Good day, ladies and gentlemen, and welcome to the Maxim Integrated Fourth Quarter of Fiscal 2014 Conference Call. [Operator Instructions] As a reminder, today's program is being recorded. I would now like to introduce your host for today's program, Kathy Ta, Managing Director, Investor Relations. Please go ahead, Kathy.

Thank you, Jonathan, and welcome, everyone, to Maxim Integrated's Fiscal Fourth Quarter 2014 Earnings Conference Call. With me on the call today are Chief Executive Officer, Tunc Doluca; and Chief Financial Officer, Bruce Kiddoo. During today's call, we will be making some forward-looking statements. In light of the Private Securities Litigation Reform Act, I'd like to remind you that these statements must be considered in conjunction with the cautionary warnings that appear in our SEC filings. Investors are cautioned that all forward-looking statements in this call involve risks and uncertainty and that future events may differ materially from the statements made. For additional information, please refer to the company's Securities and Exchange Commission filings, which are posted on our website or available from the company without charge. Now I'll turn the call over to Bruce.

Thanks, Kathy. I will review Maxim's fourth quarter financial results. Revenue for the fourth quarter was $642 million, up 6% from the third quarter. Our revenue mix by major market in Q4 was approximately 35% from consumer; 27%, industrial; 23%, communications and data center; 10%, automotive; and 5%, computing. In the quarter, our consumer business was roughly flat, below our expectations, due to recent weakness in smartphones and tablets, primarily at our largest customer. Our industrial business was up strongly, better than expected, driven by growth in our core industrial end market. Our communication and data center business was up with continued strength due to the China 4G LTE rollout, and improved demand from several OEMs off a weak March quarter. Our automotive business was up strongly, as expected, with new design win ramps across multiple applications and customers. Finally, our computing business was up, driven by a rebound in our notebook, desktop and peripherals businesses. Maxim's gross margin, excluding special items, was 60.4%, below expectations, but up from 60.1% in the prior quarter. Gross margin benefited from higher fab utilization, which was offset by higher inventory reserves. Reserves taken in the quarter were primarily to address older generation smartphone and tablet products. We are implementing additional controls to manage excess inventory while continuing to ensure high levels of delivery performance. Special items in Q4 gross margin included intangible asset amortization from acquisitions. Operating expenses, excluding special items, were $227 million, up from $222 million in the prior quarter. Operating expenses increased at less than half the rate of revenue growth in Q4, in line with our model, as we continue to tightly control spending. Special items in Q4 operating expenses included acquisition-related and restructuring charges. Q4 GAAP operating income, excluding special items, was $161 million, or 25% of revenue,…

Thank you, Bruce, and good afternoon to everyone on the call. We appreciate your interest in Maxim Integrated, and thank you for joining us today. I would like to open my commenting on trends we are seeing with our Mobility customers, as well as the broader analog market and Maxim business implications of these trends. In Mobility, consumers are adopting the latest generation products at a brisk rate, while the previous generations of products ramp down rapidly. Forecasting this transition was challenging. In the June quarter, the rapid decline of the older generation tablets and smartphones at our largest customer affected our business in 2 ways: first, we saw lower-than-expected revenue from older generation Mobility products, with particular weakness in tablet revenue. The replacement cycle for tablets is proving to be longer than for smartphones. And second, our margins were impacted, due to the need to take an inventory charge for these older generation products. Now aside from the softness in Mobility products, the June quarter reflected an -- the overall strength of Maxim's product portfolio. We grew revenue in every one of our major markets outside of consumer, and we achieved record revenue. The strong performance of our portfolio is consistent with our system integration strategy. Our customers in automotive, industrial, communications and data center markets are looking for simpler designs, lower power, higher performance and more space efficiency in their products. In addition, as we enter the second half of the calendar year, we see that the consumer market also requires an increasing system level innovation. We see new content opportunities in new smartphone platforms, tablets and a growing category of wearables. With that commentary as a backdrop, let me next provide some color on our major markets. I will start with consumer. We expect our September quarter…

Thanks, Tunc. That concludes our prepared remarks, and we would now welcome your questions. [Operator Instructions] Jonathan, please begin polling for questions.

[Operator Instructions] Our first question comes from the line of Jim Covello from Goldman Sachs.

