Good morning. My name is Diane, and I will be your conference operator today. At this time, I would like to welcome everyone to the Silicon Labs Third Quarter Earnings Call. [Operator Instructions] Thank you. Ms. Pleasant, you may begin your call.

Thank you, and good morning. This is Shannon Pleasant, Vice President of Corporate Communications for Silicon Laboratories. Thank you for joining us today to discuss the company's financial results. This call is being webcasted and will be archived for 2 weeks. The financial press release, reconciliation of GAAP to non-GAAP financial measures and other financial measurement tables are now available on the Investor Page of our website at www.silabs.com.I'm joined today by Tyson Tuttle, President and Chief Executive Officer; and Paul Walsh, Chief Financial Officer. We will discuss our financial results and review our business activities for the quarter. We will have a question-and-answer session following our prepared remarks. Our comments today will include forward-looking statements or projections that involve substantial risks and uncertainties. We base these forward-looking statements on information available to us as of the date of this conference call. This information will likely change over time. By discussing our current perception of our market and the future performance of Silicon Labs and our products with you today, we are not undertaking an obligation to provide updates in the future. There are a variety of factors that we may not be able to accurately predict or control that could have a material adverse effect on our business, operating results and financial conditions. We encourage you to review our SEC filings that identify important factors that could cause actual results to differ materially from those contained in any forward-looking statements. Also, the non-GAAP financial measurements, which are discussed today, are not intended to replace the presentation of Silicon Labs' GAAP financial results. We are providing this information because it may enable investors to perform meaningful comparisons of operating results and more clearly highlight the results of core ongoing operations. I would now like to turn the call over to Silicon Lab's Chief Executive Officer, Tyson Tuttle.

Thank you, Shannon, and good morning, everyone. I'm pleased to report another record quarter, reflecting strength across the business. Revenue was up 10% sequentially, and we delivered solid operating performance, resulting in earnings growth of 20%. I think it's fair to say that the market share expansion story we've been talking about for the last several years is intact, and we're seeing our consistent investment in the R&D pipeline pay off. While macro uncertainty is a current business reality, we continue to be optimistic about our prospects despite the weak demand environment. I'll talk more about the various product lines at our Q4 outlook after Paul reviews the specifics for the quarter. Paul?

Thank you, Tyson, and good morning, everyone. Third quarter revenue of $149.5 million was up 25% compared to third quarter of 2011. The large sequential increase encompass our recent acquisition and organic growth, demonstrating the quality of this quarter's results. I'll start with the GAAP results first. Third quarter GAAP gross margin was 57.9%, which included $4.5 million of one-time charges associated with the Ember acquisition. R&D investment increased to $34.8 million, and SG&A expense decreased to $24.5 million, resulting in an increase in GAAP operating income to 18.2% or $27.2 million. GAAP earnings of $0.24 was slightly below our expectations and included charges related to the executive separation agreement, other costs associated with the Ember acquisition, the net gain from the acquisition of our headquarters buildings and $7.9 million in noncash stock compensation. Turning to our non-GAAP results. Gross margin was flat at 61% and consistent with our guidance. This is a good result, and we expect this margin stability to continue into Q4. Operating expenses increased, as expected, to $58.5 million due to the addition of Ember as well as strong performance of the organic business, which drove higher variable compensation. Organically operating expenses declined on a sequential basis, demonstrating continued disciplined around spending to improve leverage. R&D increased to $31.7 million but declined to 21.2% of sales. SG&A increased to $26.7 million due largely to variable compensation, but also declined as a percent of revenue to 17.9%. I anticipate operating expenses will be flat to up $1 million in Q4 to accommodate additional R&D activity. Operating income in Q3 continued to improve, ending at 21.9% of revenue. Other expenses were minimal and represent the debt service on our new credit facility. Net income in Q3 increased to $26.1 million or 17.5% of revenue. The Q3 tax rate…

