Prepared remarks
Ladies and gentlemen, welcome to the STMicroelectronics Second Quarter 2026 Earnings Release Conference Call and Live Webcast. I am Moira, the Chorus Call operator. Operator instructions were provided. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Jerome Ramel, EVP, Corporate Development and Integrated External Communications. Please go ahead.
Thank you, Moira, and thank you, everyone, for joining our second quarter 2026 financial results call. Hosting the call today is Jean-Marc Chery, ST President and Chief Executive Officer. Joining Jean-Marc on the call are Lorenzo Grandi, President and CFO; Marco Cassis, President, Analog, Power and Discrete, MEMS and Sensors Group, and Head of STMicroelectronics Strategy, System Research and Applications and Innovation Office; and Remi El-Ouazzane, President of Microcontrollers, Digital ICs and RF Products Group. This live webcast and presentation materials can be accessed on ST Investor Relations website. A replay will be available shortly after the conclusion of this call. This call will include forward-looking statements that involve risk factors that could cause ST results to differ materially from management expectations and plans. We encourage you to review the safe harbor statement contained in the press release that was issued with the results this morning and also in ST's most recent regulatory filings for a full description of these risk factors. Also, to ensure all participants have an opportunity to ask questions during the Q&A session, please limit yourself to one question and a brief follow-up. Now I'd like to turn the call over to Jean-Marc Chery, ST President and CEO.
Thank you, Jerome. Good morning, everyone, and thank you for joining ST for our Q2 2026 earnings conference call. I will start with an overview of the second quarter, including business dynamics. And I will hand over to Lorenzo for the detailed financial overview. I will then comment on the outlook and conclude before answering your questions. So starting with Q2. Our second quarter net revenues of $3.49 billion came in above the midpoint of our business outlook range, driven by higher revenues in Communication Equipment, Computer Peripherals and Automotive. Gross margin was 34.8% and non-U.S. GAAP gross margin was 35.2%. Both were in line with the midpoint of our business outlook range. Non-U.S. GAAP diluted earnings per share was $0.31. During the second quarter, inventory in our balance sheet remained flattish. In distribution, inventory further decreased and is now below our standard target.
We generated a positive $75 million free cash flow. Let's now discuss our business dynamics during Q2. During the quarter, demand increased further with strong bookings and book-to-bill close to 2 overall. We were well above 1 in all end markets and significantly above 2 in Communication Equipment & Computer Peripherals, mostly driven by optical connectivity, including silicon photonics. We saw improved visibility and signs of tight supply in several product categories. In Automotive, revenues came in better than expected, increasing 14% sequentially and 16% year-over-year. This growth was driven by our solid position on application-specific ICs and sensors for conventional applications, electrical powertrain and ADAS. Automotive design momentum continued to build across multiple OEM and Tier 1 ecosystems. We secured design wins across hybrid, electric and conventional vehicles, including applications in onboard chargers, powertrain and active suspensions.
These wins were across our application-specific ICs and sensors. Specifically, our smart power ICs wins include custom devices for airbags, electronic stability control and suspension applications based on our proprietary BCD technologies manufactured in our Crolles 300-millimeter wafer fab. We have progressed well with the integration of NXP MEMS sensors business acquired in February. As we anticipated, the complementary technology and product portfolio is strengthening our Automotive Sensors business with awards at key players for active safety application and tire pressure monitoring. Industrial improved 20% sequentially and 34% year-over-year. Importantly, inventory in distribution further decreased and is now below our standard target. This solid growth was driven by our general purpose microcontrollers and by analog with their wide ecosystems and by our application-specific analog products, complemented by power conversion products.
We are strongly positioned to support the ongoing transformation of factory automation, robotics and power and energy infrastructure. Our portfolio is uniquely addressing the emerging needs of physical AI where intelligent sensing, real-time control and efficient power management are increasingly critical. During the quarter, we saw design wins across industrial automation, power systems, building automation and home appliances. We continue to introduce new advanced sensors for this application. We launched a new series of industrial MEMS sensors with embedded AI tailored for the fast-growing industrial condition monitoring market. We also announced a new compact 3D LiDAR module, delivering AI-ready output data for low-compute Edge AI systems running on microcontrollers and high-performance sensing in applications such as robotics, industrial automation, smart buildings, ER/VR and health care.
