Good day and thank you for standing by. Welcome to the Conference Call to review Fourth Quarter of Fiscal Year 2022 Financial Results. At this time, all participants are in a listen-only mode. After the speakers presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Sam Franklin, Head of Capital Markets and Investor Relations. Please go ahead.

Thank you, operator. Good morning, everyone and welcome to GlobalFoundries fourth quarter and fiscal 2022 earnings call. On the call with me today are Dr. Thomas Caulfield, CEO; and Dave Reeder, CFO. A short while ago, we released GF's fourth quarter and full-year 2022 financial results, which are available on our website at investors.gf.com, along with today's accompanying slide presentation. This call is being recorded and a replay will be made available on our Investor Relations web page. During this call, we will present both IFRS and adjusted non-IFRS financial measures. The most comparable IFRS measures and reconciliations for adjusted non-IFRS measures are available in today's press release and the accompanying slides. I would remind you that these financial results are unaudited and subject to change. Certain statements on today's call may be deemed to be forward-looking statements. Such statements can be identified by terms such as believe, expect, intend, anticipate and may or by the use of the future tense. You should not place undue reliance on forward-looking statements. Actual results may differ materially from these forward-looking statements and we do not undertake any obligation to update any forward-looking statements we make today. For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to the press release we issued today as well as risks and uncertainties described in our SEC filings, including in the section under the caption Risk Factors in our annual report on Form 20-F filed with the SEC on March 31, 2022 and on our current reports on Form 6-K filed with the SEC. We will begin today's call with Tom providing a summary update on the current business environment and technologies, following which Dave will provide details on our end markets and fourth quarter and full-year 2022 results and also provide first quarter 2023 guidance. We will then open the call for questions. [Operator Instructions] I'll now turn the call over to Tom for his prepared remarks.

Thank you, Sam, and welcome everyone to our fourth quarter earnings call. I would like to start by reflecting on our first full-year as a public company. October 28, 2022 marked the one-year anniversary of our listing on the NASDAQ and by any measure it's been a strong year for GF. I'm immensely proud of our team across the globe for their commitment and dedication in helping GF take significant steps towards delivering our long-term strategic objectives that we set out prior to our IPO. GF continues to position itself as a crucial enabler of the semiconductor supply chain and we remain deeply committed to working with our customers in providing feature rich, differentiated and innovative technology solutions to meet the long-term demand trends across each of the end markets that we serve. Simply put, we build capacity for our differentiated offerings our customers want, where they want it and in partnership engagements that create this capacity with the best economics for both partners. We've continued to implement a long-term partnership driven model with our industry, which is driving improved visibility for our business through this period of macroeconomic uncertainty. In 2022, we added 10 additional customers under long-term agreement and secured more than $5 billion of incremental lifetime revenue. Going forward, we continue to see strong alignment between our customers' needs for certainty and security of supply and our capacity to provide long-term dedicated foundry services. We are proud to have participated in the development and passage of the CHIPS and Science Act of 2022. This is the most important piece of legislation for industry in recent times and we expect to continue playing a key role in delivering targeted capacity critical to the re-issuring of supply within the U.S. semiconductor ecosystem. Finally, we continued the expansion of our…

Thank you, Tom, and welcome to our fourth quarter earnings call. For the remainder of the call, including guidance, I will reference adjusted metrics, which exclude stock-based compensation and restructuring charges. Our fourth quarter results exceeded the guidance we provided in our last quarterly update. Fourth quarter revenue was approximately $2.1 billion, an increase of 14% year-over-year. We shipped approximately 580,300-millimeter equivalent wafers in the quarter, and ASP, average selling price per wafer increased approximately 20% year-over-year, driven by ramping long-term customer agreements with better pricing, as well as continued improvement in product mix. Wafer revenue from our end markets accounted for approximately 88% of total revenue. Non-wafer revenue, which includes revenue from our radicals, non-recurring engineering, expedite fees and other items accounted for approximately 12% of total revenue for the fourth quarter consistent with our expectations. For the full-year, I am pleased to report that 2022 was a record year for GlobalFoundries. Revenue came in at approximately $8.1 billion, up 23% year-over-year, and an increase of approximately $1.5 billion from the previous year. We shipped approximately $2.5 million 300-millimeter equivalent wafers, a 4% increase from 2021 and ASP per wafer increased 17% year-over-year. Let me now provide an update on our revenue by end markets. For the fourth quarter and as expected, smart mobile devices represented approximately 39% of the quarter's total revenue. Smart mobile devices fourth quarter revenue declined 7% from the prior year period, principally driven by reduced volumes in the low to mid-tier smartphone segments. This decline was partially offset by higher ASPs, premium tier mix growth and continued content growth in our RF transceiver, audio and specialty power products. Full-year 2022 revenue for smart mobile devices grew 11% year-over-year, driven by higher ASPs and better premium tier mix as we continued to execute our strategy…

[Operator Instructions] Our first question comes from Mark Lipacis with Jefferies. Your line is now open.