Thanks, Paul. Despite macroeconomic weakness, our third quarter results -- I'm sorry, our third quarter revenue grew sequentially in the communications, consumer and industrial markets. Company wide, we set a new record for design wins, crushing the previous record and nearly doubling the total from the same period last year. Our Broad-based business was up 15% sequentially and 47% year-over-year and represented about 48% of total revenue. The strong growth this quarter was driven primarily by revenue highs in our MCU and power products. We've worked hard to diversify our business to avoid reliance on commodity markets like handsets and PCs and gain critical mass in our Broad-based business, particularly in our MCU and timing products. We have positioned the company to benefit from growth trends in energy efficiency, the Internet of Everything and the explosion in demand for bandwidth, all of which drive an increasing need for mixed signal ICs. It has taken some time to refine the business, but our discipline and focus is producing the promised market share gain. The Broad-based products are on track to total greater than 50% of our revenue in Q4. Our MCU products, which include wireless, represented 26% of total revenue and were up 29% sequentially in Q3. The addition of the Ember 32-bit MCU family for ZigBee low-power wireless networking was a large part of this increase, but record revenue in our organic MCU products also contributed. The MCU product line is gaining momentum even in the face of end-market headwinds. Our 8-bit MCUs had another record revenue and design win quarter. The design win activity further improved the 2013 revenue pipeline as these products gain share due to their optimization for space-constrained, analog-intensive and low-energy embedded systems. Both our Broad-based and low-power MCUs drove the sequential growth, bolstered by applications…

Thank you, Tyson. We will now open the call for the question-and-answer session. So that we can accommodate questions from as many people as possible before the market opens, please limit your question to one with one follow-up. Operator, please review the question-and-answer instructions for our call participants.

[Operator Instructions] Your first question comes from Steven Eliscu with UBS.

First question, just we see in microcontrollers -- we've seen -- or if you just look at the industry data from the SIA, we've seen a lot of price compression especially in 32-bit. And can you give us an idea as to what you're seeing with regards to pricing trends and how you're offsetting that?

Right. This is Tyson. Good morning, Steve. Yes, in terms of pricing, we've got a very differentiated solution with our MCUs. We take the ARM core and surround that with a number of value-added mixed-signal peripherals. So a lot of the pricing pressure out there is on what I would call pins and gates type MCUs that don't have a lot of differentiation that are more commodity-type devices. But in the applications that we're targeting, and we're targeting specific applications with our devices which rely on the mixed-signal integration that we're able to deliver, we're able to extract the value for that. We're reducing the board component count. We're delivering a performance that they can't get any other way. And in those cases, we're able to maintain our both the design win and the ASP on the device. We've been able to prove this on our 8-bit MCUs, but the 8-bit MCU market is highly commoditized in some ways. But as we're coming in with these devices that are really -- it's an embedded system. There's an MCU plus a lot of things around it. And so we've been able to prove with our 8-bit devices, and we're taking that mixed-signal differentiation and bringing that to the 32-bit space.

Great. And as a follow up, just trying to get an idea now that you have -- you've introduced 32-bit products. Seems the direction you're taking is more to integrate things like the temperature sensors and the wireless capabilities. Some of your competitors are focusing on products like the Cortex-M4 with the floating point capability, pushing higher end on the compute side. Is that for where you're targeting? Is that the direction? Do you see anything over the next year or 2? Or is it more about integrating -- more about integrating as you've done with the temperature sensor that you've talked about?

Right. So we're coming at the microcontroller business with a substantial position in the 8-bit business. So coming at this with a set of customers and a set of applications that we've been addressing that are not relying on a high-end processor like an M4. That being said, the Cortex-M3 has, we believe that, that was a good place to start with our portfolio, that has a good balance of cost and performance along with the entire ARM ecosystem. So we believe that that's a good place to start in terms of a processor core. We also believe that over time, we can expand both into the lower end and to the higher end as we gain some traction and build up the portfolio. That being said, again, the differentiation and the strategy that we have with the MCUs is about not just the processor core, which is the same core that a lot of companies are using. It's really about all the pieces that you wrap around at the mixed-signal. You mentioned the 10% through the wireless peripherals, the low-power consumption that we can achieve. Those are all areas where we believe give us a leg up on the competition.

