管理層發言
Good morning, and welcome to the Qnity Second Quarter 2026 Conference and Webcast Call. I will now turn the call over to Meg Miller, Vice President of Global Communications. You may begin.
Thank you, and welcome to our second quarter 2026 earnings call. I'm joined by Jon Kemp, Qnity's Chief Executive Officer; and Mike Goss, Qnity's Interim Chief Financial Officer. Earlier today, we issued our earnings release along with a supplemental slide presentation, which can be found on our Investor Relations website. Before we begin, I'd like to remind you that today's discussion will include some forward-looking statements. These statements represent our best view of predictions and expectations for the future, but numerous risks and uncertainties may cause actual results to differ. Please refer to our earnings release and SEC filings for a discussion of these risks. We'll also be discussing certain non-GAAP financial measures. I refer you to our earnings materials for information regarding our non-GAAP financial measures and reconciliations to the most directly comparable GAAP measure. And now it's my pleasure to turn it over to Jon.
Thank you for joining our call this morning. Last quarter, we talked about how the fundamental shift from shrink to stack is becoming the driving force behind technological advancements in the semiconductor industry. Innovation is spanning well beyond transistor shrink to focus on connecting chips in new and innovative ways that will unlock the next frontier of computing. As the stack gets taller and layers multiplied, the journey every chip must take lengthens and materials innovation becomes a hidden hero, quietly powering performance, yield and reliability. Qnity sits at the center of this trend with one of the broadest portfolios of end-to-end solutions across the stack. On the front end, our suite of CMP pads, cleans and slurries and lithography materials are essential for patterning and polishing leading-edge chips. In the middle, we provide comprehensive advanced packaging solutions from both business segments to enable next-generation architectures and support chip-to-chip connections. Finally, on the back end, our thermal materials move heat across demanding full system workloads like data centers and other AI applications. When you combine the breadth of our portfolio across the semiconductor stack with decades of innovation alongside our customers and a local-for-local model for manufacturing and technical support, it's clear why Qnity is uniquely positioned for the opportunities ahead. We're aligned with the industry's most groundbreaking technology road maps, embedded in our customers' next-generation platform and able to deliver the materials and solutions they need at scale. As AI high-performance computing and advanced connectivity continue to reshape the industry, these advantages position us to create significant long-term value. The best proof of this differentiated position is our performance. Looking at our second quarter results, we delivered our ninth consecutive quarter of strong profitable organic growth. Organic sales increased 22% year-over-year with another quarter of double-digit growth across both segments. Adjusted operating EBITDA increased 24% and adjusted EPS grew by 53% as we continue to demonstrate our ability to drive strong operating leverage in the business. In Semiconductor Technologies, we grew organic sales 17% year-over-year, led by AI-driven solutions as our advanced nodes portfolio grew more than 20% during the second quarter. We've seen broad-based improvement in fab utilization across the industry. Advanced logic is now tracking to the mid-80% range, while mainstream logic is in the low 80s. In memory, we continue to see healthy utilization levels with DRAM in the high 80s and NAND in the low 80s. As customers move to increasingly advanced nodes, every wafer requires more layers, more processing complexity and more packaging steps. All of this translates to more volume and to more Qnity content. We're seeing that with continued growth at 3-nanometer. The emerging activity at 2-nanometer and increasing engagement around future angstrom-era technology platforms. And that combination of improving utilization and rising content intensity continues to support our confidence in the long-term growth outlook for our semi business. In Interconnect Solutions, our team continues to deliver exceptional results with 28% organic growth year-over-year, again led by content and share gains across our key growth platforms of advanced packaging and Interconnects, AI PCBs and thermal management. Collectively, these platforms again grew more than 50% year-over-year during the second quarter. One of the biggest engineering challenges in next-generation AI systems isn't simply building smaller and faster chips. It's enabling those chips to reliably communicate with one another. As architectures become more complex, challenges around signal integrity, power delivery and heat dissipation become increasingly difficult to solve. As we partner with customers to