Thank you for standing by, and welcome to the GlobalFoundries Inc.'s Fourth Quarter of Fiscal Year 2025 Financial Results. [Operator Instructions] As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Eric Chow, Investor Relations.

Thank you, operator. Good morning, everyone, and welcome to GlobalFoundries fourth quarter and full year 2025 earnings call. On the call with me today are Tim Breen, CEO; and Neils Anderskouv, President and Chief Operating Officer; and Sam Franklin, CFO. A short while ago, we released GF's fourth quarter and full year 2025 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 web page. During this call, we will present both IFRS and non-IFRS financial measures. The most directly comparable IFRS measures and reconciliations for non-IFRS measures are available in today's press release and accompanying slides. Please note 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 risks and uncertainties described in our SEC filings, including in sections under the caption Risk Factors in our annual report on Form 20-F and in any current reports on Form 6-K furnished with the SEC. In terms of upcoming events, we will be participating in fireside chats at the Morgan Stanley Technology, Media and Telecom Conference in San Francisco on March 4; and the Cantor Global Technology and Industrial Growth Conference in New York City on March 11. In addition, we are looking forward to hosting a publicly webcast investor webinar at 4:30 p.m. Eastern Time on March 10. At this event, we will provide a business, technical and strategy update on how GF is at the forefront of the silicon photonics and advanced packaging revolution. We will begin today's call with Tim providing a summary update on the current business environment, technologies and end markets, followed by Sam, who will provide details on our fourth quarter and full year results and also provide first quarter 2026 guidance. We will then open the call for questions with Tim, Neils and Sam. We request that you please limit your questions to one with one follow-up. I'll now turn the call over to Tim.

Thank you, Eric, and welcome, everyone, to our fourth quarter and full year 2025 earnings call. I am pleased to announce that GF delivered strong results in the fourth quarter with revenue, gross margin and EPS at or above the high end of the guidance ranges. For the fifth consecutive quarter, the communications infrastructure and data center end market demonstrated double-digit percentage year-over-year growth, driven by strong momentum in areas such as SATCOM and optical networking. As a result of the team's consistent execution, disciplined cost management and relentless focus on profitability, we grew gross margin by nearly 400 basis points year-over-year in the fourth quarter. These achievements show that with our unique differentiated portfolio aligned to key long-term secular trends, GF is well positioned to seize emerging opportunities and deliver durable profitable growth. We made significant progress towards our strategic objectives in 2025, focusing on the three core pillars of our customer value proposition, namely, technology differentiation, deep customer and ecosystem partnerships and leveraging our uniquely diversified geographical footprint. Let me summarize some of our key business milestones and highlights in the year. In 2025, GF made extraordinary strides strengthening our technology differentiation across multiple vectors. In the exciting growth area of silicon photonics, we acquired AMF and InfiniLink, which together brings valuable state-of-the-art IP and synergetic customer bases. We expect both of these acquisitions to accelerate our technology roadmap, broaden our portfolio of optical networking solutions and drive greater customer value. As evidenced by our recently announced collaboration with Corning for detachable fiber attach, we are building a unique and differentiated ecosystem of partners for silicon photonics. In the burgeoning realm of physical AI, our acquisition of MIPS enables GF to become a diversified and holistic technology solutions provider with an expansive portfolio of offerings and a larger-than-ever…

Thank you, Tim. For the remainder of the call, including guidance, other than revenue, cash flow and net interest income, I will reference non-IFRS metrics. As Tim noted, our fourth quarter results were at or above the high end of the guidance ranges we provided in our last quarterly update. We delivered fourth quarter revenue of $1.83 billion, up 8% sequentially and flat year-over-year. We shipped approximately 619,300-millimeter equivalent wafers in the quarter, up 3% sequentially and 4% from the prior year period. Wafer revenue from our end markets accounted for approximately 88% of total revenue, non-wafer revenue, which includes revenue from reticles, nonrecurring engineering expedite fees and other items accounted for approximately 12% of total revenue in the fourth quarter. For the full year, we delivered revenue of approximately $6.791 billion, up 1% year-over-year. We shipped approximately 2.3 million 300-millimeter equivalent wafers, a 10% increase from 2024, which equated to utilization levels of approximately 85% for 2025. Let me now provide an update on our revenue by end markets. Smart mobile devices represented approximately 36% of fourth quarter total revenue and 39% of full year revenue. Fourth quarter revenue declined approximately 13% sequentially and 11% from the prior year period. Full year 2025 revenue decreased 12% year-over-year, principally driven by GF initiated onetime pricing adjustments made in 2025 with a small number of mobile customers where GF was dual sourced. We expect to gain greater share of wallet with these customers in 2026, and we also believe that pricing has stabilized in this end market. In 2026, we expect our smart mobile devices business to largely track the overall smartphone market. Moreover, as we continue our multiyear journey to diversify our products and end market portfolios, 2025 was the first full year where more than 60% of GF's total…

