Welcome to Broadcom Limited First Quarter Fiscal Year 2017 Financial Results Conference Call. At this time for opening remarks and introductions, I would like to turn the call over to Ashish Saran, Director of Investor Relations. Please go ahead, sir.

Thank you, Operator, and good afternoon, everyone. Joining me today are Hock Tan, President and CEO; and Tom Krause, Chief Financial Officer of Broadcom Limited. After market close today, Broadcom distributed a press release and financial tables describing our financial performance for the first quarter of fiscal year 2017. If you did not receive a cope, you may obtain the information from the Investor section of Broadcom’s website at www.broadcom.com. This conference call is being webcast live and a recording will be made available via telephone playback for one week. It will also be archived in the Investor section of our website at broadcom.com. During the prepared comments section of this call, Hock and Tom will be providing details of our first quarter year 2017 results, background to our second quarter fiscal year 2017 outlook, and some commentary regarding the business environment. We will take questions after the end of our prepared comments. In addition to U.S. GAAP reporting, Broadcom reports certain financial measures on a non-GAAP basis. A reconciliation between GAAP and non-GAAP measures is included in the tables attached to today’s press release. Comments made during today’s call will primarily refer to are non-GAAP financial results. Please refer to our press release today and our recent filings with the SEC for information on the specific risk factors that could cause our actual results to differ materially from the forward-looking statements made on this call. At this time, I would like to turn the call over the Hock Tan. Hock?

Thank you, Ashish. Good afternoon everyone. Well, we delivered strong financial results for the first quarter with revenue of $41.5 billion and gross margin at 62.4%, both at a very top end of our guidance. Earnings per share of $3.63 grew by 5% sequentially, while net revenue was essentially flat. Revenue was better than expected in all four segments. The benefits we achieved through business diversification clearly came through this quarter with growth in Wired, Enterprise Storage, and Industrial completely offsetting the typical negative seasonality from Wireless. The integration of classic Broadcom has gone very well and is now mostly complete. We remain focused on driving financial performance towards our long-term operating margin and free cash flow targets. Let me now turn to a discussion of our segment results, starting with Wired, our largest segment. In the first quarter, Wired revenue came in at $2.09 billion better than expected and represented 50% of our total revenue. Revenue for this segment was up slightly on a sequential basis, benefited from strong demand for Ethernet Switching and Routing products from cloud data center operators. This growth was partially offset by the continuing seasonal decline in demand for our broadband carrier access and set-top box products, which we expect to bottom in this first quarter. Turning to the second fiscal quarter, we forecast Wired revenue experience sequential growth a little bit stronger than what we saw in the prior quarter. We expect the momentum from cloud data center demand to sustain and expect a seasonal increase in demand for our broadband access and set-top box products. Now moving on to Wireless. In the first quarter, Wireless revenue came in at about $1.18 billion, better than expect and Wireless segment represented 28% of our total revenues. Revenue for this core segment was down 13%…

Thank you, Hock, good afternoon everyone. My comments today will focus primarily on our non-GAAP results from continuing operations unless otherwise specifically noted. A reconciliation of our GAAP and non-GAAP data is included with the earnings release issued today that is available on our website at Broadcom.com. Let me first start out by saying that we are very pleased with the execution this quarter and specifically the progress we've made towards our long-term target model, which remains an operating margin target of 45% of net revenue and a free cash flow margin above 35% of net revenue. Further to what Hock was saying, we also believe that we can achieve these long-term operating targets based on a sustainable long-term revenue growth rate of mid-single-digits. Now, let me review the Q1 results. Revenue for the quarter came in at $4.15 billion, approximately flat sequentially. Foxconn was greater than 10% direct customer in the first fiscal quarter. Our first quarter gross margin from continuing operations was 62.4%, about 90 basis points above the midpoint of guidance, primarily due to revenue at the top end of guidance and a slightly better product mix. This quarter's gross margin also benefitted from the impact of approximately $60 million of revenue related to the assignment of certain manufacturing rights to a customer in our Wired segment, which is included in our original guidance. Turning to OpEx, R&D expenses were $664 million and SG&A expenses were $120 million. This resulted in total operating expenses for the first quarter of $784 million, or 18.9% of net revenue. As Hock mentioned, we have not largely completed the integration of classic Broadcom and I would reiterate that we feel comfortable at this level of operating expenses relative net revenue. Operating income from continuing operations for the quarter was $1.8 billion…

[Operator Instructions] Your first question comes from the line of Ross Seymore with Deutsche Bank.

