Ladies and gentlemen, welcome to the STMicroelectronics Third Quarter 2024 Earnings Release Conference Call and Live Webcast. I am Myra, Chorus Call operator. I would like to remind that all participants will be in listen-only mode and the conference has been recorded. The presentation will be followed by a Q&A session. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Jean-Marc Chery, President and CEO. Please go ahead. Jean-Marc Chery: Thank you, Myra, and good morning, everyone. Before starting this call, I am very pleased to announce the appointment of Jerome Ramel as Executive Vice President, Corporate Development and Integrated External Communication. Jerome has been associated with our company for many years as a recognized European semiconductor analyst and has had 24 years of experience in certain roles in various finance institutions. He brings in-depth knowledge of the semiconductor industry and capital markets, which will be extremely beneficial to support the company in the way we interface with investors, analysts and external stakeholders. I would now like to briefly turn the call over to Jerome.

Thank you, Jean-Marc, and good morning. I'm very pleased to join ST and excited by this new challenge. So thank you, everyone, for joining our third quarter 2024 financial results conference call. Hosting the call today is Jean-Marc Chery, ST President and Chief Executive Officer. Joining Jean-Marc on the call today are Lorenzo Grandi, President and CFO; and Marco Cassis, President, Analog, Power & Discrete, MEMS and Sensors Group and Head of STMicro Strategy, System Research and Applications and Innovation Office. This live webcast and presentation materials can be accessed on ST Investor Relations website. A replay will be available shortly after the conclusion of this call. This call will include forward-looking statements that involve risk factors that could cause ST results to differ materially from management expectations and plans. We encourage you to review the safe harbor statement contained in the press release that was issued with the result this morning and also in estimate recent regulatory filings for a full description of these risk factors. [Operator Instructions] Now I'd like to turn the call over to Jean-Marc Chery, ST President and CEO. Jean-Marc Chery: So thank you, Jerome. Let me begin with some opening comments. Starting with Q3. So third quarter net revenues of $3.25 billion were in line with the midpoint of our business outlook range. Compared to our expectations, revenues were higher in Personal Electronics, declined less in Industrial and were lower in Automotive. Q3 gross margin of 37.8% was broadly in line with guidance. Q3 net revenues decreased 26.6% year-over-year, mainly driven by a decline in Industrial and to a lesser extent, in Automotive. Looking at our year-over-year performance, gross margin decreased to 37.8% from 47.6%. Operating margin decreased to 11.7% from 28% and net income came in at $351 million. On a sequential basis, net revenues increased 0.6%. For the 9 months period, net revenues were down 23.5% year-over-year to $9.95 billion, decreasing across all reportable segments and particularly in microcontrollers, which is impacted by the continuing weakness in the Industrial market. We reported gross margin of 39.9% in operating margin of 13.1% and net income of $1.22 billion. During the quarter, Customer order bookings were slightly up versus Q2, but were below our expectation. This reflected a continuing delayed recovery in industrial and a further deterioration in automotive. As a result, we now anticipate Q4 2024 revenues at the low end of the range previously indicated and well below normal seasonality in Q1 2025. For Q4 2024, our fourth quarter business outlook is for net revenues of about $3.32 billion at the midpoint, declining year-over-year by 22.4% and increasing sequentially by 2.2%. Gross margin is expected to be about 38%. For the full-year 2024, the midpoint of our Q4 guidance translates into full-year 2024 revenues of about $13.27 billion representing a 23.2% decrease year-over-year at the low end of the range indicated in the previous quarter with a gross margin slightly below that provided in that indication. For Q1 2025, based on our current customer order backlog and demand visibility, we anticipate a revenue decline between Q4 2024 and Q1 2025, well above normal seasonality. I would like to highlight that today, we have also announced the launch of a new company-wide program to reshape our manufacturing footprint, accelerating our wafer fab capacity transition to 300-millimeter silicon and 200-millimeter silicon carbide and resizing our global cost base. Now I will move to a detailed review of the third quarter. By segment, on a year-over-year basis, Analog products, MEMS and Sensors was down 13.3%, mainly due to the decrease in imaging and in analog. Power and Discrete products decreased 18.4% with the decline in both Power and Discrete products. Microcontrollers revenue declined 43.4%, mainly due to General Purpose microcontrollers. Both Power and Discrete and General Purpose microcontroller revenue declines were largely driven by Industrial. Digital ICs and radio frequency products declined 29.7%, mainly due to ADAS and Infotainment. By end market, Industrial declined by more than 50%, Automotive by about 18%, Personal Electronics by about 9% and Communication Equipment and Computer Peripherals by about 5%. Year-over-year sales to OEM decreased 17.5% led by 45.4% to distribution. Overall, Q3 net revenues increased 0.6% sequentially with an increase of 1.7% in Analog products, MEMS and Sensors; 7.9% in Power and Discrete products; and 3.6% in Microcontrollers, while Digital ICs and radio frequency products decreased 17.4%. By end markets, Industrial was down about 12% sequentially, Automotive flat, Personal Electronics up about 20% and Communication Equipment and Computer Peripheral down about 8%. Gross profit was $1.23 billion decreasing 41.8% year-over-year. Gross margin decreased to 37.8% compared to 47.6% in the same quarter last year. The decrease was mainly due to product mix and to a lesser extent, to sales price and higher unused capacity charges. Operating margin was 11.7% compared to 28% in the year-ago period. On a year-over-year basis, Q3 net income decreased around 68% to $351 million compared to $1.09 billion in the year ago quarter. Earnings per diluted share decreased to $0.37 compared to $1.16. Net cash from operating activities decreased to $723 million in Q3 versus $1.88 billion in the year ago quarter. Net CapEx in the third quarter was $565 million compared to $1.15 billion in the year ago quarter. Free cash flow was $136 million compared to $707 million in the year ago quarter. Inventory at the end of the third quarter was $2.88 billion compared to the $2.87 billion in the year ago quarter. Days sales of inventories at quarter end were 130 days, similar to the previous quarter and up compared to the 114 days in the year ago quarter. During the third quarter, ST paid $80 million of cash dividends to stockholders and were executed a $92 million share buyback under our current share repurchase program. ST's net financial position of $3.18 billion as of September 28, 2024, reflected total liquidity of $6.3 billion and a total financial debt of $3.12 billion. I will now go through a short update on some of our strategic focus areas. In Automotive, we saw some further deterioration in customer backlog and order entry during the third quarter. In our view, this reflects a change in the plans of our customers with some shift from full battery electric to hybrid and from premium to economy vehicles, as well as