Hi. Thanks for taking my question and congrats on the nice results. First question, maybe for Tom. Can you talk qualitatively about activity around your long-term agreements? It seems on the one-hand some of your customers are getting negatively impacted by the cycle. But on the other hand, secular trends on capacity and consolidation, the geopolitical environment might be driving more customers to you. So I'm wondering if you could describe how those who are netting out as you engage with your customers in the medium-term? And I guess what I'm getting at, it seems like the LTAs pick up every quarter. Do you expect that to continue through the year? And is there a type of customer, either by vertical market or geography that seems to have a higher motivation to sign up for the LTAs?

Well, let's unpack there, Mark. Good morning. So let me first start with a little context around these LTAs. We think of them as contracts that were signed in 2021 and that's where their life began. Actually, this is a five-year journey. When we pivoted the company in 2018, decided to become single source, differentiated type of semiconductor manufacturer. We had to do a couple of things with our customers, we had to convince them on our execution, we had to convince them that we had the financial wherewithal to be around for them for the long-term and develop those partnerships. And so as they started to get more confidence in GF and relied on us for single sourcing key products for them. That created a balanced relationship where we needed each other. Our customers needed security supply; we wanted security of knowing that if we're going to invest for capacity that we would have the ability to use that capacity to service our customers. And so what you're seeing now is the natural consequence this journey we've been on as customers signing out and looking longer term, securing their future with GF. Now you can imagine in a moment that we're in now where there's the softening that you hear about the inventory correction that customers are going to be a little bit more cautious as they go forward to plan exactly when they want new capacity extending LTAs, those discussions going on all the time, and as you could see in the fourth quarter, we signed additional long-term agreements, we just announced a really important one with GF in segments that clearly see their strength in the near-term and the long-term. So I think the LTAs are doing exactly what we talked about in our roadshow over a year ago and through 2022. That creating security for both businesses to have long-term supply and the work through, you know, cycles like this in partnership mode.

That's a very helpful. Thank you for that. And Tom, you also had described about some of the dynamics around customers asking for relief or some modifications on these. Is there a case study that you can describe that characterize as a classic way you are dealing with that scenario as your customers, who have signed up with the LTAs or are coming to you and asking you for help on that? Thank you.

Yes, I think the classic is protecting the names of the innocent here is that one of the customers, it was like the complete range of levers we have. One, there was some remixing going on, softness on one particular technology node and features we provided. Where they had more opportunity in another. So we were able to shift some of their volumes from one platform to another. They remixed a little bit later in time and created a duration. And then there is a part of that was, hey, we have some near-term underutilization, let’s just give you an underutilization fleet for that. The key is that the economic intent of these contracts are always getting fulfilled and we use these levers to go create that opportunity to work in partnership with our customers.

Very helpful. Thank you.

Please standby for our next question. Our next question comes from Joseph Moore with Morgan Stanley. Your line is now open.

Great. Thank you. I wonder if you could talk a little bit more about the GM deal. And just in general, what those conversations are like? I know you've had other OEM deals with autos as well. I feel like two or three years ago they probably didn't know who the foundry suppliers were. So how directly do you think they're driving their semiconductor suppliers to use Western foundries? And just maybe some insight into what -- how those conversations came about and how pervasive it could be?

Yes. Good morning, Joe. I wouldn't put it as just driving the Western foundry, I think if you take a step back, the auto industry is looking forward and looking at the capacity that's been put in place over the last two decades in the areas where we play and clearly see that investment needs be made. There isn't enough of this capacity. Again, we play for 12 nanometer and above and getting ahead of that curve. And saying, okay, how do we go create that capacity, because new investment is going to be needed. And as they start to understand more and more about the economics, of this, it’s better to direct -- to create that capacity in partnership with the foundry and then direct their supply chain to use that capacity. So for the automakers it’s -- let's first decide what are the important platforms to create this capacity on that have legs over the next decade. Decide how much you want, where you want it? And then create this partnership mode to make sure it happens with the best economics. That's the model, we called it a first of a kind with General Motors. It's not last of a kind, I think this is a winning model, because it creates the opportunity to minimize inefficiencies of the economics of a very steep or broad ecosystem. Where costs get passed through and marked up without value being added, investment costs that is. So we think this is a winning model. We'll see more of this coming along. I hope that helps, Joe.