Hey guys. Thanks for letting me ask a question. I guess Hock the first question is on the Wireless side. It's good to see the content rising at other customers besides just your big North American customer; can you talk a little bit more detail about what's driving that content up? Is there anything unique or is it basically the same goodness that you've seen in the North America side? And any more color about that goodness continuing on the North America side into the second half of this year would also be helpful. Thanks.

Yes, Ross thanks for the question. Yes, it's -- in fact it's a phenomenon we have been indicating to you guys for the last several years which is over the medium term -- long-term, I would say, our strength of franchise in cellular and our RF cellular analog, the front end cellular analog, which includes FBAR and power amplifiers and all the circuitry and component that goes in front of the transceiver in the handset for cellular. That's one area and the other area in Wi-Fi Bluetooth connectivity. Those two functionality, those two features in phones continue to evolve and with each generation. And as each generation evolves, when it involves, in the case of RF cellular is two-fold. One is basically more band as we progress -- as more and more countries globally progress into 4G and eventually even further beyond that. More and more bands -- spectral bandwidths get pulled into the fold and number of skills of phones get less and less for any major OEM manufacturer simply because of complexity of these phones. And so because of more bands, it requires more filters, more components like power amplifiers -- low noise amplifiers and because of that necessary content increases. I should also add the difficulty of engineering those products increased fairly exponentially, which therefore drives towards better and better content for us into those very high-end flagship smartphones. In the case of wireless connectivity, the same phenomenon is happening and it's particularly driven on bandwidth on the peer [ph] throughput as we move from -- what we gradually move from what used to be much lower bandwidth in Wi-Fi to today's AC. As we move from to single users to multiple users and as we move next generation from AC into AX and further. Obviously, difficulty of doing those products in smartphones become correspondingly more difficult, content increases and we benefit from basically content increase. It's a normal phenomenon and we expect to see that continuing into the medium term.

Great, that's helpful. I guess for my one follow-up, both you and Tom, Hock, mentioned about the 15% growth not being your long-term assumption. Just wondering why you are bringing that up? Is there something you're seeing now that gives you pause that things are going to slow down or is this just a reminder that the level we are now is not the base assumption in your business model?

I think the fairest way to answer that is we have articulated last fiscal year very clearly and even a year ago when we acquired Broadcom, as long as a year ago, that we were scaled and we were diversification of product portfolio. Our long-term model, out five years, 10 years is a compounded annual growth of 5%. Not every year necessarily, but long-term 5%. And why we feel the need to mention it is obviously you saw the numbers we were guiding for Q2 on the topline and they're showing 15% year-on-year from a year ago. That's just one quarter and obviously just one fiscal year, one point in time. So, we felt it necessary to just mention it that do not just take it and extrapolate it to say that we have move away from our broad model on guidance of 5% compounded annual growth in the long term to a 15%, far from it.

And Ross, I mean just to add -- I also want to reiterate, we don't believe we need to have this accelerated revenue growth to hit our financial targets which we remain very focused on, specifically the free cash flow margins at 35%. We're very comfortable achieving those results based on a more normalized long-term CAGR of mid-single-digits.

Very well. Congrats on those results. Thanks a lot.

Your next question comes from Blayne Curtis with Barclays.

Hey guys thanks for taking my question and congrats on the great results. Just following-up on the Wireless guide, you've talked in the past sometimes it can be seasonal down 15%, 20% to the high single-digits. Just curious between contents and the units, what are you seeing with your two large customers in terms of the seasonality and the timing of the ramp magnitude versus the content gains you're seeing?

