Good day and thank you for standing by. Welcome to the Conference Call to review First Quarter of Fiscal Year 2023 Financial Results. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions]. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Sam Franklin, Head of Capital Markets and Investor Relations. Please go ahead.

Thank you, Operator. Good morning, everyone, and welcome to GlobalFoundries first quarter 2023 earnings call. On the call with me today are Dr. Thomas Caulfield, CEO; and David Reeder, CFO. A short while ago, we released GF's first quarter financial results, which are available on our website at investors.gf.com, along with today's accompanying slide presentation. This call is being recorded and a replay will be made available on our Investor Relations webpage. During this call, we will present both IFRS and adjusted non-IFRS financial measures. The most directly comparable IFRS measures and reconciliations for adjusted non-IFRS measures are available in today's press release and the accompanying slides. I would remind you that these financial results are unaudited and subject to change. Certain statements on today's call may be deemed to be forward-looking statements. Such statements can be identified by terms such as believe, expect, intend, anticipate and may or by the use of the future tense. You should not place undue reliance on forward-looking statements. Actual results may differ materially from these forward-looking statements and we do not undertake any obligation to update any forward-looking statements we make today. For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to the press release we issued today as well as the risks and uncertainties described in our SEC filings, including the section under the caption Risk Factors in our Annual Report on Form 20-F filed with the SEC on April 14, 2023. We will begin today's call with Tom providing a summary update on the current business environment and technologies, following which Dave will provide details on our end markets and first quarter results and also provide second quarter 2023 guidance. We will then open the call for questions. We request that you please limit your questions to one with one follow-up. I'll now turn the call over to Tom for his prepared remarks.

Thank you, Sam, and welcome, everyone to our first quarter earnings call. I'm pleased to report to Q1 results that are in line with the guidance we provided in February, as we continue to deliver resilient financial performance amidst a challenging macroeconomic and cyclical backdrop. Let me start by providing a brief update on the current business environment. Similar to others in the industry, we believe that semiconductor inventories are coming down more slowly than previously expected, and that the rebalancing of demand will extend at least through the second quarter, particularly in end markets such as smart mobile devices, communications, infrastructure, and data centers, as well as the lower end of the consumer and home electronics markets in general. Based on discussions with our customers prior to the our fourth quarter update, we previously anticipated that the first half of 2023, and likely the first quarter of 2023, would mark the low point in revenue and the peak of the inventory cycle. Based on more recent conversations with customers and our own internal models, we continue to anticipate that the first quarter revenue will represent the low point of our 2023 quarterly revenue, and that will have quarter-to-quarter modest sequential growth throughout the year. Though, we are expecting continued sequential revenue growth, the return to more normalized inventory and demand levels is forecast to happen more slowly than previously anticipated and will most likely occur later in the year well into the second half of 2023. Despite forecasting slight year-over-year improvements in ASP or our average selling price per wafer, we are now anticipating that revenue will decline year-over-year in the mid to high-single-digit percentage range. David will comment on this further in his section. Despite the headwinds in the aforementioned end markets, we continue to see healthy demand…

Thank you, Tom, and welcome to our first quarter earnings call. For the remainder of the call, including guidance, I will reference adjusted metrics, which excludes stock-based compensation and restructuring charges. Our first quarter results were in line with the financial range we provided in our last quarterly update. First quarter revenue was approximately $1.84 billion, and we shipped approximately 511,300 millimeter equivalent wafers in the quarter, an 18% decrease from the year prior period, driven by reduced wafer shipments, primarily related to mobile and consumer driven end markets. ASP increased approximately 12% year-over-year, driven by ramping long-term customer agreements with better pricing, as well as continued improvement in product mix. Wafer revenue from our end markets accounted for approximately 87% of total revenue. Non-wafer revenue, which includes revenue from radicals, non-recurring engineering, expedite fees, and other items accounted for approximately 13% of total revenue for the first quarter, broadly consistent with our expectations. Let me now provide an update on our revenues by end markets. Smart mobile devices represented approximately 38% of the quarter's total revenue. First quarter revenue declined 29% from the prior year period, principally driven by reduced volumes in the low-to-mid tier smartphone segments and a continuation of the well-publicized inventory correction within the broader smart mobile market. This decline was partially offset by higher ASPs, premium tier mix growth, and continued content growth in our RF transceiver and audio products, which recorded double-digit growth from the prior year period. As you've heard from others, inventory levels have remained higher than expected in most of the smart mobile markets during the first quarter as the inventory correction continues to work through the supply chain. We believe that inventory levels will be largely normalized throughout the first half of 2023, and that more historical inventory levels will…