You referenced weakness in both tablet and smartphones. Am I right in reading it that the tablet weakness was more about the June quarter miss and the phone weakness is more about the September quarter weakness, is that right?

Absolutely. I think in June, it was probably both tablets and older smartphones. And I think when we're talking about September, it is actually across all of the products. But certainly, the sort of the, kind of the leading-edge smartphone is the largest contributor.

And then, I mean, it feels a little bit like Groundhog Day with last year. Hopefully, it won't be as deep and last as long, because it seems like you guys are taking actions pretty quickly. And I understood the comments about -- it was 33%, now it's 20%, 20%. It's going to be down to mid-teens. I mean, at what point do you guys consider it not worth it re-ramping with this business? I mean, we're going to go down the path again of next year, new phone cycle lunch and leaving ourselves exposed to this kind of dynamic again. I mean, is there any thought within the organization from a strategic perspective to stop pursuing this kind of business?

So I mean, if we look at it, your numbers are right. I mean, we had a -- if you look at last year, we had a pretty deep revenue drop from our largest customer. As you pointed out, it is less this year than it was last year. Well, we have to accept the fact that this business is cyclical. There will be new platforms or new products at our customers that get announced and they're going to have -- we have ups and downs, whether it were our largest customer, or other customers that are in the Mobility market. But we are committed to this market. We can see that it's profitable for us. The customers really need the types of products that we make. We're able to win these sockets, not only at one customer, but at multiple customers. And all of that leads us to believe that this is a good market for us to be in with huge growth potential. So what we need to get used to is the fact that there are ups and downs and to make the adjustments necessary so that we don't get into inventory situations, of which we got into a little bit last quarter. So other than that, this is a good market, whether we're in the power side, on the sensor side, on the audio side or on the MEMS side. So we're going to pursue it, just like we said at our Investor Day.

Our next question comes from the line of John Pitzer from Crédit Suisse. John William Pitzer - Crédit Suisse AG, Research Division: I apologize if you addressed this in your prepared comments, I've been jumping across 3 or 4 different calls. But can you help me quantify your handset exposure today between flagship, mid-range, low-end? And then, kind of help me understand for the shortfall in the September quarter, how each of those buckets kind of contributed. And I guess -- that was my first question and then I have a follow-up, sorry.

Sure. This is Bruce. I'll take that. Well, certainly, the bulk of our business is still in the high-end, and I think we've said, probably 10% to 20% of our business is in the kind of the mid-range category, from a smartphone point of view. But still, we're primarily in the high-end. And when we look at the kind of where we saw that -- the shortfall, it clearly was in, as we've said, in the June quarter. It was due to the older products, both the kind of the older smartphones and the tablets. We still see some weakness from those in the September quarter. But this is really the kind of the demand for their flagship product, it's certainly weaker than expected. And I think it's worth pointing out that this is something which has kind of weakened as just in the kind of the last couple of weeks as well. So it is an area that we've looked at. As Tunc said, it's something I think we'll get better at managing the inventory side on. And as we continue to kind of sell different technologies into different platforms, have different customers, we look to -- try to smooth out these ups and downs. But I absolutely agree with Tunc's question, there's going to be product life cycle fluctuations in this business going forward. Going forward, my final point is, just again to reiterate what Tunc said, this is a profitable business for us. This isn't a question where maybe some of our other peers maybe exited businesses because they were losing money, that is certainly -- has not been the case for Maxim. And because of what we provide, the innovation and the benefits to our customer, it is a win-win. John William Pitzer - Crédit Suisse AG, Research Division: And then Tunc, as my follow-up, given that your strategy is to focus more on the flagship, there's a pretty strong evidence that suggests that maybe that's no longer a strong unit growth market. And so I'm kind of curious, as you look out over the next several years, what kind of content growth do you think you can achieve in that flagship bucket? And kind of what are the key applications we should be thinking about driving that content growth?

