Ladies and gentlemen, welcome to the STMicroelectronics Q3 2020 Earnings Release Conference Call and Live Webcast. I am Alessandro, the Chorus Call operator. [Operator Instructions]. At this time, it's my pleasure to hand over to Celine Berthier, Group Vice President, Investor Relations. Please go ahead.

Thank you, Alessandro. Good morning, everyone, and thank you for joining our third quarter 2020 financial results conference call. Hosting the call today is Jean-Marc Chery, ST's President and Chief Executive Officer. Joining Jean-Marc on the call today are Lorenzo Grandi, President of Finance, Infrastructure and Services and Chief Financial Officer; Marco Cassis, President of Sales, Marketing, Communications and Strategy Deployment. This live webcast and presentation materials can be accessed on ST's Investor Relations website. A replay will be available shortly after the conclusion of this call. This call will include forward-looking statements that involve risk factors that could cause ST's results to differ materially from management's expectations and plans. We encourage you to review the safe harbor statement contained in the press release that was issued with the results this morning and also in ST's most recent regulatory filings for a full description of these risk factors. [Operator Instructions]. I'd now like to turn the call over to Jean-Marc, ST's President and CEO. Jean-Marc Chery: Thank you, Celine. Good morning, and thank you for joining ST on our third quarter 2020 earnings conference call. Let me begin with some opening comments. Starting with Q3. As announced on October 1, 2020, net revenues were $2.67 billion, up 27.8% on a sequential basis, above the high end of our outlook range. This revenue performance was due to significantly better than expected market conditions through the quarter, demand for Automotive products, our engaged customer programs in Personal Electronics as well as Microcontrollers were the main factors that contributed to this result. Gross margin at 36% included about 140 basis points of unsaturation charges. Our operating margin was 12.3% and our net income was $242 million. For the first 9 months, net revenues grew 2.7% year-over-year to $6.98 billion, with an operating margin of 9.5% and a net income of $525 million. Looking at Q4 2020. At the midpoint of our guidance, we expect net revenues to be about $2.99 billion, representing sequential growth of about 12%, and gross margin to be about 38.5%, including about 70 basis points of unsaturation charges. For the full year 2020, we now expect net revenues of about $9.97 billion, at the midpoint of our Q4 '20 guidance, translating into 4.3% year-over-year growth and with a double-digit operating margin performance. Our CapEx plan for 2020 is unchanged at $1.2 billion. Year-to-date, we have invested $897 million. Now let's move to a detailed financial review of the third quarter. During Q3, market conditions improved progressively versus expectations. In early September, we communicated that net revenues would come in above the midpoint of our Q3 guidance and, as we preannounced on October 1, net revenues came in 690 basis points above the high end of our outlook range. Net revenues increased 4.4% year-over-year, with higher sales in Microcontrollers, RF Communications, MEMS and Analog, partially offset by lower sales of Automotive, Imaging and Power Discrete. Year-over-year sales to OEMs increased 7.5% and sales to distribution decreased 3.4%. On a sequential basis, net revenues increased 27.8% and all product groups grew revenues double-digit. Our gross profit was $959 million, a decrease of 0.8% year-over-year. Our third quarter gross margin of 36% came in at the midpoint of our guidance, decreasing 190 basis points year-over-year, mainly due to price pressure and unsaturation charges. Unsaturation charges were about 140 basis points. Moving to operating expenses, we continue to manage them. In parallel, we continue to execute on our R&D, sales and marketing programs, and transformation initiatives. Net operating expenses at $628 million were below what we anticipated when entering the quarter. Our third quarter operating margin was 12.3%, decreasing 80 basis point on a year-over-year basis. Both ADG and AMS operating margins decreased, while MDG operating margin improved. Our net income decreased to $242 million and EPS to $0.26 compared to $302 million and $0.34 per share, respectively, in the year ago quarter. Turning now to the revenue performance of the product groups on a year-over-year basis. ADG revenues decreased 4.9% on weaker demand in legacy Automotive and in Power Discrete, while AMS revenue has increased 3%, with MEMS and Analog higher, while Imaging sales were lower. MDG revenues increased 18.6%, reflecting double-digit growth in both Microcontrollers and RF Communications. In terms of operating margin by product group on a year-over-year basis. MDG operating margin increased to 17.4% compared to 15.7%, while ADG operating margin decreased to 5.8% from 8.5% and AMS operating margin decreased to 17.5% compared to 20.5%. Net cash from operating activities decreased 10.3% to $385 million in Q3 compared to $429 million in the year ago period. CapEx was $319 million in the quarter compared to $244 million in the year ago period. After the cash outflow of $76 million for acquisition to further strengthen the company's wireless connectivity capabilities and $33 