Yes, that does. Thank you. And then I guess as you look at your capacity in the next couple of quarters, you're obviously seeing some capacity free up from smartphone-oriented technologies. Would you still say you're sold out on the specialty process technologies that supply the auto industry? And are you limited in your ability to serve that near-term?

Specifically to auto. All of our capacity is now we call fungible able to address all the demand we have in auto. So for every way we can make into our auto business, we can sell. And that's where we would. We're constantly looking and putting pressure on our manufacturing teams to figure out how they can make more of that.

And Joe, I think I would add on to that is if you listen to the prepared commentary, you would have heard us say that instead of saying that we would exit 2022 or 2023, excuse me, at an automotive revenue run rate of $1 billion we actually said in this quarter's prepared commentary that we would be about $1 billion of automotive revenue in 2023. So that remixing that Tom just highlighted that and you kind of alluded to in your question, that is ongoing as we speak.

Great. Thank you very much.

I want just to pile on that, Joe. In that revenue year-on-year ‘23 to ‘22 will be greater than 2 times growth.

Great. Thank you.

Please standby for our next question. Our next question comes from Harlan Sur with JPMorgan. Your line is now open.

Yes, good morning and congratulations on the solid execution. Your manufacturing lead times are quite long where do you guys have to start wafers about quarter ahead of target shipments? So I believe the team has pretty good visibility already into Q2. You gave us the puts and takes in the various segments, which is consistent right with your customers' demand profile. So if you put it all together, does the team still think a trough in total revenues this quarter or first half of the year is the most likely scenario? And does the team still believe that they can grow revenues this calendar year?

Yes. Good morning, Harlan. Maybe I'll start that one, Tom. And then if you have anything to on -- you can build at the end. And look, we do believe that first half is the trough. From a revenue perspective, we think it's most likely first quarter, but certainly from a first half perspective, we believe that, that is the bottom. Based upon what our customers are telling us based upon our LTAs and based upon I think what you all are seeing broadly in the industry most of the industry is currently forecasting a recovery in the second half of this year. We've mentioned previously and we still stick with that guidance that we believe ASPs will be up modestly on a year-over-year basis. So really if you're looking at growth for the year, it's really predicated upon that volume and it's predicated upon a second half recovery, which right now is what we're currently expecting. Tom, is there anything you'd add to that?

No, I would just reinforce that we're -- not smarter than everybody else. What our customers are telling us what we're seeing in the industry and that's worth winning.

Great. Thank you for that. And obviously, it's a tough and uncertain environment. But for the things that the team can control, right, process development, innovation, stronger customer engagements, manufacturing optimization. Is there a strategy in place to try and emerge from this downturn in a much stronger position and try to accelerate the move to or exceed your 40% gross margin target?

There is Harlan. We outlined, I would like to thank, a pretty comprehensive bridge both during the IPO Roadshow, as well as Capital Markets Day, that bridge to how we get to our long-term financial model, which includes 40% gross margin. I would actually say that kind of like to-date, we've been ahead of that model, slightly ahead of that model where we expect it to be. We feel like we've made great progress and strides against it. We feel like we still have line of sight to achieve that model. To be able to achieve that model, we've been adding capacity, right? So in 2020, we said we had about 2 million wafers of capacity, 2021 we built that up to about 2.4 million wafers, in 2022 about 2.6 million wafers of capacity. On the CapEx that we're deploying this year, we'll have about 2.8 million wafers of capacity and still on track even with reduced CapEx still on track. To more than 3 million wafers of capacity in 2024. So as the industry works its way through a little bit of macroeconomic uncertainty and a little bit of inventory burn here in the first-half of the year. We start to get that utilization and absorption up. We feel like we're on a very good path towards those gross margin numbers that we've outlined in some pretty clear detail.

Well, perfect. Thank you.

Please standby for our next question. Our next question comes from Vivek Arya with Bank of America. Your line is now open.

Thanks for taking my question. First one on gross margins. So, the Q1 outlook 28%, about 150 basis points above their expectations were - I was wondering, Dave, if you could give us some of the puts and takes? And from what you're describing, seems Q2 revenue could be kind of at least flattish? And then if that is a scenario, then can gross margins continue to go up? Or is there anything on the utilization side or anything else that we should keep in mind to think of a gross margin trajectory for this year?

