Good morning. My name is Kim and I will be your conference operator today. At this time, I'd like to welcome everyone to the Silicon Labs' First Quarter 2017 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. I'd now like to turn the call over to Ms. Jalene Hoover.

Thank you, Kim, and good morning, everyone. Thank you for taking the time to dial-in. Tyson Tuttle, President and Chief Executive Officer; and John Hollister, Senior Vice President and Chief Financial Officer are on today's call. We will discuss our financial performance and review our business activities for the first quarter. After our prepared comments, we will take questions. Our earnings press release and the accompanying financial tables are available on the Investor Relations section of our website at www.silabs.com. This call is also being webcast and a replay will be available for four weeks. 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 and that information will likely change over time. By discussing our current perception of our markets, 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 accurately predict or control that could have a material adverse effect on our business, operating results and financial condition. We encourage you to review our SEC filings which identify important factors that could cause actual results to differ materially from those contained in any forward-looking statements. In addition, it is not our intent that the non-GAAP financial measures discussed today replace the presentation of Silicon Labs GAAP financial results. We are providing this information to enable investors to perform more meaningful comparisons of operating results and to more clearly highlight the results of core ongoing operations. I would now like to turn the call over to Silicon Labs' Chief Financial Officer, John Hollister.

Thank you, Jalene. I am pleased to report that first quarter revenue was $179 million, at the high end of our guidance range and representing a year-on-year growth of more than 10% consistent with our target model. Revenue results for Q1 were primarily led by upside performance in our IoT business. IoT started off the year on a strong note with revenue ending at $88 million or 49% of total revenue. Surpassing our expectations with robust 24% year-on-year growth, the upside in IoT was led by our 8-bit and 32-bit MCU products combined with another solid quarter from our mesh networking products. Infrastructure finished the quarter at $36 million or 20% of total revenue, representing year-on-year growth of 14%. Infrastructure revenue was slightly behind our expectations on a sequential basis, down around $1 million due to weakness in the optical networking market which affected our timing products. Partially offsetting those was another strong quarter for our isolation products where we have now completed nine straight quarters of consecutive growth. Broadcast finished the quarter at $37 million or 21% of total revenue which was seasonally down sequentially as expected. Our broadcast automotive products performed well in the quarter with around 16% year-on-year growth. Access declined in the quarter as expected to around $18 million or 10% of total revenue. Geographically widespread growth in our IoT products drove record performance in Europe in Q1which was offset by declines in the Americas and Asia. Looking at revenue by end market in Q1, we saw growth in industrial primarily on strength in IoT. Consumer and communications were down. Distribution revenue for the quarter was 70%, up 1 percentage point from last quarter. No single customer represented more than 10% of total revenue. Non-GAAP gross margin for Q1 was in line with our guidance at…

Thank you, John. We're very pleased with our first quarter 2017 financial results reflecting solid year-on-your progress with more than 10% revenue growth and 24% growth in non-GAAP EPS. Our Internet of Things and infrastructure businesses now represents nearly 70% of revenue targeting large, high quality, sustainable and growing markets. Silicon Labs largest and fastest growing market opportunity is the Internet of Things with revenue approaching half of our total revenue. In Q1, our IoT product achieved the fifth consecutive record revenue quarter with year-on-year growth of 24% exceeding our 20% strategic growth target. The IoT is made up of thousands of applications and tens of thousands of customers spending a wide range of market segments. Our IoT customers need wireless connectivity solutions, which simplify development, streamline deployments, offer high performance are reliable easy to maintain and have a long lifetime in the field. We're seeing a growing number of use cases in business models unlocking value by connecting things to the Internet. For example, municipalities are increasingly incentivized to maintain their infrastructure, optimize the distribution of services, and comply with regulations. They're turning to smart city technology to accomplish these objectives through energy management, parking systems and smart lighting. Silicon Labs is addressing these needs with a broad based wireless portfolio built on a flexible hardware and software platform. We are capturing market share with a strategy built around our software architecture, which is fundamental to the IoT. Unlike the PC and handset markets were software has optimized around the single application, software for the IoT team must support a variety of market segments and applications. Our multi-protocol Wireless Gecko solutions enable enhancements, upgrades and updates, which are increasingly critical to the maintenance and lifecycle of IoT devices. In markets with emerging use cases standards and protocol, the ability…

Thank you, Tyson. Before we open the call for the question-and-answer session, I would like to announce conferences that we will participate in during the second quarter including Canaccord Genuity's Technology Conference in Toronto on May 25th. Stifle's Technology, Internet & Media Conference in San Francisco on June 6th. Stephens Spring Investment Conference in New York on June 7th. And NASDAQ's 36 Investor Program co-hosted with Jefferies in London on June 15th. For those of you who are unable to attend our Analyst Day in March, you may obtain a copy of our presentation and listen to the webcast in the investor section of our website at www.silabs.com under Events and Presentation. We would now like to open up the call for your questions. To accommodate as many people as possible before the market opens, we ask that you please limit your questions to one with one follow-up. Kim?