Your next question comes from Anil Doradla with William Blair. Anil K. Doradla - William Blair & Company L.L.C., Research Division: A couple of questions. When I look at Broad-based business, you talk about contributing half of your revenues. When I look at over the next 12 to 24 months, how do you like the company to look like, Tyson? I mean, does this become -- what is the revenue composition? And second question was, how much did Ember contribute in this quarter? Was that a full quarter?

Thank you, Anil. On the Ember topic, we are not breaking out Ember separately. We are giving some directional guide in terms of the organic business, and MCUs grew and that we also layered on the Ember revenue. So that's the extent to which we're going to provide specifics there now and going forward. In terms of the composition of the revenue going forward, we have been investing very heavily in the Broad-based products: MCU, wireless, power and the timing products. And so that has been taking more than half of our R&D expenses have gone into those areas over the last few years. So we believe that going forward, we're seeing the results of that. We're now marching toward and in Q4, we should be at 50%. I don't see any reason why that -- those products would not be 60%, even 70% of our revenue as we scale the company up to a $1 billion and beyond. Anil K. Doradla - William Blair & Company L.L.C., Research Division: But Ember did contribute a full quarter of revenues in Q3, right?

Yes, at Ember -- this is Paul. We're very pleased with what we -- with the product lines in the first 90 days from Ember, and that was a significant contributor. But it was a significant contribution from our organic side of the business as well. But it wasn't a full quarter to answer your question.

Your next question comes from Craig Ellis with Caris & Company. Craig A. Ellis - Caris & Company, Inc., Research Division: Tyson, historically, SLAB has provided color on expectations for your growth around this time of year. I'm wondering if you can help us with your view of how you'd expect the major segments to grow next year, and if not, then provide some relative color if you can't provide specific growth bogies for the various segments.

Right. We're not providing full year guidance at this point. We'll be talking about that in January, in the next call. I can -- just in terms of the design win activity that we've been seeing across our timing products, across our MCU products and power products, all of that points to a strong year in 2013 as well as the traction we've seen on the automotive audio side as well as the video side. We believe that we'll be upping our share there, but we aren't giving specific targets. So we're bullish about 2013. At the same time, we're all looking at the same news and somewhat realistic about the demand environment out there. And so it's a little bit early, I think, to be talking about what we think we can do in 2013. Craig A. Ellis - Caris & Company, Inc., Research Division: Fair enough. Following up a prior question but at a deeper level of detail. Within timing, you've talked about design win mix shifting towards newer applications from communications. In MCUs, you've got the 32-bit product ramps. So in those 2 segments, how do you see the mix of business changing as you go through the year next year?

Right. Well I think that -- let's take those one by one, let's take timing first. If you look at timing, we've had a leadership at the high end with the communications infrastructure equipment makers, and we've had very good design win traction there. I think that if that market picks up, that is going to -- that business is going to do very well for us. So if the end markets and the economy picks up, we stand to benefit given the fact that we've won a lot of the sockets in these boxes going forward. But if you look, we've been investing over the -- again, part of that investment we talked about earlier in R&D has been directed at expanding our timing portfolio, both in breadth at the high end, but also pushing down into some embedded applications and some consumer applications with a full portfolio of clock devices. So I believe that -- we talked about the Q4 revenue that the embedded and consumer applications, and that's across a broad range of computing infrastructure and consumer portable-type applications, is going to be 20%. And I think that, that number going into next year, I think you'll start to see a continued diversification of that timing revenue going into next year. But I think that the new revenue that's coming in is going to layer on top of the growth that we should see in the communications infrastructure market. Second part of your topic in terms of 32-bit, we've had good customer interest and some design win activity with the 32-bit products, seeing a very nice reception there. I think that we'll start to see some revenue off of the new MCU products, but we've also got the Ember, the ZigBee products, that have come in and…

Well, I think it's a combination. We brought Arrow on a couple of years ago, and we've been putting a lot of effort into making our products easy to support, scalable in the channel. We can't talk to each one of the customers. We sell to thousands of customers through the channel, and we've seen those design wins up in every product line quarter-on-quarter, every year. We really see this as a measure of the health of the business that's out there. And so I think all that effort is starting to pay off.