Sure. Good morning, Vivek. I think when you think about gross margin, you obviously think about two big elements. One is ASP, which as we mentioned, we believe ‘23 will have modest ASP growth over 2022. And then the second element is really what you touched upon, which is utilization. So, in the fourth quarter, utilization was in the mid-90s. For first quarter, we believe utilization is going to be, call it, the mid-ish-80s to perhaps the high-80s from a utilization perspective. And we previously talked about how every -- about every 5 points utilization was about 2 points of gross margin from a mathematical perspective, that’s without necessarily taking a lot of actions. So I think sequentially what you're seeing is, you're seeing us move from about 30% gross margin in the fourth quarter moving to a midpoint in the first quarter of about 28%. And so, what you're seeing from us is you're seeing us actually make progress towards that gross margin bridge, but obviously it's being offset a little bit based upon the utilization. So as utilizations improve throughout the year and as we mentioned, we think first half is the bottom, then we believe that that will be the driver for increased gross margin will be that utilization figure in that absorption. Did you have a follow-up?

Yes, thanks. Second question is just in the premium smartphone segment, what's your view of how much of your customers’ component inventory is in the premium smartphone segment. Do you think Q1 is where it kind of clears out? Or do you think there could be a little bit that persists into Q2 and then there is a seasonal back half assumption? Just curious, if specifically in the premium smartphone segment, do you think we get to a supply demand balance exiting Q1? Or it could take until Q2 for that to happen?

I think if you were to maybe be a little bit more granular and look at it perhaps a bit on a monthly basis, we think some of that inventory starts to get cleared out towards the end of first quarter, so call it in the March period and maybe it rolls over a little bit into the second quarter, maybe April, perhaps even May, specifically for the high end of smartphones. So ultimately, it depends on what's the sellout or the sell through demand, but we do believe that, that inventory starts to clear out of the channel in a more meaningful way towards the end of the first quarter and perhaps rolling over into the second quarter.

Thank you.

Please standby for our next question. Our next question comes from Ross Seymore with DB. Your line is now open.

Hi, guys. Congrats on the solid results and thanks let me ask a question. I just wanted to go back to something Tom you said earlier about the prepayments rose I think 34% sequentially. How do I reconcile those with the end demand caution? Is this something where people are just having to pay upfront for pushing out the duration? Because I otherwise would have expected, kind of the urge to prepay or the need to kind of wane as some of the caution from your customers enters the equation? So, any color there would be helpful.

Yes. Look, for me, it's pretty simple. This is single source business by and large. Customers are looking to secure their supply. In some cases, it requires investment. The only way the investment can be made and make economic sense for both parties is we both put our balance sheets in there. So the rated pace of some of these LTAs where they're talking about adding capacity will always get a little bit softer in a period, we're in now just, because of the uncertainty of when customers will want that growth. But that's what we're going through right now. And you could see even in the fourth quarter of last year, we were able to ink some long-term agreements where customers had visibility, especially in the auto side of things of what they wanted longer term.

And if I could build on that, I think when you think about that increase in the fourth quarter, Ross, call it $1.2 billion maybe around $1.3 billion, 34% as you mentioned to $5 billion of customer committed funding. The LTAs that are being signed today are not for really capacity in kind of 23% and 24%, it’s really for capacity that's being added for ramps and really 25%, 26% and 27%. And so those committed customer funds, those are being deployed in the areas of capacity increases, as well as process technology qualifications for the design wins associated with those LTAs. So, the customers are looking through this kind of near-term demand perturbation. They're looking through this near-term period. They're looking out into time. And they're saying we believe that the industry will still be structurally short of capacity, especially in the technologies and the geographies where we would like to have it and they're making the investments now to ensure that, that supply chain is there in the future.

Thanks for that color. I guess -- yes, if I can. I just want to go into the CHIPS Act and the investment tax credit side of things. I think the CapEx numbers you gave are all on the growth side of things. I know you guys have been very committed to those programs and Tom you highlighted that earlier, but mechanically how should we think about that starting to flow through and kind of timing and magnitude?