Thanks, Dave. We are proud of GF's 14-year history and specifically the strong progress we've made over the last several years. But the opportunity ahead is even more exciting for GF. In a world that depends on the supplier of semiconductors for economic, national, and supply chain security, we offer our customers a unique and differentiated value proposition. We achieve this by focusing our innovation on application specific features, our end markets require and deliver these via deep customer partnerships. You've heard this story play out as we've continued to achieve significant growth in sectors such as automotive and IoT, two of the most exciting growth engines for our industry. What's different about these markets is that innovation required to win is not based on Moore's Law scaling. GF wins in these end markets because we deliver industry-leading power efficiency with our proprietary FDX technology. We win because we bring world class RF connectivity across all our technology platforms allowing for optimized digital and analog content in customer designs, and we win because we add intelligence and security at the edge with a range of world-class embedded memory technologies. The proof is in the numbers, as you heard early on during the call, we are continuing to grow our revenue in these markets, and it's our differentiation that is driving that. We see secular acceleration of the role of semiconductors in the world. We believe in the criticality of secure manufacturing to deliver products to global markets, and we are committed to continuing to invest in our global talent so that GF can play an increasingly vital role in the future of this industry. It is in that context that I'm delighted to announce two accomplished leaders who are joining the GF leadership team to help drive our business and…

Thanks, Tom. Three years ago, I joined GlobalFoundries with a singular mission, one that was shared across GF's talented and diverse workforce, to build the world's leading and only geographically diversified feature rich semiconductor foundry. We have made tremendous progress towards this goal and have never been better positioned to serve our customers, increasing demand across multiple markets as a secure, geographically diverse partner with best-in-class technology. With all the progress GF has made, I'm ready to hand over the reins to Tim Stone. I look forward to welcoming him to GF and will continue to support the company as we complete the transition over the coming months. In closing, I wanted to extend my appreciation to our 13,000 employees around the globe who deliver every day for our customers. With that, let's open the call for Q&A. Operator?

[Operator Instructions]. Thank you. [Operator Instructions]. And our first question comes from the line of Harlan Sur with JPMorgan. Your line is now open.

Good morning. Thanks for letting me ask a question. Dave thanks for all the support and helping the team drive the strong execution profile and best of luck on future endeavors.

Thanks, Harlan.

The team's pricing -- yes. Thank you. The team's pricing is based on technology differentiation, right, which drives the very high mix of sources engagements and your partnerships are not arms links, right, but very strategic. On the flip side, I mean, the supply/demand dynamics industry have weakened competitors continue to add capacity. You did say that the team is still on track to grow ASPs this year. What about on new business and LTAs that you're winning, LTAs that you're negotiating, what's the ASP trend on the new business?

Thanks, Harlan. Look, when I think about our pricing, the first time we talked about pricing for 2023 was on our November call where we said we thought pricing was going to increase on a year-over-year basis in 2023 versus 2022. We reiterated that again in February. We delivered it in Q1, and we're kind of reiterating it for the year here in 2023 that we believe that pricing will increase slightly on a year-over-year basis 2023 versus 2022. When we look out in time and we think about the D wins that we're winning and the LTAs that we're signing five of them in the first quarter another $1.4 billion of LTAs. Those LTAs deliver the economic value that GF needs to deliver our long-term financial model. And so I think customers are looking through this kind of near-term perturbation with the inventory in their channel. They're looking out into time and they are seeing capacity constraints in the future, particularly in the geographies where they want that capacity, and they're hungry for that geographic diversification as well as the technology that GF delivers. Tom, anything you'd add to that?