Your next question comes from Sandy Harrison with Wunderlich.

So the biggest question I had right now that hasn't been covered really is kind of touching base on the video markets. I guess the first one is, as you start to see '13 layer in that you talked about in your prepared remarks, how are the ASPs looking here? And then also, how is your reach in the Tier 1 versus the Tier 2 and Tier 3? And then I have a quick follow-on after that.

Okay. Well, in terms of 2013, we're sampling our fourth-generation tuner that is now driven as the bulk of the 2013 design win. That has a strong cost down for us. So while we are addressing the market and being aggressive in taking share from the module makers and other silicon tuner makers, we believe the margins in our video business are going to step up next year. So that's an indication that our cost reductions are outpacing the ASP declines that we have in the market. That being said, the video business is not going to be up at the corporate total, but it will be somewhat closer to the corporate targets going into 2013. In terms of our traction with the Tier 1, Tier 2 and Tier 3, we've got a leadership position in the Tier 1. So really, all of the Tier 1 makers, certainly Samsung and LG in Korea, we've got a tight relationship with those customers and are doing a number of developments with them that are for some of our higher value-add products. So there, we're doing quite well in terms of the technology and the relationship and in the business. They are increasing the share of silicon tuners in their mix next year. So we believe that that's going to be some upside for us as well. But then we've been putting a lot of focus on the Tier 2, Tier 3 makers in China, Taiwan. We were starting to see some of the China customers ramping, coming up in Q4, and we believe that, that will continue. So we were about 30% or will be about 30% or above this year in terms of market share for video. We think that share will grow next year. Revenue will grow next year. We aren't ready to say exactly what those are going to be, but it's looking quite good across the board in Korea, in Japan, Taiwan, in China and some in Europe with the leading TV makers. So very bullish about the video business going into 2013.

Great. And my follow-up is you guys look pretty prophetic right now about getting out of the touch market and the handset business. It looks like it was a pretty good decision, although, at the time. A tough one. Are you seeing applications outside of the handset market for your solutions that are built into your MCU family? And if you are, in what areas?

Yes, in terms of the Touch -- actually, if you take a look at our 32-bit MCUs, you can look at that on our website, the latest 32-bit MCUs integrate touch functionality. And we're continuing to see a number of industrial applications, a number of low-power consumer applications where you need a small touchscreen or button or other types of human interface controls that are embedded into the system. It's not just the touch controller, but it's also the controller for the entire system and are seeing some good activity. Those are good value-added features. And I would say that the fact that we engaged with the handset market and refined our solution in a high-volume type application, that was actually beneficial to us. But I do agree with you that the exit of that business was the right thing for us.

Just for housekeeping, how much of revs was that this quarter?

We talked earlier in the year about that when we -- I think Q1, it was about 8% and Q2, it was about 5%. And we're going to see that continue to ramp down. It ramped down somewhat in the third quarter. It's going to last maybe a little bit longer than we thought, but it's certainly on the march down becoming a small fraction.

Your next question comes from Vernon Essi with Needham & Company. Vernon P. Essi - Needham & Company, LLC, Research Division: I'm wondering, Paul, if you could give us an outlook on your tax rate going into next year and even further beyond that, in 2014?

