Tower Semiconductor Ltd. Price & Performance (TSEM)

Before we begin, I would like to remind you that some statements made during this call may be forward looking and are subject to uncertainties and risk factors, that could cause actual results to be different from those currently expected. These uncertainties and risk factors are fully disclosed in our Forms 20 F and six filed with the Securities and Exchange Commission as well as filings with the Israeli Securities Authority. They are also available on our Web Tower assumes no obligation to update any such forward looking statements. Please note that the fourth quarter and fiscal year 2024 financial results have been prepared in accordance with U. S. GAAP. The financial tables and data in today's earnings release and in this earnings call also include certain adjusted financial information that may be considered non GAAP financial measures under Regulation G and related reporting requirements is established with the Securities and Exchange Commission. Financial tables include a full explanation of these measures and the reconciliation of these non GAAP measures to the GAAP financial measures. We have a supporting slide deck that complements today's conference presentation is accessible on our company's website and is also integrated into today's webcast for your convenience.

Now I'd like to turn the call to our CEO, Mr. Russell Elwanger. Russell, please go ahead. Thank you for joining our call today.

During today's call, we'll provide our financial highlights for the fourth quarter and the fiscal year of 2024, reviewing strategic developments of the year and outlining our vision for the future, including statutory taking to ensure sustained growth, now having entered into 2025. Please find the 2024 financial details in the supporting slide deck. At the onset, and looking back at 2024, I take this opportunity to express gratitude to our employees for their dedication and hard work to our customers and supplier partners for their collaboration, and to our shareholders for their continued trust and support Together, we have built a strong company enabling us to capitalize on the great opportunities that lie before us. We concluded 2024 with an annual revenue of $1,440,000,000 a net profit of $2.00 8,000,000 and our fourth quarter revenue of $387,000,000 [indiscernible] Q1 to Q4 revenue growth of 18% and fourth quarter to fourth quarter year over year growth of 10%. We guide the first quarter of twenty twenty five to be a midpoint of $385,000,000 plus minus 5% which midpoint represents about 10% first quarter year over year growth. We target year over year growth for '25 with sequential quarter over quarter revenue increases within the year with an acceleration in the second half of the year as our capacity and investment continued to progress, customer qualifications We will now present the 2024 revenue breakdown for our major technology platform and the expected trend for 2025.

Later in the call, we will provide summaries of the Techno Advanced which continue at this time in order to not just maintain but to grow these specific market shares. The revenue breakdown by technology and by end market application is shown in Slides five and six respectively. RF Infrastructure revenue was about $241,000,000 or 17% of our corporate revenue in 2024. In 2025, we target strong growth in the RF infrastructure revenue quite significant as this is on top of a near doubling in 2024 over 2023, with a more than tripling of SIFO revenues in 2024 to $125,000,000 for that year. [indiscernible] was approximately $418,000,000 29% of our corporate revenue in 2024. After achieving strong growth in the segment, in 2024 over 2023, we anticipate some decrease in RF Mobile in 2025 only as a result in the present Android market as forecasted by our customers However, within this context, we target growth in our more advanced 300 millimeter platform signifying market share wins for us and our customers, as the market recovers. Power management and discrete revenue was about $426,000,000 or 36% of our corporate revenue in 2024 broken down evenly between IC and discrete revenues. Based on the current customer forecast, we target growth for the Tower Management business unit in twenty twenty five with the highest growth for advanced 300 millimeter platforms.

Due to the impact of having discontinued Fab one larger margin I'm sorry, lower margin, legacy 150 millimeter activities Discrete business is expected to decrease in 2025 versus 2024. Sensor and Display revenue was about $221,000,000 or 15% of our corporate revenue in 2024. Based on the current customer forecast, We target 2025 moderate growth Mixed signal and CMOS revenue was about $105,000,000 or 7% of corporate revenue in 2024 targeted with moderate growth 2025, Now we will provide additional color for a major business platform. RF Infrastructure. RF Infrastructure was our fastest growing segment in 2024 riding on the megatrend of scale up and scale out of cloud computing and AI clusters. Even before the announcement, of the Stargate program by The U. S. President last month, several hyperscalers had committed to significant investments driving strong demand for electronic and optical components that require ExAP silicon germanium and silicon photonics technology. To that effect, our silicon germanium platform has seen rapid growth throughout 2024 and is forecasted to condeniso in 2025. We take pride in being the foundry of choice for leaders in this industry building components, such as CDRs, drivers and TIAs for optical transceivers and pluggable and retimers for active cables.