Yes, I'd add, this is in the bottom of our slowdown and we sign these kinds of long-term agreements. Our single source business, if you look at the design win mix for the first quarter over 90% we're single source business. And our discipline around design wins, we make sure that all new design wins are accretive to our financial model. And that's the way we're driving our business. It's not about all business. It's about accretive business.

Appreciate that. And then for my follow-up, given the weaker full-year revenue outlook you should still grow your revenues on average like mid-single-digit sequentially in Q3 and Q4. You've got the strong ASP profile. So how should we think about the gross margin profile for the remainder of the year? Can the team exit this year at 30% or better gross margins?

Yes. So Harlan, as you know, we'll guide one quarter at a time but we did want to give you some of that color for the year. That stated I would like to add a little bit more context. When you think about 2022 or the year of 2022, we ran utilization in the very high 90%s for the entire year almost 100% for the entire year. And so when you think about 2023, in the first quarter, we guided that we would run in the mid-80s from a utilization perspective, as, you know every 5 points of utilization is roughly 2 points of gross margin. But yet, when you look at what we delivered in Q1 from a gross margin perspective, it was actually very much in line with what we delivered for the year of 2022. And so we've been able through good operational performance improved mix, improved pricing to be able to reset the gross margin baseline for 2023. And so when you think about the full-year Q1 being the lowest quarter for our revenue, we stated that we believed we would guide on a Q-to-Q-to-Q basis sequentially throughout the year. I would expect that there to be a high correlation of gross margin and revenue.

One moment for your next question. And your next question comes from the line of Mark Lipacis with Jefferies. Your line is now open.

Hi, thanks for taking my question. Dave, sorry, you're leaving. Really appreciate all the great support that you've given us over here at Jefferies. So thank you for that.

Thank you, Mark.

Maybe a question on the topic of reassuring, which is interesting for many investors, it sounds like your engagement with customers is very high and I imagine that this is because you guys are providing great technology with good value. But I guess I'm wondering, is there a way to quantify or how the trend of reassuring is impacting your engagements? Or are customers telling you that, that, that that part of your value proposition is the ability to bring the manufacturing back to local markets or if you can provide any color on the conversations that you're having with your customers on that topic? Thank you.

Thanks Mark. It's an important; I think the realization of how important it is to first to get a more balanced supply chain. Concentration in very small pockets of the world are not good for geopolitical, geological reasons for a lot of reasons. So the realization is there. And now it always comes down to execution, implementation. I would tell you a lot more awareness and drive in more sensitive applications think of aerospace and defense, where supply chains out of China, for example, would be very problematic for those types of applications. A lot of energy out of the fabulous companies in China, in Taiwan, their businesses could be shut down if they don't have a global supply chain. So I think what's -- what you're -- we're seeing is a lot more conversations, companies trying to plan their next move. I don't think it's realistic for anybody to say, let me take an existing design and report it somewhere else. That's a lot of over reuse of important engineering talent, but thinking about future designs and planning it not only on technology and application space, but who and where it's going to be built. So I would tell you in the net -- in net of all of that, this still remains an opportunity for us ahead, very little of it in the present P&L that you've heard today.

Got you. That's helpful. And follow-up on the auto business, which is more than doubled on a year-over-year basis, you continue -- you expect to see continued ramp here and you're adding capacity. How like -- can you just remind us like how you think about the growth vector and auto is doubling annually? Is this kind of how we should think about this for you guys? Or could you just talk about how you see this business over the next several years? Thank you.