downsized production at car makers to control inventories. However, we do not anticipate significant changes in the long-term electrical vehicle adoption by consumers, and we assume their concerns residual value, charging stations, price will gradually alleviate. During the quarter, we continued to execute our strategy on car electrification. We introduced our fourth generation of Silicon Carbide MOSFET technology. This brings new benchmarks in power efficiency, power density and robustness and is particularly optimized for traction inverters in electrical vehicles. We had multiple wins with both silicon-carbide and silicon devices and modules for new traction inverter and on-board charger designs. We also won additional business with our automotive smart power technologies for electrical vehicle battery and power management systems as well as our smart fuse solutions. In car digitalization, we gained further traction with our portfolio of automotive microcontrollers. Our Stellar Microcontroller was selected by a major European Car maker in a new platform for Traction Inverter and On Board Charger management. Another significant Stellar win was with a Japanese Tier 1 as part of an electrification platform design that integrates multiple functions in a single MCU. This approach is generally called X-in-1 and is an important trend for next-generation car architectures. A further win saw Stellar chosen for an active safety application in a new electrical vehicle platform from an emerging player. We also continued to have important design wins in traditional applications like braking, where we are the leader in smart power. In sensors, we had a number of wins with our automotive-grade motion MEMS for smart keys, telematics units and for an innovative rotating car display. Our design win activity here continues to position ST well to leverage the structural growth in this key market. In Industrial, we are seeing continuing inventory correction at OEMs and along the value chain, preventing any significant recovery in semiconductor demand. In this context, we continue to work with customers to design in today's products while investing in R&D to create the next generation of solutions. We had design wins across a broad range of applications for our power and analog portfolio. This included a design with silicon and silicon carbide products for a leading provider of power supply units for AI server infrastructure, a fast-growing application requiring very high power efficiency. In Embedded Processing, our STM32 microcontrollers continue to be the most familiar MCUs for developers. We have a recognized software ecosystem with over 1.2 million unique users, growing more than 30% year-over-year, and one of the fastest growing and most active microcontroller technical communities, with over 500,000 unique visitors each month and 40% year-over-year growth. This growth in STM32 adoption will position ST to capitalize effectively on the next Industrial market upcycle. Additionally, we have over 50,000 active development projects on ST's Artificial Intelligence tools. This activity has been also boosted by our ST Edge AI Suite that we launched at the end of the last quarter. During Q3, we also announced a new strategic collaboration with Qualcomm Technologies for the next generation of industrial and consumer IoT solutions. Together we will integrate Qualcomm's leading wireless connectivity technologies with our STM32 microcontroller ecosystem. We will start with a Wi-Fi/Bluetooth/Thread combo system-on-a-chip. Thanks to this, developers will enjoy seamless connectivity software integration into STM32 microcontrollers. Moving now to the other two end markets: Personal Electronics was slightly better than expected and Communications Equipment and Computer Peripherals was in line with expectations, for all our engaged customer programs. To conclude on this Q3 update, I would like to mention a new step in our Company's organization. Since the beginning of 2024, ST has made significant changes in the way it is structured and operates, including the re-organization of its Product Groups. Since October 1, 2024, Lorenzo Grandi, President and CFO has taken additional responsibilities, with a perimeter now also covering Supply Chain, Corporate Development and Integrated External Communication in addition to Finance, Global Procurement, Digital Transformation and Information Technology, Enterprise Risk Management and Resilience. The Company's Executive Committee remains unchanged and continues to report to me, as President and CEO. Now, let's move to our fourth quarter 2024 financial outlook and our plans for the full-year 2024. For Q4, we expect net revenues of about $3.32 billion at the mid-point, representing a year-over-year decline of 22.4% and a sequential growth of 2.2%. Q4 gross margin is expected to be about 38% at the mid-point, impacted by about 400 basis points of unused capacity charges. For 2024, our Q4 guidance at the mid-point translates into 2024 net revenues of about $13.27 billion. This represents a decrease of about 23.2% year-over-year in the low-end of the range indicated in the previous quarter. Within this guidance, we expect a gross margin of about 39.4%, impacted by about 290 basis points of unused capacity charges at the mid-point of our 2024 full-year indications. The $13.27 billion is in the low-end of the revenue range indicated in the previous quarter. The difference compared with the mid-point of the range relates mainly to lower revenues in Automotive and to a lesser extent lower revenues in Industrial, partly offset by slightly better revenues in Personal Electronics. We confirm our 2024 net CapEx plan of about $2.5 billion. For Q1 2025, at this time of the year, we usually do not comment two quarters ahead; but based on our current customer backlog and order entry dynamics, we anticipate a revenue decline between Q4 2024 and Q1 2025 well above normal seasonality. Fair to say, this also includes a significant lower number of calendar days in Q1 2025 versus Q4 2024, a 6% sequential decrease, which is the highest sequential decrease in the number of days in the last three years. Finally, today we have announced the launch of a new company-wide program to reshape our manufacturing footprint. We are accelerating our wafer fab 300 millimeter transition in Agrate and Crolles in particular in Agrate, reaching a scale of about 4,000 wafers per week exiting 2026. In Catania, in Silicon Carbide we will accelerate our transition to 200 millimeter. Moreover, we will resize our global cost base. This program should result in strengthening our capability to grow our revenues with an improved operating efficiencies resulting in annual cost savings in the high triple-digit million-dollar range exiting 2027. To conclude, as I said last quarter the current market cycle dynamics, coupled with the ongoing transformation of the Automotive and Industrial end markets, are bringing both opportunities and challenges in the short, medium and long-term. And this is true for ST and for our customers equally. In the short to medium term, we are adapting our operating plans to this situation, and we are launching our company-wide reshaping and resizing program, while continuing to invest in innovation and our strategic manufacturing initiatives. Medium to long-term, we continue to be convinced that this will provide the basis for our sustainable growth ambitions and for delivering value to our stakeholders. We look forward to updating you on our strategy at our Capital Markets Day on November 20th, either in person in Paris or via our live webcast. Thank you for your attention, and we are now ready to answer your questions.