So just to make sure that we're clear about our strategy, we do -- obviously, our leading-edge products go into the high-end smartphone space. And most of our revenue there comes from our power SoCs or power management products and also some comes from our sensor products, our optical sensor products. So our strategy, in general, is at the high-end, get more design wins with some of our other technologies, and those are audio and MEMS. And also, be able to add other sensors that are new, that are not even out there, functions that we don't have in current smartphones. So kind of broaden the technology base, that's one angle we're going with on the high-end. And on the mid-range, we see that much of the IT and technology we develop for the high-end phones can actually be repackaged up and wins design, and we see this in Chinese manufacturers, where we can win designs for our power management products, and we're getting revenues from that now. And we also see that in the future, some of these functions that are in high-end phones are going to migrate down to the mid-range phones as well. So that's another growth opportunity for us. So it's really both diversifying on the technology side, but also taking that technology and repurposing it into the mid-range phones, that's part of our growth. And as we've said before, the other piece of the strategy is to get more wins at other customers, not just remain at our largest customer, but diversify that revenue base. And we're definitely making progress on that front as well. So it's really mid-range and high-end, diversify the customers and get more technology or more dollar content per phone.

Our next question comes from the line of Tore Svanberg from Stifel. Tore Svanberg - Stifel, Nicolaus & Company, Incorporated, Research Division: So my first question is on the industrial end market. It had a strong quarter here in June, but it looks like you're expecting a little bit of a slowdown in September. Now is that just simply because of seasonality? Or is there anything else going on there, maybe distributors getting a little bit concerned about inventories?

It's -- we really see it as seasonality. We really have not seen much of a signal of concern about inventory levels. We did quote the days of inventory, and it's really getting back to where, in our opinion, it should be, frankly. So I don't think we're seeing a growth of inventory in the channel in the industrial front. So for the core industrial business, it's basically seasonality. The first half has historically been stronger than the second half of the year. And that's offset a bit by our vertical business, which really doesn't have that seasonality, it's usually when our customers win their tenders and so on. So it's the combination of those 2 things. We don't believe it has to do with inventory build. Tore Svanberg - Stifel, Nicolaus & Company, Incorporated, Research Division: Very well. And as my follow-up, obviously, the flagship business and model is going to be down quite a bit in September quarter. But I think you also said there will be some offset from a new platform. I was hoping you could elaborate a little bit on that. Is that a new platform with the same customer? Or is there something else going on there?

What's in my prepared remarks, what I was really talking about is a new platform at our largest customer that's going to begin to ramp. And in that platform, we -- if that platform goes to production as planned, we expect to have more content than last year's platform, so that's good news for us. But I was talking about that, it was not another customer or another application.

Our next question comes from the line of Blayne Curtis from Barclays.

If I could just follow right up on that, because I thought you made comments about a pushout in a new category, and that being -- you have talked in the past about adding to your diversity of your customer base this year. Maybe you could just elaborate on that, what you were expecting and what you're seeing now.

All right. Well, this is -- I did mention in my prepared remarks of a new consumer category. It's one that we have been working on for a while now. As I said, we do expect some revenues from it to add by the end of the year. And that's pretty much where we need to leave it at in terms of discussions.

Okay. Maybe a similar question, when you look -- I hate to bring up last year. You took the reset in June, September. It helps offset some seasonality. That customer typically has a down December. Could you see a similar trend as last year? You talked about a new platform at that customer, that should help offset. Just any perspective as you look into December, as you ramp any new content at new customers plus, just seasonality with your lead customer?

Yes, Blayne, this is Bruce. I'll take that. Certainly, when we talk about our largest customer, I think we all know they have their normal year-end inventory adjustment. Given our sort of limited visibility into demand and channel inventory, it's hard for us to predict if it's going to be any different this year than in prior years. But we generally assume they're going to do some level of inventory correction. As you said, that same customer is ramping a new platform. That ramp starts this quarter. And then, really in the December quarter, it kind of depends on how well that product does out in the marketplace, but that is -- can be an opportunity for us. But in addition, I think as you referred to, we do expect revenue from our other Mobility customers. It should be up meaningfully in that quarter. We'd still have to wait and see how everything goes, but as kind of -- as we look at it today, I think we feel good about the progress we've been making.

Our next question comes from the line of C.J. Muse from ISI Group.

This is Ada calling in for C.J. Could you maybe shift gears a little bit and talk about the China LTE build-out, kind of how long do you see that continuing and where do you see upside after that cycle's complete?