To be -- I don't have specific data between to be able to speed out accurately between units and content, but off the cuff, my sense is it's largely content.

Okay. And then you mentioned strength in switching, I was curious obviously you don't want to -- for a full year, I was just curious you talked about some businesses being soft in the second half. There's obviously a big upgrade cycle that's 2500G. Just curious your perspective as you look at the rest of the year the trajectory of the switch business?

That's a very interesting question and on the switching side, which is a subset, obviously, of our Wired segment, which is our largest segment, but just if you look at our switching and routing sites, fair way to put it together, which is really data center networking business, we continue to see strength through the rest of the year. We see -- a big part of that strength we see is simply because of a very strong data center demand -- data center buildup by the cloud operators. We're seeing that now and I suspect that phenomenon will still continue, particularly when we start to ramp-up newer generation with high-bandwidth of Tomahawks and Tridents and as we go later part in the year of our DMX router and aggregation switches. So, we see that and this momentum to be fairly good based on demand -- intrinsic demand out there in data center expansion, especially into the cloud, but also from the fact that we're launching a few very key new products in this year.

Thanks.

Thanks.

Your next question comes from Harlan Sur with JP Morgan.

Good afternoon and thank you for taking my question and it's great to see the diversity in the business playing out here. On the strong growth in the storage business that I'm assuming some of this is your SSD product lines; I believe you guys are supplying Enterprise SSD controllers into the top two enterprising cloud SSD suppliers. And I think your top customer here just grew their Enterprise SSD business I think 20% sequentially and 20% year-over-year in the December quarter. Wondering if you guys are seeing similar growth trends? And do you expect double-digit growth in the SSD segment for the full year?

I'll be [Indiscernible] our visibility in the SSDs are not as good as perhaps our customers are. A big part of it is there are three parts to our Enterprise Storage, three broad parts, one is very related to storage server connectivity, that's the rate part and the Fiber Channel whole part side of it rate. And then there is the components we ship into hard disk drives. And hard disk drive has experience as you well know a strong surge over the last several months probably because flash have been in short supply. And the last and smallest part of our business in Enterprise Storage is really related to Enterprise flash controllers for SSD. And that's really a small part. So, we don't get that broad visibility into this SSD market as a lot of other people would. But you're, right now, it's very, very strong and especially in SAS.

Great. Thanks for the insights there. And then off of the success of Tomahawks and I also hear that your prior generation Trident is still very strong as well and the team is ramping into this upgrade cycle, but you started sampling Tomahawk II, I think it was second half of last year. Can you just give us an update on the qualification, customer feedback, and when should we see the adoption curve for T2 starting to ramp, is that going to be kind of 2018 timeframe?

For very competitive reasons I really hate to give you specifics here. Suffice to say it's very well received. We have a lot of momentum on our entire switch portfolio. And by the way as Tomahawk doesn't fully replace Trident, Trident is using a different segment versus Tomahawk and both are going very well as are the Jericho products, which are more aggregation switching and routing. So, broadly our portfolio of -- from high end down to even low range -- on the low-end range of switching -- campus switching pointers [ph], those are all going very well. And I suspect it's all largely due to the strength in data center spending that still receive continue, particularly more recently since we had very strong conversion of Enterprises into the cloud.

Thanks Hock.

Your next question comes from William Stein with SunTrust.

Great. Thanks so much for taking my question and congrats on the very strong results and outlook. I wanted to address the free cash flow margin trajectory. Tom I think you referred to some of this in your prepared remarks, but I'd like you to maybe highlight what aside from the restructuring expenses that are still being paid and the temporarily higher CapEx that you are experiencing, what are the other drivers to get you to the 35% free cash flow margin? And what sort of timing should we think about for that?

William good question and I think that's sort of the point of the prepared remarks. And if you look at where we are from an operating margin perspective, you look at the fact we restructured the balance sheet around now fixed rate debt. If you look at our sustainable tax rate of 4.5% and cash taxes of approximately $100 million a quarter and you take out the restructuring costs, which are bleeding off here pretty quickly, you take out the one-time campus initiative, the one-time tester initiative this year which will sort of play itself out over the next couple of quarters. Frankly, we're largely there. And that's probably the real takeaway and of course that doesn't take into account what we would expect to be the second half seasonally up trends from a revenue perspective.