While we have recently received a reduced forecast, for active copper cable silicon germanium components, we have at the same time received upside orders for silicon germanium optical transceiver components and as such we see continued growth in silicon germanium without interruption. To support all customer growth in 2025 and beyond, we are bringing up our high demand silicon germanium platform in both our San Antonio and Bigdell Hemmings factory adding incremental tooling to Newport Beach factory as part of our announced $350,000,000 investment in capacity. In addition, we have released 300 millimeter Solium germanium PDKs our Wozo Japan factories, and have a lead customer already in product design. 300 millimeter tools will add additional silicon remaining capacity at larger wafer form factors. Our silicon photonics platform continues to gain strong market share at 400 gs to 800 gs and is now in volume production at 1.16 We are working closely with our partners including six out of top 10 leading optical transceiver module makers in the world of which the top two namely in the light and coherent, press released our multi generation co development partnerships. We highly value these customer partnerships yielding continuous world leading best in class technological advancement.

Support the strong growth, we are bringing up our SIFEL platform in our San Antonio factory and have also released a full PDK for a 300 millimeter Lozo factory. 300 millimeter enables our SIFO customers to more easily address the future potential needs of CPO architecture that combine advanced SIFO technology with 2.5D integration of optical and electrical components. The added capacities mentioned for SiGe and SIFO are in various stages of customer qualification with expected shipments and result in high value incremental revenues in Q3 and Q4 of this year. Finally, we continue to work with our customers to bring to market next generation 400 gigabit per lane technology targeting the upcoming 3.2T standard. To note, have already demonstrated with a lead customer Badwoods consistent with the 400 gigabit per lane speed requirements, [indiscernible] for the 3.2 standard. We see further application of our leading SiG and SIFO technologies outside of the optical transceiver market. For example, we announced our partnership with Renaissance in the emerging Satcom market where phased array ICs [indiscernible] built using SiGe technology promised strong growth with proliferation of satellite based Internet services, [indiscernible] we are working with several customers in emerging areas of automotive, lidar, photonics based diarometers, and photonic quantum computing.

In our RF mobile market, despite some headwinds with weaker customer forecast in '25 versus '24, particularly for Android based devices we see a strong positive trend towards higher end 300 millimeter SOI technologies, which not only offer improved performance to address higher performance markets, but also die shrinkage allowing both [indiscernible] and the customer to maximize margin. In addition to existing markets, we continue to invest in new technologies such as the triple play process announced with Broadcom, for WiFi seven which offers industry leading integration of a power amplifier low noise amplifier and switch onto the same die in the single die form factor, to support high end WiFi functionality hence a much smaller footprint than previously possible. Looking at our Tower Management business, During 2024, we executed the transfer of our flagship advanced 65 nanometer BCD platform to Albuquerque, to take advantage of the large capacity available to us As part of the previously announced agreement with Intel. In the fourth quarter, we delivered successful prototypes to Elite customers and based on the success have received our first production PO a major milestone achieved ahead of plan. We have extreme customer interest in these flows well beyond what could be supplied in Mozu, Japan.

Additionally, in Q4, we announced the release of our next generation 300 millimeter power management platform, which promises as much as 60% lower conduction losses versus prior platforms critical for power management ICs used within lithium ion battery operated products such as smartphones, tablets, wearables, a large and growing market presently at about $6,000,000,000 Turning to Sensors and Displays, there are several trends shaping this market that have given and continue to give impetus to our priorities and investment among which [indiscernible] are transitioning to 300 millimeter platforms enabling denser logic smaller form factors and higher resolution pixels We demonstrated 100 megapixel and 300 megapixel high speed global shutter stack sensors with 2.47 microns charge domain pixels.

Medical and dental sensors, some hundred millimeter CMOS products are shifting to lower cost Ingso platform Whilst high performance applications mammography and extra dental X-ray, drive demand for 203 millimeter stitch seam off. Hence, our development activities in medical and dental are focused on next generation CD detectors 200 millimeter extra roll X-ray and 300 millimeter X-ray. Including having released a 300 millimeter more cost effective layer reduced lean flow PDK enabling our customers to battle on price as well as with performance. OLED on silicon, is a significant large incremental business growth opportunity For CMOS backplane for high resolution micro OLED displays, known as OLED on silicon for ARVR and XR applications. Our expertise and long performance history and large format imagers position us as a leader. First OLED on silicon prototypes are targeted to ship second half of this year featuring unique ultra low leakage transistors combined with high k capacitors. Looking at utilization, we are strategically repurposing certain capacity across multiple fabs to further enhance our SiGe and SIFO capabilities. While this may result in lower overall utilization rate in the near term, is a crucial step towards aligning our production with the evolving needs of our customers.