million of accreted interest paid to settle the 2022 Tranche A of the convertible bond issued in 2017, free cash flow was negative $25 million in the third quarter compared to positive $170 million in the year ago quarter. In Q3, we paid cash dividends totaling $38 million. During the quarter, ST exercised the call option for the early redemption of its $750 million '22 Tranche A of the convertible bond issued in 2017. Simultaneously with the exercise of the call option, ST issued a new - sorry, $1.5 billion dual-tranche senior unsecured convertible bond due '25 and 2027. Let's now discuss the market and business dynamics. In Automotive first. Global demand picked up faster than what we were expecting in July. This acceleration was driven by car production volumes, which continued to increase in China and South Korea, and restarting faster than expected in Europe and in the U.S. Importantly, during Q3, we saw a progressive acceleration of key trends driving the increase in semiconductor content per car, electrification and digitalization, our strategic focus areas. In car electrification, the latest 2020 market estimates for hybrid and electrical vehicle production are for about 7 million and 2 million vehicles, respectively. Also, in car digitalization, the trend is positive, although with a different mix. The pandemic may delay Level 4 and 5 ADAS deployments, but demand is clearly accelerating on Level 2 and Level 2+. These dynamics are visible in our achievements during the quarter. In car electrification, we had again a number of new design wins for silicon carbide MOSFETs in application such on-board charger for electrical vehicles. We also won a number of sockets with complementary technologies, such as our MDmesh MOSFETs for a battery management system, low-voltage transistor in an integrated belt starter generator, VIPower products for our body electrification platform and with ultrafast and silicon carbide diodes. Overall, our silicon carbide engagements with customers has increased again during the quarter. As of today, we are engaged with 60 customers in 68 ongoing programs. We are extending our reach with electrical vehicle carmakers, with important production starts in Asia during the quarter. You will hear more during the ADG session of our Capital Markets Day on November 6. In car digitalization, we are focused on technologies and solutions for driver assistance and autonomous driving, V2X communications and embedded processing solutions supporting new car architectures. Here, we won a power-supply platform designed for ADAS applications with multiple Asian manufacturers and a design for a digital output tuner for a software-defined radio. As mentioned, we are seeing an acceleration trend on Level 2 and Level 2+, where we have already delivered, together with our partner, Intel-Mobileye, over 50 million vision processing chips to the market in the past 5 years. With our 32-bit automotive MCU embedded processing solutions, we won designs in a keyless access control application and in an integrated communication solution. We also had additional awards for our 28-nanometer phase-change memory microcontroller, called Stellar, which support the evolution of car architectures. We recently announced further details on our Stellar MCUs to show how the devices ensure execution of multiple independent real-time application. ST has developed this new technology with Bosch to meet future OEM integration demands. To conclude this Automotive review, I would like to mention that we also expanded our sensor business with automotive-grade motion sensors and accelerometers for key phone applications. Moving to Industrial now. The Industrial market dynamics remain mixed, but gradually improved during the quarter. This trend was visible across all geographies. Demand was strong for power tools and home appliance applications. We continue to see positive dynamics in power-related applications, motion control and factory automation, all of which are focus areas for ST. Distribution is an important element of our go-to-market strategy in Industrial. Here, the improvement of the situation in the channel is accelerating. In Asia, point-of-sales trends remained strong, up sequentially in a year-over-year, with healthy levels of inventory in our distribution channel across all product families. In the Americas and Europe, recovery is ongoing, with point of sale up sequentially. Here also, inventory is back to healthy levels across all product families. We address in this realm, end markets with our general purpose and secure MCUs, analog and sensor, power energy management solution. One of our strategic objectives in Industrial is leadership in embedded processing solution. Last month, we held the first module of our 2020 Capital Markets Day covering MDG. In the presentation, we detail how we are strengthening our embedded processing offers around the STM32 family in term of wireless connectivity, security and artificial intelligence. During the quarter, we had several announcements supporting this strategy, including acquisitions of Riot Micro and BeSpoon to further strengthen wireless connectivity, machine learning tools from a partner to support AI deployment and higher-performance top-end microcontrollers. In addition, last week, we announced the acquisition of SOMOS Semiconductor, a power amplifier and RF front-end module specialist. With this latest move, we are