We will now begin the question-and-answer session. [Operator Instructions] The first question is from Francois Bouvignies from UBS. Please go ahead. Francois-Xavier Bouvignies: Thank you very much. Jean-Marc, I wanted to come back to Q1 comments. Obviously, you mentioned less calendar days, but the sharp decline in Q1, could you highlight maybe some drivers? And importantly, it is the first quarter of the calendar year which is the pricing we set and you know that we have a lot of fear on the market right now, especially given the oversupply and the demand environment that pricing could fall significantly into next year. How should we think about that as negotiations started and you guided a weaker Q1, what is the pricing impact here? And how should we think about the next year's pricing environment? Jean-Marc Chery: On the pricing, I will let Lorenzo comment, but here is not a warning about pricing. Absolutely not. It's more warning about the customer backlog and the order dynamic. And the fact that, okay, you know that in Q1, we have it is the usual seasonality of Personal Electronics. And including on Personal Electronics, potentially this year could be worse. Well, unfortunately, it will be significantly this year amplified by the fact that the quarter will be shorter, 88 days compared 94 days in Q4. So this impact also significantly the run rate of the revenue. Well, so usually, we have let's say, a low and double-digit sequential growth. This year will be amplified by the 6%, is more related to the customer or the dynamics and backlog, maybe worse specifically on Personal Electronics rather than something trigger by the price. So Lorenzo, you want to comment?