As you saw in our 6-K filing this morning, today is Niels' last earnings call at GF, and I want to express my sincere gratitude for his service and contributions. Over the past three years, Niels brought clarity, strategic discipline and a deep customer focus that strengthened our operations and helped advance our product and technology road map. I wish him the very best in his next endeavors. Here is Niels for some final remarks.

Thank you, Tim. As I step down from my role as President and COO, I want to express my deep gratitude to the entire GlobalFoundries team. The past three years have been some of the most rewarding of my career. And together, we sharpened our strategic focus, strengthen our business discipline and advance the three foundational strategic pillars that now define GFC [indiscernible] position in the market. I'm incredibly proud of how we aligned our manufacturing, commercial and product organizations to move with greater speed, customer focus and purpose, a shift that is now reflected by the strong technical advancements across our road map, expanding design win momentum and our stronger operating rhythm. What stand out most though is the relentless dedication of our people their commitment, their drive to win and their belief in what GF can achieve have shaped the company's trajectory and laid a powerful foundation for the years ahead. GF is in a stronger position today than at any point in its history, and I have full confidence that Tim and the team will continue to accelerate the company's strategy and deliver exceptional results. It has been an honor to be part of this mission to you. And with that, let's open the call to Q&A. Operator?

And our first question for today comes from the line of Mehdi Hosseini from Sesquhana Financial Group.

And the first one, I want to focus on silicon photonics, especially in the context of the recent SAP acquisition in Singapore and InfiniLink from November of last year. Can you remind us what the strategy here is and how GlobalFoundries is intended to differentiate? And I have a follow-up.

Thanks, Mehdi. It's a great question. Obviously, you've seen over the last year a very strong acceleration and a lot of public announcements about the need for silicon photonics as a critical enabler of the scale-up of AI in the data center build-out that we're seeing. That's something we've been working on for more than a decade as GF organically building an incredible organic platform. And obviously, in 2025, we added to that with inorganic plays, including the acquisition of AMF and also of InfiniLink. Look, our goal, and I think where we're making great progress is to be the best in the industry for three key reasons: Number one, having the strongest process technology offering, and that includes an offering for 200 gig per lane technologies today and a road map to 400 gig per lane and beyond, which is what the industry needs to achieve the next level of performance, and we're well on track to deliver that and those acquisitions support in that journey. Also having the strongest enablement, obviously, these are new areas for customers to design, and they need robust PDKs, simulations, modeling and so on to be able to bring their solutions to market. They also need ecosystem partners within that, some of the partnerships we've mentioned, for example, with Corning, brings the table specialized solutions, things like detachable fiber attach, which are critical for the transition to copackage optics, and the last thing that, of course, GF is well known for is that global manufacturing footprint. And so we're scaling silicon photonics in Singapore and the U.S. including on a 300-millimeter platform, which, again, we think gives us a lot of opportunity to grow the business and differentiate going forward. I think you're seeing the proof points reflected in the revenue trajectory, we obviously had a strong 2025 doubling from the prior year, and we think that will continue through the course of 2026 and beyond. And that's given us also confidence to accelerate what we said previously about reaching $1 billion run rate revenue, which we think will reach by end of 2028. So overall, very strong momentum, lots more opportunities ahead. We're very much at the beginning of this transition in the data center.

Great. And then the second question, actually a different topic, but perhaps part of your longer-term strategy. And one -- I would like for you to remind us, what is your strategy with quantum compute? And I asked that because IonQ recently acquired SkyWater. SkyWater was a smaller analog fab. And I think your strategy on the risk side is somewhat also a strategic with a lower opportunity that Quantum brings. So can you remind us what the strategy is? And any additional color that you can provide us would be great.