overcome these increasingly complex system-level challenges, we're seeing demand broaden across our portfolio and additional opportunities to increase content throughout the AI ecosystem moving forward. This combination of strong platform growth, expanding content opportunities and deepening customer engagement reinforces our confidence in the durable long-term growth outlook for our ICS business. As the technology for both shrink and stack accelerates, we advanced our own innovation progress during the quarter, extending our leading technology position from front to back through both new products and broader industry engagements. At the front end, we announced an expansion of our CMP offerings with the launch of Optivision Max polishing pads. Our newest commercial soft polishing pad delivers superior performance in critical CMP steps to enhance surface quality, process stability and reliability for advanced architectures and nodes. We're already seeing adoption across both leading-edge nodes and advanced packaging applications, including emerging AI and HBM-driven architectures. At the same time, we continue to gain traction in next-generation logic, securing multiple POR wins at 16 and 14 during the first half of the year as we advance towards angstrom-level nodes. Beyond semi-fab materials in AI PCBs, we are winning new business in pulse plating, a key metallization technology for the most advanced high layer count printed circuit boards used in AI applications. For customers, pulse plating helps deliver the precise reliable Interconnects required to support higher density designs, stronger signal integrity and more dependable power delivery in next-generation AI systems. Shifting to back-end assembly materials, thermal management is becoming a critical performance enabler as AI systems push higher power density across chips, packages, boards and data center infrastructure. We further strengthened our broad thermal portfolio in the first half of the year, which now spans liquid thermal interface materials, phase change materials, thermal pads, gap fillers and other advanced solutions that help customers move heat more efficiently, improve reliability and accelerate deployment of next-generation AI systems. These latest materials offerings demonstrate how we're innovating against the industry's most complex technical challenges. Just as importantly, we're backing that innovation with the targeted capital investments required to scale alongside our customers. Over the past several years, we've executed a disciplined, sustained investment in capacity deployed in step with our customers' technology road maps. Since 2022, we've deployed approximately $600 million in growth investments across the business with a focus on expanding capacity and enabling the next generation of technologies aligned to our local-for-local operating model. Combined with our innovation efforts, these investments position Qnity to support the accelerating demand we continue to see from our customers. It also strengthens our ability to capture long-term growth opportunities across our end markets. Pulling this all together, our innovation isn't happening in isolation. We're pairing technology leadership with disciplined capital investment to expand the capabilities, capacity and customer proximity required to support the industry's most important road maps. That combination is translating into stronger customer engagement today and positioning Qnity to capture the long-term growth we see ahead. Before I turn it over to Mike, I want to touch on the end market trends that we're seeing. As customers allocate capacity to the highest value applications, our portfolio mix continues to evolve. Over the past 6 months, we've seen end market composition shift driven by the rapid growth in data centers, steady growth in automotive and other industrial markets and slower growth in consumer electronics. With that said, our consumer electronics portfolio continues to prove resilient with positive growth given our outsized exposure to premium devices and continued content gains. Increasingly, we see AI moving from the cloud into the physical world of devices, vehicles and machines. If the cloud is where AI learns to think, the physical world is where AI will learn to do. This presents another exciting long-term growth opportunity for Qnity, where we are well positioned across the industry through our existing relationships with both OEMs and the broader fab and foundry landscape. While these chips are often less complex than data center class processors, the market needs dramatically higher quantities of them produced efficiently and reliably. The physical world demands chips that deliver targeted AI inside strict thermal, power and size envelopes. This means a fundamental re-architecture of how AI gets built, deployed and scaled and progress will depend in large part on materials innovation to make it happen, and that plays directly to Qnity's advantages. Let me now hand it over to Mike to step through our financial results and guidance in more detail.