So I'll go in reverse water. It's all about what you believe. If you believe that the transition from an internal combustion engine to what we call ACE, an autonomous connected electrified vehicle drives significant content growth of semiconductors in the automotive industry, somewhere between 10% and 15% compounded, eventually that's the rate at which we expect our growth but because we're starting with new design wins on new models, and off a relatively smaller base, you'll see a higher growth rate like you've seen from us. Think about if we go back in 2020; our automotive revenue was less than $100 million. Last year it was around the $375 million mark. This year, we still feel that we're going to be bumping our head up on $1 billion, where earlier we were talking about a fourth quarter run rate. So we have a high visibility to the types of applications our technology is going into the work and what cars and the types of features to feel very confident that we're not done growing in this space. But doubling on big base is a lot harder than doubling on small base. But I firmly believe that we will continue to grow revenue in this market and gain share more importantly.

One moment for your next question. And your next question comes from the line of Vivek Arya with Bank of America Securities. Your line is now open.

Thanks for the question and thanks and best wish to Dave on his next adventure. He'll be really missed. So first, I wanted to ask Tom, you mentioned second half 2023 to mark a return to some kind of normal trends. Is that based on historical seasonality? Is that based on specific customer orders? Because your large smartphone customer was talking about the weakness in the smartphone market and kind of persisting towards the end of the year. So that's why I'm just curious what is giving you the confidence that second half could mark a return to some level of seasonal trends?

Well, it's -- I think the point was, see -- we're starting to start to see normalization of inventories in the second half. And as a result, that's why our revenue will have very modest sequential growth. Inventories are coming down, if you look on aggregate first quarter, we saw from an industry range modest decrease in inventories that bodes well for the second half, especially with certain customers are telling us they want to let the inventories come down. They -- more normalize how they're feeding the channels they want to get this past us. And so the real change, I think is what we came into this year. There was a belief that the second half would be a strong recovery. And what we're seeing, the second half is a more muted recovery. That was the point we were trying to make.

And if I could just build on that just a little bit in a couple of end markets. So with respect to smart mobile obviously that market's a bit more challenged with some of the inventory there as well as some of the handset volumes. The bright spot for us is that we do play in that premium segment of the market where we actually not only play in that premium segment, but we also attach more silicon in that premium segment. And that's a segment of the market that's held up -- held up a little bit better. We talked a little bit about automotive earlier in the call, so I won't reiterate that point. But then the other end market or maybe sub end market that I would talk about is the aerospace and defense business as well as the industrial side and governmental side of the IoT business has also held up quite well. And so while we've seen smartphone general weakness, and we've also seen some of the lower end consumer centric weakness, we do have some other businesses that are helping to offset that weakness. And we've been able to reallocate capacity in a very capital efficient way to those markets that are growing.

And my second question is, what is the report card on LTAs that were supposed to be executed this year? Because if you go back, let's say a year right and think about the LTAs that were supposed to come through in 2023, what has been the actual realization of that? How much has been pushed out or canceled? What I'm trying to get a sense for is how flexible are you guys with the LTAs and how much can we depend on them to right deliver on a certain amount of revenue expectation for a given year?

Great. Let me address that one and then Tom, maybe you can build on it as well. So from an LTA perspective, the LTAs are actually performing to their stated purpose and what was that stated purpose? Well, that stated purpose was that they would create a framework for discussion for GlobalFoundries and our customers, such that when there were inflection points in the market that we would sit down in a rational way, in an equal way and have a healthy conversation around the investments that we've made for maybe demand that perhaps isn't materializing the way we originally expected. And so we all recognize that we're in an environment where there's too much inventory in the channel. And so just continuing to ship more inventory in the channel actually isn't helpful. And so that framework has really come into play where we have sat down with our customers and we have looked at the entire economic life and value of that contract. And we've worked across the three main elements that we had spoken about previously. I mean, as early as even our Roadshow and that was we talked to our customers about price, we talked to them about volume, we talked to them about duration, and we also talked to them about future design win opportunities such that we can capture more share of their wallet in the future to preserve if not enhance the economic value of those LTAs. And so we've been able to deliver on that. And so, as we mentioned last quarter, we had one customer where we had an underutilization fee settlement. That one was fairly well publicized. We do not have any other new settlements to announce, but what we have been able to do with those contracts is work across that framework that I discussed to not only preserve, but also enhance the economic value to GF. Tom, anything you'd add to that?

