Doanh thu quý của Qorvo giảm 45,7% so với cùng kỳ năm ngoái trong khi hàng tồn kho kênh tiêu thụ
News: Microelectronics
15 May 2023
Qorvo Inc of Greensboro, NC, USA (which provides core technologies and RF solutions for mobile, infrastructure and defense applications) has reported revenue for the fiscal full-year (to 1 April) down by 23.2% from 2022’s $4646m to 2023’s $3569m. The two 10% customers were Apple (at 37%, up from 33% in fiscal 2022) and Samsung (at 12%, up slightly from 11%).
Fiscal fourth-quarter 2023 revenue was $632.7m, down 14.9% on $743.3m last quarter and 45.7% on $1166.2m a year ago. However, this outperformed the midpoint of the $600–640m guidance range, despite a weak demand environment and despite Qorvo reducing channel inventory of its components in the Android ecosystem by about 25% (following a more than 20% reduction in the December quarter).
Advanced Cellular Group (ACG) revenue was hence $418m (down 14.9% on $491m last quarter and 46.2% on $777m a year ago). However, total Android revenue was up sequentially on the strength of a large customer flagship ramp with record Qorvo content. “March was a low point for China-based Android quarterly revenue,” believes president & CEO Bob Bruggeworth.
High-Performance Analog (HPA) revenue was $133m (down 14.2% on $155m last quarter and 37% on $211m a year ago). Relative strength in power devices and defense markets was offset by weakness in consumer-facing power management markets and inventory digestion at infrastructure OEMs.
Connectivity & Sensors Group (CSG) revenue was $82m (down 15.5% on $97m last quarter and 54% on $179m a year ago). Relative stability in automotive was offset by continued inventory draw-downs and weak end-market demand for Wi-Fi-enabled products and cellular IoT.
“We held factory production at characteristically low volumes, which created under-utilization impacts that negatively affected margins,” says chief financial officer Grant Brown. “Charges related to low factory utilization continued to weigh on margins on a year-over-year basis.”
Impacted by about 1000 basis points due to lower factory utilization and 80-100 basis points due to inflation across direct costs, non-GAAP gross margin has hence fallen from 52% a year ago to 41.3%. Nevertheless, this was up slightly from 40.9% last quarter after a modest increase in factory utilization. Full-year gross margin has fallen from 52.4% for 2022 to 46.3% for 2023.
Operating expenses were $227.4m, up from $205.7m last quarter, given the timing of seasonal employee-related expenses such as payroll taxes, the timing of vacation accruals and other items driven principally by R&D as Qorvo supports its customers and invests in future growth opportunities.
Net income has fallen further, from $339.6m ($3.12 per diluted share) a year ago and $76.5m ($0.75 per diluted share) last quarter to $25.7m ($0.26 per diluted share, but above the forecasted $0.10–0.15).
Operating cash flow has fallen to $65.4m. Capital expenditure was steady at $34.1m. Free cash flow hence fell to $31.3m. During the quarter, Qorvo repurchased $150m worth of shares. Overall, cash and equivalents therefore fell from $919m to $810m. Qorvo has about $2bn of debt outstanding with no near-term maturities.
“We are seeing increasing strength in customer design activity across our businesses, and we expect improved financial performance supported by content gains in large customer programs,” says Bruggeworth.
Strategic highlights of the quarter are listed as follows:
- In High-Performance Analog, Qorvo continues to see broad-based multi-year design win activity (spanning applications in aerospace, battery management, defense radar, electric vehicles and renewable energy systems) that it expects to contribute to long-term growth.
Qorvo was selected by an aerospace industry leader to supply cell-to-satellite solutions that combine aerospace, base-station and mobile technologies technologies including multiple RF components and BAW-based multiplexers. These solutions enabled low Earth orbit (LEO)-based space-to-terrestrial connectivity, helping to provide cellular coverage in the hardest-to-reach geographies.
Qorvo achieved a milestone by delivering its first prototype RF multi-chip module (MCM-1) to BAE Systems under the SHIP contract with the US Department of Defense. Qorvo is leveraging its production capabilities in its Richardson, Texas facility to advance heterogeneous packaging integration, enabling significant savings in power, size, weight and cost.
In the power device business, Qorvo booked a multi-million-dollar follow-on silicon carbide inverter order for residential and industrial solar applications. This win complements the firm’s ongoing business in automotive charging applications and data centers. - In the Connectivity and Sensors Group, design activity was strong across applications including smart home, precision location, indoor navigation, automotive connectivity, automotive smart interiors and enhanced human-machine interfaces (wearables).