Sure. We guided 20% to 21% for Q4. As you may recall, the federal R&D tax credit was not reinstated for 2012. At this point, no one really knows when -- if and when that will be reinstated, I think. So the outlook for '13 and '14 largely depends upon that. I think if you assume that it comes back, we're probably in the mid to high teens. Vernon P. Essi - Needham & Company, LLC, Research Division: Okay. And then getting back to, I guess, on the most recent question on the video side and then just in general on the consumer electronics market. You've seen a little bit of a lift there, and I guess I'm trying discern whether you feel, Tyson, that's more or less a function of perhaps share gains on your front versus just the end markets overall. And since you also ship into the audio side, are you really seeing any seasonality, if you will, on the consumer end markets on a global basis? Or has it been pretty much flattish from your perspective?

Yes. So I mean, from our perspective, if you take an aggregate to Broadcast, we were up 8% from last quarter, 18% year-on-year. That is really a function of the growth in video, some growth in automotive and some growth coming into the third quarter on the CE side. I wouldn't say that the market on the consumer side is strong. I think if we -- I think we've got a good position in the CE market. And if the economy was stronger, we would benefit from that. And we also, in that number, that 18% up, we did still last year have -- that was some decline on the handset side. So we outgrew that with the CE automotive and video. But I think it's a market share gain story, in this case, with video taking share from mostly the CAN module type tuners and in audio, taking some share in automotive and continuing to penetrate into the CE market. We introduced a high-end consumer device this quarter and are seeing good traction with companies that really value our performance and integration and size and everything else. So it's quite positive on the position that we are and the outlook going to 2013.

Your next question comes from Tore Svanberg with Stifel, Nicolaus. Erik Rasmussen - Stifel, Nicolaus & Co., Inc., Research Division: This is Erik calling in for Tore. Just want to get back to the guidance. Your guidance seems to be very solid now, well above consensus. I mean just what gives you the confidence? What are you hearing that you think you can achieve this level? And are there any downsides that you see that could impact results? And then if you could just go through -- I think I missed the GAAP and non-GAAP outlook for the fourth quarter.

Okay. Erik, this is Paul. I'll take those questions. For the guidance, what we've been seeing is similar to what we saw last quarter. We've mentioned in the earlier part of the call we've seen consistent strong bookings trend. And think this really reflects a lot of the product cycle momentum we have across many of our product lines. And certainly, we're not immune to the macro environment. So I think that plays into -- that is also comprehended in the guidance. But what we've seen from ordering patterns in the past month and into this quarter is what gives us confidence in that range of $145 million to $150 million. And on the guidance, we have guided GAAP of $0.38 to $0.43, and a non-GAAP of $0.55 to $0.60.

Your next question comes from Ian Ing with Lazard Capital.

Could you talk a bit about the macro impact out there? Is it impacting the number of design wins that make it to market or the volumes of some of the current designs? Perhaps a little bit geographic and end market granularity?

All right. Well, thank you, Ian. Yes, in terms of regional, we have some strength in Asia. I would say that Europe and North America were weak but stable. A lot of times when the economy is struggling, we actually -- it does create some opportunity. And I think that customers that are driving for differentiation in the market, driving for cost down or further integration can be driven to our products. But I think in terms of -- the comms infrastructure market is not strong. The consumer market is not necessarily strong. So if we look there, we do see some impact from the macro demands. But overall, it's hard to tell given the trajectory of our design wins, either we're doing the right thing with the products and the product strategy that we've got and that's starting to really take some traction, or there is demand out there for the types of products that we do. The fact that we've been targeting these at some of the new and emerging areas, I think is also potentially somewhat immune to the specifics of the macro, I mean, given that the things in energy efficiency, a lot of the Internet of Things applications where people want to connect devices up to the Internet and to themselves for security, home automation type applications. And a lot of the need for bandwidth, the design win activity and the comms infrastructure market has been strong, while the demand has not been necessarily reflective of that design win activity. There's a little bit of disconnect there. So we're -- that's kind of where we are.

I see. You've got some time expansion opportunities with integrated products. And then just a bit on -- now that you've talked about smartphone declines, I mean, how about some of the other secular decliners: FM handsets, set-top box, modems, mature business? Is that sort of a long tail, or is that been falling off?