[Operator Instructions] Your first question comes from a line of Tore Svanberg from Stifel. Your line is open.

Yes, thank you and congratulations on the quarter. First question for Tyson, Tyson you talked about the new Gecko SOCs having more memory. Could you maybe expand a little bit on that especially as far as how that opens up potentially a bigger market or new customers just trying to understand the potential return you can get on that investment? Thanks.

So, the new wireless Gecko SOCs are the largest memory footprint devices and part of a growing portfolio of devices that we've been talking about for some period of time. We've seen a number of trends in the industry where customers are adding multiple protocols to the wireless SOC or the internet end node connected devices. So that's why for example be a device which would connect to zigbee network to achieve mesh networking capability but also be able to speak a Bluetooth smart and talk directly to a mobile phone. So we've seen a number of different combinations of these wireless technologies and customers wanted to integrate those into a single device. So that requires more functionality and more memory. You also have desired customers want to put that capability and update that over time. So as the wireless protocols change and the functionality changes, they want to be able to push updates. So that means that you'll have to take multiple stacks and multiple versions of the stack and keep those in memory as well. So those are all trends that are driving additional memory and that at the same time is driving higher selling prices for the devices and tending to push the overall level of functionality up. We see this as a very positive trend and very happy to introduce this new product to be able to address those needs.

That's very helpful. And that's my follow-up question. You guiding the infrastructure business to be up sequentially in the June quarter, now there's some reports out there that optical remains weak especially on China. So is there some new product ramps or is there anything else going on as far as that business being up sequentially in June? Thank you.

Yeah. The timing business in particular was down in Q1, largely due to weakness in our China customers and also in optical networking. And we do see that continuing somewhat into Q2. That will be offset by very good performance on the isolation side, so isolation products have had a nice consecutive record in Q1 and we see that that will continue that trend and into Q2. So the net-net as we think we do think that the booking patterns in Q2 overall will drive infrastructure to be up somewhat but still not back to where our expectations would have been earlier in the year.

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Sounds good, congratulations again.

Your next question comes from the line of Anil Doradla from William Blair. Your line is open.

This is Joe Hodes here for Anil Doradla. Tyson at the Analysts Day, you kind of focused on infrastructure and IoT and just slightly touch on EVs, I mean Mark Thompson talked briefly about automotive, given that auto has been the third driver in recent years, can you give us an update on your outlook for automotive segment, what you expect for growth and if you see anything materially different as result of the Qualcomm NXP merger?

On the automotive side, we continue to see progress on the broadcast the automotive radio. We saw that business was up 14% year-on-year and we believe that we're still very well positioned to take share from NXP or what could be a future Qualcomm in that area as we have a very compelling solution compared to what they have. And we have a number of the Tier-1 makers wanting to incorporate our automotive radio functionality and bring on a new supplier because NXP being in the number one position tends to dominate that market. It's about $400 million market and we have a small share today. So we think we can continue to gain share there. We also see the electric vehicle market and as interesting that's in our isolation product that is partially responsible for some of the record performance that we've seen in that business and we continue to get very good traction in the automotive area. I would like to say that the automotive mix of our business is still relatively modest. It is in the 8% range of total revenue with the majority of that being in the broadcast automotive area. So overall, automotive is still a modest part of our business but we feel very good about that as a growth driver for us going forward.

Great. And then you guys you talked about your busy M&A streak over the past several years and obviously just raised a significant amount of capital. Can you talk about some important pieces that you think might be missing from your vision of where and what Silicon Labs can be three to five years from now? And then could you remind us right any internal hurdle rates you use when you're approaching M&A opportunities? Thanks.

I'll talk about the criteria. We are seeking targets that are growing and have a strong strategic fit to the company and - which can add adjacent capability to what we're doing or accelerate our product development roadmap in which would be accretive. So overall earnings, I'll Tyson comment on the specific areas of focus.