Yes. Good morning everybody. You know that when we look at the price dynamic today in this quarter, substantially the pricing is similar to what was expected, I would say, low-single digit decline. Next year, as was Jean-Marc remarking, we don't see a dramatic price environment. Yes, it's a little bit, let's say, there is a little bit more pressure than this year. We still are talking about mid-single digit decline overall. So we -- of course, we are in the negotiation phase now. But as I said, overall, for the company, on average, we see something that is more in the mid-single digit that is a little bit higher than this year, but not dramatically changing. Jean-Marc Chery: Thank you for the [indiscernible]. Francois-Xavier Bouvignies: Thank you very much. Jean-Marc Chery: Yes, really follow-up. Francois-Xavier Bouvignies: Follow-up or just one, yes. Jean-Marc Chery: Follow-up, yes. Francois-Xavier Bouvignies: Yes, the follow-up would be on the microcontroller side. I mean, obviously, it has been a big decline through the year. I mean Q4 might be also declining a lot. I was wondering where are your inventories in the channel? I mean where are you in this inventory correction versus your normal level, where you think you should be? And do you see any light in the tunnel here with regard to microcontrollers industrial particularly? Jean-Marc Chery: For general purpose, okay, it is clear that it is a very significant decrease this year, above minus 50% and '24 versus '23. We have to say that about more than half of this decrease for microcontroller is really connected to an inventory correction. But the point is that this inventory correction is lasting more than expected, because the end demand of our customer, okay, moving along the year was also decreasing. So we also have said that 30%, 35% of the decrease of microcontroller is ultimately linked to the end demand weakening of our customers. It is true that we have lost some market share in China, linked to the fact that during the shortage of semiconductor, okay, we squeeze some Chinese company, okay, to support, let's say automotive and other big OEM and industrial. So we squeeze distribution in China in 2021 and 2022 and now we have lost this market share. About the inventory correction in the channel, it is not decreasing at the expected speed. And why? Because decreasing our POP, we didn't see, unfortunately -- globally, I've spoken, there is a value dynamic by region. POS is not, let's say, behaving sufficiently to decrease inventory faster. So we expect that in Q1, the inventory correction will continue and especially in Asia, amplified by the Chinese New Year vacation impact. Should continue to decrease a bit in Q2 and discussing with our distributor, we should expect a normalization in H2 2025. So this is where we are today. Francois-Xavier Bouvignies: Thanks so much.