It's helpful. Appreciate it. Maybe one more. Something that came up last quarter was the change in capital allocation strategy. Maybe you can sort of highlight for us your plans on the M&A front from here despite the higher dividend -- the significantly higher free cash flow that you are going to be generating I guess after these temporary expenses falloff would seem to meet to continue to support a good M&A pipeline. Maybe you can characterize for us please?

Yes, I mean there's no real uptick there other than we outlined very clearly that we're going to continue to drive given back 50% of free cash flows to investors in the form of dividends, which, of course, at these levels, would imply that we're going to have the ability to continue to increase the dividend pretty meaningfully here over the next couple of years certainly. Beyond that we've used M&A to drive returns, obviously, over the last several years pretty effectively. We continue to see opportunities to do that. Brocade is the latest example of being able to put capital work and an interesting opportunity that drives better returns than our alternative. So, we're going to continue to do that, but given our scale, we have the opportunity to do that mostly off the balance sheet, particularly with smallest opportunities that arise.

Great. Thanks.

Your next question comes from Craig Hettenbach with Morgan Stanley.

Hello, this is Vinay Jaising calling in for Craig. Thanks for giving the opportunity to ask the question. So, I wanted touch upon carrier aggregation, like this is one of the key growth drivers for RF business. Hock, can you provide us an update on the trends you're seeing by geography for that? And what that means for your portfolio?

Okay. Carrier aggregation as you well know is the phenomenon of especially benefiting operators who have multiple spectral bandwidth, not necessarily one but multiple, and interest of reducing CapEx infrastructure is the phenomenon of enabling those bandwidths to max together into one, which creates much more capacity throughput and that's not only in infrastructure, it goes into the phone. And we are probably one of the leading enablers in the phone of making that happen simply because not just of architectural design of the cellular RF analog, but also the fact that FBAR filters which are FBAR, are much better performing and more integral -- have been able to integrate it into a module to allow of that maxing and de-maxing separate spectral bands. And that's happening. It started very aggressively obviously in China continuing to be very much so in China. It's also happening very aggressively in the U.S. Those are the two biggest geographies where a lot of that is happening, started with downlink last year, I think, and it's now moving on to up-linking, not just downlinking, which, of course, then part of reason why it's helping create -- not the only reason, but one of the reasons creating increased content in a cellular RF demand. So, it's great for us and we see that phenomenon continuing to grow and expand into other regions of the world.

Got it, that's helpful. And for my follow-up, I want to touch upon gross margins. Pretty good performance in gross margin during the quarter and the guidance, but I was thinking about how should we think about gross margins for here? And if you can outline like what are the top two drivers of gross margin expansion as we look out towards rest of fiscal 2017?

Okay. Well, it's a very interesting point and as we -- if you look back to a year ago when we just closed the Broadcom transaction every quarter since then, we have been able to expand our gross margin in the range of roughly 40, 50 basis points sequentially. A big part of it is as we settle down the portfolio, as we start to get the benefit of larger scale in purchasing materials and as very specific actions like taking -- basically bringing testing very much in-house and consigning testers to contract manufacturers instead of leasing test time for our huge volume of semiconductor chips. All those various actions -- a lot of a big part of this expansion of gross margin comes from a scale and ability to leverage on the scale in direct materials. It also helps that our product margin as we move from one generation to the other, keeps getting richer in terms of the mix. So, that's a combination of those two things. And in terms of where will it go from here? Frankly, I don't know. Best indicator is probably to look at history.

Got it, that's helpful, and congrats once again on a good quarter.

Thank you.

Your next question comes from Stacy Rasgon with Bernstein Research.