Yeah. So certainly we've been focusing primarily on the Internet of Things area. We've done a number of acquisitions in that area over the last five years and we certainly see that as the primary focus of our M&A activity. But we've also indicated during our Analyst Day that the infrastructure area where our high quality businesses and timing and power and in isolation provide good areas for us to consider additional incremental businesses that would fit in with those strategies as well.

Great. Thanks.

Your next question comes from the line of Harsh Kumar from Stephens. Your line is open.

Yeah. Hey, guys, first of all, congratulations, very solid results, strategy seems to be playing out really well. Tyson, if I can ask you, we've heard several companies talk about sort of explosive growth in data centers that's on the horizon, you mentioned 100 gig part of your commentary. I was wondering if you could scale that business, I know it's small but any kind of relative size idea would be helpful for us?

Our optical networking business is the primary driver of our timing revenue. We - the data center portion of our revenue and interconnect within the data center, we have seen comments from other companies where that is a big growth driver. That is - that does not have as much timing content, it's really be the metro area networks in the long haul and data center interconnect between data centers that where we play more. And those are some of the areas but we did see some weakness in Q1. So I think that the big ramp of the 100 gig inside the data center and moving to 400 gig is not something that is going to be a huge driver for a timing, although we do play in there somewhat, but it is mostly in the higher performance longer haul.

Understood. And then, as a follow-up, you've got the U.K. smart metering program, that's sort of on the way. And I was curious for explosive markets - for explosive growth in the IoT market which you're seeing but from lots consumers, lots of devices, are you seeing any government programs here in the U.S. that perhaps could be huge for us just a macro level of talk on that or thoughts on that would be very helpful for us?

We do see activity in U.K. and continued rollout of the smart energy platform there and that continues as we move here to 2017. I see that the main benefits in the U.S. being you've got smart home activity. There are a lot of smart city activities and energy efficiency requirements and the trend towards LED lighting and a lot of various industrial applications. I see that is mostly driven by the economic benefit of deploying these technologies followed by consumer demand for convenience and improving quality of life with within the U.S. really the regulatory pieces being down the list.

Got it. Thanks guys. Congratulations, again.

Your next question comes from the line of Blayne Curtis from Barclays. Your line is open.

Hey, guys. Thanks to taking my question and nice result. I just wanted to follow-up on previous question in infrastructure, any perspective is just how big optical is within that bucket if you can just break out the exposures there, that would be helpful?

Optical is about 80% of the timing business. That's overall, it's at least three quarters of the business. We've got emerging some emerging pockets of that within data center and wireless that we've been talking about but those ramps are really further out.

And Blayne, within the infrastructure category overall timing is about two one compared to the isolation business.

Very helpful. And I just wanted to ask you on the gross margin, you're guiding it flat obviously with the weakness in timing you know IoT is a bigger percentage, but you're keeping it flat, do you about the offers is gross margin you're seeing in that as you got the rest of the year, if IoT continues to outperform here just effective on gross margin would it be able to stay at the 59 level or would it below?

Yeah, Blayne, so there's puts and takes and definitely products mix within these categories, but as we indicated earlier the bulk of growth in Q2 we expect to come from IoT and as you've got wireless is now over half of the overall IoT category and there's a sizable component of wireless now that's comprise of module sales. So that is a bit of a drag on margin. So IoT margins overall bit below the corporate average not much, but it bit below and you know our goal is to maintain stable within the range and targeting to hold out of 59% level.

Okay, thanks.

Your next question comes from the line of Matt Ramsey from Canaccord Genuity. Your line is open.

Thank you, good morning. Tyson in your script you've talked quite a bit about operating systems in IoT around Micrium et cetera. I just wondered if you could maybe update us on the landscape there a little bit, how fragmented is the operating system space in IoT are those decisions made in end products typically by a suggestion of the hardware vendor like yourself or from the customer side, and just I guess as a follow up to John, is this something that as operating system in more software sales or packaging with your IoT business is that should we think about that as an offset to the gross margin pressure for maybe the mix of sales in the new IoT business with sort of platform hardware pulling the gross margin down and to software something that could offset that in the long term? Thanks guys.