I think that that, that was exactly the intent. It was to create partnership to go to manage the upsides and the downsides together. And the operative term is preserve the overall economic value of the agreement. And a lot of that has to do with new wins and new opportunities and extending the life of these. And again, back to a quarter that we're all calling in the low $0.4 billion industry, we still brought in $1.5 billion of new long-term agreement and $200 million of prepay as part of that.

One moment for your next question. Your next question comes from the line of Ross Seymore with Deutsche Bank. Your line is now open.

Hi guys, thanks for letting me ask a question and David, best of luck. Sad to see you go. I wanted to go back to the pricing side of the equation, I know you guys don't guide by wafer units and pricing, but it looks like the first half of this year is on the pricing side going to be up double-digits. And you said the full-year was going to be slightly up year-over-year. That seems to imply the second half is going to go down if that math is correct, is that something to do with mix? Are you having to price more aggressively as part of the negotiations with the LTAs that you just discussed in the last question? Is there any sort of metric that I'm missing in that analysis?

Sure, Ross. Obviously the compares in the first half are a little bit easier than the compares to the second half of last year. What we've always talked about is we've talked about the pricing would continue to improve as we ramp those LTAs, many of which started ramping in the middle to the last half of 2022. And so the way we think about pricing is we think pricing at the current levels is very stable, slightly up, and then you're going to bump around a little bit depending on what the mix of your business is. And so when you think about a year-over-year basis, that would lead you to the kind of double -- high-single-digit, double low-teens type of growth that you mentioned. And then as you get towards the back half of the year, you look at pricing that's relatively flat depending on exactly what the final mix is.

Got it. Thanks for that. And then from an end market perspective, you said earlier that you reiterated the bumping up against the billion dollars in the automotive side of things, so that's really impressive growth. And it seems like that could get you that slight sequential growth in the back half quarters all by itself. Are there other segments that you expect to continue to go down in the back half? It seemed like you said that inventory should be pretty normalized, so I wouldn't expect them to go up that fast necessarily, but it didn't sound like anything was going to go down. So what's really the offset to the automotive growth?

Sure. When you think about the sequential growth in the back half of the year, really what you're looking at is you're hearing us say, when we say slide, you're hearing us say, we feel good about the industrial and the governmental portion of home and industrial IoT. So that's the A&D as well as the industrial business and IoT. We feel good about automotive. We've taken a more cautious outlook on the low end of consumer as well as the lower end of the handset market. And so that's what you've heard us communicate is just the fact that we feel good about those markets, that on the aforementioned comments and then the other markets, we've just taken a cautious outlook. And if the inventory normalizes the way we expected then perhaps we'll do slightly better. If the inventory and the macroeconomic kind of low end malaise continues then we'll be in line with what we told you. So we feel like we've positioned ourselves conservatively.

One moment for your next question. Your next question comes from the line of Joseph Moore with Morgan Stanley. Your line is now open.

Great. Thank you. And let me add my thanks to David and good luck. In terms of the CapEx, you guys maintained this $2.25 billion from last quarter, your revenue obviously a little lower for the year. So I wonder if you could just kind of walk us through the trade-offs that you're making is that confidence in 2024? And what are the -- just what are the trade-offs between trying to drive more cash flow versus trying to invest in the business?