By focusing on these advanced process technologies, we are positioning the company sustainable long term growth ensuring we meet increasing demand. This initiative optimizes our production portfolio, and underscores our commitment to innovation, and fast execution to maintain market leadership in a rapidly evolving industry. In the fourth quarter, Fab one operated at 70% utilization with all activities now fully consolidated [indiscernible] [indiscernible] capacity activities operated under approximately 55% utilization. Fab three was at 70% utilization. Fab five at 60%, and Fab7 300 millimeter at 90% foundry utilization, with the highest process layers to date. Non CapEx projects are ongoing in fab seven to maximize shipments from fab mix changes and with the agreement with NTC Chain, utilizing some of their capacity. To summarize, in 2024, we've shown our commitment to innovation, excellence and growth. Made significant progress and built a strong foundation for the future. Looking ahead, our investments and focused efforts are already delivering positive results positioning us to target year over year [indiscernible] with sequential quarter over quarter growth in the year. We're actively engaged in seizing new opportunities to grow our served markets and provide continued leadership. Thank you for your continued trust and support We look forward to sharing with you our achievements throughout what will be an exceptional year ahead With that, [indiscernible] call to our CFO Tower, Lauren Shirazi.

Warren?

Hello, everyone.

Earlier today, we released our financial results for the fourth quarter and for the full year and also released our balance sheet. For the fourth quarter of twenty twenty four, reported revenue of $387,000,000 a 10% increase over the same quarter of the prior year. Thereby achieving the target provided one year ago demonstrating quarter over quarter revenue growth each quarter in 2024 against the previous twenty twenty four quarter.

This resulted in and 18% revenue increase from Q1 'twenty four to Q4 twenty four For Q1 twenty twenty five, we guide $358,000,000 revenue plus minus 5% represents 10% year over year revenue increase. Gross profit for the fourth quarter of twenty twenty four was $87,000,000 higher as compared to $84,000,000 in the fourth quarter of the prior year despite being impacted by the headwinds resulting from added fixed costs and depreciation that the company took on for the first time following the commencement of operations in the 12 inches fab facility that the company and STMicro in Italy. Operating profit for the fourth quarter of twenty twenty four was $46,000,000 compared to $45,000,000 in the fourth quarter of the prior year. Net profit for the fourth quarter of twenty twenty four was $55,000,000 or $0.49 basic and diluted earnings per share Net profit for the fourth quarter of the previous was $54,000,000 or $0.49 basic and $0.48 diluted earnings per share. For the full year 2024, revenue was $1,440,000,000 Gross profit was $339,000,000 Operating profit was $191,000,000 and net profit was $2.00 $8,000,000 $1.87 basic and $1.85 diluted earnings per share.

Tax expenses recorded in our P and L for full year 'twenty four and for the fourth quarter of 'twenty four were at a low All in tax rate of 54% respectively. Much lower than our long term financial model mainly due to tax benefits recorded during '24 following a statute of limitations expiration and other tax related benefits which impacted 2024. However, please note that for the long term model planning needs, one should continue to assume 15% will be our all in effective tax rate previously communicated for the full year 2023, revenue was $1,420,000,000 Gross profit was $354,000,000 operating profit was $547,000,000 This high operating profit included $314,000,000 net from the Intel merger merger. Contract termination and $33,000,000 of net restructuring income from the reorganization and the structure of our Japan operations. Net profit for the full year twenty twenty twenty three was $518,000,000 or $4.7 basic and $4.66 diluted earnings per share, and included $290,000,000 net income from Intel due to the merger contract termination and $11,000,000 net of restructuring income. Moving to the balance sheet and future CapEx and cash plans. As of the December 2024, Our balance sheet assets totaled $3,100,000,000 as compared to $2,900,000,000 at the end of twenty primarily comprised of $1,300,000,000 in fixed fixed assets net of depreciation predominantly comprised of heavy equipment, and $1,800,000,000 of current assets.