So essentially, the China LTE build-out, obviously, has been good for us and many other semiconductor suppliers. We -- but the thing -- the fact is that it's been rather lumpy in the past, and we don't expect that to really change too much. That makes it kind of difficult to predict the future. As I said, we did grow our revenues very healthily in the past year. And looking forward, I think it's pretty hard for us to really predict. But it's not a huge portion of our business, and that's probably the most important note I need to make, which makes us really not a good indicator of how that market's going to do in general. But I think that, from where we're looking at it, it looks like it's going to continue. But I think there are other chip suppliers that are probably a better indication of where that market is going. And as I said, it's not that big of a portion of our revenues.

And for my follow-up, could you provide some additional color on the data center side of things? Maybe an update on the progress of integrating and proliferating the Volterra products that you now have.

Yes, sure. So as you know, we've now completely moved Volterra into our business. We really do like the technology that we've seen. We've -- just to give you -- I'll use this opportunity to give you an update on that, we did see some headwinds, as everybody knows, in the OEM suppliers that everybody's familiar with, that are mostly in the U.S. However, we do see great opportunities for this technology in cloud data center applications that are not the OEM customers. And we definitely have found that because of the acquisition of Volterra by Maxim, by a company that has a much bigger presence in the market, many doors have now opened to us in the companies that are -- the cloud, let's call it the cloud companies, and we're seeing tremendous opportunity for us to be able to grow the comm and data center business, both from the Volterra side and from the optical side. So from that viewpoint, we've seen it being very beneficial. We also found -- we were kind of guessing at this, but we weren't sure, but we also found that the technology and the capabilities of that team are helping us out on the Mobility side as well. Some of the technologies of high current delivery of low voltages, it turns out it's getting more and more interesting and important, even in tablet and smartphones. So what we're seeing is -- just to summarize, we are seeing the headwinds from the traditional server customers that we had. I think that went through like a minimum, probably last quarter and recovered in the June quarter, somewhat. And -- but we're seeing, and a lot more excited about new opportunities we're seeing with a set of customers as well, that are either in the communications space, classical communication companies, or in the cloud space. And those revenues obviously will not contribute right away, but as we said, they will start picking up in the coming years. Hope that was helpful.

Our next question comes from the line of Mike McConnell from Pacific Crest Securities.

Just wanted to follow up on Blayne's question. So do you think your mobile revenue will bottom in the September quarter?

Yes, that's going to be a little bit difficult to predict but what we can tell you is what our -- what the puts and takes are. And from our viewpoint, I think there's -- if all the programs occurred in the timing that we expect it to occur, we think that we should get better results in Mobility. But I think I've put enough words of caution in there about timing and so on at customers.

Okay. And then regarding utilization rates, I believe you had said previously you're in the mid-70s. Where do you think you will be in the September quarter?

Yes, Mike. This is Bruce. So yes, we did increase from 64% in the March quarter to about 75% in the June quarter. So we did see that increase we were expecting. I think for this quarter, given the lower revenue, we're probably going to dip down to around 70% from an internal fab utilization point of view. Again, that's something we can -- we're always actively managing, our split between internal and external. But right now, with the lower revenue, we're looking at for a small drop in that utilization.

Our next question comes from the line of Ambrish Srivastava from BMO.

I had a question on the target, and Bruce, I apologize if you addressed it already. At the Analyst Day, you said 30% op margin, it was a completely different run rate versus I'm sure what you're expecting, because you alluded to the fact that things changed over the last weeks, few weeks. So what's the right way to think about it? Is this going to be top line driven? And you expect a big ramp back half of the year? And if not, then is it going to be more on the OpEx side? And then I have a follow-up, as well.

Sure. I mean, I think as I said in my prepared remarks, we're still committed to that 30% operating margin in Q4. I think, again, as we said at Investor, that's assuming sort of the industry grows as expected. But I think it's going to come from both. I mean, but the current revenue weakness that we're looking at in the September quarter is near term, and it's sort of related to kind of products that we're selling currently. And it's too early to tell if this will impact our Q4 revenue. Certainly, as we've kind of talked about, our revenue opportunities outside our leading customer are all on track. I'm confident we're going to fix gross margin, and that's going to improve as we get inventory controls better. And as you can see, we're going to continue to tightly control OpEx. So the messaging that we gave during Investor Day, the goals around that from a financial model, that's something we're still aggressively working towards and are committed to.