reinforcing our ability to play a major role in RF front-end modules for the IoT connectivity market. And we strengthened our RF front-end road map for 5G. Another strategic objective is to accelerate our growth in Analog and sensor for Industrial. In Q3, we won several new designs with our analog products for this kind of application. For example, we received awards for a new smart metering platform as well as in motion control and automation with our STSPIN product, which integrates an STM32 microcontroller. We also continue to expand our business in industrial sensors with wins for our inclinometer with a number of large players. The third objective for us is expansion in industrial power energy management. Here, we capture many wins for our power discrete products, silicon carbide MOSFETs and high-voltage silicon MOSFETs, IGBT, TRIAC diodes and intelligent power modules. These wins were for customers in applications such as power supply, air conditioning, metering, home appliance, power tools, solar pump and motor control. Moving now to the Personal Electronics market. In Q3, there was a strong restart of consumer demand for smartphones, combined by steady growth in wearables, tablets, hearables and game consoles. This was driven in part by the stay-at-home effect and by consumer demand for health and fitness devices. In Personal Electronics, we have 2 strategic objectives. First, to lead in selected high-volume smartphone applications with differentiated products or custom solutions. Here, we continue to have success with multiple wins in flagship devices with time-of-flight ranging sensor, motion sensor for image stabilization, wireless charging products, touch display controllers and secure solution such as ESIB and CQ in AMS with near-field communication. I would like to give you more detail on one win I mentioned last quarter. I can now confirm it is Samsung Galaxy Note20 Ultra smartphone, which use ST multi-zone direct time-of-flight sensor. Also, both the Note20 and the Note20 Ultra include our MEMS for pressure sensor, inertial measurement units and EEPROMs. Our second objective is to leverage our broad portfolio to address high-volume applications, such as true wireless [indiscernible] headsets, smartwatches, bracelet and gaming devices. Here, we had wins for sensor, analog and power products as well as microcontrollers. It's worth mentioning that we shipped a record number of MEMS sensors during the quarter. We also launched the laser scanning for augmented reality, so LaSAR Alliance, as an ecosystem to accelerate the development of augmented-reality eyewear applications. We see this as another potential high-volume application. In Communication Equipment and Computer Peripherals, during the quarter, we continued to see growing demand for homeworking-related product, while the demand for hard disk drives was softer. Our approach to this end market has 3 objectives. One is to address selected applications in cellular and satellite communication infrastructure. Here, I would like to mention a win we had with a new gallium-nitride-, GaN-, based product in the communication infrastructure application. This was based on our new MasterGaN smart power product, which combines a driver and a GaN set. In this area, we also capture multi RF-CMOS ASICs awards, an award for our new STM32 microprocessor and awards for our STM32 microcontrollers for 5G infrastructure. Our other objective are to address selected high-volume application with differentiated product or custom solutions while leveraging our broad portfolio. And here, I would like to mention wins with our FlightSense products, motion sensor and electronic fuses in personal computer and hard disk. Now let's move to a discussion of the fourth quarter and brief comments on the full year 2020. In the fourth quarter, we expect net revenues to be about $2.99 billion. This sequential revenue growth of about 12% at the midpoint is expected to be delivered by all product groups, except the RF Communication subgroup, for obvious reason. Gross margin is expected to be about 38.5%, including about 70 basis points of unsaturation charges. For the full year, we now expect net revenues at the midpoint to be about $9.97 billion, translating into 4.3% growth year-over-year. Based upon this plan, we expect to report a double-digit operating margin performance. We are maintaining our CapEx plan for 2020 at about $1.2 billion. Before concluding, let me remind you on the upcoming virtual Capital Markets Day, which are conducting through 4 modules. We had our first module on MDG on September 15. Thank you for attending that session. The 3 upcoming modules are ADG, November 6; AMS, November 20; and overall strategic update, December 9. To conclude, I would like to reinforce to 2 key points. First, in response to the global COVID-19 pandemic, we will continue to ensure both the ongoing health and safety of our employees and continuity of our business operations for our customers. These priorities remain of utmost importance for us. Second, ST fundamentals are solid. The strategic decision we've made years ago stem from secular growing market trends addressing key societal needs. The underlying principle of our strategy have not changed, and we remain determined to continue to make ST stronger, executing our sales and operating plan and outperforming the markets we serve. Thank you. And we are now ready to answer your questions.