Hi guys, thanks for taking my questions. For my first one you've talked a lot about free cash flow margins, but I wanted to dig a little bit into the payout ratio. You are paying out right now about a little over 30%, target is 50%. Should we think about that sort of level going up to 50% in line with the margins going up to 35% or more? Or like how should we think about the trajectory of reaching your target on the payout ratio that seems like something that's more in your control maybe even quicker than the margins themselves?

Well, they kind of go hand-in-hand Stacy. I think what we're going to do and so articulate in the past is we're going to get to the end of the fiscal year, we're going to look back at the free cash flow trajectory on those margins over the course of that previous year. We're going to look at the business; obviously, we're very focused on sustainability. And then we're going to pay out 50%. And so all you are seeing is the general trajectory improving from where we exited last year to where we are here exiting Q1 and guiding Q2. And you're right consistent with the policy as we get to the end of the year where we will achieve expectations that we're going to have -- obviously be in the position to raise that dividend consistent with getting back 50% on an LTM basis.

Got it. Thank you. That's helpful. For my follow-up I also wanted to dig into gross margins a little bit. You talked a little bit about the drivers, but I heard you say earlier that you're sort of comfortable with your level of OpEx spending as a percentage of revenue, which implies that the operating margin improvement toward the model from here comes from gross margins, but it's not that much, only about 150, maybe 200 basis points from where we are. And this is even before you buy Brocade, which comes in at gross margins in the 70s. so, given all the levers that you just talk about and Brocade coming in, why should 64%, 65%, which is where that would take you -- why should that be the upper limit? Like how should we think about this if we're going farther, I don't see any reason why shouldn't expect gross margins to go even higher than that unless there something else -- mix or something else that ought to be taking it down. Can you talk about that a little bit?

Well, Stacy, it's -- actually I think we're going to get into the gross margin where we think we can go and if I go all the way back to the original Avago first margins in the 30s, obviously we're always focused on continuing to improve on our gross margin. I think the second part of the question is we are in our seasonally weak part of the year and so when you do look at the general seasonality of the business and where things are, I think you could take a whole fiscal year approach to looking at where operating margins will land and could land and apply that to how you're thinking about the model. That's the only guidance I'd give you.

Got it. Thank you.

Your next question comes from Vivek Arya - Bank of America Merrill Lynch

Thank you for taking my question. Congratulations on the good results and the consistent execution. For my first one, Hock, your Wired business has essentially been in the $2 billion to $2.1 billion range for the past year on a quarterly basis. Can you give us some puts and takes on what's done well, what's been different than expectations? Because my rate is that the switching parts has probably done fairly well with all the cloud opportunities, but your broadband access and set-top boxes has perhaps not done so well. But then on the prepared remarks you mentioned you are starting to see a little bit of a pick up on the broadband access side. So, just if you could give us a look back on what was different than expectations? And then as we look forward to this year, could we see contribution from both parts of Wired -- both the cable side as well as the switching side?

That's a very interest -- good question actually, very insightful and let me try to explain it on our Wired business. You're right, it's our biggest segment and in simple terms broadly, there are two groups of products here and end markets. There's switching and routing, you correctly put out and that come from various fronts from standard switching and routing, as well ASICs, which is also part in there, as would be building block products as well as fiber optics components. That business is very Enterprise driven directly and has actually done very well even on a year-on-year -- especially on a year-on-year basis because it's growing as we move from 10-gigabit few years ago -- couple of years ago, to increasingly 25 and 100 coming out very fast. As that transition happens very fast, obviously it's driving and you always hear products like Trident going to Tomahawk, especially in the very high end and at Jericho. All these are related to data center switching and that's very, very -- that's driving growth on all infrastructure on a very stable basis, but driving growth very nicely close to high single-digits, even double-digits. Then the other part of the segment, which is pretty big too, is our broadband. And here the set-top box on the CP side and access gateways like DSL/PON on the infrastructure side. And here the business is stable; it's very stable, has been stable for the last couple -- few years and continues to be very stable and it's also very seasonal. And you will see that the later part of second half of the year is typically when it drives up and in the first half of the year is when it shows a seasonal decline. Hence in my opening remarks, I was mentioning that Q1 -- fiscal Q1 is probably a very seasonal low point and it gradually picks up seasonally later part of Q2, but certainly Q3, and then starts rolling over again, but if you look at it year-on-year, relatively very stable. So, we have a confluence of two segments mixed together in our Wired business which is what you're seeing. It dilutes basically the strength, the growth of switching and routing, but nonetheless, both are very franchise product, very franchise business and drives stability in this company.