This is in line with our strategy to move beyond stand-alone sensors and deliver integrated sensing systems that support real-world Edge AI. Finally, we announced a further expansion of our collaboration with NVIDIA to accelerate physical AI. As a partner in NVIDIA Halos for robotics and end-to-end functional safety system for industrial and humanoid robots, ST is bringing its microcontrollers, sensors, motor control and security solutions to support Halos readiness across chips, evaluation kits, software and reference designs. For Personal Electronics, second quarter revenues were up 3% sequentially and 20% year-over-year. This growth was driven by increased content per device in our engaged customer programs and better-than-normal seasonality. During the quarter, we introduced secure chips that help smartphone and personal electronics manufacturers prepare for quantum-ready security requirements.
It combines post-quantum cryptography acceleration with NFC, secure element and eSIM functions on a single die for use cases such as digital identity, payments and digital car keys. We also introduced a new generation of ultra-low power global shutter image sensors that deliver high-quality, always-on vision to compact devices operating on batteries or harvested energy such as wearables, AR/VR and IXA/IXS, smart home appliances and medical devices. They are engineered to deliver rich visual context and AI-ready data under tight constraints on power, size and cost. With the depth sensing technologies I mentioned earlier and this device for AI vision, ST delivers a complete perception stack for Edge AI to customers. For Communication Equipment & Computer Peripherals, second quarter revenues were above expectations, showing an increase of 13% sequentially and 50% year-over-year. This growth was driven by our engaged customer programs with our custom design products, boosted by our microcontrollers for optical connectivity.
Indeed, ST is a core enabler for the Cloud AI era. We see strong traction on optical connectivity driven by silicon photonics ICs, electronic ICs, microcontrollers. For the power stage of Cloud AI, we are already successful with our microcontrollers and high-voltage power and analog products, and we are building a pipeline of design wins for low-voltage power and analog products. Therefore, we are raising our revenue ambition for data centers. We now expect revenue above $1 billion in 2026 and, assuming the current dynamics continue and with the current engagements, well above $2 billion in 2027. During the quarter, we secured multiple design wins across a range of products from optical connectivity driven by silicon photonics ICs, electronic ICs and microcontrollers to silicon and silicon carbide-based power solutions. In addition, we see a growing number of nontraditional AI server companies, including players coming from industries such as solar power and battery storage, where we are leveraging strong relationships to support their expansion into this field.
In May, we held a webcast on the Low Earth Orbit satellite communication and new space opportunity for ST, highlighting how ST is positioned as a core semiconductor enabler across this new industry. We see a significant opportunity here with our addressable market expected to reach around $3 billion by 2030 or about 4x the 2025 level. ST expects to generate well above $3 billion in cumulative space revenue over the period 2026 to 2028, mainly with our BiCMOS, FD-SOI and Panel Level Packaging technology. Finally, in June, ST joined the EUR 115 million Series A financing of Quobly to accelerate the industrialization of its silicon-based quantum computers and bring its first commercial product to market by the end of 2026. For ST, the scale needed by high-performance computing customers can only be achieved if breakthrough quantum systems can be industrialized and integrated with semiconductor-grade standards and backed by a robust ecosystem.
We are leveraging years of shared expertise in FD-SOI and deep technological collaboration to accelerate the commercialization of Quobly's products through our 300-millimeter silicon fab environment. In May, we held our 2026 ST Microelectronics Annual Shareholder Meeting, where all resolutions were approved. Following the AGM, ST Supervisory Board appointed Mr. Armando Varricchio as the Chairman and Mr. Nicolas Dufourcq as the Vice Chairman of the Supervisory Board. Now over to Lorenzo, who will present our key financial figures.
Thank you, Jean-Marc. Good morning, everyone. Let's start with a detailed review of the second quarter, starting with revenues on a year-over-year basis. By reportable segment, Analog Products, MEMS and Sensors grew 26%, mainly due to Imaging and MEMS and to a lesser extent, Analog. Power and Discrete products increased by 3.7%. Embedded Processing revenues were up 35.5%, mainly due to general purpose microcontrollers and to a lesser extent, custom processing and connected security. RF & Optical grew 32%. By end market, Communications Equipment & Computer Peripherals grew 50%, Industrial 34%, Personal Electronics 20%, and Automotive 16%. Year-over-year sales to OEMs and distribution increased 23.3% and 33.1%, respectively. On a sequential basis, by reportable segment, Analog Products, MEMS and Sensors increased by 8.2%, Power & Discrete by 19.2%, Embedded Processing by 17.7% and RF & Optical Communications by 8.6%.