[Operator Instructions]. The first question comes from Deshpande, Sandeep from JPMorgan.

Maybe if you could help us understand granularly the revenue increase from the third quarter to fourth quarter. It's about $310 million of additional revenue. Where are these $310 million approximately coming, in terms of buckets, in terms of Automotive, in terms of Personal Electronics, et cetera? Jean-Marc Chery: So thank you, Sandeep, for the question. Okay. I will address the question to Lorenzo.

Sandeep, yes. Indeed, we do expect a significant increase in our revenues in the coming quarter, in Q4. Where we do expect? As we were saying before, we do expect that all groups contributed to the sequential growth in term of revenues. But where we see, let's say, the driver? We see driver in term of revenues mainly coming from Imaging, coming from Analog. We will continue to grow in a significant way also in MMS, means that our microcontroller, both general-purpose and secure microcontroller. We will also grow our revenues in all our, as I said, product groups. So even if a little bit less extent, we will see growth also in power and discrete in the quarter. Automotive will contribute and MEMS as well will contribute. As we said, we have only 1 significant headwind in the quarter. That is mainly related to our subgroup RF... Jean-Marc Chery: Communication?

Communication groups, which we will decline revenues. So looking sequentially, all the groups will grow. On a year-over-year basis, I can tell you that we - our expectation is that, definitely, MDG group, AMS group will grow, while we do not expect this growth in ADG, that sequentially will grow, but on a year-over-year basis will be substantially flat. This is the dynamic that we see for the next - for this current quarter, Q4, in term of revenues.

Your next question comes from Anthony Stoss from Craig-Hallum.

With the 38.5% gross margin guide for December, not too long ago, you held out a goal of getting to 40% gross margins. Any thoughts on if you can attain that in 2021? And also, if you wouldn't mind just sharing where you think you'll end for silicon carbide revenues for 2020 and any thoughts on that for 2021. Jean-Marc Chery: So thank you for the questions. So I will address the first question to Lorenzo and I will answer the second one.