The current assets ratio reflecting the multi payer by which current assets are larger than the short term liabilities is very strong at about 6x. Additionally, shareholders' equity reached a record of $2,640,000,000 at the December 2024. Strong financial position enables us to plan the following investments in strategic opportunities that support our corporate vision: we have committed to invest up to $300,000,000 to acquire equipment and other CapEx [indiscernible] in Intel's new Mexico fab facility. Enabling us to ramp up fab capacity and capabilities for our customer. About 15% of this amount has already been paid and the remaining 85% of this CapEx amounts are forecasted to be paid in installments during the upcoming two years. Two, in addition, dollars 500,000,000 of total cash has been allocated to make investments in equipment that Tower is to own in the 12 inches fab in Agrotta, Italy. To date, we have already invested 80% of this amount placed purchase orders for all the equipment and other CapEx required and the remaining amounts are expected to be paid in the upcoming year. In addition, we are executing $350,000,000 investment plan to expand 5.5 gs capacity and capabilities for the qualification and ramp up of those technologies in our eight inches and 12 inches facilities in Israel, Texas and Japan to serve our growing customer demand.

Payments towards this CapEx investment plan are Lastly, I want to note that all Tower investments, including the five gs and five gs CapEx investments are included in the business strategy and financial model previously presented by the company and are required steps achieve it. In this model, we outlined a revenue target of $2,660,000,000 per annum that could be achieved by fully loading our existing facilities, including the above mentioned 5.5 gs CapEx in the Tower our newly built and to be built capacity at the Agrata and New Mexico facilities. Which revenue level could result in $560,000,000 of annual operating profit and $500,000,000 of annual net profit. Now I'd like to turn the call back to the operator. [indiscernible] Thank you. And now we're going to take our first question.

And it comes from the line of Cody Kru from The Benchmark Company AlloC. Your line is open. Please ask your question.

Thank you guys for taking my questions and congrats on the progress. Maybe if we could start, Russell, with your thoughts about the mobile market your comments there. If you can maybe help to size your expectation for contraction? And then just you mentioned Android. You didn't specifically talk about your Apple customers and just comments recently from Skyworks that they'd lost about a quarter of their dollar content. I wonder if that had any impact or that was factored into your thinking as well?

No, specifically, For what we believe that we're supplying into Apple, we don't see any reduction As far as serving into Android [indiscernible] We have customers that are serving multiple markets within Asia. And their forecasts are down It's not wildly down. And as stated, we have within 300 millimeter portion of it we do see growth this year. For high end activities what we see is some of the 200 millimeter having been reduced.

If you're asking for to what degree it would be reduced [indiscernible] don't like getting [indiscernible] But it's not overly substantial. It would be somewhere probably in the upper teens? That I would say we would have a reduction in the RF Mobile business. All right. Thank you for that, Russell.

And then maybe Oren, if you could talk about the incremental margin, just the the contraction that you saw this quarter, if you can maybe help frame how much of that was the Agate ramp and then what is that impact for the rest of the year?

Yes. Thank you. For the rest of the year, we don't expect any additional headwinds because like we explained previously, from this new baseline that we presented in Q4 'twenty four, we expect the incremental model to work according to the path 50% incremental margin because all the headwinds were already included in this report If you ask how much, so you see that the if you compare Q4 'twenty four to Q3 'twenty four, you'll see an increase of $16,000,000 in the revenue which by the 50% incremental model should have result in additional $8,000,000 gross margin. However, there is a minus six So the difference between plus eight and minus six most of that is attributed to Agate Hedoom.

All right. Thank you very much.

Thank you.

Now we'll go and take our next question. And the question comes from the line of Mahmoudis Magboup from SIG. Your line is open. Please ask your question. This is Bastian filling in for Mehdi Hosseini.

Hi. So, Ruslan, Oren, thank you for taking my question. The guide of Q1 of $358,000,000 implies revenue high single digit sequentially, which is in line with seasonality, but still growing year on year. I would assume that your RF infrastructure grows above seasonality, while discrete business should be impacted by discontinuation of the fab one. Could you elaborate on which segment do you expect to be above or below seasonality? And my follow-up is you started the production ramp on the 1.6 terabyte. At several lead customers. Could you give us an update on the timing of revenue and when should we expect material contribution to revenue? Is it still in track for material contribution in the second half of twenty twenty five. Thank you.

It's already a reasonable amount of revenue in the fourth quarter.

I don't have at this point strong visibility in the specific POs that will be receiving second, third quarter.