Myra, next question please.

The next question is from Sandeep Deshpande from JPMorgan. Please go ahead.

Yes, hi. Thanks for let me on. I have a question on the automotive market. In the first half of the year, you saw a slowdown from your big EV customer as well as you saw a slowdown due to Mobileye. And now you're saying in the fourth quarter, you're seeing further slowdown. Can you quantify where this slowdown is occurring? Is it in legacy parts? Is it in silicon carbide? So where is this slowdown occurring in the automotive market? And associated with the slowdown, are you seeing the Tier 1 suppliers reducing their inventories now, given that they have been holding such high levels of inventory in the automotive supply chain? Are we now seeing that correction in the automotive supply chain in terms of inventory? And is that what are the reasons why -- of course, there's a consumer angle as well, but or the personal electronics angle, but is that continuing into the first quarter of the year? And I have one quick follow-up. Jean-Marc Chery: So thank you. If you don't mind, I will share the answer with Marco Cassis.

Yes, Sandeep. Good morning. So yes, what you say is correct. Let's give me some color. So first of all, the reduction in automotive is related with an overall reduction in terms of light vehicles, '24 will be lower than '23. And going specifically on battery-operated cars, we see a reduction in the battery-operated cars, giving space, let's say to an increase in the hybrids and flagging hybrids. We are able to quantify this decrease in terms of battery-operated car in the range of 15%, not equally distributed much less in China and more in Europe and in U.S. So clearly, this has an impact considering that battery-operated cars has a higher content in terms of silicon and has, of course, an impact also on the silicon carbide. We believe and is what analysts are saying is that '25 will be still not growing the overall number of light vehicles. So it's a situation that will proceed during '25, at least for the first half. And clearly, this has created, of course, probably some excess of inventory at carmakers and along the supply chain, which has an impact and as we have seen in our overall numbers. Now I say that if you extend a little bit the time horizon, we do believe that electrification is going to come, because it's linked to factors that will be in place and it's going to come at a lower pace than what we were expecting. '25 first half would be not easy, but as you said, yes, it's a combination of the factor that we are highlighting. I hope that this answers the question.

Thank you. And then, I mean, you mentioned earlier on the pricing environment at the moment, can you just comment on what you're seeing in terms of in the automotive space, in particular, what you're hearing in the current negotiations that are happening for pricing into next year, given how difficult the environment is for your customers and given also that they are holding quite high levels of inventory? Jean-Marc Chery: Lorenzo, will you take that one.