By end market, on a sequential basis, Industrial grew 20%, Automotive 14%, Communication Equipment & Computer Peripherals 13% and Personal Electronics 3%. Turning now to profitability. Gross profit in the second quarter was $1.22 billion, increasing 31.1% on a year-over-year basis. Gross margin was 34.8%, increasing 130 basis points year-over-year, mainly due to lower unused capacity charges and better product mix. On a sequential basis, gross margin increased by 100 basis points. Non-U.S. GAAP gross margin was 35.2%. Q2 gross margin included about 60 basis points of negative impact resulting from nonrecurring cost related to our manufacturing reshaping program. The negative impact on gross margin I just mentioned, nonrecurring cost, is expected to remain at a similar level over the rest of the year. Total net operating expenses, excluding restructuring, amounted to $970 million in the second quarter.
Non-U.S. GAAP OpEx stood at $960 million, in line with the expectation given in April. For the third quarter of 2026, we expect non-U.S. GAAP net OpEx to stand at about $980 million. The sequential increase is mainly due to start-up costs and employee share award expenses that are more than offsetting the positive vacation seasonality effect. Excluding these two headwinds, Q3 '26 non-U.S. GAAP net OpEx would have been at about $920 million. For full year 2026, we now expect non-U.S. GAAP net OpEx to be slightly above $3.8 billion taking into account increased employee share award expenses and the temporary impact of the start-up cost, reducing our other income and expenses positive line. For full year 2026, non-U.S. GAAP net OpEx are expected to increase low double digit year-over-year. Excluding NXP MEMS business acquisition and the exchange rate impact, like-for-like net OpEx should be up high single digit year-over-year.
Our cost saving plan is delivering its expected benefits. At the same time, we are accelerating our investment in new business opportunities. In the second quarter, we reported $187 million operating income, which included $58 million for impairment, restructuring charges and other related phase-out costs. These charges are related to the execution of the previously announced company-wide program to reshape our manufacturing footprint and resize our global cost base. Q2 operating income also includes $24 million purchase price allocation effect from our acquisition of NXP MEMS sensor business. Excluding these items, Q2 non-U.S. GAAP operating income stood at $269 million and non-U.S. GAAP operating margin was 7.7% with Analog Products, MEMS & Sensors at 10.1%, Power & Discrete at negative 21.4%, Embedded Processing at 19.7% and RF & Optical Communication at 21.2%. Second quarter 2026 net income was $222 million compared to a net loss of $97 million in the year-ago quarter.
Diluted earnings per share were a positive $0.24 compared to a negative $0.11 one year ago. Non-U.S. GAAP net income stood at $291 million and non-U.S. GAAP diluted earnings per share stood at $0.31. Net cash from operating activities totaled $502 million in the second quarter, including $44 million outflow related to restructuring compared to a net cash flow from operating activities of $354 million in the year-ago quarter. Net CapEx was $409 million in the second quarter compared to $465 million in the year-ago quarter. We now expect 2026 net CapEx to be at the high end of our $2 billion to $2.2 billion range, reflecting accelerating investments in the selected growth drivers, including cloud optical interconnect. Free cash flow was positive at $75 million in the second quarter compared to a negative $152 million in Q2 2025. Inventory at the end of the quarter was $3.19 billion compared to $3.17 billion in Q1 '26 and $3.27 billion in Q2 2025.
Days sales of inventory at the quarter end were 126 days, in line with our expectation compared to 140 days for the previous quarter and 166 days in the year-ago quarter. Cash dividends paid to stockholders in the second quarter of 2026 totaled $75 million. ST maintained its financial strength with a net financial position that remains solid at $2.01 billion as of June 27, 2026, reflecting total liquidity of $6.03 billion and total financial debt of $4.02 billion. During the quarter, ST issued a new $1.5 billion dual tranche senior unsecured convertible bond, Tranche A and Tranche B for $750 million each due 2031 and 2033 and announced the early redemption of its $750 million convertible bond due in 2027. Now back to Jean-Marc, who will comment on our outlook.