For second half shipments So I can't really predict what the mix will be. I have a much greater granularity on overall forecast. As far as your first question, on what segments are stronger seasonally [indiscernible] the Q4 to Q1 seasonality. Certainly, if we were to look at it, you would have [indiscernible] The SIFO [indiscernible] Yes, I would say also the mixed signal and the power as far as the entireties of them. They're staying about at the same CIS is actually a little bit stronger. Where we're seeing the biggest seasonality is within the mobile.

Got it. Very helpful. Thanks.

Thank you. Now we'll go and take our next question. And the question comes from the line of Richard Shannon from Craig Hallum Capital Group. LLC. Your line is open. Please ask your question. Hey, Richard.

Russell, hi, how are you? Excellent. Thank you. Thanks for letting me ask a couple questions here. Maybe on kind of RF infrastructure, I guess probably a multipart question here. Want to try to maybe pin you down, pin you down isn't the right terminology, A little bit more specificity on your thought process for growth in the RF infrastructure business this year. As one proxy, one of your customers talked about this last week here about seeing what seems like an acceleration in their data center related business. I know it doesn't have a complete overlap with you, but I think since you're a supplier to them, it makes it seems like a good proxy. So maybe if you can kind of talk about whether you're seeing growth this year anywhere near what you saw last year, which is obviously very strong. And then maybe as a follow on to that specifically, you talked about silicon photonics. In the context of share gains when you get to 400 gig and 800 gig, maybe if you could provide more specificity on that please?

I don't think I said share gains in 400 gig and 800 gig. In general, there's certainly A share gain in that FIFO really didn't exist very strong at all at 100 gig. So if you were to look at 408, that's where SIFO first came into the play. And it was put in there, although there's some back feed at 100 gig as well. I suppose a corollary there is that SIFO has equal benefits for 100 gig as it does with 408. Meaning the ability to have very high scale by not having to have discrete indium phosphide [indiscernible] versus having a SIFO component with germanium and silicon But the fact that not until April did SIFO really come into the market That's why you would say that if you were to say share of optical transceivers obviously, it only started to grow at that level There was some thoughts and internal playing around that if for example, large learning model software would be driving step back in data center speeds, which I don't believe now that it's proven, would have big growth in 100 gig as well. So I don't but if I understood your question, specifically, SIFO really only started to gain market at 400 but as well it came into and backfilled into 100.

But the biggest use of it is 408. And then going into 1.6. But it's not intrinsic that it has no benefit at 100, it has the same benefits there as well.

I don't know if that answered your question, Richard, but I'll follow-up on that. I clearly made some incorrect notes when I heard that. So let me follow-up on that one. Let me touch on RF Mobile here. You obviously delineated the dynamic here between the Apple or iOS and Android ecosystem. Maybe you can also delineate it in terms of wafer size here. Sounds like we're going to see a fairly strong ship particularly with the Agratte capacity coming online this year. How do we see your exit rate of this RFS capacity towards 300 when you exit this year?

When I exit twenty twenty five, Yes, please.

One second. When I look at the numbers, I don't give you any wrong information. If we look at the RFSOI, 302 There was probably two fifths of it was 200 in 2024. Three fifths of it [indiscernible] 300 millimeter And if we were to look at our forecast for 2025 is probably more on the order of Four fifths and one fifths?

Okay.

That is helpful to think about that.

Last question for Orin. Orin, if you could help us out think about your depreciation load here, obviously had a step up in the fourth quarter, expect we'll see some more here going throughout the year. How do we think about depreciation number for the year? And I'll Just to clarify, I just gave you was revenue breakdown. Wasn't wafer units, right?

Okay. All right. Thanks for that clarification. Or in depreciation, how do we think about that for the year as well as the exit rate, particularly as we add in from both Agratte and New Mexico?

Okay. In New Mexico, you should not expect any depreciation this year because we are just qualifying the factory. Like I mentioned, we only so far invested 15% of the $300,000,000 So August if we only paid for 15% part of the 15% will have been arrived and installed and qualified and start depreciation. So we're not be at all this year. Agratte it's already baked in into Q4 depreciation number and so you can see. I mean, we have disclosure of depreciation is actually you can also learn it from the report [indiscernible] depreciation is about including amortization of RSUs and ever is $65,000,000 a quarter So but it's already in the number. So whatever Q4 run rate will continue. This $65,000,000 quota.

Run really continue. Okay, fair enough. That is all for me. I'll jump on the line guys. Thank you.

Thank you. Now we're going to take our next question. And the question comes from the line of Lisa Simpson from Zacks Investment Research. Your line is open. Please ask your question. Hi, good morning. My question is about your expectations for revenue growth this year.