Negotiations are ongoing. For sure, let's say, this year, the price pressure in Automotive was there, but quite mild. I would say that at the end, let's say, was in the low-single digit. It's true that starting negotiations, we see some more price pressure in Automotive than in the one that we see in 2024. Of course, as you can image, is different in respect to the various customers. But I would say that assuming that at the end, the negotiations that are ongoing will end like the one that we have closed already. We may say that in Automotive now the price pressure will be mid-single digit, let's say, something in that range. Then we may have some more and less, but at the end, this is what we see today. Jean-Marc Chery: Maybe if I can complement. It is clear that also it has been assessed in the perspective of a regional view. It is clear that today that's what happening in China, especially of the fact that the Chinese carmaker are really have excess of capacity. The price pressure in China, specifically around the ecosystem of passenger vehicle or light vehicle is definitively high. So this is a different behavior compare the Western world or other region.

Maybe if I can add just the last comment here, Sandeep. What we see, let's say, yes, this pricing environment, and then you have also to consider in term of capacity reservation fees, let's say, in 2025 there will a further reduction because, clearly, let's say, is acknowledged by the market that now capacity is available. This will be an element that will be there definitely in 2025.

Thank you, Sandeep.

Myra, next question please.

The next question is from Lee Simpson from MS. Please go ahead.

Great. Good morning, everyone. Thanks for squeezing me in. Just wanted to ask around the R&D number, I think $492 million, looks that gap down maybe about 10% relative to some of the expectations out there. So just trying to get a sense for, is this a sustainable level? Do we think this is the right level going into next year? And whether or not related to this, there was any change perhaps in the spend structure around silicon carbide as a strategy? Thanks.

No, I would say that when we look at the expenses in the quarter, in Q3, you have to keep in mind that there are a few elements. First of all, the expenses came lower than expected for few reasons. Well, one reason is we know, let's say, is impact of the vacation in Europe, this was expected, were a little bit higher than what we were modeling entering the quarter, but this is not the main reason. There are one, let's say, an item -- onetime item in the cost of labor that was decreasing our expenses, and this was not expected in respect to entering the quarter. But then there is also, let's say some more control during the quarter on our discretionary expenses. So that's the combination of these elements combined together were running our expenses lower. Is not something structural. We have not, let's say, especially when we look at our R&D change, our effort in terms of R&D. So we continue to invest. We continue to invest in the silicon carbide and we continue to invest, let's say in the development of our products. It's true that, let's say, the new organization is bringing some efficiency in our, let's say, ability to follow our programs and somehow be more efficient in the way that we drive our expenses. This is also driven by the fact that we have reorganized our groups in a way that, let's say, today, we are avoiding overlaps between the activity in the group. And this is a portion also that is impacting our ability to have a better control of our expenses.

Great. Thanks Lorenzo. Very clear. Really, if I could just turn to, I think somewhere in the commentary you mentioned wins in AI servers. So I was just trying to understand which part of the server power semis architecture are you addressing? There's three major parts with power supply units, voltage handling across the rack and of course, the delivery to accelerators or GPUs themselves. Is there a specific area where you're winning? And could you tell us anything about the architecture of the power semis that you're using? Thanks. Jean-Marc Chery: Thank you. Obviously, I will pass the question to Marco Cassis. He's now in charge of this fantastic product line.

Yes, so. Good morning. Now we are going to address all the three main blocks. So I'm speaking about the power supply units, I'm speaking about down to the 48-volt or whatever and down to drive the GPUs, which means we will address through silicon carbide, high voltage MOSFET began to come and phase change mortgage regulators and SPS. So the SPS is the low-voltage [indiscernible], which is the part in which we are now really focusing. It will take a little bit of time clearly to come with strong offer, but our offer is going to go through all the chains, because we do believe we will have the portfolio, and we have the portfolio and we have the capabilities to serve all the contents inside the AI servers. Surely, considering the maturity of the products, the first big target is going to be on the power supply units and down the voltage and the scale through the AI service architecture.

That's very clear. Thank you very much.

Thank you, Lee. Myra, next question please.

The next question is from Didier Scemama from Bank of America. Please go ahead.