Okay. And then my follow-up is for you, Tunc. I and I'm sure everybody along with me who's listening, we regard you guys as very good stewards of capital, shareholder capital. This consumer business, tablets are slowing down. It looks like it's -- now it's a secular trend of tablets slowing down. Handsets, it's just hard for anybody to pick the next winner. So the reason that you intend to stay vested in this segment is because you think, if I understand it correctly, you think that there is -- it has good profit margins for you and it can drive growth. But why not take that and invest in -- you have really great franchises. Your automotive business has grown, as you showed us at the Analyst Day, it's a much bigger percent of your business. So why not take investments away from here and put them in areas where you're building strong and defensible franchises?

Well, I mean, first of all, in all of the areas that we said we're investing in, we believe that we're investing in at the appropriate levels, whether it's automotive or industrial or communications and data center. And Mobility is one of them. So the way I really view where we put our money is, and we kind of look at what returns do we expect in each one of these segments and what's the risk profile. We -- when we look at the Mobility market, it is about 30% of the analog market, so it's not something you can ignore. And when we look at it, we don't really look at that we have to invest in Mobility, but what are the product lines inside of Mobility that are the ones that have the best returns for us. So that's the way we look at it. And what we see in Mobility is still a lot of growth opportunity. And there's a lot of growth opportunity even if the smartphone segment does not grow anymore. I mean, our share is still pretty small in the smartphone market, which means that we can grow it in a case where the growth is not huge. But the decisions are made based on each technology and product line. What is the growth opportunity for that? How profitable is it? How differentiated can we make our products? So we look at those, and depending on that, we move them within each one of these segments. Now Mobility is not just smartphones. I mean, we are investing in things that you mentioned. It might be slowing down, but it's still a good growth market in tablets. There's a whole new category coming up, which is wearables. Where that's going to exactly go, nobody knows right now. But I believe that there's some fundamental value that can be delivered to consumers, and I think it's a market where we actually have the technology and capabilities to make a difference. So that's a piece of Mobility. So in each case, we're looking at what returns can we get, what's the risk profile and what's the growth profile. Now in automotive, we've been investing in for many years. Almost 10 years ago was when we decided to get into it. So it takes -- it's a great franchise, but it takes a long time to build as well. So we really need to make sure that we're investing our portfolio of R&D into areas that have got all of these, that give us a good solid base, which we're doing with our industrial, comms and automotive, but also we have growth opportunities with our technology and our capabilities, where we can differentiate inside of Mobility. So that's why it's a portfolio that we manage.

Our next question comes from the line of Ian Ing from MKM Partners.

So industrial markets, I understand September should be down on European seasonality. But how sustainable is the recent industrial outperformance? I know around 2011, you had this distribution sales training increases, they created a lot of new design wins that have ramped over the years. How are you going to keep the momentum going here?

So it's good that you remembered the, all the stuff we talked about back then. I mean, we do have -- we do obviously intend to continue to grow this business and we have taken some actions to make sure that occurs. We actually have a business unit that's actually dedicated, they don't design any products or have R&D, but it's a BU dedicated to grow the, what we call the small- and medium-sized customer business for the company, and most of that is industrial. This dedicated business unit really works jointly with our distribution sales force. And this model really gives us the ability to sell more of what we already got in the company. So really to extend our reach into the small and medium-sized businesses and market our products more aggressively to get more design wins. And we stopped reporting about it, but the number of new customers that we add, we do keep measuring it and it keeps going up every quarter. And our design registration numbers, those are also going up every quarter. So we're not just relying on what we did 2 or 3 years ago, but are still pushing it in innovative ways so that we can actually leverage our very broad product line and get it in front of more and more customers, more and more small customers around the world. So that's a very intense and focused activity in the company.

And then, my follow-up. Your Sensor Fusion products for wearables, you talk about wearables, but you don't talk about the Internet of Things. Are you exposed to Internet of Things but you're not talking about it? Or you just chose not to repurpose your building blocks here, like sensors and microcontrollers?