Sure. So first let me start with just by saying that the majority of that CapEx is really related to Fab7H on our campus there in Singapore. And really giving us the capability longer-term to be able to satisfy some of these LTAs that we're signing today, as well as some of those LTAs that we've signed in the past. Before I just immediately direct your question, I do address your question. I do want to provide a little bit of context. When we talked about our expansion plans, we talked about increasing our wafer capacity from about 2 million wafers in 2020 to about 2.4 million wafers in 2021 to about 2.6 million wafers last year to about 2.8 million wafers this year to north of 3 million wafers in 2024 and we're actually very much on track to deliver that capacity. In fact, we're on track to deliver that capacity with probably what will be something like $3 billion less CapEx than originally anticipated for that total expansion that I just mentioned. And so we feel like we have appropriately positioned ourselves for growth in the future for the business that we're winning both through LTAs and design wins. We will continue to make trade-offs with regards to free cash flow for the period. In fact, we stated last quarter that we thought we would be free cash flow positive for the year. I'll reiterate that on this call that we believe will be free cash flow positive for the year. And then as we look to the future, we are very well-positioned with capacity for future growth. Tom, anything you'd add to that?

Yes. Joe, let me do a little P times Q here. Average price, 3,000, 3 million wafers, we've essentially positioned the facilities, our factories to give $9 billion plus of revenue for the future without any -- just on the wafer business, not even the non-wafer revenue. So the capital we've planted is going to allow us to grow and actually respond to the market much more quickly than we were in 2021 when we had to build that capacity. So I think the capital that we've deployed is really positioned the company to for the eventual growth and it'll make us a lot more capital efficient as we think about 2023 and 2024 and beyond.

Great. Thank you for that. And then in terms of your overall utilization of your capacity, we continue to hear about from some of the automotive centric companies that there are some bottlenecks still in terms of specifically non-volatile memory oriented MCU processes for automotive, things like that. I know you've talked about broad fungibility, but are there still any areas where you guys would say here's a hotspot where if we can add a little bit more of this type of capacity, we can grow more?

Yes. There's never a perfect world. This idea that supply matches demand every day every month for year is not there. And there are segments in customers where we are scrambling to funge enough capacity in a corridor to make those very specific platforms with the features. And so we see that too. We see that we're still in a game of trying to respond to the complete set of customer demand, notwithstanding that we still will deliver our full outlook on the automotive business for this year.

One moment for your next question. Your next question comes from the line of Rajiv Gill with Needham and Co. Your line is now open.

Yes. Thank you for taking my questions and best of the luck to you Dave as well. So just a question on the smart mobile market, that's really one of the main drivers of the weakness. I wonder if you could maybe break it down a little bit more specifically in terms of where you're seeing the softness in terms of technology. Is it more on the with the RF front end module customers, is it with some of the NFC or is it just kind of across the Board given kind of the large inventory correction that's occurring in the smartphone industry? Any color on the smart mobile will be helpful.

Yes. Maybe David, I'll start on this one now. So what's the industry outlook? Last year double-digit decline in handsets this year 3% with an inventory climbing, so this is the broadest stroke and most heavily weighted is just in unit sales. As David pointed out before, at least the premium handsets are impacted less than any other handset. And that's where we have high content. In fact, I think our smart mobile -- our smart devices -- smart mobile device business is faring better because there's some important design wins we had last year that are shipping this year that's offsetting some of this --this decline. So it's not any particular element or feature in the handsets, it's just the overall volume that's a high, high fraction of the fact that our smart mobile revenue -- smart mobile device revenue was only 38% in Q1 of this year. David, anything to add for that?

No, well stated, Tom.

Thanks. And just for my follow-up, regarding pricing, you talked about some of the pricing in the near-term, but if you kind of think about long-term, there's been discussions around if wafers are made in the U.S. that domestic foundries could charge a premium in terms of pricing. So there's been chatter about that. Is that something that you are debating with customers? Is that a reality premium pricing for kind of wafers made in the USA?

I would say it this way. When you're hearing about its capacity being put on capacity drives investments and investments require competitive returns. And so you're seeing is that -- is what's the reality of the right economics to go create new capacity on these nodes and how do we do it in the most efficient and economic way? And the answer is we have a very disciplined industry environment capacities being put on in partnership investments. It's being put on with long-term agreements. And what I think that does, it's really healthy for the industry and it creates a very constructive environment that with through partnerships that the investments that that companies make will get healthy and competitive returns.