Thank you, Lorenzo. Now let's move to our business outlook for Q3 2026. We are expecting Q3 revenues of $3.7 billion plus/minus 350 basis points. At the midpoint, Q3 net revenues will increase 6.2% sequentially and by 16.2% year-over-year. We expect our gross margin to be about 37% plus/minus 200 basis points, including about 70 basis points of unused capacity charges. This business outlook does not include any impact for potential further change to global trade tariffs compared to the current situation. To conclude, in Q2, we saw demand further accelerating, strong bookings in all end markets and improved visibility. In Q3, revenues are expected to continue to grow sequentially and year-over-year and gross margin to continue to improve. As previously anticipated, Personal Electronics seasonality this year is different compared to previous years. Revenue growth for Personal Electronics is expected to be below normal seasonality in Q3, moderating ST sequential growth in the third quarter.
In Q4, we anticipate a revenue growth acceleration, mainly driven by our engaged customer programs in AI data centers and Low Earth Orbit satellite communication. We expect Q4 revenues to be above $4 billion, representing a sequential improvement better than normal seasonality. This translates into H2 versus H1 growth above our normal 15% seasonality. ST growth drivers remain solid. We continue to see strong demand in AI data centers, reflecting the success of our product and technology portfolio. We are raising our revenue ambition for data centers. We now expect revenues above $1 billion in 2026 and, assuming the current dynamic continues and with the current engagement we have, well above $2 billion in 2027. This confirms ST's strong position in the evolving AI data center. Thank you, and we are now ready to answer your questions.
Questions and answers
I was just looking into your second half guidance and trying to get a feel for your gross margin trend into Q4. So I know you don't want to guide on Q4, but you are talking about a bigger increase in revenue quarter-on-quarter. And we don't know how much it is, I agree, because you just said more than $4 billion. But I was wondering directionally, whether you can give us any qualitative comments on how your Q4 gross margin could proceed and how you see that evolving into 2027 as well?
Thank you for the question. I will take the question about the gross margin evolution. The midpoint of Q3 non-GAAP gross margin for us will be 37%. We have guided at this level of gross margin that is increasing about 180 basis points compared to Q2. Starting from this Q3 gross margin at 37%, we do expect for Q4 a sequential improvement in our gross margin, considering that our revenue will increase significantly. But you have to keep in mind some headwinds as well. One is that our level of unused capacity charges will not change significantly in Q4 due to the fact that we are starting some fabs, particularly in China, which will still have some negative impact on our level of unused capacity. And there is also the cost related to the transfer of technology related to our reshaping program in our manufacturing infrastructure that will still be there, similar to what we have in the current quarter. So yes, I confirm there will be improvement, but there will also be headwinds impacting our gross margin. Overall, I confirm that in Q4 there will be a sequential improvement compared to the 37% of Q3.
But given that your revenue jump is going to be bigger, can we assume that your gross margin jump will also be bigger? Or is that speculation?
As I said, gross margin will improve compared to 37%, but you should also consider temporary headwinds. The unused capacity will not decrease between Q3 and Q4 as it did between Q2 and Q3. Also, when we look at the dynamic of our gross margin moving from Q2 to Q3, we had a benefit from foreign exchange that improved. In Q4 that FX effect will be neutral. So I repeat that there will be an increase in our gross margin, but consider in your modeling that there are temporary headwinds that will limit the improvement in Q4.
I guess I want to start with the data center number. Can you provide some more granularity on what's driving the big increase in 2027 versus the prior expectations? Like how much of this is optics versus power? It did sound like there was some positivity on the power side. And then I guess also, you mentioned you were capacity constrained before. Is that number greater than $2 billion, assuming you're still constrained as well?
Before I pass the question to Remi to go into further detail, it's clear that our growth in 2027 will be driven both by our engaged customer programs in this field and by the overall success on optical connectivity. Optical connectivity will be the main driver of the significant growth next year. I will let Remi comment in more detail.
To complement what Jean-Marc said, we see an acceleration in the adoption of 800 gig and 1.6 terabit per second pluggable optics. Those are generations and categories of transceivers where we are seeing a triple effect: a large market share in the microcontroller for the control plane, a growing share in the electronic IC driven by our BiCMOS technology, and, starting from next year with strong acceleration, our growing revenue in silicon photonics supporting photonics ICs that are part of these pluggable transceivers. We have a lot of scalability in capacity on that technology because of the structure we have in our Crolles factory. So we are not right now gated by capacity expansion to capture revenue at this stage.