No, thank you. Actually, longer term, very excited about the trajectory for quantum. And I think the reason is you see now significant investment going into building scalable, full-tolerant quantum systems. And that's the key. It's not about proving at the lab scale now. It's about proving that we can actually build functional systems at scale. GF has very specific solutions for different quantum modalities, everything from Photonics, which we've talked about just now and more broadly, including partnerships that we have with companies like CyQuantum. But we actually also have partnerships in areas like spin qubit, ion trap, topological quantum. So a lot of these modalities that are all competing in a way to prove they can be the first ones to scale. GF provides for all of those. Obviously, since that announcement that you referred to, people have recognized even more the importance of high-volume manufacturing. Again, it's not just about proving at the lab scale, but how do you actually industrialize and build larger scale systems. We have good partnerships out there. We expect to announce more in the coming months. And again, just given the depth of our technical bench, it's an area I think will play a critical role going forward.

And our next question for today comes from the line of Ross Seymore from Deutsche Bank.

I want to talk a little bit about the supply side of the equation. You talked about what CapEx was doing. But as we think about areas of tightness, pricing environment and some of your more unique process technologies. How are you viewing the tightness of the differentiation and what that means for kind of sustained CapEx going forward beyond this year?

So thank you for the question. I think we're seeing, particularly in these areas of differentiated technology, combined with strong end market traction, a big step-up, that's compared to a year ago in corridors, such as silicon photonics. Also, our FDX platform, a lot of use cases there from the car to the IoT and beyond. In areas like silicon germanium, we haven't spoken so much about, but again, getting pulled through in a lot of the optical connectivity in the data center. So the demand drivers are strong. those corridors are running hot. We're able to meet our customers' demands today. But given the ramp profiles of new designs that have been won already and are now taping out, will we see good areas rough to invest there and scale. The good news for us in terms of those investments is they're highly accretive, short time to market within our existing 4-wall footprint. So they come with quick ramp and very good capital efficiency. And maybe one thing to add to that is, obviously, they're also eligible for some of the best government support we've had in, frankly, our history in terms of putting that capacity on given the strategic nature of the footprint. So I think a good opportunity for us to grow, to invest more strongly against that customer demand.

And Ross, maybe just to put a couple of numbers around that as well and kind of reinforcing Tim's point there around the guiding principles that we have for deploying CapEx. And as Tim said, number one, customer-led demand; number two, in accretive corridors; and number three, in a highly capital-efficient manner. Actually, 2025 as well is a good example of where we've already demonstrated that's starting to come through, not least in the increased investments we've made in Silicon Photonics to support the ramp that we've seen so far. But also some of those government grants that we've seen come through as a result of the strategic importance of our overall footprint. And so you take our gross CapEx in 2025 versus 2024. You're actually up about 15%, but on a net basis, down about 7%. The single biggest driver there is that we are now starting to see the level of increased government support across the U.S., across Germany, across Singapore, start to fall through. So relative to 2024, about $10 million of government grants came through 2025, about $150 million. We expect that to grow again in 2026. So really kind of plays to those thought of those three core principles.

I guess as my follow-up, just if we take all of these investments on one side and I think, Tim, you described it as kind of a holistic technology solution provider in your transcript. How do we think about the margin structure? What does it mean to the gross margin over time for the company and perhaps even the OpEx intensity. It seems like the business model, whether it be mix shifting or just a solution approach is really a different model than when you last updated us on some of your long-term targets. So I just wanted to see how some of those targets might be changing.

Sure, Ross. I'll take that one. And I think there's a couple of important points to unpack there, both in terms of some of the margin drivers and as you say, on the OpEx side of the equation as well. The margin, I think, is really starting to come through and what you saw us deliver in the fourth quarter as well. You take a relatively flat revenue profile year-over-year in the fourth quarter, we delivered almost 400 basis points of increased gross margin. Now some of that comes through the continuation of our focus on productivity of disciplined spending, very modest utilization pick up during the year as you heard, we were about 85% for the full year of 2025. Where we're really starting to now see the fruits of the strategic decisions that have been taken come through is around the mix. Clearly, with silicon photonics roughly doubling in 2025. That comes through at a highly accretive gross margin. That contributed to that large step-up that we saw and enjoyed in quantum in data center in 2025. And you overlay that with automotive, which has typically been a strong tailwind for us from a margin perspective, but also a secular growth perspective, you take the combination of those two, and that's about $2.2 billion of revenue in 2025, about 1/3 of our total revenue. That on a stand-alone basis, it's larger than some of the competitors that we see within this space. And so this continued diversification of the portfolio from an end market perspective and a product perspective is going to be a good driver of margin tailwind over the years to come. And then the last piece, which I'll just call out there as we think about it on a long-term basis is really about scale.…

Congrats Niels as well.