Ian, this is Paul. That was -- that's been gradually declining when we ended last year, and that was about 11% as we exited the year, 11% of the company, those 2 product lines. And that's now probably in the 8% to 9% range. So we'll continue to see that step down but at a somewhat moderated pace.

Your next question comes from Cody Acree with Williams Financial.

I guess back to maybe the last question. Maybe if you can handicap or look at the company as a whole, take a look at your product lines and maybe your end markets, what percentage do you think is really being impacted by the macro and seeing something maybe more consistent with what we're hearing from some of the larger players? And what percentage is that product cycle driven or some of new design wins? I'm just trying to get a feel for when things do finally come back, how much dry power do you have that starts to contribute. Is it a small piece, or is it a much larger piece of the total revenue?

Right. This is Tyson, if you look across our businesses, let's take Broadcast for instance. There's a lot of consumer products in there, and I would say that those are impacted. And if things come back, I would think that people would start spending more money and driven there. If you look through the Broad-based business, I think it's a similar story. I think that we saw the 8-bit market decline this year. The whole semiconductor market has declined. And I think that if we see some strength that that's going to just broadly raise all of the markets that we're dealing with in there. So communications, consumer, industrial, probably consumer more than the others, but certainly the comms has been impacted. I think that the strength of our results and the growth that we're going to see into next year and the growth that we're seeing right now is really the result of R&D activity, driving product development, getting the strategy right and targeting these new emerging applications and driving design wins and product cycles. So I think it's blocking and tackling with all the work, but seeing the results of that finally starting to pay off.

And Tyson, you mentioned that, especially with the Korean TV makers, that you were seeing increased penetration. Could you give us some color on how far into their products line you are today, and how much room you've got left to go?

Yes, I mean Samsung has been our largest customer for a long time as a company. We sell them multiple products. On the video side, we have a great relationship there, and also with LG. And those 2 customers have been taking a lot of share from other companies. In particular, the Japanese brands have come down. So I think we have benefited disproportionately from there or proportionally with their success, and I think that will continue to be the case going into 2013.

Do you think you have a significant amount of room left within their portfolio though?

I do. This year, they did not -- they had a substantial fraction of their model which you still use the discrete tuners. And so they are increasing the penetration of silicon tuners in their product portfolios, and I think that a lot of the other -- if you take China and Taiwan, those were mostly discrete tuners and those are going to be converting over to silicon tuners over the next couple of years. So I think we'll see an increase in silicon tuner penetration globally in the flat-panel TV market, the iDTV market in 2013, with probably the rest of it converting over into 2014.

And lastly on that, on the Chinese and Taiwanese, it sounds like you're just getting into some of those at a time when maybe seasonality is going to start to work against you. Do you expect that early penetration to some of those newer customers is going to be enough to offset that seasonality? Or how should we look at that?

Right. I mean, you really have to look at the video business in terms of model years. So we are currently shipping towards the tail end of the 2012 model year. There's a conversion from 2012 to 2013. So a lot of the 2013 wins were made earlier in the year, and those start to ramp. Some of the ones in China are ramping now in advance of the Chinese New Year, but then if you go into next year, those will continue to ramp and then the Tier 1 players typically convert in Q1.

Your next question comes from Terence Whalen with Citigroup.

This question refers to a comment that you made earlier, I believe, Tyson, referring to consumption tracking -- revenues tracking to consumption. I want to understand that comment given that you did see a fairly large sequential increase in your channel inventory. And also, Edom grew about 17% sequentially in the third quarter in a weak Asia consumer environment. So I wanted to understand your view of whether there's risk that channel inventory at this point is too high?

Terence, this is Paul, I'll take the channel inventory question. The channel inventory did grow, grew to 52 days on a unit basis. That's a backwards looking measure. There are some specific new product ramps that are in there that we're well aware of, and we know where those will be shipping in the near term. So we're quite comfortable with that level of inventory.