In term of gross margin for 2021, what can I say is the following. You see that, the next quarter, our gross margin - next quarter. Sorry, I'm talking always on next quarter, but actually, I'm referring to Q4. For the current quarter, Q4, you see that our guidance is at 38.5%. This is impacted still by, I would define, a significant amount of unloading. We will have a 70 basis point impact on unloading in the quarter. This comes from a very different situation, where, we have today, if I look at the various fabs, some of our fabs that are fully loaded, running at full capacity. Some other, mainly related to our legacy products, that are still suffering unloading. This situation will be continuing. We see this situation continue at least for Q1, and most likely, even for less extent in Q2 next year. For the level of gross margin of next year, allow me, let's say, to give me some more time in order to understand also how there will be the evolution of the market and our revenue for next year. Jean-Marc Chery: So this year, about silicon carbide, well, we will not achieve the $300 million. We will be well above last year. The reason why we will not achieve is because, okay, as you know, we face unprecedented situation in H1 along the value chain of all these products. Now what is, let's say, great, is our current run rate and current demand is, let's say, well-aligned with this $300 million, let's say, revenue target.

The next question comes from Jerome Ramel from Exane BNP Paribas.

Yes. Maybe could you help us to model the OpEx? You've been better than expected in Q3 once again. So how should we model OpEx going forward? And maybe if you could give us again for a little bit for next year.

Yes. I will take the question, Jean-Marc. Jean-Marc Chery: Please, Lorenzo.

Okay. For OpEx. For OpEx, if you remember, I was guiding for the year, OpEx in the range - quarterly OpEx between $635 million, $645 million as a total of the year divided by 4, with some different dynamic quarter - in the different quarters, mainly due to seasonality, these kind of things. As you rightly say, we are coming a little bit better. So now if I see the OpEx for the full year, I would expect that we will be a little bit lower than our midpoint if we exclude any extraordinary item. Why I'm saying so? Because our expectation for Q4 actually is that we will have an extraordinary item that is related to the grants catch-up in one jurisdiction for, let's say, the year 2019 and 2020. This will be material for Q4, but it's onetime event, so it's not repeatable. That means that we will have our OpEx, let's say, in Q4, well below the normal average. We do expect OpEx in Q4 between $605 million and $610 million, mainly driven, let's say, by this onetime impact. I repeat, without this onetime impact, we will be, in term of OpEx, as an average in the quarter, say, in the range of $640 million for the year, quarterly average. So we will be at the level that we were expecting to be. Next year, there will be definitely some increase in term of OpEx. Now to be honest, it's a little bit early to model. There are 2 - anyway 2 ingredients that we needed to take into consideration. One ingredient is the fact that there will be the normal increase related to salary. There will be the increase related to the cost of labor. There will be some increase also in term of activity. So these will bring us to be - to move a little bit higher in terms of expenses. As well as you see that, today, our exchange rate going in the range of $1.17, $1.18. This is for sure something that we have to factor in. Just to give an idea, in term of impact of FX, for 1 percentage point of change in eurodollars, this has an impact in our operating margin per quarter of around $8 million to $10 million. And this split half and half between gross margin and OpEx. In modeling this, you may want to keep into consideration this impact.

The impact is per quarter, right?

Yes, yes, yes. The impact is per quarter.

Next question comes from Stephane Houri from ODDO.

Yes. Can you please help us understand what is your visibility at the moment for 2021? And given the pretty high starting point or ending point at the end of Q4 and given comparison basis, especially in H1, is a double-digit growth assumption for you next year a credible scenario? And if you can give us some comment about the visibility you have with the large customer engagement program for next year like silicon carbide and other. Jean-Marc Chery: I take the question. No, let's say, of course, a very, very good question, okay? But what I can say? I would like to repeat what I say, let's say, early September. Yes, our assumption is next year will be a year where the market will grow again. This year, we have a view about ourselves that basically could be flattish, okay, minus 2%, plus 2%, but it's still difficult to say. And next year, okay, we expect, okay, to have year 2020 with, let's say, market growing again. Now saying that, okay, you know that, okay, we have, let's say, fixed milestone, okay, to communicate with you. December 9, okay, during our update about strategy, we will communicate about our model, so the $12 billion. Then you know that end of January, we will communicate about our CapEx for 2021, which will be, let's say, a first indication about the confidence level we have for the full year. And as we have done this year and last year, we will communicate the plan with which we drive the company in April during our Q1 earnings. I would like to strictly follow this process. And honestly, today is too early to give more detailed color. But again, the takeaway, the assumption we have preparing our budget, preparing our next year, is next year will be a year where the market we address will grow again.