And our next question comes from the line of Mark Lipacis from Evercore ISI.

Tim, if I look at the acquisition of the recent ones on the processor side, MIPS and ARC and then on the connectivity side, it's the Advanced Micro Foundry for SIFO and InfiniLink. So is there a synergy between these, for example, if the customers who are using the processor, are they're also using the connectivity IP? Or are these separate ideas? And then separate from that, is -- are these acquisitions, they -- are they just broadening your portfolio that you can offer? Or is this -- are they meant to also move you up the value chain, so to speak. So are you becoming more than what you've been in the past, I'd like a classic foundry. I don't know if that's the right way to say it, but are you moving up the value chain with these acquisitions? Is that part of the idea?

Yes. No, Mark, thank you for the question. It's a great one. I mean really quick recap on the photonics-oriented acquisitions because we've already spoken about that a bit. Those are absolutely about bringing new technology to that road map, accelerating capacity, by the way, bringing also new customers. AMF came with different customers that GF hadn't worked, deeply within the past and now we have new opportunities to grow with those customers. By the not just in photonics, many of them are also potential customers for the rest of the portfolio. So that's highly synergetic. And then InfiniLink, great team in Cairo, Egypt, where you've got very good design skills in our platform. That's helping customers onboard more quickly, build more innovative solutions and architectures, including some of the customers that are building more co-packaged optics type solutions, which are more complex have more packaging and so on in them. So that's highly geared towards that data center AI build-out and obviously build on our organic photonic story. The mission synopsis is different. And so I think you can think of that more as laying a foundation for that physical AI transition. We firmly believe that will outstrip the current boom on the data center over the long haul because the number of applications are much, much broader. And what's interesting is the customer reaction we had to those acquisitions first one we announced MIPS and then even more so when we announced Synopsys, I got a lot of answers sheet says very, very positive feedback to customers who said, "Listen, this is great because this allows us to engage earlier together in the road map, and we're thinking about how we solve critical problems in the car, in the IoT, in the defense space and so on." And I think it's, therefore, not just, Sam kind of alluded to accretive revenue, which it is, but it's also synergetic to our manufacturing footprint and allows us to engage much earlier, which means those engagements are much more strategic much longer and more durable as well. So I think the synergies are with our current business, but both of them really play to those megatrends that we're talking about.

Very helpful. And then a follow-up, if I may. When you listen to your customers on their earnings calls like most of them are of the view that the supply chain inventory correction has largely played out. And I'm wondering if you could give us a sense like what is the visibility for you guys look into 2026 compared to a year ago? And any color you can provide us on like how your customers are thinking about giving you like longer lead times and longer kind of visibility or higher facility into the year versus a year ago? Is that helpful?

It's a great question. And I think across all end markets, it is significantly more visibility versus a year ago. I think that's consistent. Obviously, there are some markets where the visibility is extremely high. And you hear that on other earnings calls, again, anything touching the data center. Most of the customers are talking about '27. For them, '26 is already a deal that I think is very consistent based on what you're also hearing from the big spend of data center CapEx and so on. So that's very strong. I think for us on areas like automotive, we're just sustaining momentum and not just in classical areas like microcontrollers where we have a strong business again, good visibility, but areas that are ramping very nicely like smart sensors, things imaging, think radar, some even emerging opportunities in LiDAR. And so you're seeing new growth, but this is also based on design wins that happened in some cases 2, 3, 4 years ago, and that's just the nature of that automotive business. So I think we remain with pretty good confidence and visibility into the automotive side. I think we talked about the IoT. It's a bit more of a story of product transition this year. So we do see growth. We definitely see stronger growth in the back half because we know which products are taping out and are moving into ramps in the back half of the year. But I'll call out key areas, again, like medical, they're starting to pick up, which is very interesting, I think, longer term, very, very good growth driver. Other areas of the IoT, I think, also industrial picking up as well on the same basis. And then look, smart mobile, we said we track the overall market. I think that's the one that people ask the most questions about in general from a market dynamics point of view, if you listen to some of those earnings calls. I'd say our portfolio is geared more to the premium handset and premium handset is typically more resilient to some of the disruptions you've heard about from other calls. So again, overall tracking the market. Obviously, we're watching the space very carefully.

And our next question comes from the line of C.J. Muse from Cancer Fitzgerald.