We actually have not talked about it because it's a very broad subject. So we view Internet of Things that are any type of electronic instrumentation or gadgets that are connected. And typically, those are gadgets that are measuring something, reporting something or controlling something. And we are in the middle of it. And we have many products that go into what I would call Internet of Things. But I find that everybody's got a different definition of what Internet of Things is. Definitely, any product that we make that's wearable or any sensor that's connected through either Bluetooth or Wi-Fi is Internet of Things. And all of these products have in them what we make. I mean, that we have -- it can either use our sensors, we find customers in that space who are using some of our advanced microcontroller products, which have security, analog metrology, a very low-power micro in them. So we're seeing design pull for those. So we're basically in it. But in my mind, it's really not clearly defined what it is. It's a pretty wide swath of products that go out there. So we definitely have products that are going there. And definitely, wearables are -- I guess, you could call them, some of -- in a group of Internet of Things, even though they mostly interface with humans. So we're in it and we've got the technologies to be able to win in that market. And our biggest investment, I would say, is on the medical side of that market.

Our next question comes from the line of Mark Lipacis from Jefferies.

Tunc, when you talked about the MEMS product as being something you're looking forward to in the wearables market, could you drill down on that a little bit? On MEMS, where are we in the development cycle? Are you shipping into production systems right now? And on the wearables side, which of the components you think in the wearables market are you most differentiated? And when do you think that market helps move the needle?

Okay. So there's, I guess there's 2 parts of that question. On the MEMS side, let me give you some -- I'll give you an update on that. So we do -- as you know, we did announce our first generation products. We did make some improvements in those, and got another generation of product now. Basically, the biggest thing we had to do was to reduce the amount of power consumption the product has, so we've achieved that. We do have the product that's got the best accuracy overall. But power usage turned out to be more important. We are shipping -- and we have a design win in a small volume smartphone. We're going to begin to start shipping that pretty soon, but that will be pretty modest. But it's a start. Essentially, we have to prove ourselves. We know we have made the technology work, but until you're in production, the rubber hasn't met the road. So the second generation 6-degrees-of-freedom product, we're engaged with multiple other customers, other than the one that I just mentioned. And we're seeing good responses to the technology that we're showing them. So we're -- we've seen some progress and I'm happy to see that we are seeing that progress. Now on your other question on wearables, where is it that we can add value. Clearly, we know we can add value on the power management side. We know we can add value on all the functions related to power management: charging and regulation and fuel gauging, functions like that. We know we can add value on the sensor side, and we have products and technologies of various kinds, actually, that can be used in wearables, whether it's the sensor itself or whether it is the signal processing that's required for the sensor. So, and we have touch, so we're capable. We've got programs going in each one of these areas. But I feel like the killer product in wearables is not really out there yet. And when that happens, I think there will be -- my belief is that there will be an explosion of demand for these types of parts.

Our next question comes from the line of Doug Freedman from RBC.

Tunc, can you maybe spend a little time talking about some of the successes or what you're seeing in driving your highly integrated solutions outside of handsets? And what type of content growth that, that could be driving for you?

So outside of handsets, we're -- let me take it market-by-market, that's probably easiest to categorize here. So clearly, the high-integration products are very valuable in applications where there's either a power constraint or a size constraint in the application, or we can deliver better functionality or performance by putting together a complete solution for the customer. And if you look at -- in the medical space, for example, clearly, I gave that example earlier, where our new generation advanced microcontroller products, where we got a micro, we can put on a very accurate, precise high-quality analog front end to make measurements. Combine that with security features so we can lock down any data in a medical application, and really combine that with a micro that's ultralow power, which we've been able to achieve. That's a really good example of a high-integration product that can provide great value to the customer. And other examples that we can think about are in the comms market. We have some really advanced RF data converters, these are mostly D2A converters and they have, the old chips that have combinations of not only a very high-speed, gigahertz-speed DAC, but in combination with some digital upconverter technology that we also deliver to the customer, is another example where we've been able to differentiate and really make a difference for the customer's end product. We have examples in industrial for financial terminals, for example, those products are cases where you've got to combine security, you've got to combine the tamper-detection circuitry and many other functions on a single chip. And really give the customer an entire solution, that's been what's winning designs for us, because the customer knows that the product we provide, not only do, does all the functions, but it also is completely certified by Euro, MasterCard and Visa, so it's an easy way for them to get to their end market. So those are just a few examples I picked. Another one is in smart meters. Again, a core microcontroller, which is really the core of the system. And around it, we combine it with metrology to measure energy consumption. Again, we combine it with security features, and it really makes the best product out there, if you think about smart meters that are getting installed all over the world. So these are just a few examples, and it's a pretty long list. But I -- just for the sake of time, I'm going to just end it there.