One moment for your next question. And your next question comes from the line of Chris Danely with Citi. Your line is now open.

Hey, thanks, guys. Just to get a little more specific in terms of what's going on this year, can you just talk about how much in aggregate of the LTAs have been pushed out, and then what's been the change or how much change in pricing have you had to renegotiate?

Sure, Chris. Look, when we think of this year if you go back to our Capital Markets Day, we thought we were going to essentially be fully utilized this year. Now not all of that was covered with LTAs, but that between LTAs and POs, I mean, that was our expectation this year. And as we kind of rolled into the year and we looked at the inventory positions in the channel and we looked at how the sell-through was going based upon the macroeconomic backdrop that we're in, we recognized with our customers that continuing to build inventory was the wrong decision. So we sat down with those customers and we started working on the framework of the LTAs to be able to preserve the economic value of those contracts because of the dollars that we had invested in capacity. And so what I can say, I can't speak specifically contract by contract. I can tell you that we did close a contract that we disclosed or maybe they disclosed but it was broadly talked about where there was an underutilization fee. I do not believe that we're going to have significant underutilization fees that are required throughout the year and certainly that's not really factored in a meaningful way. I would say for our annual forecast for 2023, we've been working with those customers to take the economic value of those contracts preserve them as well as to ultimately enhance our value and deliver our long-term model. And so I think that's probably the most that I would add there. Tom, anything that, that you would add to that?

Yes, a minor add to that. When you think of single source business, it's not -- if I -- if there's price elasticity, if I lower at price would I get more volume. The volume is the volume and the price is the price. And the question is how do you go work through an inventory correction like this? It's not let's go win share by price elasticity. That's the value proposition we provide to our customers. We have single source business differentiate. They can differentiate their products that we can be a better supplier to them in the great times and in the -- in inventory correction times.

And if I could just add one point, I don't know of a contract that we've amended in which price went down in the LTA amendment. So when the volumes are being decommitted, the conversation isn't about how do you decrease price to try to stimulate demand when you have too much inventory. So it's usually the going in the other direction. So hopefully that's a helpful clarification.

Very helpful. Thanks. And for my follow-up great job on landing Niels, he's got a good reputation. I guess, Tom, can you talk about the genesis of the CBO job? I don't think you guys have had this before. Is this just to sort of manage this downturn that seems a little more longer and serious and expected, or just talk about why he's coming over and what his specific duties are going to be?

Yes, very good. It has nothing to do with downturn. It has everything to do about our future. We -- the complexity of our business and the uniqueness of being a foundry requires a tight coupling between understanding the end markets and the specific requirements in end markets. So we need to be as much as an expert as our customers in understanding the future where end markets are going, so that we can create product lines by definition to meet those end markets and then drive our technology development in an aggressive and accelerated way. And we need the three of those areas to come together with one executive who can integrate that activity. And so our commercial team with under Juan Cordovez, with our business unit team under Mike Hogan, and our technology development under Gregg Bartlett, altogether will report into Niels to drive that integration, to accelerate our financial and commercial success and performance.

And one moment for your next question. Your next question comes from the line of Mehdi Hosseini with SIG. Your line is now open.

Yes. Thanks for letting me ask a question. I have two follow-ups. David, do you have any guides for EBITDA in Q2 and 2023 and I have a follow-up?

Sure. I would -- hi Mehdi, hope you're doing well. EBITDA guide, I would think about EBITDA on a sequential basis, as tracking with the marginal fall through that you'd see from slight revenue growth. So I think that statement holds true for second quarter as well as the subsequent quarters where we are expecting sequential growth throughout the year kind of Q-to-Q-to-Q for the remainder of 2023.

Got it. And best of luck in your next endeavor. And a question for Tom. I understand there's a lot of anxiety over the inventory correction, which is nothing new given cyclical nature of the industry. But what I want to learn from you, maybe you -- maybe is a good time for you to remind us in a smartphone and electric vehicle and outside of the SOI wafer, what are the some of the key product or drivers for increased content, especially as you look into post-inventory correction? It would be great if you could remind us of those key growth drivers outside of the core SOI wafers.