I'm just curious if you could spend a little time on the silicon photonics side. You talked about doubling revenues again here in 2016. Curious if there's a change in mix, customer base within that? And then as part of the bigger picture within CID, how are you thinking about kind of the growth trajectory for that overall business, particularly given silicon photonics doubling once again?

Yes. No, great question, C.J. So overall, what I mentioned with AMF is we brought in new customers to the mix, which is great, and those customers as to say, have more opportunities that we can grow. That's given us a pretty broad portfolio into silicon photonics. As a reminder, the majority of photonics revenue today is in the pluggable space pluggables are doing very, very well globally. If you walk around any AI data center today, you'll find a huge number of pluggable optical transceivers being used. Obviously, that pulls on silicon photonics, but also within our CID end market that pulls on things like high-performance silicon germanium actually a very strong business for us that, again, we're investing in given that the capacity is being very, very well utilized today. So I think that part is there. What you're also seeing and hearing about is the beginning of the co-package optics, transition. I think we've always been consistent that, that was a '27 scale ramp more than a '26 scale ramp, but all the progress we're seeing in terms of design wins, in terms of takeout, planning gives that a good indication that that's on track. And that's just because CPO is the only way to address certain performance workloads, especially on scale up networks. And so look, I think photonics still, like I said, very early in its rollout and those form factor changes will also drive significant increases of content.

And maybe, C.J.; just to capture 1 other aspect that look in 2025, we grew our I&D business about 30%. So really an inflection from some of the legacy migration that we saw in 2023, 2024. To Tim's point, a big piece of that is silicon photonics and optical networking, but we're also now seeing this continued growth from a communications infrastructure perspective and specifically within satellite communications as well. So you look at the LEO satellite launch projections over the course of the next couple of years, the continued commercialization industrialization of this technology as well. We believe that's a good tailwind as well heading into 2026 and consistent with the commentary that we provided on the call, we expect to have a similar growth rate in '26 as well.

Very helpful. And then -- and maybe just to get our arms around all of the acquisitions in '25. How should we think about kind of the incremental revenues and the implications to gross margins as well as OpEx. Any kind of framework around that?

Yes, happy to. And look, there's obviously a period of ramp and integration that comes through with these acquisitions as well. I sort of categorize a little bit the difference between, say, an InfiniLink acquisition, which is really focused on high capability, design team that will support revenue growth in the outer years, particularly within photonics and packaging, versus, say, AMF and MIPS, which are revenue generated from day 1, albeit more with a second half ramp. So the disclosures we provided on both MIPS and AMF in the past, where we expect MIPS to deliver about $60 million to $100 million of revenue in 2026, albeit with a second half skew. And similarly, AMF, call it, at least $75 million in '26. But look, they're not the reasons why we acquired both of those companies, the multiyear opportunity that comes with acquiring those companies is really where the focus is for GF, and we're going to provide more color on that when we get together as part of the circum photonics webinar that Eric outlined. So good opportunities on a multiyear basis, short term, call it roughly $150 million there or thereabouts, we'd expect across the two. As it relates to both of those, they are margin accretive. So think about it as roughly a point of incremental margin in 2026.

And C.J., maybe just to add on because we've talked about the photonics kind of 2028 run rate goal that we've set and increasing and confidence to deliver given how we pulled it in. We have a similar goal for what we're doing on the custom design and IP side with MIPS and now with Synopsys. Again, we believe that can be more than $1 billion business for us -- incremental $1 billion business for us over time. And so again, these are meaningful opportunities. Obviously, we start from today, but there's a lot of growth behind the plans.

Our next question comes from the line of Krish Sankar from TD Cowen.

Tim, can you give some color on how to think about wafer volumes in ASP in 2026 given the different moving parts between smart mobile and trend in auto and data center infrastructure?

Yes, it's a great question. I'll start and then Sam adds some costs. So I think you're kind of alluding to also the pricing environment. You've also heard comments from other players out there. We definitely see a stronger pricing environment in 2026. You see that evidenced not just by some of our peers and other players in the industry looking at price raises, but you're also hearing about customers of ours raising prices as well. So I think people are willing to pay for those growth areas, where they want increased volumes, they're willing to pay, and they're also passing in some cases, those on to their customers. So I think, again, versus a year ago, you're in quite a different price environment. We were very deliberate in our price decisions in '25, specifically in the smart mobile space. But again, we don't see any significant action in '26 on the same basis and overall in a better spot from a pricing point of view. We will grow wafer volumes this year. But I think, as Sam alluded to, the mix is really is really the driver for us in terms of the profitability growth because the delta between the most valuable wafer and the least valuable wafer is very significant, driven by the technology, the application and the market dynamics. And I think that mix driver will probably the stronger reason for growth from a profitability point of view in 2026.