Okay. And so as a follow-up question, it seems like Ember is doing well. Can you describe, given that other companies, Linear Technology, Max, some other well-equipped analog companies are competing similarly in the space, can you just help us to understand what's allowing Silicon Labs to win designs and what differentiates your approach to low powered wireless versus some pretty impressive peers?

All right. So this is Tyson. So if we take the ZigBee product, you've got to differentiate between the low-power type devices which are really for control and sensing type applications where you have a large number of nodes that are connected, take a home automation system or home security system. You have door sensors and window sensors and smoke detectors and thermostats and temperature sensors throughout the home, and those all connect into a central place. So this relies on mixed-signal interfaces. It relies on very low power. It also relies on top-quality software and the network protocol stack. And that was really where Ember had a lead in the market, the main competitor there being TI, but also companies like NXP and others that are competing in that space. So we have a leadership position, both in terms of market share and in terms of software maturity there. And I believe that if you look at the silicon platform that we have and where we can take that given the skill set that we have and the expertise that we have on the mixed-signal side, we are very well positioned in this Internet of Things and which I view is one of the large emerging market that's going to drive the demand for mixed-signal devices going forward. And I think across-the-board, we've got all the pieces and are out there delivering that today.

Your next question comes from Blayne Curtis with Barclays.

I just want to follow up on the video products. I know you don't want to sign up for a revenue number, but I was wondering if you could just frame the market, the potential ranges for silicon tuner adoption next year. And then we've seen some press releases from some new guys like an RDA Micro. Just talk about the competitive environment and pricing environment as you go into next year?

Right. We talked about the fact -- I mean we've locked in most of the 2013 design wins at this point. And in terms -- we feel confident that our cost reductions will outpace any ASP declines. I think you have to be careful when looking at -- somebody can call a product a tuner, but the tuner that we have is addressing hybrid applications, which means that it receives analog and digital television, and those have to have a very high degree of fidelity. There's also a difference in a tuner that goes into mobile applications and in the ones that go into flat-panel TVs. With the one in flat-panel TVs being the most difficult problem to solve, that you have to have very, very high levels of performance. And you also have to have proven performance around the world. The TV is shipped into every geography, every city, every standard, and you have to have that level of experience. So this is, I believe, a -- the product that we have and the position that we have and the fact that we went after the Tier 1s and have the dominant share of the Tier 1 makers, puts us in a very good competitive position going forward. And I also want to note one other thing that a lot of people have talked about the sustainability of this business long term. I fundamentally believe that this function will not be integrated into another device, as we saw with the FM tuner and handsets. And so I believe that our market position, our pricing leverage that we have given our performance and our track record and the penetration of the silicon tuners is going up here over the next couple of years, that we've got a really good couple of years. And we're going to have this as a good strategic business for a long time to come.

If you could just comment on the -- just your perspective as design wins are lockdown kind of just the adoption of silicon tuners in the TV market seems like a fairly flat market, but you're expecting an increase in adoption. Could you just frame what ranges that could be?

Well, for 2012, we were -- we guided to 30% that we'll hit that or exceed that this year. We are the dominant player in terms of silicon tuners, in terms of volume, the #1 supplier of those, and that number will go up next year. I would hesitate to speculate on what that will be next year and the following year. But I think that over the next couple of years, you'll see the complete adoption of silicon tuners. But today, 2012, we still have a lot of the module tuners. And in '13, you'll still have a fair number of modules. But I think that over time, those will -- are not competitive in terms of size, performance and cost. I'm just not prepared to give a specific number at this point.

I appreciate that. And then just a quick housekeeping for Paul, and this maybe obvious. But the Ember deal is in MCUs. You used to break out short-range wireless. Is that in MCUs as well? Or are you still breaking that as a separate category?

No, we've essentially combined MCU and wireless into one category. And so...