It starts with embedded memory for microcontroller for automotive. It starts with our by CMOS device technology for higher voltage. If you think of power management chips with embedded memory for both control and power management, it's a suite of applications and technologies beyond RF SOI, which features in the front end module phones. And so I said it earlier in my remarks definitely, we are the ultimate player in low power on our FDX platform. We bring a broad range of RF to all our platforms, not just for front end modules, but for all levels of connectivity especially in the IoT space. And then the winning play is to create intelligent and secure processing capability by having industry-leading embedded memory in our solutions and that's what plays to the strength these end markets.

Is there a key milestone or a threshold for increased adoption specifically electric vehicle? Is this -- or is this just going to be a steady any kind of adoption as electric vehicles pontificates then you will see increased content? Or is there a milestone that would accelerate that adoption?

So I think if it was just an electrification of cars, you'd start to look for inflection points of how model years come where units of ICE internal combustion cars go down and fleets change or brands change their fleet strategy. But because it's about autonomous and connectivity in the car, it's not just one driver. And we play in a broad range of those applications. I don't think of I could pick a particular car model year-on-year has less features in it. In fact, it becomes a standard each year. So think of this as about a transformation of the auto industry, not just to electrification, but to connected cars to autonomous cars. And that's the range of and suite of products and applications request.

Bella, we'll take one last question, please.

All right. And your last question comes from the line of Krish Sankar with Cowen and Company. Your line is now open.

Yes. Thanks for taking my question and David, thanks for your help and good luck on the next endeavors. I've two questions. Either Tom or David, number one on ASP, it's nice to see ASPs holding up despite lower volumes, but next year as more double-digit nanometer capacity comes online for the industry, how to think about ASPs into next year and then I had a follow-up.

So when we think about ASPs for 2024, again, I'll kind of point you back to that that Capital Markets Day presentation. If you stood back and kind of squinted at that chart, you would see that we had LTAs that covered about three quarters of the capacity for 2024. And so I would say that a lot of the pricing discussion has already happened. It's already been memorialized and it's already been signed in a contract. So then you look to the future and you say, well, what does pricing look like in the future? And when I look at the new design wins and the new LTAs that we're signing, pricing is holding up very, very well. In fact, I'd say pricing is actually delivering a -- it's accretive to our long-term financial model that that we had put out as we became a public company. And so it remains a very constructive pricing environment in the future. I recognize that there's more single-digit nanometer capacity that's come online and even in some regions of the world more double-digit nanometer capacity that has come online. But as we've always stated, our interest is in differentiated accretive business where we provide and attach a lot of GF technologies. More than 90% of our design wins in Q1 we're single source design wins. We've remained kind of around that two-thirds of revenue is single source revenue and over time those two numbers will converge. And so we feel quite good about pricing. Tom, anything you would add?

Yes. It's back to the economics for investment will be forced for a much more constructive environment for how we all fund the doubling of this industry over the next decade.

Got it. Super helpful. And then just a quick follow-up. Obviously the auto industry segment has held up pretty well for you folks and many, many other folks from the industry. I'm kind of curious, do you worry that that could be the next shoe to drop or it could moderate as smartphones start getting better and dampen what could be a stronger recovery?

Look for the horizon that we see in talking to our customers and the fact that this transition we've been talking about this morning autonomous connected and electrification of cars. See the next decade, automotive is a key driver for our industry as we continue to add more and more content to these cars. The key for GF is to make sure that we are developing the technologies that best meet those needs and provide differentiation for our customers.

We don't have any further questions at this time. I will now turn the call back over to Sam Franklin.

Thank you, Bella, and thank you everyone for joining us today. Appreciate the questions, and as always, look forward to seeing many of you on the upcoming conference circuit.

This concludes today's conference call. Thank you for your participation. You may now disconnect. Have a good day.