Well, let me tell you how we're going to put that funding to good use and then I'll let David talk about how it flows through. Most importantly, the capital investment and free cash flow and then maybe on top of the P&L. We are in the process of bringing in a three-part proposal to leverage the CHIPS funding for capacity expansion. One phase is in our 200-millimeter facility in Vermont. We're remixing that technology more towards wide bandgap types of devices. And also to do some modernization in that facility to keep it strong going forward. We have a Phase 1 expansion plan in our Fab 8 facility where will use the investment to fill up their existing floor space with additional tools for capacity. That's more or less where the GM capacity will be solution from. And then the last part of our proposal will be a new brick and mortar investment module expansion and that's very same Fab 8 facility in Malta, New York to add somewhere between 350,000 to 500,000 wafers of capacity to make much longer-term needs. That's the play for GF in this first phase of CHIPS funding. Dave, I'll hand it over to you to talk about the implications on free cash flow and P&L.

Yes. So touching on the two elements, I think Tom covered CHIPS in some detail there where we think for any funding or any CapEx and investment in the U.S. Where we can get kind of 30% to 40%, we think of a project refunded via the chipset. There is also the ITC, so the investment tax credit enables companies that deploy CapEx in the U.S. to claim back essentially 25% of the value of that CapEx. The way that it would flow through the P&L is that you would essentially and call it late first quarter, early second quarter of this subsequent year. You would file that ITC; you would get that credit back from the government that would then go on the balance sheet and it would net against that gross CapEx number. And so we have then a net CapEx number that then depreciates over whatever your depreciable period is. So that's how it would flow through the P&L as we make additional investments in the U.S., for some of those projects that Tom mentioned. We will be able to claim not only the CHIPS Act funding, but also the ITC as well. One thing that I would touch on just briefly, because it is a similar type of program that we actually are just seeing the benefit of. So we won a case recently, you may have seen a few details about it, but we're essentially getting a $152 million tax refund here in the first quarter, that $152 million will essentially be offset against the purchase of the equipment that we made in kind of that 2014, 2015 period. As it's netted against that equipment, some of it will flow through as a gain, some of it will just flow through as a net to that equipment through the depreciation. And I think the treatment of that refund will look very similar to the ITC.

Thank you.

Please standby for our next question. Our next question comes from Chris Caso with Credit Suisse. Your line is now open.

Chris? Are you there?

Hi, sorry, long-view. Good morning.

Good morning.

So the first question here is on CapEx for the year and you've given some indications of what you expected to share. It seems like it's responding to some of the industry conditions. And it slows in the second half of the year. Can you talk about -- is that more of a push out into 2024, it sounds like the customers still need the capacity. So what you're not spending from the original plan in ’23 does that start to accelerate as you get into 2024?

Yes. So think about the rate and pace of our CapEx as really being aligned with the rate and pace of our customers' needs, as well as the productivity that we're actually able to drive. So we're actually becoming more CapEx efficient. And so the way I would think about it is I would think about some of those CapEx is indeed a push out from ‘23 to ’24. And I would say there's a portion of it. I'm going to round and use a really rough and tough number here and say kind of maybe 10% to as much as 20% of it where we've actually just become more capital efficient. And so those savings will be banked to the P&L. And again, as I kind of mentioned earlier on the call, we are still very much on track to delivering the capacity that we've been speaking about for some time and that's 2.8 million wafers of capacity this year and then more than 3 million wafers of capacity in 2024. We are still very much on track even with some reduced CapEx and some timing of CapEx being slightly delayed. We are very much on track towards those numbers. Did you have a follow-up, Chris?

I do. And so with the answer there, it sounds like it's similar wafer capacity at lower CapEx, which is obviously good. As you go forward, could you give us some more granularity on where you're spending that CapEx? And there's a lot of different businesses and a lot of these processes are not fungible. So give us a sense of where that capacity is being targeted to?

Sure. The single biggest portion of that CapEx is actually still going towards Singapore and the ramp in Singapore. That's our new fab there on our existing campus. And so that's the lion's share of the CapEx. That said, we are continuing to invest in all the regions with additional CapEx, so we still have some additional CapEx going into Germany. To kind of complete that footprint. We still have some CapEx coming here into the U.S. As Tom mentioned, we do have some customers that are desiring some capacity on U.S. soil and so we'll be making some of those investments as well.

Yes, let me just add to that. You said some of this capacity is not fungible, some of the capital efficiency David is talking about is to make sure there's more fungibility between our technology platforms and quarters, so that we can respond to demand where it is at any given time.

Got it. Thank you.

Please standby for our next question. Our next question comes from Mehdi Hosseini with SIG. Your line is now open.

Yes, thanks for taking my question. Going back to the ASP -- wafer ASP. Can you help me understand how the mix is impacting? And how is that compared to ASP like-for-like? And I have a follow-up.