Thanks, Jon, and good morning, everyone. We sustained our strong momentum in the second quarter, performing better than our expectations across both segments. We delivered net sales of $1.4 billion, up 22% year-over-year and 9% sequentially. On an organic basis, sales were up 22% versus the same period last year. Adjusted operating EBITDA for the quarter was $431 million, up 24% year-over-year. Adjusted operating EBITDA margin was 30.2%, reflecting our resiliency while continuing to invest for growth. Adjusted EPS for the quarter increased 53% to $1.19. Taking a closer look at each of our business segments, Semiconductor Technologies net sales were $744 million, up approximately 3% sequentially. Organic sales grew 17% year-over-year, driven by continued demand strength, especially for advanced logic and HBM chips. Semi gross margins were steady at approximately 49% and adjusted operating EBITDA margin was approximately 34%, both down a bit year-over-year and sequentially, in line with our expectations, driven by product mix in the quarter and continued investments to support advanced node growth. ICS delivered another exceptional quarter with net sales of $685 million, up more than 30% year-over-year and 16% sequentially. Organic sales grew 28%, led by our AI and data center platforms, advanced packaging, AI PCBs and thermal management. ICS gross margins were approximately 44% and adjusted operating EBITDA margin was approximately 29%, an improvement of 290 basis points year-over-year and roughly flat sequentially. This was driven by sustained operating leverage on higher volumes and favorable mix. We generated adjusted free cash flow of $259 million, reflecting strong operational performance and continued execution against our cash priorities. This performance reinforces the confidence reflected in the higher guidance that we are providing today. Capital expenditures totaled $90 million in the quarter and remain on pace with our planned investments to support capacity expansion, transformation initiatives and future growth. We continue to anticipate elevated CapEx investment for the full year driven by these initiatives. Over the longer term, we expect CapEx to return to the 6% net sales range. We also continue to deliver strong capital returns for shareholders through our quarterly dividend. And during the quarter, we repurchased $25 million worth of shares to partially offset normal equity dilution. We're well positioned from a liquidity perspective with approximately $960 million in cash and short-term investments at the end of the second quarter. Total debt outstanding is $4 billion with net debt leverage of approximately 2x. Immediately after quarter end, we successfully repriced our senior secured term loan facility to further enhance our free cash flow profile, resulting in an annualized benefit of approximately $6 million. Looking forward, we are a few months into our multiyear transformation plan and are beginning to see tangible benefits from our efforts with productivity and throughput improvements, creating additional operating flexibility and supporting growth. Let me share just a couple of examples of our program in action. In our Kalrez business, which has seen strong growth in the first half of the year due to accelerated demand for wafer fab equipment, we're executing targeted productivity, capacity release and automation initiatives. These actions position the business to better convert strong demand into growth. Additionally, to advance our local-for-local model, we continue to optimize our distribution footprint through targeted warehouse consolidations that simplify our network, improve service levels and reduce operating complexity. These actions are expected to deliver approximately 10% logistics cost savings while improving warehouse efficiency and operating leverage over time. We also continue to make meaningful progress towards IT independence. We're on track to migrate about two-thirds of our sites to our own systems by the end of this year. Each site migration reduces our reliance on transition services and gives us more direct control to run our business. Overall, we're pleased with the steady progress on the transformation plan and are confident it will unlock operating flexibility and build a stronger, more agile operating model required to support Qnity's next phase of growth. Before I hand it back to Jon for closing comments, let me walk through our updated guidance. For the third quarter, we expect sequential net sales growth in the low single digits range. The strength is broad-based across the same secular drivers we highlighted earlier in the year, namely AI-driven applications, high-performance computing and advanced connectivity, along with the muted seasonal peak in consumer electronics that typically characterizes our third quarter. As a reminder, the third quarter of 2025 included approximately $40 million of net sales that was accelerated into the third quarter ahead of our pre-spin IT systems go-lives, roughly $25 million in Semiconductor Technologies and $15 million in ICS. This created an elevated prior year comparison base that does not recur in 2026, modestly tempering the year-over-year growth in the third quarter for both segments, even as underlying demand continues to remain strong. In Semiconductor Technologies, we expect sequential net sales growth in the low single digits range with an adjusted EBITDA margin profile in the mid-30s. For ICS, we expect sequential net sales growth in the mid-single digits range with adjusted EBITDA margins in the high 20s. Overall, we're watching industry supply chain dynamics closely, including memory and other materials and are working with customers to meet their needs. The modest upward pressure we flagged earlier in the year of approximately $20 million is largely playing out as we expected and the mitigation playbook we put in place, coupled with our local-for-local model is doing its job. Where isolated input or logistics costs have moved higher, our targeted pricing actions are in place, and we see no near-term risk to supply or output. With our strong first half momentum and improved visibility into the second half, we're raising our full year outlook. Net sales is now expected to be $5.55 billion to $5.65 billion. Adjusted operating EBITDA is now expected to be $1.675 billion to $1.725 billion. Adjusted EPS is now expected to be $4.40 to $4.60. And finally, adjusted free cash flow is now expected to be $600 million to $700 million. At the midpoint of our updated guidance, we now expect to deliver 18% net sales growth, over 20% adjusted EBITDA growth and adjusted EPS growth of 35% for the full year. Lastly, we'll continue investing with the strong customer ramps we're seeing while maintaining the cost discipline that supports our results. Jon, back to you.
