Amazon Web Services, Microsoft Azure and AliCloud are deploying NVIDIA GPUs for AI, data analytics and HPC. AWS has recently announced its new EC2 P2 instance, which scales up to 16 GPUs to accelerate a wide range of AI applications, including image and video recognition, unstructured data analytics and video transcoding.”

Microchip FY 2Q17 Earnings Call Notes

Microchip Technology (MCHP) Q2 2017 Results
Steve Sanghi

We have never bought into the notion that 8 bit is dead

“Well, it’s all of the above. We have never bought Street notion that 8-bit is dead, everything is going to 32-bit. That notion has been around from 1994, and I have a cover page EE Times article from that time. And so Microchip has been short for those people since 1994, when the stock was $0.57 in the current currency. So our 8-bit business is extremely profitable, extremely good margins, operating as well as gross. The business did record on core as well as total, as Ganesh mentioned. We are continuing to introduce a large number of new products with new features. We’re garnering new customers, existing customers where businesses are growing. We are not seeing what everybody keeps talking about, but please, everybody keeps talking about because that takes everyone away from 8-bit and turn to something else and we’re enjoying this business quite a bit.”

We’re one of the few companies that continued to innovate in 8 bit

“Yeah. I don’t think it’s necessarily with Bluetooth and wireless. I think there are plenty of areas where people are trying to make devices smart. And if you have innovative new products available as 8-bit microcontrollers, often they are the most cost-effective products to apply to these new systems that are being designed. And we are probably the minority of companies that has innovated to put lots of new capabilities in 8-bit microcontrollers. We are doing that not only on PIC but the Microchip product line before but also an AVR, the Atmel product that we’ve inherited. And I think if you have products that are innovative at the right price point, which are easy to design in to many systems, they will. I don’t think they’re anything related necessarily to Bluetooth and wireless – and Wi-Fi specifically.”

We do all our wafer probe and 60-70% of assembly ourselves

“Now when you look at the back end, Atmel did majority of the assembly and test all at the subcontractors. They did no assembly themselves and 90% of the test was outside. They only did some wafer probe in Philippines. If you compare that to Microchip, we do all of our wafer probe and about 60%, 70% of our assembly and about 90% plus of our test ourselves. So that’s where we see some opportunities where as we compare the assembly and test cost structure, Microchip’s testing technologies, assembly technologies at lower cost than some of that Atmel is using”

Christmas builds have gotten later, partially due to gift cards

” It used to be the case that most of the Christmas builds would be in our revenue in the September quarter because parts get built in Asia. So whatever is being built, equipment gets built by the end of September and gets on ships for six-week journey to U.S. over the ocean and arrives here in time for Thanksgiving when the stores are then full of merchandise. That used to be the case. Increasingly in the last five years plus, what we have seen is the Christmas build is later and later and later. Nobody rushes to build it in September anymore. Parts get built all the time in October and November. A lot of it gets shipped by air rather than getting shipped by sea. And even the heavy items sometimes it gets shipped by the sea and they arrive in November and December. And many a times, there are IOUs where certain product is not available before Christmas, and you put an IOU under the Christmas tree and then you take delivery in January. A lot of the gift card giving has driven that also where people kind of gift gift-cards and then they’re actually buying the merchandise in January. So the entire Christmas buying, which largely used to happen prior to the end of September, is now really spread out.”

Microccontroller market is competitive

“Well, people ask us the same question when Freescale was getting acquired. They asked us the same question when Renesas was forming with NEC, Hitachi, Mitsubishi. And now we’re getting the same question with NXP. And I think microcontroller market remains competitive. There are a number of players. We compete with Renesas, NXP, STMicro, Microchip, and others, some smaller players. The market remains vibrant and competitive and Qualcomm purchasing NXPI would not really change anything, because Qualcomm was not a microcontroller supplier. So the same product line that NXP had will continue, and we’re not seeing any change now. Although the close of the acquisition is about a year away, we’re not expecting to see any change coming out of that.”

Not clear Qualcomm any different

“It is not clear that Qualcomm’s sales force had a similar focus in NXPI, and then they didn’t have a sales force to call on all of the thousands of NXPI customers. as much of a distribution line. We didn’t think Qualcomm had factories themselves where NXPI could leverage. So there were reasons for that acquisition, whatever Qualcomm’s reasons were to diversify. It’s not clear to us that in terms of the microcontroller and analog offerings of NXPI, the Qualcomm acquisition makes them anything different, which could be troublesome to us. We don’t see that.”

Texas Instruments 3Q16 Earnings Call Notes

Texas Instruments’ (TXN) on Q3 2016 Results
David Pahl

Overview of demand

“the automotive market remained strong. We’ve got five sectors inside of that market and most of them had grown double-digit. Industrial demand improved and encouraging part of that was it was very, very broad-based and we had most of the sectors growing. Inside the personal electronics that was even and that was despite continued year-over-year declines in demand from one customer, but I think that speaking to the diversity of our product portfolio and our customer base, we were able to offset that with growth elsewhere inside of personal electronics. And then communications equipment grew from a year ago was even sequentially. And lastly, we did see growth in enterprise systems as well. ”

Personal electronics doing well outside of one customer

“Yes, at that level we’ve had PCs come in year-over-year about even which is an improvement from what we saw. I think that outside of that one customer we’ve actually seen really broad based growth. And so I think that all the classical areas inside a Personal Electronics are doing well.”

Improvement in industrial demand

” I think as we talked about last quarter we did see an improvement in industrial demand it actually had been flat for several quarters year-on-year, so we were encouraged by that. This quarter we’ve built on that a little bit and like last quarter it was very, very broad-based. I won’t try to go in and try to predict how long that will last or carryforward, but I definitely would say that we were encouraged as we saw most of those sectors growing.”

Inventories lean but stable lead times

“So if we look into the distribution channel inventory is actually decreased by about a half a week and it’s currently very, very low levels at about four weeks and that’s pretty similar to what we saw a year-ago. So again, we just we believe that that inventory level just reflects an environment of really good product availability and we’ve got you know good inventories on our books available to be able to ship. We continue to have very stable lead times and those things kind of taken together just drive very high customer service metrics. So customers in general are getting products when they want to have them. So and I’ll just make the reminder too that four weeks of inventory is just structurally lower because of the consignment programs that we have at our major distributors.”