Sure. So from an ASP perspective, we've been not only mixing up our business amongst end markets or between end markets, but we're also mixing up our business even within those specific end markets. And so when I look across our end market landscape, and I see our ASP sitting north of $3,000 of wafer in the fourth quarter. There's within the segments that the single biggest differentiator with regards to ASP is how much GF technology do they use, as well as is it single source revenue business? And so when you look at those two factors, about two-thirds of our revenue in 2022, with single source revenue. In fact, fourth quarter was our highest quarter of single source revenue in 2022 and about 90% of our design wins in 20 22 are single source. And so as we have customers increasingly being single sourced at GF, on GF technology that deep customer partnership where they're using more of our technology in their products to help them win in their market. Then that obviously helps us with value capture. Did you have a follow-up, Mehdi?

Yes. If I heard you correctly, although -- will account for about three -- I'm sorry $1 billion of revenue this year, right? Did I hear you correctly?

That's correct. It'll be approaching $1 billion of revenue in fiscal year 2023.

Okay. So that's like you're almost 2 times to 3 times higher, compared to ’22? Is that the majority of that, is that driven by single source? Being single source foundry partner? Or is that the technology mix that is also impacting the 2 times to 3 times increase?

The majority of that business is single sourced at GF.

Okay. Thank you.

Michelle, we'll probably take one more question.

Please standby for our last question. Our last question comes from Rajvindra Gill with Needham. Your line is now open.

Yes. Thank you and congratulations on great results. Just a big picture question, Tom. You mentioned obviously that the trend towards reshoring of supply, you guys are instrumental in the CHIPS Act. When you're discussing contracts with customers, and trying to win share. Are you seeing, kind of, an overarching trend among fabless semiconductor companies to start to, kind of, reshore here in the U.S., with you versus other foundries in Taiwan or elsewhere. Are you actually seeing that kind of tangible trend as we kind of look out for the next several years?

I think we're starting to see at the beginning of that and I'll put a context around it. Maybe because it was the end of the year, it was holidays. The NDAA National Defense Authorization Act was passed, I think it was last week of December, if not it was just the second to last week of December. And specifically in there, it highlighted that the U.S. government over the next five years, they want to not have any supply in anything they buy that has CHIPS from snack. And so that's relatively new event that our customers are starting to comfort and what does that mean. What I see is it's very difficult for them to want to go and take an existing part number and re-qualified and resource it. But rather looking forward, saying how do they take their new product lines or their new spins of designs and then create a different footprint for that type of sourcing. And I think this is the year ‘23, ‘24, we'll start to see some of that business come our way in response to these types of legislation moves. And just in general, to get a more balanced supply chain across the globe and leveraging on our footprint. It will never be a look back in doing -- we work over again in the design that already exists. I think it's about the future designs. I hope that helps.

Yes, that's super helpful. And just my follow-up, Dave, if you look at the free cash flow projections potentially for this year. Given kind of the reduction of the CapEx and the cash flow from operations growing this year depending on kind of assumptions. It looks like free cash flow is going to move up significantly into positive territory. So how are you thinking about usage of cash going from 2023 and beyond? As you get more scale in the model and you generate significant more free cash flow? Thank you.

You're right. Based on our cash from operations and our ability to generate cash, as well as our reduced CapEx. And really kind of an envelope of CapEx going forward where we're essentially at our long-term model or close to our long-term model of roughly 20% of revenue being in CapEx. Obviously, you have the ability to generate increasing and significant free cash flow over time with that model. So as we look at it, right now, we're very pleased with our cash position. We're in a net cash position minus our debt. We're in a position where we can be free cash flow positive this year, which I stated in my prepared commentary. And then as we look to the future, as we go through the first half of this year, look at the demand in the second half and then the subsequent demand in 2024. We'll start to formulate those CapEx decisions for the future. And as we do that, I think you'll see us come out with some type of capital structure and perhaps some type of capital program. That we would release to shareholders. At this time, I'm not willing to go out publicly at this stage in state what our policy will be other than we feel like we're at our long-term model or very close to our long-term model from a capital intensity perspective. That will enable us to start to generate some meaningful free cash flow and stay tuned for our capital deployment strategy.

Great. Thank you, Dave.

I would now like to turn the conference back to Sam Franklin for closing remarks.

Thank you, Michelle, and thank you very much everyone for joining us today. Appreciate the questions. We look forward to seeing many of you on the upcoming conference circuit. Thanks again.

This concludes today's conference call. Thank you for participating. You may now disconnect.