Thanks, Mike. Before we open the call to Q&A, I want to provide updates on two critical leadership roles. First, I want to officially welcome Kate Dei Cas, who started yesterday as President of our Semiconductor Technologies business segment. Kate brings more than 25 years of experience in the semiconductor industry and a proven record of driving growth, managing global supply chains and delivering operational excellence. We're thrilled to welcome her to Qnity. I also want to recognize Sam Ponzo for his leadership through this transition as he returns to his role as Qnity's Chief Commercial and Strategy Officer. Second, on our search for a new Chief Financial Officer, we've been really pleased with the strong candidates we've seen and are in the final stages of our search. I look forward to sharing an update soon. To close out our remarks, I want to briefly recap the highlights from our call. Qnity delivered another strong quarter with broad-based growth across both segments and continued momentum across the secular drivers reshaping our industry. We are benefiting from the powerful combination of both shrink and stack, where more process complexity and more layers are increasing materials intensity across the semiconductor value chain. Our portfolio breadth, customer intimacy and disciplined investment strategy position us well to capture these opportunities and deliver durable long-term growth. As we look ahead, we remain focused on disciplined execution, enhancing value for customers and delivering long-term growth for our shareholders. With that, operator, we can now open the call to Q&A.
分析師問答
Please be advised that today's call is being recorded. We will take our first question from Jim Schneider with Goldman Sachs.
I was wondering if you could comment on how you're seeing sequentials play out, especially into Q4. It seems like at the even towards the upper end of your guidance, the Q4 sequential would be very muted and potentially even down a little bit sequentially. I want to make sure I understand what is driving that. Is there any pull-in that you're seeing in Q3? Or do you expect that you could actually see a little bit of headwind in any of the areas? Maybe just talk about the Q4 implied sequential relative to normal seasonality.
Yes. Thanks for the question. From our updated guidance perspective, we're putting in a combination of the first half momentum that we saw, better second-half visibility and customer ramp timing and industry supply dynamics. The midpoint of the guidance we put out today has us at 18% sales growth for the year and over 20% EBITDA growth for the year as well. As far as pacing through the back half of the year, the third quarter perspective does include a seasonal peak around consumer electronics that we typically see, and we expect that to be consistent in the third quarter as well. With that, we do expect semi to be in the low single digits range with EBITDA margins still in the mid-30s, and ICS in the mid-single digit range with EBITDA margins in the high 20s. As a reminder, we did have a prior year $40 million move between third quarter and fourth quarter tied to our pre-system IT go-live, which affects the year-over-year comparison but does not recur in 2026. At a headline level, order books remain healthy, our customer engagement remains strong, and we're seeing inventory move across the value chain as we'd expect. A couple of variables we're watching in the back half of the year include ongoing developments in the Middle East as well as timing on customer ramps and trends in utilization rates. To the extent those items resolve or improve, we have an opportunity to do better.
Yes, Jim, to offer a bit of historical context: typically, we'd see a small seasonal peak in the third quarter that's generally tied to consumer electronics. Consumer electronics has been fairly resilient for us this year because of our exposure to premium devices. Nonetheless, we typically expect a little bit of sequential deceleration from third quarter to fourth quarter from a consumer electronics standpoint. Customers also tend to do a bit of inventory control in the fourth quarter.
That's helpful. As a follow-up, you cited some headwinds to gross and EBITDA margins in the quarter, and I think they came in a little below where we were modeling. You called out specifically mix and investments. Can you unpack those a little bit? I know ICS has lower margins, but was there any like-to-like mix that was dragging on margins in the quarter? And could you talk about prospects for gross margin improvement over the next two to three quarters given some of the pricing actions you mentioned to offset input cost pressures? Any other color would be helpful.
Thanks. From a margin perspective in the quarter, we did have some nice product mix in the first quarter, and coming off that into the second quarter included a combination of that as well as growth investments. The timing in any given quarter can vary because of R&D efforts and product qualifications, and that can weigh on results. Stepping back, semi had margins around 35% for the first half, and I'd expect that to continue into the back half of the year. Regarding headwinds, the approximately $20 million we referenced are logistics and energy-type costs. We've seen about half of that come through in the first half and expect the remainder in the back half. As I mentioned, our playbook is working, and I expect we'll be able to offset that throughout the year. There can always be quarter-to-quarter variability, but the margin profile is constructive and I expect that to continue into the back half.
I'd add that as we start to see benefits from our transformation program—examples Mike gave on plant productivity and footprint optimization—we're beginning to see opportunities kick in. Most of that will be weighted toward the back half of next year, but as we see increases in volume and these transformation programs, there's an opportunity for positive incremental expansion in gross and EBITDA margins.
We'll move next to Melissa Weathers with Deutsche Bank.