Thanks Hock. And as my follow-up question, it's a somewhat longer term question. You're obviously doing quite well in the Wireless business and that can continue for some time. The cloud business is also doing quite well. But when I talk with a lot of your peers and ask them about growth in semis over the next three to five years, they talk about connected cars or Internet of Things, or machine learning, or 5G. Do you beer Broadcom is investing adequately to pursue those markets? Is there a part of the company that is looking at those longer term areas? Or do you think M&A is the better way to address some of those things as they become real over time? Thank you.

Great question. Giving the opportunity to expand a little propaganda here, again, as we've already articulated. The franchise products we're in, the -- we are the technology; we are also the market leader in those areas. In those niches, some of them are very large niche, but we are the technology leader and we don't get there by not investing. We invested, as my remarks said and I said many times, very heavily in those areas we are in. We develop products that generally in those franchise areas before anybody else do it out there. And that's why we can sustain it, that's why our margins are the way it is because we provide products that allow our customers to differentiate and innovate themselves. So, we invest very heavily and you look at our total R&D, we invest in total $2.7 billion a year as a company in R&D. We're the best engineers out there; we have the best products in this area. So, that's really where we continue to sustain leadership in our existing franchise products. In some of those flights of fantasy somewhat that you covered earlier, we're not -- I'm not saying it won't happen. I will be direct, let somebody else take another hits and then we'll buy the company if it's successful. Thank you.

Thank you.

Your next question comes from [Indiscernible] with Goldman Sachs.

Great. Thanks for taking my question and congrats on the strong quarter. I had one short-term question and then another longer term question. On the short-term question, with regards to Wireless, you talked about trends at you're Korean customer offsetting the seasonal trends at you're North American customer and therefore you are guiding Q2 to be down only high single-digits relative to history being down about 15%, I recall. Is the upside versus historical seasonality, is that all coming from dynamics at you're Korean customer or dynamics in terms of units or content at your North American customer trending better than history as well?

You are really trying to pass the data, aren't you? It's all a combination really. It is -- and you obviously know out there it's also timing of some of the shipments and purchases by our two largest customers. So, there's a bunch of -- a few factors involved in here. One of which was there's timing this quarter differences in timing. There's the fact that you're right, Korean customer is coming in with a vengeance to try to recover share. And broadly, we're also talking about content increases as each new generation comes in and it's not even the Korean customer it's also the major North American customer. And it's a mix of all these factors. Have I sat down and broken it out in detail? No. We don't try to analyze it to that in degree, but those multiple factors mix pull together to basically indicate that the seasonality -- the downward seasonality that we saw a year ago is perhaps less pronounced this year.

Okay, great. That's helpful. And then as my follow-up, another question on Wireless, specifically around China. Obviously, you're tied to the North American customer and the Korean customer in a big way today, but when you think about your Wireless business and your RF business specifically, on say a three-year view, how do you think about the opportunity in China today?

Well, there are opportunities for us in China, and -- but the focus of our success and our product success in Wireless, especially content increases year-on-year is -- as you know, we push the cutting edge on technology. Be it wireless Wi-Fi connectivity or RF cellular, we push the envelope and that tends to go very much largely to the flagship class phones. That top of the pyramid where a big part of it has been our major North American customer and Korean customer, plus a few other guys spread around. That's where our strength is, that's where the demand and value seen our products can have. As China evolve over time, having said that, the opportunity exists, they will move from feature phones to low-end smartphones to now some premium phones. And we begin to get traction on even those premium phones to the extent that those brands in China use it, and that's why we need the technological engineering edge that we provide in the products. Until then, they need less of it. Except -- with exceptions like carrier aggregation when we obviously are the leader in providing solutions for carrier aggregation on a discrete basis. But on an integrated basis into smartphones, it's really the flagship phones and now increasingly premium phones making its way into flagship phones that we see the demand. And that transition is happening in China, albeit, on a very gradual basis, but we're very patient people, we'll wait for it.