Good morning. And congrats, Jerome, for your appointment. There is a couple of questions. First on the Q1 commentary, should we assume that your gross margins are going to take another leg down, a, because obviously, your volumes are going to be lower and you're going to lower your factory utilization to lower your inventories on the balance sheet are lingering at a high level? That's my first question, and I've got a follow-up. Thank you.

You see that in this quarter, our, let's say, the impact of the unloading charges is very material because it's impacting our gross margin by 400 basis points. We start already, let's say, to take some measure in front of a weaker Q1, as we said before, let's say, this will be well below our normal seasonality. There is the impact of the calendar, but there is also the impact of the visibility of the backlog, but for sure, Q1, yes, we do expect it's early at this stage to give a precise guidance, but definitely it will be a difficult quarter in terms of gross margin also, because we will continue to have a significant impact for the unloading. We wanted to keep under control our inventory. And this is something that, for sure, let's say will have an impact in Q1.

Thank you. Jean-Marc Chery: It is clear that our manufacturing activity in Q1 will not follow the usual activity profile. But in Q4, okay, we have to follow a strict process of discussion with representatives or personnels and people, okay, to plan this on Q1. But again, we will come back later on.

Makes sense. And on the restructuring program, thank you for highlighting the fab sort of resizing and perhaps OpEx cutting. I think one of the questions we got this morning was, is the high triple-digit millions of dollars a net number or is it a gross number?

This is the expected savings that we will have, let's say, there was a combination of COGS and expenses. Of course, this is not including the possible, let's say, cost related to severance or, let's say, something cost like that.

Yes, so it's a growth number. I mean -- okay. And maybe just a quick one. Last time, Jean-Marc asked you if you were still looking at M&A, you said that you're actively looking. So can you just give us an update on that? Thank you. Jean-Marc Chery: No, we continue to operate within our organic growth strategy with bolt-on acquisition, okay? We have activity in our radar screen, which are pretty active today. So we'll come back to you as soon as conclude on it.

Thank you.

Thank you, Didier. Myra, next question please.

The next question is from Gianmarco Bonacina from Banca Akros. Please go ahead.

Yes, good morning. A couple of questions from me. The first one is, if you can specify what is the onetime charge related to your cost-saving plan? The second one is more strategic midterm. What -- given that we are seeing, especially in Europe, some change in the platform and factory closures. So what makes you confident that in the mid-to-long term, we will see still a significant ramp-up in the penetration of EVs? Thank you.

Hi, good morning. You refer the onetime that I was referring for Q3 or something different, sorry, I'm not sure...

No. Assuming you will have, let's say, $800 million of cost saving in 2027, assuming that this will be partially related to, let's say, a lower headcount, how much will be the onetime cost associated with the cost saving plan?

I would say that at this stage, it's a little bit early to enter in those kind of details, let's say, of course, it is kind of things I think will be better clarified moving ahead on our Capital Markets Day and entering, let's say, more in detail on this plan. If you don't mind at this stage, I would prefer okay? Jean-Marc Chery: Well, for the second question, if I want to simplify, well, it is clear that for any semiconductor company to continuously improve its competitiveness and especially facing ultra-competitive marketplace that we are facing now due among many reasons some capacity that has been triggered by [indiscernible] here and there everywhere. And unfortunately, as well with some, let's say, trade constraints. All the way is to increase the wafer size and to shrink the product. But then, okay, you know that when the industry is facing and our customers are facing this kind of down cycle, each time, okay, the exit period is asking for new product and new technology. So that's the reason why for ST, there is no other option to accelerate our 300-millimeter. And the reason why I have mentioned, okay, specifically, and we have to accelerate to reach as fast as we can the right scale in order to have benefits of the cost of goods sold about this 300 millimeter. Well, I would like to recall that basically, the benefits we can expect are moving to 300 millimeter with at least a 20% productivity increase. But directionally, this is ST what I see as engaged. Of course, we will update you finally. [Indiscernible] we have defined the critical milestone. And of course, we will give more color at our Capital Market Day next November 20th.