So the operating system that came in through the Micrium acquisition. We are in the process of extending that, we launched a new version of app that supports multiple architectures in Q1 along with some development tools, which make it more flexible and capable. And we are in the process of optimizing that operating system for IoT to creative, what is essentially an IoT operating system that integrates all of the connectivity and security that's required for these end node devices. That does provide a potential revenue stream for us although today that's small in the single digit millions of dollars. Longer term there's multiple options for us to monetize both the software as well as a service and maintenance and updates of devices and that's a very exciting opportunity for us although I would say that that from the revenue basis is somewhat out in time. You can imagine that when devices get connected to the internet, like your phone gets connected to the internet or when you get a device it lives into the future, and it gets additional capabilities that you can upgrade over time and extend and our customers would like help in doing that and that that again takes us beyond just the silicon and into the RAM in software and service sales and device management and all of these sorts of things. So while I think near term it's a very exciting opportunity that is bringing customers to us for our solutions and the real time operating system in the IoT operating system that we're developing provides a significant differentiator for us and certainly these customers are we supporting number of different operating systems and a lot of the customers don't use an operating system at all today. But we think that is the functionality continues to evolve that there's going to be more and more need for this and as you extend the business out into the long tail of applications across all these different markets and different types of functionalities that this type of platform approach and kind of you know fully baked software, ready to go software, architecture and our operating system becomes really, really important for our customers.

Yeah, I don't really have much to add to that, it's John.

Fair enough John. Thanks guys.

Your next question comes from the line of Craig Ellis from B. Riley. Your line is open.

Thanks for taking the question and gentleman congratulations on the product and quarterly financial execution. John, I think you said in your commentary that in the outlook operating expenses would be in a range that I think implies a sequential decrease of about a $0.5 million, I know that mass set cost were expected to take up in Q1, is the decrease lower mass set and slightly lower, why would the operating expenses be lower and how should we think about the second half of the year on that line item?

Yeah Craig thanks. So the mass plan has been relatively stable, what you're really seeing is more on the payroll tax effect, Q1 rolling off into Q2, but the delta is pretty modest you know we came in the just below $75 million in Q1 and indicator range of close to that just slightly below that for Q2. We do have a modest amount of incremental hiring in a few areas, but the overall goal would be to have the you know the roll off of those annual effects offset this modest incremental hiring and to basically hold up as flattish for the balance of the year. We provided a 3% call earlier this year and we have not updated that view today.

Thanks for that. And then switching gears and shifting towards much more of a longer term question at Analyst Day the company talked about a goal of $1 billion in revenues in the 2020 timeframe, Tyson I thought I would just open that up and ask you to comment on how you see IoT and infrastructure evolving over that multi-year period both from an offerings and end market standpoint. And then John if we just run that target model out it seems like $5 in earnings would be possible at that revenue level, it is there anything that you would see as you look out to the longer term growth of the company that would cause any expense or gross margin discontinuity. So thanks for the color on those two items guys.

So Craig this is Tyson, I can comment on the markets in the revenue opportunity. Consistent with what we said in our Analyst Day, we believe that our largest growth opportunity is in IoT and we've provided a strategic growth target of 20% for that and you've seen least year in the first the last three quarters we've exceeded have had a very nice growth there. I think that the underlying complexion of that market in the growth drivers are indeed quite long term and spread across a wide range of customers in applications. So we believe that is an attainable number, it's certainly my hope that over the long term timeframe our leadership in these areas and in the explosion of the market opportunity within IoT the proliferation of devices in the deployment of networks and gateways is going to continue to drive very exciting performance in IoT area set of products. So I feel very bullish about our ability to maintain the growth in that area. The infrastructure area is again very promising driven by a lot of long term trends the growth of data and increasing energy efficiency and the deployment of our isolation technology has seen very good trend, and we have a very strong roadmap there and in the timing area the continued deployment of advanced 5G wireless networks and data center and continued penetration of our product to the optical networking space tend to give the infrastructure area very positive long term view. We've talked about a 10% rate there and even with the weak Q1 performance, we had a 14% year-on-year growth. So I think that those growth trends are intact with the legacy portions of our business in broadcast and access more stable we've got it goes both that down 10% but those becoming a smaller and smaller piece the infrastructure and IoT areas are now are now approaching 70% of revenue and that percentage is going to continue to increase. So I feel good about our long term growth trends our positioning in the market the quality of those businesses the competitiveness of those and certainly you can take that model out in the future and we'll hit that $1 billion mark.