All right. If I could -- you mentioned touch in some of your earlier comments and in the answer to the last question. Touch has been an area where it's been on again, off again with you guys. Where do you think that can go? And do you expect any material revenues? Is this something we should be paying attention to now?

Well, the touch space is pretty competitive. We believe we have a different and a compelling solution. But I think the incumbents usually have an advantage because they're incumbents. We do have some design wins and some revenue coming from it, but it's still -- if you look at the rank order of the suppliers in that space, we're not in the top 5, and it's -- I don't think that's really going to change materially. However, we are finding opportunities to use that technology to combine it with some of our other products and that could be really useful in a very space-constrained, like a wearable-type product. So we see that as an opportunity. But I don't want to mislead, there's -- it's not like we have any design wins in that space either. But I think there will be modest revenues from that and it's really not going to make an appreciable difference in the next year.

Our next question comes from the line of Craig Hettenbach from Morgan Stanley.

Given some of the issues you've seen in the Mobility segment, are you rethinking at all just some of the long-term growth opportunities that you see in that market?

Well, we think about it all the time. It's not -- we think about it because it's part of our planning for the future, and we look at what the growth opportunities are overall in the market, and we look at what the growth opportunities are for each product line in terms of return on investment. So it is a market where the analog content is projected to grow at about 8% or 9% by market research analysts, which is very healthy growth, looking at the growth rate we've seen in analog for a long time. But we really look at it product line at a time. I mean, inside of Mobility, which are the product lines where we can deliver value and where customers are seeking that value from us. And we're making those decisions constantly, not just based on reaction to some overbuild of some inventory and weakness in demand in some old generation products. So it's not something that -- it's not really a knee-jerk reaction, it's something that we do constantly.

Okay. As a follow-up for Bruce, last summer, when you saw some reset, you opportunistically stepped up the buyback, how do you think about kind of the balance sheet today and buybacks at this time?

Sure. I mean, I think, obviously we're committed to that return of capital. You saw the increase in our dividend. We increased that by 8%. In addition, we do have -- we're always in the market and looking to buy back our stock. To the extent that there is any pullback near term, we will certainly -- we have a matrix that drives higher buybacks at lower stock prices. So we'll absolutely take advantage of any near-term pullback.

Our next question comes from the line of Vernon Essi from Needham & Company. Vernon P. Essi - Needham & Company, LLC, Research Division: Just sort of going back to, I guess, the sensor and MEMS discussion, and if you could give us any, I guess, understanding of the size of that revenue footprint versus, say, the core analog and power functionality you're bringing to the phone over time? I'm just trying to understand, over the next couple of years, how much of a scope creep you think you're going to have in that dollar content versus where you're at today?

I -- okay, so in general, we're -- we've talked about market growth rates and the SAMs that we're really going after. We've not broken down what that means in terms of individual product line growth rates, and I don't think we really want to do that at this time either. But directionally, what we see when we looked at our plans is that currently -- and we had shown that -- I'm trying to visualize the slides that Chae showed. But we're showing that today's revenues were about 3/4 from power, is what I remember from the slide, and 1/4 was from sensors. And going forward, what we showed as in the next few years, we expect that to be maybe about 50/50 between sensors and power. And I'm doing that from memory, and we can look back at the slides and make sure that was right. But that's pretty much what we see going forward in terms of the Mobility content. Vernon P. Essi - Needham & Company, LLC, Research Division: Okay. And then, just to follow on that point, Tunc, how do you feel about the margin structure of the sensor side of the business versus the margins that you've had on power? There seems to be this prevailing thought process that sensors could be a lower margin opportunity over time. How do you feel about that over the next couple of years?

Well, it really depends on the type of sensor. We expect the margins to be similar to what we've seen in the Mobility market when taken overall. But I think, from a margin standpoint, I've no doubt that it would be more challenging on the MEMS side, and because that's a more mature market. But when we look at some of the newest generation products we bring out that have functionality that customers have not seen before, on those ones, we're able to maintain the margins that we need. So it's going to be a mix, and it's really determined by how differentiated your product is. I don't think that's a surprise to anybody. So I think the combination of those 2, probably going to end up approximately where we need it to be in the Mobility space.

Our next question comes from the line of Steven Chin from UBS.