The next question comes from Dominik Olszewski from Morgan Stanley.

First one, just on the gross margin. Obviously, revenues came in significantly ahead for this quarter. So maybe could you just help us bridge this quarter's gross margin versus maybe quarter-on-quarter sequentially, just to understand the moving parts there? And then separately, there was a mention of some pricing pressure dynamics on top of your unsaturation charges. So maybe could you just describe which products or divisions were affected there? Jean-Marc Chery: Lorenzo?

See, yes, I will take the question. I would like to take the chance of this question also to give some colors about not only the dynamic of our gross margin moving from Q3 to Q4, but also some color on the Q3 gross margin. As you will notice that our gross margin came, in Q3, exactly at the midpoint of our guidance with a higher level of revenues. And on top of that, we were - we had in the quarter, lower level of unloading charges because, at the end, unloading charges in the quarter accounted for 140 basis point. This lower level of unloading charges and slightly better manufacturing efficiency, even in much lower impact, this has been totally offset in our gross margin of the quarter by unfavorable product mix, and in a much more lower extent, also by some negative impact of the exchange rate. Why the product mix came, let's say, not accretive in the quarter? Product mix in Q3 was characterized by definitely a higher level of sales in Automotive legacy product in respect of what was our expectation entering the quarter. These products were the ones much suffering in the first part of the year, and in Q3 - in Q2 particularly, from not an optimal manufacturing decision. And this was due to the lack of loading that we suffer. As you know, this inefficiency is impacting our gross margin with one quarter of delay due to the impact on the inventory. So this is the reason why, actually, we did not see significant benefit in the quarter by this higher level of revenues. Moving to the second part of the question. Let's say, why - let's say, what are the drivers of the gross margin moving from Q3 to Q4? We increased by 250 basis points sequentially. And this is mainly thanks to, in this case, improved product mix net of price decline. The price decline will remain, let's say, normal price decline. I want to underline that we don't see, in the market, any significant pressure on prices, price decline as a norm. Definitely, we will have a better loading and some better efficiency in our fab. The loading will reduce from 140 and 70 basis point. The only, let's say, headwind that we will see, but slight - really mitigated at this stage by our policy hedging, is the negative impact of the exchange rate. So I would say that, at the end, moving from this quarter to - from Q3 to Q4, the driver will be definitely lower level on unsaturation and much better impact on the product mix. I was trying to explain to you what it happens in Q3, and that will be a significant difference in respect to what will happen in Q4.

The next question comes from Matt Ramsay from Cowen.

Yes, and congratulations on the execution in what's been a very challenging environment. Jean-Marc, one of the questions that I've been getting from investors is around profitability, particularly as your silicon carbide revenue grows in your Automotive division going forward towards the long-term targets that you've set out. Maybe you could just talk a little bit about how you're thinking about growing revenue in the Automotive business, particularly in the hybrid and electric vehicle space versus profitability of that growth as you look forward. Jean-Marc Chery: So I will start, okay, to answer and Marco will complement. Now it's - okay, it is clear that what we want to do in our Automotive activity and power-related to - activity is to, let's say, transform the company from, let's say, heavy legacy weight, which you remember, at present, today, approximately 70% of the total revenue, we have from Automotive, and 30% are, let's say, related to the new application, electrification, so - and in digitalization, it is ADAS. It is connectivity. It is microcontroller-addressing domain. So this is clearly, okay, where we want to go. Now we consider that we have all the enablers to push this strategy from device, so silicon carbide MOSFET, low-voltage power MOSFET to address the mild hybrid car, silicon carbide to address the electrical car, both on-board charger, but as well, let's say, the powertrain of the electrical car. We will have the GaN in the near future for charger as well. Now we are really serious - we have a serious offer in IGBT. And last but not the least, now we are really competing in the field of power modules, both with our internal source in Shenzhen and external one, or various partnership we have with a critical OEM. So we have all the set of enablers to push our strategy to grow this 30% part of the Automotive revenue we have. And we do believe that this part will be a key driver of our profitability. Last but not the least, you have seen our announcement with Bosch. More clearly, we have demonstrated that in term of change of architecture of the, let's say, the car moving from fragmented ECUs to more domain ECU, large-domain ECU, you need a very powerful microcontroller capable to drive real-time activities in parallel. And we have already demonstrated that we have this device, we have this technology, which I repeat is a 28-nanometer, embedded phase memory, but 28 with FD-SOI, which is - present some specific, let's say, feature, okay, really great for automotive. This will also drive our profitability in the future to increase. So this is the overview that I can share with you. So Marco, you want to complement some points?