And Craig you can perform your long term analysis that as you clearly done there, but if you just look at the company's strategic model as far as how we're targeting to operate the business, we're pleased that we achieve that performance in the second half of 2016 and you know as we move from period to period, we're continuously evaluating the tradeoffs between gross margin stability, the need to invent in the business, revenue growth at any particular point in time but indeed as you look out at $1 billion revenue level versus our profitability targets, we think there is definitely the opportunity to expand earnings very significantly.

Thanks guys, good luck.

Your next question comes from the line of Suji Desilva from ROTH Capital. Your line is open.

Hey, good morning, Tyson and John. Congratulations on the strong results here. So in IoT at last couple of years, the first quarter has been strong, I recall the 8-bit market has seasonal weakness typically in the first quarter, are the pass the plane where the legacy 8-bit product seasonality impacts that or are those equally growing the second IoT trend as much as the 32-bit ones?

We see quite strong performance out of our 8-bit products. If you look at the revenue in Q1, I mean despite there is a consumer seasonality piece of 8- bit, but we actually had record revenue in the 8-bit, all-time record revenue in Q1 in our 8-bit area and we've continued to introduce new products in that area. If you look out into the market, you've got consolidation of companies like Microchip and Atmel and you've seen comments from those competitors where they are constrained on capacity and also raising priced out in the market, that's very favorable to us. That is driving some customers to us. And we have a very broad 8-bit portfolio with which to address that. And we see quite strong performance out of our 32-bit products as well. Although more and more of the 32-bit area is moving those, a lot of those customers are moving into integrated wireless functionality and we do see the wireless is being the strongest growth driven in all of the IoT and that continuing forward as well.

Right, Tyson, that's helpful color there. And then on the products in the IoT area, you guys have done a lottery and it seems to be put together very compelling product platform, can you help us understand what kind of remains if you would in the product roadmap, you would move the products forward on to help us to understand what more you can do to solidify your position, because it seems like it have done it already?

Can you repeat the first part of your question? I didn't hear exactly what you was talking about. I am sorry.

Sure, Tyson. It seems like you guys in IoT the products you've done a lot already to kind of solidify the product features and sets. I am wondering what other vectors you can here move the products forward on in the roadmap, what other things you can approach to try to continue strengthen that position?

Got it, thank you. In IoT, we continue to expand our portfolio especially on the wireless side with all of the multiprotocol capabilities of this Wireless Gecko platform, a lot of the aspects of those are now software and we continue to invest in tools and communication stacks in operating systems and cloud and devise management technologies to be able to offer more and more the solution to our customers as they create these end node devices. We also have a number of sensors that go into those and that business - that portion of the business is also quite strong. So we can - we see the majority of the investment and the focus on driving cost and integration and functionality into the wireless area but that also spills over using the same platform into the 32-bit MCU area with some continued modest investment in the 8-bit like we just talked about in terms of that opportunity.

Great, thanks guys, congrats again.

Your next question comes from the line of Ruben Roy from MKM Partners. Your line is open.

Thanks. Tyson, I just had a quick higher level question around IoT, John noted that the performance classification then it's great to see continued year-over-year growth in the 20% plus range. Just wondering if you can characterize design activity that you are seeing out there across the various sectors that you are selling into, comparing that to last year, obviously you guys have more technologies that you are offering et cetera and I am wondering what you are hearing from your customers and how you can - how you can characterize that design activity as you look ahead here?

So we measure our design activity both in the size of the funnel and in the lifetime revenue of the design wins that we continue to take over as time moves on. And we have seen substantial growth in both of those in the IoT category year-on-year as we've introduced our wireless platform and engaged in the market. And those growth rates support our long term growth target as well. The design activity is very strong in smart home, in lighting and I would say just classify a broad range of industrial application. The other exciting trend that we see is in gateways that you can think about this is the access point that goes into your house and that could come from an operator like Comcast or it come from a retail operation. And we see the integration of mesh networking capabilities of zigbee and/or Thread into those gateways as a substantial trend. And that really talks about the need for this low power mesh networking command and control areas, the integration of those with ecosystems like you see from Nest and Google and from Amazon and others. And the deployment of these is going to drive is driving the development and deployment of lot of end node devices where we are very strong with our SOCs. And we also see the development of the ecosystems driving interoperability between those and the ability to control and make these more useful. And so all of those trends, we see that customer activity and we are seeing evidence of that in our metrics that we use to measure the growth in the business.