Maybe a follow-up also. I totally appreciate what Lorenzo was highlighting from the manufacturing transitions and underloading charges. But on a like-for-like basis, should data center as it grows be accretive to gross margins?
Yes. This product mix is contributing positively to our gross margin already from Q2 to Q3 and will continue to do so from Q3 to Q4.
I had a question and a follow-up. On pricing, could you give us an update on what you are seeing in terms of pricing tailwinds? And when do you think that might impact revenues this year?
In terms of pricing, there are two effects. On one side, input costs are increasing for some materials and contractor activities. On the other side, we are increasing prices on selected products. This is an ongoing process expanding in terms of price increases. At this stage, the two impacts are more or less offsetting each other, so input cost increases are more than offset by our pricing actions on the top line.
If I ask a quick clarification: on your data center revenue guidance hike, was that increase driven by increased demand outlook or by a faster expansion of your capacity and supply?
It's both. Demand is the primary driver for the increase above $1 billion in 2026, and our capability to grow in assembly, test and manufacturing covers that demand. Next year, we will close the gap between demand and our capability to supply. Engagements and backlog are covering our expectations. Our capability to grow on advanced 300-millimeter technology is a very important competitive factor for us.
Could you talk about the revenue growth guidance into Q3 and then potentially into Q4 by your segments? You said earlier that Personal Electronics was weaker in the third quarter. But can you describe growth in the other segments? And based on your order book today, how should we see the different segments into the fourth quarter?
Starting with the key growth driver, Communication Equipment & Computer Peripherals: in Q3 on a year-over-year basis this segment will grow very similarly to Q2, close to 60% year-over-year, and in Q4 we expect a strong acceleration to about 90% year-over-year. Industrial grew 32% in Q2 and will step up to close to 40% year-over-year in Q4. Automotive is performing above expectations and will grow in the low double digits year-over-year, consistent with the semiconductor industry expectation of about 13%–14% growth. Personal Electronics has a different profile: it will be slightly negative mid-single digits during Q3 and Q4 as anticipated, moderating H2, but on a full-year basis Personal Electronics will grow low to mid-single digit as we anticipated earlier. So the takeaway: very strong growth in Communication & Computer, accelerating from about 60% in Q2 to near 90% in Q4; Industrial moving to about 40% in Q4; Automotive low double-digit growth; and Personal Electronics softer in H2 but positive for the full year.
You've seen significant strength in Computer and Peripherals associated with the AI market. Is there flexibility to fill capacity in the third quarter itself? Why does this have to wait until the fourth quarter given that you still remain underutilized in the third quarter?
For advanced technologies enabling Industrial and Communication & Computer growth, we are accelerating and on a competitive path. The limited flexibility relates to ramping legacy analog technologies. In Q1 we were heavily underloaded, so the Q2 ramp-up was challenging and slightly delayed. That delay has affected our capability in Q3 to fully fulfill demand on legacy analog technology. So the temporary constraint is on legacy analog ramp-up and specific unused capacity charges for legacy analog, not on the advanced technologies driving AI data center.
I have a follow-up on the gross margin. In the past you suggested at $4 billion sales per quarter that gross margin would be at least in the 40% range. Now you are suggesting you will probably not be at that point in Q4. Are you still confident to get to the level of profitability you were suggesting and are there some specifics or temporary effects on Q4 we should take into account? And a follow-up on AI data center demand and your engage program: can you give a sense of how concentrated the demand is today and how the engaged program supports your $2 billion revenue for 2027?
Regarding the 40% gross margin model at $4 billion, we always said two conditions are needed: revenue and completion of our manufacturing reshaping program. We are in the middle of the transformation—transfers from 200 millimeter to 300 millimeter for silicon and 150 millimeter to 200 millimeter for silicon carbide—and we are not yet at optimal manufacturing efficiency. There are extra costs related to transfer activities, product qualifications and mask rework that impact gross margin during the transition. We confirm our model to be above 40% when the company is there, but completion of the transformation is required and that is expected by the end of 2027, not before. This is why being at $4 billion alone does not yet deliver the target gross margin.
On the AI data center demand concentration, Remi can comment on the key growth drivers putting us on a trajectory above $2 billion in 2027.