Tunc, your most recent -- maybe if you can help -- in terms of the September quarter, what's the typical linearity for the industrial and the comms businesses? I understand that they had both really strong performances in June. I was wondering if there's any typical progression and if there's any opportunity for potentially a bit more demand later in the quarter depending on the state of inventories and general macro trends later in the quarter?

Yes, I mean, generally speaking, linearity throughout the quarter for us, we're relatively linear, right? We don't have any type of big back end. And so from that point of view, as you know, we enter a quarter about 60% cover through backlog. And generally, that kind of shifts evenly throughout the quarter. The only comment, potentially, is I think we all know, in like core industrial business, right, to the extent that Europe business slows down in August and then we all, historically, wait for after Labor Day and see what the POs look like to see if there's going to be any uptick in that. But I think over time, that's become less meaningful as MRP systems have gotten more sophisticated. So I don't think there's any big takeaway on the linearity within the quarter.

Got it. And then just a quick follow-up on the sort of data center power management business, in terms of Volterra and that product line. Can you remind us, with the upcoming Intel Grantley server cycle, what kind of opportunity that represents for the Volterra business?

Yes, so on the Grantley cycle, the design wins at Volterra, and we knew this going in, were slightly less than they were in the previous generation. So that's really not a surprise for us. But as I said in a previous question that got asked, we see a huge opportunity for that technology that we found in -- not in the traditional servers, but servers that are custom-designed by cloud companies. And in general, what we find is that the CPU still might be the same, it still might be an Intel CPU, but the -- some of the architectures are different, so it's not as standardized as it is. And as all of you know, if something is standardized, there's a lot of pressure on price. But what we're finding is that many of the cloud servers, because they have to pay for the cost of running this equipment, they're a lot more -- they're looking for a lot more innovation, and that's where we're seeing our opportunities, frankly. So we're more focused, not only on what the processor companies do, but more on what are the special requirements of the cloud companies. That's the focus of the company right now.

Our final question comes from the line of Steve Smigie from Raymond James. Jonathan Steven Smigie - Raymond James & Associates, Inc., Research Division: I was just curious on the Mobility weakness there, is it just a unit issue? Because it seems like you had gained dollar content on the latest generation at your largest customer. So I just was trying to clarify it's just a unit issue there versus really a dollar content change versus your original expectations.

Yes, it is a unit issue. I mean, we had said before that our dollar content has actually gone up, and it really is the number of phones that are being sold and how the inventory in the channel is playing towards that. So if we really -- when we really look at our numbers, and we also -- keep in mind that we don't really know how many phones get turned on by consumers, but there are market reports that we look at, and if you add up what the market reports are saying, it sounds like this quarter, we'll be shipping less than what the end consumer sale of smartphones are in flagship phones. So it really is a unit issue, it's not a dollar content issue. Jonathan Steven Smigie - Raymond James & Associates, Inc., Research Division: Okay. And then you've been trying to diversify your customer base. I think you mentioned you gained at some other major OEMs, not counting the Chinese. I'm just curious how you felt you did in terms of the dollar content gains at the other Tier 1 OEMs relative to what you were hoping to get?

Yes, Steve. This is Bruce. I don't think we're going to comment on something that's -- dollar content that's not yet out there. Except to say that we do think, overall, these businesses should be meaningful for us. Jonathan Steven Smigie - Raymond James & Associates, Inc., Research Division: Okay. And last question, I just -- I think on the tablet side, it sounded like the cycles were a little bit longer. Do you have any visibility into when that might come back in? Because it sounded like you said you were being conservative, so maybe there's an opportunity that comes in at the end of the day, stronger than you might have hoped.

Well, I think on tablets, what we really were -- if we didn't convey it properly, I will. It's really the fact that the growth that was being expected from our leading customer is really not happening in terms of unit sales. Basically, that's it. It's -- and what we said was that consumers really are not replacing their tablets at the rate that they replace their smartphone. So that really -- you can see that as end demand is really not growing, because people are using the tablets they had that they'd brought previously.

And I think, Steve, in addition to that, it's just kind of worth noting that we've commented in the past, and Tunc commented as well, when we look at tablets and we look at our audio products, that's certainly an area where our technology fits well with that platform and that's a business, which for our audio business, we think we're growing that business through market share gains.

Okay. So with that, this concludes Maxim Integrated's conference call. We would like to thank you for your participation, and for your interest in Maxim.

Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.