Yes, Blayne, the rational for that is that the ZigBee devices have a Cortex-M3 core inside. A lot of these systems are really embedded where you've got the wireless as a peripheral and those processors are serving as the main MCU in the system. So it's really difficult to break those out separately. So we think that the right thing to do is to just put that all into the MCU category going forward.

Yes. It's very synergistic.

Your next question comes from Craig Berger with FBR Capital. Craig Berger - FBR Capital Markets & Co., Research Division: I wanted to just ask, I know you're not providing guidance on Q1. But can you help us understand what's historic seasonality? Also, it seems like more of your business is Broad-based industrial that tends to do better in the first quarter. How do we think about seasonality, and any factor -- other factors that might be in play?

Well, Craig, this is Paul. Historic seasonality would suggest something like 5% or 6%, but that norm hasn't played out in a number of years. So I hesitate to speculate what the first quarter of '13 would be. We have so many different businesses now that operate on different seasonality cycles that is becoming more difficult to predict and it's also muting the overall impact that we used to see historically in a number of years ago. Craig Berger - FBR Capital Markets & Co., Research Division: Great. The other question I had was just a brief update on the Power over Ethernet. I think that's in the Access business. About how big is it? What kind of traction are you seeing in that business?

Craig, this is Paul again. PoE is a relatively small contributor. It's in the low single digits as a percent of revenue for the company and it's been pretty steady at that level in recent quarters.

Our last question for today comes from Arnab Chanda with Avian Securities.

2 questions. One, Paul, it seems like you always have a very good balance sheet. It seems -- it's still pretty strong but you are increasing your debt position. Is there a change, or is it just a kind of because of the acquisition? And then one question for Tyson. If you look at your embedded end market, especially the market you're addressing, the Internet of Things, your main competitor, TI, forgetting what their size but obviously lack of focus, they also have technologies such as other kinds like Wi-Fi, and some companies like Qualcomm are trying to use a cellular kind of radio strategy in the similar market. Do you think that it is necessary to have kind of higher speed wireless technologies? Or do you think that your partnership strategy kind of works? If you could explain that.

Arnab, this is Paul, I'll take the first question. Yes, we do have -- we continue to have a very strong balance sheet even with the debt. We took on debt historically below rates. We took advantage of this opportunity, and we used that, the proceeds there, to finance -- basically finance the acquisition of buildings, which were under a synthetic lease which would've expired next year. So we're able to buy these buildings at a sub-market rate. There was an option in that -- in the agreement that we had. So that's really some of what's behind that. And the balance sheet remains strong across all areas.

All right. So in terms of the Internet of Things applications, I believe that a lot of the growth in units is going to be driven by areas outside of handsets and PCs. I think that you look at all the sensors and actuators, everything from light bulbs to electric switches to temperature sensors, thermostats, all of these require low-cost and low-power and also embedded operations. So a lot of the devices that companies like Qualcomm have are optimized for handsets, and those require a different optimization point. That being said, if you -- we've been through the analysis, and if you look at the energy consumption of a ZigBee network, it's 1 to 2 orders of magnitude less than a Wi-Fi type system and certainly far less than a cellular system. And these are applications where the -- ultimately those batteries have to last 5 to 10 years. And so we believe that there is space for another wireless standard to be widely deployed similar to the way Bluetooth and Wi-Fi coexist next to one another. That being said, a lot of the applications for Wi-Fi, there's multiple opportunities for partnering there. And certainly, there are some of our embedded applications which require that. But we believe that the top-tier makers have a mature solution, and we don't know exactly the differentiation that we could bring at that point. But certainly, there are applications for Bluetooth, for instance, with the low-energy applications that could be interesting at some point. But we believe that ZigBee, in terms of these industrial, home automation, security type applications, are going to be broadly deployed and that that's the right technology going forward. And that's the one we're focused on in terms of the embedded applications and also the integration path going forward.

All right. That concludes our call today, and thank you very much for joining us.

This does conclude today's presentation. You may now disconnect.