Thanks for that Tyson. The quick follow-up, you mentioned zigbee and Thread and I probably should this you might have mentioned is at Analyst Day but what's your opinion on Z-Wave and what you are seeing out there with the adoption of Z-Wave?

Z-Wave is a technology developed by a single company and supplied by a single company. They got some early traction in the connected home space kind of the DIY, the do it yourself space. We see the momentum and that technology continue to erode. It is not a technology that we believe has a roadmap into the future. It's not an open standard. It's again supported by a single vendor. And we see a lot of customers moving away from that and moving toward more standard based technologies like zigbee and Thread. But certainly there is room in the IoT given the size of it and the longevity of that for multiple standards to continue to coexist. But we see the momentum in the Z-Wave declining overtime.

Very helpful. Thanks, Tyson.

Your next question comes from the line of Cody Acree from Drexel Hamilton. Your line is open.

Thanks for taking my question. Tyson, maybe you alluded to this a little earlier but last night you guys told there is a lot of discussion about help of the distribution the inventory channel and I think Microchip is even going out talking to customers about needing to place longer lead time orders or maybe end up short term supply. Have you seen anything in the supply demand environment that we prompted you have any similar discussions and maybe if you can just talk about the elderly terms individual?

Yeah, Cody, this is John. We see generally a healthy landscape out there. We've seen a number of peer companies with pretty solid results thus far in this cycle and you know overall the industry seems reasonably healthy. You know I think our days inventory both on the hand here at the company and at the distributions channel are normal, so we are doing a good job managing inventory and managing the company's working capital overall.

Yeah, I would also just comment that give our use of standard technologies, we are fabulous, we leveraged companies like TSMC and others with very large production capacities and we work with the m to you know to lock in capacity for the business that we see and don't see constraints and the supply chain holing back on our ability to growth the business over the year.

And I think at the Analyst Day, you mentioned about 60% your revenues coming through the distribution channel, anything standout there one way or the other either application wise?

Yeah, that's because it's 70% for Q1 and that's going to be reasonably stable, it's been rising over the last several years. We have a chart on that both on the Analyst Day deck and the updated IR deck. That's on the website this morning. But you know if you think about on across the four major categories, in IoT, you have a heavy distribution focus in the isolation business. You also have a heavy distribution focus. You know the broadcast tends to be a little more vertical as does the access with a smaller set of customers but those contributions are more modest today to our overall revenue as compared to the IoT and infrastructure.

Thanks guys, I appreciate it.

Your next question comes from the line of Atif Malik form Citigroup. You line is open.

Hi, thanks for taking my question. Tyson, can you talk about the proliferation of AI, artificial intelligence and its impact you are seeing for your IoT demand in the factory of the future. I mean you to talk about home and personal assistance employing AI but can you just talk about your how AI is impacting your opportunity in the factory of the future?

Certainly with the Internet of Things you get a proliferation of sensors and a proliferation of data and there is a lot of work in the analytics of that data and in making actionable judgments about what to do and that is part of the value proposition of why people deploy both IoT and AI type technologies. And the more data you have the more useful it is and the more processing power and the more that makes it to the cloud and the more you know insights that you can gain from that the more useful it is. So those are trends that are tied together. I would say that more of the IoT that were in is in lower data rates and command and control type things. So certainly if you made a decision and you need to control something that factors in that the large amounts of sensor data that you get from a growing number of devices becomes part of that equation. We are certainly not in the vision side or in real time driving, autonomous driving in these sorts of things that lot of those the other applications that are out there. But it's certainly one of the drivers that we see for the demand in the end node devices where we play.

Okay and then as a follow-up, I think this has been asked in a different forms before, but your auto business which was up 16% year-over-year in the March quarter, how do you see that tracking in the June quarter?

So that the automotives business for us, the automotive radio business was up 14% year-on-year and that's the largest portion of our automotive business. We don't break that out separately and talk about growth rates in the automotive area. We will occasionally provide updates on the performance of the automotive radio. And then you've also got a portion of automotive in our IoT business actually and 8-bit MCUs as well as in our isolation business where we sell into power invertors and electric motor controls and battery packs for electric and hybrid electric vehicles. But we don't provide specific guidance there but those are certainly all trends that are in our favor and performing quite well for us here in the first quarter.

Thank you.

I would know like to hand the call over to Ms. Jalene Hoover.

Thank you, Kim, and thank you all for joining us this morning. This concludes today's call.