No, I - yes. Just I would like to add that, as you said, we see a change in the market moving more towards electrification, digitalization. And our product portfolio, with the innovation that we are bringing, is moving towards the direction where we do believe we will outperform that market. And obviously, this will bring together an improving profitability.

The next question comes from Aleksander Peterc from Societe Generale.

I just have a few specific points. One, if you could quantify the Huawei headwinds in the fourth quarter in terms of revenue percentage here. Second one, do you have a view on what will be this year's automotive semi market evolution? And how does your year-to-date revenue in Automotive compare to this overall market growth? And then just lastly, should we anticipate still some lingering unsaturation capacity, ancillary charges going into the beginning of the next year? Is it like for the first half or just the first quarter? Jean-Marc Chery: So I will take the first question, and Marco and Lorenzo, you will take the other one. About the first question, if I have well understood, for Q4, I guess I have been quite clear. After 30 quarters of consecutive revenue growth with Huawei, ST revenue in Q4 from Huawei will be 0. We have stopped to ship any PCs to Huawei September 15, being compliant with a direct - the foreign-produced Direct Product Rules from the BIS in the U.S.A. Of course, we have applied for export license to continue to support our customer. But at this day, we have not received any feedback. So our revenue will be 0 in Q4. I guess I am quite clear on the subject. So overall, again, Huawei, let's say, weight in ST, no, we do not communicate percentage of customer, only when they are above 10%. And we have only one. But okay, it's quite well-known that Huawei weight was, let's say, mid-single-digit percent, okay, weight in our revenue overall this year, with Q4 at 0.

Okay. So we take from Automotive, what we do see, confirm again that Q2 was the bottom. And we have moved up our view of light vehicle production for the full year. Now we see a range between 70 - $73 million to $77 million, which means the midpoint around $75 million, which moved - but nearly half to what we were seeing in the Q2, where we were between 63 million and 72 million cars, of which 7 million are hybrid cars and the 2 million are electric cars. And in terms of market overall, semiconductor market, clearly, we see the acceleration of increase of content in - thanks to electrification and thanks to the digitalization of the car, a trend which is ongoing and probably further accelerated due to the provision more and more of electric car. Lorenzo, if you want to complement in terms of...

Unloading charges, yes. If I well understood the question is that, how the unloading charges will be in a - moving forward in the first half of next year. Yes, I confirm what I said before. Now yes, we do expect that to still to have some unloading charges in Q1 and likely, even if progressively going down, also in Q2. Let me say that, as I was saying before, this is a very unbalanced situation in which we have some of our fabs that are fully loaded at this stage, let's say, for which we cannot do more than what we do. And we have some other fabs that are still suffering for unloading charges due to, let's say, the demand is not balanced between what is the demand and what is our capacity. This we do expect will continue for at least, for sure, Q4, Q2 - Q1 as well, and will start to progressively be corrected during the course of Q2 moving forward. Just to give you an idea. Let's say the level of saturation of the fab that we were, in average, let's say, suffering during the quarter, during Q3, was in the level of 73%, 74%, the saturation level, with many very different situation, so one, in the half 2 peak is one above 90%. And in the current quarter, in Q4, this level will be more in the range of 82%, so with some improvement. But still, you see that we are not at the optimal level, and this will continue, I repeat, for sure, also in Q1, progressively reducing, but not immediately reducing.