We are at the intersection of three growth vectors: our oversized market share in MCU for 800 gig and 1.6 terabit per second, the growing adoption of our BiCMOS process for electronic ICs, and the steep ramp-up of our silicon photonics platform in 300 millimeters. Our photonics platform has been well adopted by major actors. Regarding concentration, our revenue composition is consistent with market share distribution across hyperscalers, which gives us confidence about the composition of our revenue.
My first question is on the outlook. In your prepared comments you mentioned book-to-bill was close to 2 overall and above 2 in certain segments like optical interconnect in particular. Does that imply that your first quarter seasonality might be better than normal? I have a follow-up.
Yes. Out of 100% of the bookings we received in Q2, well above 50% were for next year, so customers are providing more visibility. Our total backlog now represents about an average of 4.5 to 5 quarters of Q2 average revenue, an improvement. Coming back to visibility, Q1 is currently on a dynamic to be well loaded and continuously boosted by our revenue related to AI data center.
A follow-up: previously you talked about 45% gross margin at $18 billion and maybe 50% at $20 billion, contingent on execution of the restructuring plan. Is that still the case and do you have increased confidence you can deliver those numbers around 2028?
We confirm our confidence to reach $18 billion in 2028. Increasing our indication on data center is one of the key growth drivers positioning us to reach $18 billion by 2028. Lorenzo commented that AI data center business is accretive to gross margin. Assuming we complete our reshaping program on time and FX remains in line with our model, we should be in position to reach the gross margin target consistent with the $18 billion model.
I would like to come back on the satellite Low Earth Orbit opportunity. Can you tell us the current dynamic, notably with your main customer and the ramp of your second customer? Can you confirm the target of $1 billion for this year and do you have a view for next year already?
I'll pass the question directly to Remi.
The dynamic is quite healthy. As I explained earlier, we stick to well above $3 billion over 2026–2028. It's a launcher-dependent business in deploying satellites and delivering services which then fuels user terminal consumption. Directionally, nothing has changed; we see a strong 2026 and an even stronger 2027. Some constellations have faced snags lately that should be fixed in the coming quarters, but overall the trajectory is positive.
Can you comment on the level of profitability, the gross margin on this LEO business? Is it accretive?
LEO is a business combining different products going into satellite, gateway and user terminal. Looking at the average gross margin of this business, I confirm that Low Earth Orbit satellite is contributing to the improvement of our gross margin.
My first question is on capacity. We see an acceleration of growth from a cycle perspective and from AI data centers, and we are seeing some tightness. How do you feel about your capacity in the next two to three years? Do you have enough capacity to deliver different growth scenarios, or are you evaluating brownfield or greenfield expansions?
We see this under two angles. For AI data center, we believe we can sustain and support the demand, assuming the current dynamic for optical cable and microcontrollers continues. The key success factor is Crolles, which will reach 15,000 wafers per week and will go above to support this business. We see some short-term tightness on general purpose microcontrollers because of two cumulative effects: the enormous success of microcontrollers for optical cable and the solid recovery of the industrial market. Distribution inventory is now below our standard and POS dynamics are very strong, which has created some tension and increased lead times. Our advantages include our 300-millimeter fab, which will be fully built out before 2028 and capable to support microcontroller growth as we qualify 19-nanometer and 14-nanometer technologies. Our China-for-China strategy will start to pay back as we have qualified 14-nanometer in China with our partner to support growth in China. For other technologies, the challenge is the transition between 6-inch to 8-inch silicon carbide and 8-inch to 12-inch analog. We are accelerating as fast as we can in synchronization with customers; this can cause temporary supply tightness. There are also occasional OSAT constraints, but we manage them.
A follow-up on silicon carbide: we see changes in silicon carbide demand driven by Chinese EV makers adopting 800 volts and other customers delivering strong volumes. Do you see an improvement on the silicon carbide front, and can you provide any guidance for that business?
We see the positive dynamics you described. In Q2 we saw revenue growth in low teens year-over-year for silicon carbide and mid-30s quarter-over-quarter. We have strong bookings with book-to-bill well above 1, resulting in a growing backlog. In this context, I can confirm that this year we expect silicon carbide revenues to grow double digit in 2026 versus 2025 based on existing design wins and backlog. We are moving from 6-inch to 8-inch, which sometimes creates supply tightness as products require customer qualification, but the dynamics are positive and improving day by day.
Thank you, Francois. This is ending our call for this quarter. Thank you very much, everyone, for joining us. We remain at your disposal should you need any follow-up questions. Thank you.
Thank you.
Thank you.
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