I want to touch on the Interconnect Solutions business. You had another strong quarter sequentially. It seems like it's growing faster than what was discussed at your Investor Day last September. Any updated thoughts on the long-term growth profile of that business given AI and the shift from shrink to stack?
Thanks, Melissa. We're very pleased with the continued strong performance of the ICS segment—28% organic growth. The growth we've seen in the first half is powered by our three key growth platforms: advanced packaging and Interconnect, AI PCBs and thermal management. What's different since our Investor Day is the pace at which advanced packaging and thermal have accelerated because of AI adoption. That has created a favorable trajectory for ICS given how well positioned we are on both the shrink and stack inflection. The business remains consumables-based and tied to volume—PCB area volumes, advanced packaging volumes, thermal volumes—and the broader market is still refining third-party data. We're working with those third parties to better model that. We're thrilled with continued outperformance from content gains and new application wins across the Interconnect segment. Looking ahead, customer expansions particularly in advanced packaging that add capacity to high-value areas give us confidence in the long-term durability of ICS growth.
On the capacity side, you've been adding capacity the last couple years to support ramps. With the semi technologies business ramping and ICS growing, are you capacity constrained anywhere? How are you thinking about your ability to supply both businesses as they grow?
Our strategy is anchored in a local-for-local model aligned with customer footprints. We've steadily added capacity since the 2022 peak. We reviewed constrained areas in 2022 and have incrementally expanded capacity in each semi business since then—most of that reflected in the roughly $600 million of investments we referenced. We have existing facilities in major geographic centers, and most investments are high-return, modular expansions done in step with customer road maps. The growth is a bit faster than expected, but we're able to quickly adjust and bring capacity online to support the ramps we see, and we're well prepared for long-term growth in 2027 and 2028 from a capacity perspective.
We'll move next to Chris Parkinson with Wolfe Research.
Your media relations team has been quite busy in the first and second quarter with product launches and collaborations across EUV, HBM, CMP, and partners in Taiwan. When do you think we'll see the majority of these benefits? What are you most excited about? Also, were these announcements considered at the time of the spin, or are many of them new?
Thanks, Chris. What you're seeing is the benefit of being a pure-play company and telling a more specific story. The track record of continual innovation and partnerships with technology leaders has been part of our strategy for years; it's just more visible now. Most of these announcements are about innovation progress. Our R&D team has earned a seat at the design table with leading technology companies. We've secured POR wins across every line of business targeting the most advanced technologies from front to back of the stack. I'm most excited that these wins are in the fastest-growing, highest-value parts of the market, setting up a favorable growth trajectory for Qnity as we see a steady drumbeat of innovation wins and customer partnerships for the most advanced technologies.
Looking out two to three years, do you see Qnity's portfolio distribution across logic, mainstream, advanced versus memory the same as 6-18 months ago? Any change in how you're evaluating that given feedback from your shareholder base?
Customers are allocating capacity to highest-value applications, so our mix continues to evolve. Advanced logic remains the most significant part of our portfolio—roughly 80%—with memory about 20%. HBM and DRAM are growing a bit faster and have ticked up a couple percentage points, so we're around a 75-25 to 80-20 split. Data center has increased modestly, industrial markets like automotive and aerospace have steady growth, and consumer electronics is positive but growing slower. The key takeaway is our highest growth is aligned to highest-value parts of the market: advanced nodes, advanced packaging Interconnects and thermal materials.
We'll move next to John Roberts with Mizuho.
Congratulations on the results. First, on advanced packaging: there are multiple road maps and architectures, each with different material requirements. How are you positioned to serve these different architectures, and is your content opportunity consistent across these road maps?
Good question. There are many advanced packaging architectures being developed, but thematically they tend to do two things: larger format sizes (panel-level packaging or larger package sizes) and tighter geometries (smaller lines and spaces on high layer count boards or IC substrates). Both trends increase material complexity and material intensity. Greater material complexity reduces the number of suppliers who can provide needed solutions, and larger format package sizes increase content per package. The people and partners driving these changes are the same ones we've been working with to commercialize existing advanced packaging formats, so our incumbency, proven relationships and capabilities position us well to capitalize as packaging architectures evolve.
You mentioned mainstream logic utilization improving into the low 80s. What's driving that mainstream improvement from last quarter, and what do you expect next quarter?