Qorvo was selected to supply ultra-wideband (UWB) solutions across multiple verticals, including a next-generation smartwatch supporting secure car access, Wi-Fi access points enabling indoor navigation, and an additional 2024 flagship Android smartphone.
In automotive connectivity, Qorvo has collaborated with automotive OEMs and leading third parties to advance smart antennas and next-generation shark-fin architectures, and expanded design engagements with automotive tier-1s regarding 5G network access devices.
In sensors, Qorvo has secured a design win to supply force-sensing touch sensors leveraging the ultra-sensitivity of Qorvo’s MEMS-based sensors to enable a new industrial design in a premium true wireless headset for a leading European OEM.
In Wi-Fi, Qorvo secured its first Wi-Fi 7 BAW filter design win and expanded sampling of its Wi-Fi solutions, enabling full coverage of 2.4GHz, 5GHz and 6GHz bands for smartphones and consumer and enterprise access points.
- In Advanced Cellular, design activity during the quarter continued to be favorable across all leading smartphone OEMs, increasing Qorvo’s content in the highest-volume flagship phones.
Qorvo supported the ramp of a Korean-based smartphone OEM’s flagship smartphone with broad-based content, including low-band (LB), mid-high-band (MHB) and ultra-high-band (UHB) power amplifier duplexers (PADs) as well as secondary transmit, tuning and Wi-Fi. “We are seeing expanding opportunities as they migrate their mass-market portfolio to integrated 5G solutions,” says Bruggeworth.
Across the Android ecosystem, Qorvo was awarded broad-based design wins in support of upcoming flagship, mid-tier and mass-market 5G devices at the top five Android smartphone OEMs.
To support new designs, Qorvo shipped the first samples of its newest mid-high-band PAD to an Android OEM, addressing this customer’s most challenging performance and size requirements for smartphones launching in 2024. This new architecture is reckoned to be the industry’s most highly integrated radio-frequency front-end (RFFE) placement, combining main-path and diversity receive content for the mid and high bands. This product leverages the reduced size and enhanced performance of Qorvo’s newest BAW and SAW filters to integrate nearly twice the BAW filter content in a smaller footprint than existing main-path-only, mid-high-band pad architectures.
“Despite ongoing weakness in end-markets, our strong design-win activity on large customer programs supports our view for sequential revenue growth in June and robust sequential revenue growth in September,” says Brown. “We anticipate continued progress reducing Android channel inventory in the coming quarters, with a return to historical norms by calendar year-end.” Qorvo hence expects total Android revenue to grow sequentially in June.
For fiscal first-quarter 2024 (to end-June 2023), Qorvo expects revenue of $620–660m, gross margin of 41.5%, and diluted earnings per share of $0.15. Operating expenses should be up about $10m sequentially due to investments in multi-year customer programs, investments in core systems and other productivity initiatives, and the return of incentive compensation based on expectations for improved financial performance.
“Inventory balance will increase in the June quarter as we support a seasonal ramp at our largest customer,” says Brown. “Our expectations for this quarter are for channel inventories to decline again in the double digits. Later this calendar year, we expect Android channel inventories will normalize. Outside of the Android ecosystem, there are smaller pockets of channel inventory elsewhere in our business that may take longer to digest.”
For fiscal Q2/2024 (to end-September 2023), Qorvo expects revenue to grow about 50% sequentially, driven by strong content gains and a large seasonal ramp. Gross margin should also rise by about 400 basis points as product mix begins to favor some newer products for Qorvo’s largest customers that are less burdened by higher unit costs associated with under-utilization.
In fiscal Q3/2024 (to end-December 2023), revenue is expected to be roughly flat sequentially. Gross margin should fall by 100–150 basis points as utilization begins to ramp down following that large seasonal ramp and product mix begins to modestly shift to some of that higher-cost inventory.
“In the March [2005] quarter, our fiscal Q4/2024, we expect Android to be a higher percent of our mix, but decline less than might be historic seasonality due to a clean channel and returning to shipping to end-demand,” says Brown. However, gross margin will be down by 200–300 basis points quarter-on-quarter as mix reflects that higher-cost inventory.
For full-year fiscal 2024, Qorvo expects revenue to be up on fiscal 2023 and to benefit from strong dollar content growth at its largest customers. Gross margin should be about 44% (down from fiscal 2023’s 46.3%). “Although there is no change to our view of returning to 50% in the gross margin line, it’s unlikely in 2024… It’s dominated by under-utilization,” concludes Brown.
Qorvo’s December quarter exceeds the mid-point of guidance for revenue, gross margin and EPS