Yes, that's right, Krish. And just one point from Tim, and we'll focus principally on the guidance for the first quarter, but you can see some of that coming through, right, on a year-over-year basis, call it revenue up about 3%. But then you look at where the midpoint of the gross margin guide is as well. That's up over 3 points. And so it really plays into some of those comments, Tim was making around the mix as well.

Got it. And then a quick follow-up. You gave a lot of color on the acquisitions, both the MIPS and Synopsys, ARC, IP, which makes a lot of sense. I'm just wondering, are you like kind of enclosing more into ARM territory? Are going to be competing with ARM in the future, or how to think about it?

It's a great question. And I think the way we are anchoring all of these acquisitions is in a strong focus on what our customers are asking us for. And so one of my priorities since I've taken the role to spend a huge amount of time on the road meeting customers and understanding the gaps and the challenges they have. And they want optionality. They want choices. And let's take the risk 5 example. Risk 5 is a strategic priority for the majority of semiconductor companies. You've seen that from everything from Mesa to Qualcomm. Obviously, all of the IDMs have been very public in their support for risk V, and there are many, many more. And so what they said is we'd love to have a provider who can invest behind that road map, who can drive a multiyear kind of support structure who can invest in building tools and software so we can simulate our designs and our architectures before we make them in silicon. And so I think the feedback for that reason has been really, really good and so on. So I think a bit less is competition, but more about filling gaps in the portfolio that the customers need today.

And our final question for today comes from the line of Timothy Arcuri from UBS.

Non-wafer revenue, obviously, you're pushing into custom silicon it's gross margin accretive, but how accretive is it? And the 10%, 12% for March quarter as a portion of revenue, is that sort of what we should think about staying in that range for the rest of the year? And then I also had a follow-up too.

Sure, I'll take that one, Tim. And as you think about what comprises our non-wafer revenue, look, the masks, the reticles IP royalties, nonrecurring engineering, all of those are key leading indicators for us in terms of where we see some of the opportunity as it relates to future production revenue and that has continued to ramp during the course of 2025, and we expect a similar range as we outlined for the call as it relates to at least the FERC quarter. But really, as we look at it over the longer term, clearly, the key addition as it relates to the last few months, is that a mix and what that kind of IP processor, software licensing royalty, revenue framework will provide as well. So it's the right range to think about for now. And clearly, that is a step-up of, call it, roughly 2 points in that range from where we were this time last year. And then from an overall margin perspective, the non-wafer revenue has traditionally and will continue to fall through at a level which is highly accretive to the corporate targets that we've set out.

Okay, Sam. And then the middle of 2025, you thought you could get to 30% exiting the year, you got closed, but you didn't quite get there. So sitting here right now, do you think we can exit this year at 30% or possibly even higher than that?

Sure, Tim. And we tried to give you a couple of the considerations on the call, and I'll just kind of reinforce some of those principles. And it really ties to some of the growth in margin that we've seen during the course of the last 12 months as well, continued expansion of margin associated with mix, continued improvement associated with productivity and really cost discipline within the business, call that a couple of points on its own. Really, the wildcard at this point is what happens from a utilization point of view as we get into the second half of this year, we see strong oversubscription in certain corridors from a technology point of view that will continue during the course of this year, and you heard that reflected in some of the comments from both eComms infrastructure and data center point of view, but also automotive as well. So I would say they're the kind of core components. Look, the long-term goal for us is still to be driving towards that 40% gross margin target. And I think what you've seen from us over the course of the last last six months, some very deliberate strategic actions to not only keep us on track to that, but ultimately go through it.

And I'd say, Tim, just to a little bit -- I'm going to give you a yes for 2026 to the question of getting to our 30% target. But as Sam said, our focus is not to get there. Our focus is to get there and keep going to that long-term target that we talked about.

This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Eric Chow for any further remarks.

Thanks, Jonathan. Thanks, everyone, for joining today. We're looking forward to seeing you at our next investor webinar on March 10, where we'll discuss how we're at the forefront of silicon photonics and advanced packaging. Thank you.

Thank you, ladies and gentlemen, for your participation. This does conclude the program. You may now disconnect.