Thank you.

And our last question comes from the line of John Pitzer with Credit Suisse.

Yes, good afternoon, guys. Thanks for sneaking me and congratulations. Hock, my first question is kind of a follow-up on the Enterprise Storage side. You rightfully pointed out that today, the SSD controller businesses is the smallest part of that business. I'm kind pf curious as you look out over time, do you see that market developing similar and potentially getting to be the size of the HDD controller market? Or is there something inherent about the growing complexity of raw NAND itself, which means there will always be a large portion of that controller market which is insourced, the guys building demand actually building their own controller. Do you think eventually you will end up in situation where it's all outsourced?

That's a very insightful question and we see the SSD controllers for Enterprise to be a lot of it will be outsourced. Why? Because there are certain IP inherent in those Enterprise flash controllers that are very tricky to do. Not dissimilar from the re-channel of hard disk drives, so that will happen. [Indiscernible], because the nature of [Indiscernible], it's not so complex technology, IP required is not so extreme. We see that as probably less opportunistic for us, though one never knows. But certainly on Enterprise, which is where we are very focused on, we see a lot of need for intellectual property blocks features that few people can do. And we are one of those few people who can do it very well.

That's helpful. And then, Hock, as my follow-up, I think a lot of us in the investment community understand the Wireless, both on the RF and on the connectivity side, the content ASP story. I'm wondering if you could talk a little bit about that same dynamic in your Wired business. And maybe differentiate between switching and routing versus set-top box and broadband access? How do we think about the ASP trends in those two segments over time? Or just your content going into the CapEx dollars being spent in the Wired market?

Well, if you talk about switching and routing, it's really more than just chips -- building blocks of chips. It's really as much an architectural play, especially in the high end top of the rack, in the [Indiscernible] and the spine side of the data centers. And here is where our model just goes beyond selling pieces of silicon; we sell a lot of firmware and software that goes hand in hand to enable those chips to work with multiple OEM customers at the end of the day. So, that's a very interesting model for us and what is overriding all of this is obviously the need for more larger and larger more and more throughput, especially, in data centers, and especially in top of the rack and all the way to the spine. So, we have big advantages in this area simply because of the strength of the intellectual property we have in making very complex engineering, very complex SoCs, but also interface very high-speed interfaces or [Indiscernible] as we call it. So, all that plays to our advantage of being able to do it. And we continue to do that, and we continue to -- it goes from 10-gigabit to 25 to 50 to 100 and maybe -- and going on in the future to 200-gigabit to 400-gigabit. We believe we are investing heavily to ensure that we can develop those kind of products and develop it first and better than anybody else. So, -- and with that expansion of features, we benefit from content increases, simply because you are providing a customer more throughput and it's not a one-on-one scaling, it's more and more -- it's a lot of value for our customers to be able to go from 25-gigabit -- or 10-gigabit to 100 in the next year or two and we provide a lot of value in that. And by the way, in broadband, it's not dissimilar. Except that maybe it's not evolving as rapidly simply because it's a much more stable market, for instance, you hear about now 4K TVs video delivery to moving on to high definition, HD, and eventually moving even to 8K. That would be interesting to see how 8K is going to be accepted since the human eye may not even notice the difference, but people want it. And they want that, we're able to provide that. But it might take a bit longer, that's why I said broadband to us is a much -- we look at it as a much more stable gradually evolving market, even as OTT, the hype behind OTT and all that comes play which we participate in. But in data centers, it's serious stuff. More and more data are being basically pushed through pipes stored, processed as social media keeps expanding. And that's why we are seeing this past quarter and current quarter extraordinary strength in the demand for switching and routing.

That's great. Thanks guys. Appreciate it.

That concludes Broadcom's conference call for today. You may now disconnect.