The next question comes from Adithya Metuku from Bank of America.

Yes. Two questions. Firstly, just looking at the OpEx numbers. I just wondered if you could give us some color on what, in your view, has led to OpEx being so different to what you expected at the beginning of the year. What were the key puts and takes? Just so we get a sense for what's changed. And then also, if you could give us the exact grants figure that we should expect in 2020 and how would that figure look going into 2021. Any color there would be much appreciated. And if possible, just a quick follow-up on the share count for next year given the redemption of the convertible bond. Would that really change? Should we factor anything in versus the disclosures in 3Q? Any color here would also be appreciated.

So the question is on the level of OpEx on average per quarter for 2020. This is your question, Adi?

Yes. And then what has changed? I know the numbers that were given earlier. But what was different to what you expected?

Yes. If you say it's for the full year, Lorenzo can...

Okay. For the full year, as I said, the average quarterly expenses that we do expect at the end of 2020, if you take the full value of our expenses, including other income and expenses, and you divide it by 4, it will be in the range of $640 million, before onetime item that we do expect in Q4. In Q4, we will have a positive impact in the line other income and expenses, material impact in the range of $100 million positive, that will reduce significantly the expenses, but it's onetime. So at the end, let's say, this will not be repeatable. It's due to the fact that we have a catch-up of grants, thanks to a new law, let's say, one legislation that allow us to recognize these grants. But then, is onetime, will not be repeatable. So in respect to our original guidance, we are there, of course, without this impact. For sure, will be lower because you have to consider that this will decrease the average of our expenses in the year. What has changed? I would say, a part of this onetime in Q4, what we have seen when we gave our original guidance, $645 million, $635 million, for sure, also due to the pandemic impact, we had some savings. For sure, let's say, at the beginning of the year, we were thinking to travel in a normal way. This would not happen, let's say. So at the end, what it happens, we had some savings, especially in this kind of discretionary expenses. But not on our R&D programs. What I can tell you is that, in the R&D programs in our, let's say, core activity, the activity was there, was done, let's say, even if we were under this particular situation of the pandemic. For sure, there was other savings because less traveling, less meetings, less - like put discretionary expenses that in the normal life, of course, of a company, you have, and in this situation, we did not incur. On the other side, we had some more expenses for some items that were not supposed to be, like masks, protection for the pandemic, these kind of things. So at the end, if you want, we were, before this exceptional catch-up, substantially in line with our expectation. A little bit less on the discretionary, a little bit more on extraordinary expense and related to the pandemic, but more or less, we were there. I don't know if this actually answer completely to your question.

They do. And just a quick follow-up. Just on that share count number, whether the 3Q number is really reflective of the changes in the convertible bonds that you did in the quarter or whether we should factor anything when we look at the share count for the fourth quarter.

The share count? You mean the total share count of the company?

Yes.

Yes. It's reflected.

Yes. It's reflected. We have provided as well the number of shares which has been provided, treasury share. Okay. So with this, I think this conclude - we are at the time, at 10:30. With this, I think it conclude our earnings call. Thank you very much, everybody, for attending. As usual, we remain - Investor Relations team is available. If you have some follow-up question, do not hesitate. Jean-Marc Chery: Yes, and the next meeting is ADG, November 6.

Yes, next meeting to answer all your question on Automotive and Power Solutions is 6 November with Marco Monti. Jean-Marc Chery: Okay. Bye-bye, everybody.

Thank you very much.

Thank you.

Thank you. Bye.

Bye, bye.

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