Thank you.

Thank you, Gianmarco. Myra, next question please.

The next question is from Stephane Houri from Oddo BHF. Please go ahead.

Good morning everyone. You have described the change in dynamic of the EV market. Can you please update us on your vision and your targets for silicon carbide for this year and the following years? Thank you.

Okay. Thank you for the question. Clearly, considering, let's say, the change that we have seen in terms of dynamics when specifically the fact that fully battery-operated electric vehicles has decreased compared to what was the expectation in 2023. And this reduction is going through linearly in the next year. This has an impact for us in 2024 that as you remember, we're expecting to be in the range of $1.3 billion. Now we expected to land the year at $1.15 billion, $1.2 billion. So reflecting this change in terms of mix, in terms of electrification. Now we do believe that the trends going forward. So if you expand the horizon up to 230, we believe that the trend for indication of mobility remains. And as I was saying before, if we go outside, we see also opportunity in AI servers or industrial for what is related [indiscernible]. So we still believe that our ambition to reach -- to go over the $5 billion by 2030 is there, because -- and this is linked to market share that we do expect to be in the range between 30% to 33%. So yes, there is a slowdown, but the long-term ambition towards 2030 is remaining at the level that we were expecting. I hope that this answer your...

Yes. Well, in fact, you also talked about 2025, I think you were targeting $2 billion, but I think you decreased this target to $1.8 billion, so that was also the question, what do you see for next year?

We no longer expect to grow the $500 million. But due to the short-term uncertainty, we will provide better visibility at a later stage. Now it's too early to further comment.

Okay. Thank you very much. And if I may, I have a follow-up. It's a specific question on the evolution of the tax environment, notably in France, where you've got significant operations. Have you thought already about the potential impact on your -- on the evolution of your tax rate of the new tax, let's say increase in France coming?

Well, as you know, in this kind of things, it's always a little bit difficult because there are many ingredients, let's say, that are combining together. Of course, it depends also how the distribution of the profit of the company is among the various, let's say, country's jurisdiction. Definitely, yes, you see that today, our tax rate will be in the range of 17%. We think that more or less the impact that we may have if the law is enacted as has been announced, we need also to look in details how this will happen, but we may have an impact that will be below 1 percentage point on our tax rate.

Okay. Thank you very much. Jean-Marc Chery: Thank you, Stephane. We have time for very quick one.

The next question is from Joshua Buchalter from TD Cowen. Please go ahead.

Hey guys. Thank you for squeezing me in. I wanted to ask about the accelerated move to 300-millimeter in the cost cutting. Should we -- how should we think about the implications to CapEx from this change? Are you guys shutting down more quickly 200-millimeter facilities and in the short to medium term, does this bring your CapEx up or should it lower it? Thank you. Jean-Marc Chery: We will reduce our CapEx, let's say, next year and in -- on the next three year planning horizon. But it is, of course, something that we will disclose during our Capital Market Day based on the market evolution and our capability, let's say, to grow over the market perspective. But yes, of course, we will decrease our capacity.

If I may add to Marc, let's say, you have to think to consider that the big infrastructure to go to 300 millimeter are already there. The effort has been done. Let's say, we have already, let's say, put in place the infrastructure. So means that, yes, of course, we will have some CapEx, but we did lower in respect to what has been in the past. Jean-Marc Chery: And the second, as we have accurate of this story, I would like to highlight that the concept of our wafer fab of silicon carbide 200 millimeter in Catania is copy paste of the concept of Crolle, means, okay, we can increase by getaway. So we don't need to build a big infrastructure to grow. We are building by module. So this is really a smart way to adapt ourselves to the market condition and investing in due time at the right time, but never in excess.

Thank you, Josh. I think this is ending our call for this quarter. So thank you very much all of you for being there. And we remain here to disposal should you need any follow-up questions. Sorry for the ones who didn't have time to ask questions here. Thank you very much.

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