Mainstream logic is seeing steady improvement so far this year, consistent with our prior commentary. The improvement is driven by stronger demand from data center and industrial end markets, including automotive. We expect continued sequential improvement, but perhaps not as strong as it could be because memory market dynamics may temper some utilization gains. Overall, we see steady progress, and I'm especially excited about broader participation in physical AI—AI moving from cloud to devices, vehicles and machines—which creates many more chip opportunities and plays to Qnity's positioning across OEMs, fabs and foundries.
We'll move next to Frank Mitsch with Fermium Research.
Jon, you indicated advanced nodes grew over 20% in the second quarter. At the Investor Day, the expectation was steady growth around 7% for advanced nodes. How should we think about the near term? Can we expect the 20% growth in advanced nodes to continue, and what's your visibility?
We're very pleased with the semi segment performance and our positioning in advanced nodes across logic and memory. What's different this year is broad-based participation from many technology leaders—successful commercialization across several advanced nodes and memory technologies. Historically, we often work on R&D programs years out and hope they commercialize as planned, but you don't know until scale-up occurs. This year we've seen successful scale-up for HBM3/HBM4, strong activity at 3-nanometer, and increasing engagement around 2-nanometer and 18A. Given that, we aren't providing a specific quarter-by-quarter forecast for advanced node growth, but we expect to continue progressing toward our Investor Day goal of 45%-50% of the portfolio driven by advanced nodes. At the end of the first half, we're around 40% and could reach that target earlier than previously expected if the current pace continues.
Excellent. Do you have a latest view on what MSI growth we should expect for the broader industry in 2026?
Our latest view is that MSI is expected to be in the high single digits for 2026. PCB growth, which we also watch, is in the mid- to high single digits for the year.
We'll move next to Bhavesh Lodaya with BMO Capital Markets.
Congrats on the solid results. On Semi Tech, volume growth of 18% is significantly ahead of traditional metrics like MSI and higher than last quarter. Is this due to fewer CMP steps, share gains, business wins? Can you break out the outperformance? And do you consider MSI an accurate metric to track your performance going forward?
We're a consumables business and will be correlated to wafer volumes, so MSI remains the best indicator of overall wafer volume. What's driving our outperformance is content gains: as customers successfully commercialize advanced nodes, each wafer requires more processing steps, layers and materials, which increases our content per wafer and pushes our growth above the MSI benchmark. We're also seeing incremental share gains, particularly in our CMP portfolio of pads, cleans and slurries—cleans and slurries are areas of notable share gains. The lithography business is doing well too; while EUV is important, many ancillary layers around photoresist are critical and we're partnering with customers to optimize those layers. So it's a mix of rising content intensity in advanced nodes plus share gains in key product lines.
We've seen some M&A in your subsector recently. You have strong organic investments underway, but what's your updated view on capital allocation toward M&A given the balance sheet is stronger post-separation?
We continue to execute our capital allocation framework. First priority is organic reinvestment—CapEx and R&D—because that delivers the highest returns. From an inorganic perspective, we're focused on bolt-on and tuck-in opportunities adjacent to our current areas, particularly in high-growth areas like advanced packaging and thermal management. We have an active pipeline, a disciplined process, and we watch the market consistently. Any M&A would be targeted and complementary.
We'll move next to Edward Yang with Oppenheimer.
Jon, could you remind us on your margin profile across your data center business versus auto and electronics? Thank you.
From an end market perspective, total company we focus on a blended margin around 30%. Semi is consistently in the mid-30s and maintained that level in the second quarter. ICS has moved from mid-20s toward the high-20s and we believe ICS is structurally in the high-20% range for EBITDA margin. That profile is stable as we move through the back half of the year. We expect ICS' growth and margin profile to continue to outpace semi for the back part of the year.
We don't provide specific margins by end market, but a proxy is where the most advanced technology content is going. AI data centers have very strong margin profiles because of high advanced-technology content. Other industrial markets like aerospace, defense and automotive are more balanced, and premium consumer devices are balanced as well but generally lower margin relative to data center. The positive is that industrial markets are among the fastest-growing parts of our portfolio, which supports value creation.
Can you give an early view into 2027 growth? Your long-term model was 7% growth, but you grew 10% last year and you're guiding 18% this year. What do you see for 2027?
It's early to speculate on 2027 specifically, but the important point is we continue to see broad-based demand across the secular drivers we've highlighted—AI-driven applications, high-performance computing and advanced connectivity. Customers have made significant capacity investments, which should drive capacity coming online, and we're well positioned to capitalize on that growth across our portfolio from front to back. All things are stacking up nicely for 2027.
This does conclude the call and webcast. You may disconnect your line at this time, and have a wonderful day.