You said to expect it sequentially Do you expect it to do similar or better than the 18% from Q1 to Q4?

We didn't guide for the exact revenue from Q1 to Q4. We said three things. We said that target the year to be higher than '24. And we target sequential revenue growth and we target that H2 will be [indiscernible] So stronger, but We cannot talk about specific numbers for Q4. Guidance in terms of Okay. And And in the second half, you said revenues will be helped by added capacity. Can you just list maybe an order of what capacity is coming online that's going to be the biggest contribution to revenues, I think it's mainly the Cygiant SIFO capacity also Agrata capacity. But mostly the SiGe from the $350,000,000 plan, not that everything will be qualified and installed this year, but that's main driver.

Okay, great. Thank you. That's my only question.

Thank you. Now we're going to take our next question.

And the next question comes from the line of Matt Bryson from Yes. I have a couple of questions if that's okay. First one is I think heading into Q4, you said you thought you'd be able to get to roughly $150,000,000 run rate on your silica photonics business and previously I think you targeted doubling that business in in total in 2025. Did you hit that target? And I guess is that assumption still still valid for the silicon photonics business?

Yes. At least hit the $150,000,000 annualized run rate on Q4. So that was definitely the case. What we said that we targeted wasn't doubling against the Q4 run rate, we had targeted a doubling of the 2024 revenue. Right?

So it's not that we've targeted at any given point. Understood. But yes, that was statements that we made and that's still within our target Absolutely. Achieve or exceed the 150 run rate.

That's great to hear. And then just you were talking about Siggy for active cables being down a little bit in 2025. There's been some conjecture that as there's a shift to optics that there may be less demand for active copper cables. Is there anything fundamental going on that or do you think it's just inventories or something with your specific customers. I guess longer term, how do we think about that business?

I think in the very short term, it was stated in the MACOM financial release that NVIDIA's change from a 2x36 to 1x72 had an impact on the ACC. Although [indiscernible] believe that there's many other needs and drives of ACC for the architecture. So I don't think that active copper cable and active optical cable for that matter is going to reduce in the long term. I think it will grow. But there was reductions in forecast, at least and this is I'm not speaking out of turn, it was in the MACOM release. Related to that change of architecture. Awesome. And my last one, Russell, is just you talked at a couple of different places where you're seeing some shift from 200 millimeter to 300 millimeter wafers. I mean, how do we think about that impacting your model? Is there I'm assuming you get some step up in ASP, but there's some required step up in investment or is that production already there? And so [indiscernible] I think it's within the model that Oren has spoken with you about in in the meetings that you've had with [indiscernible] of our finance Certainly, the 300 millimeter has a higher selling price, but it also has a higher substrate price So the margin impact is very similar The revenue impact is a bit higher.

But the big thing is that at 300 millimeter at this point, we are having greater integration of more advanced components such as the LNAs which in and of itself then can drive higher incremental margin. But those are already within the models that we've given. When we give the $2,700,000,000 model, we did forecast within the next years. That's the bulk of everything we're doing. With RFSOI specifically would be at 300 millimeter.

Awesome. And I guess last one for me is just on the RF side of things. You talked about your expectations related to the downtick in Android contribution. Just want to clarify, when you were saying teens down or I think it was high teens down. Was that the entire RFP or just the Android piece? And then also when you're looking at that business, is that more inventory rightsizing Is it more customer base? Is it something that's changed structurally in that business? Trying to figure out how to model it beyond the next few quarters?

It's really an excellent question. [indiscernible] We really do serve leading customers into the Android market. Specifically into Asia. When there's a good year, fortunately within that year, customers build greater inventory. Because they never want to be short. And the minute that they're short to a lead phone maker they opened the door to losing market share. So and then you have the knee jerk reaction that if demand goes down, for this or that reason, the impact in the short term is a big correction with our customer. So I believe that There is weakness [indiscernible] In Asia, specifically in China. But within that, I think it's not necessarily that the market is as is as far down as far as what the leading makers are selling I think it's that it is down. But the inventory of our customers is more than is needed for the short term. The expectation internally is that it will recover within this year. But honestly cannot forecast. I can only state where we're sitting now with customers and that's a very honest answer to where we sit So what we're doing within mobile itself is down about upper teens this year.

By our forecast. But I speak specifically with our lead customers on a very regular basis. And that's their present forecast. They don't want to to give us numbers that they cannot meet. But the general belief and consensus is that numbers can be substantially better.

Awesome. I really appreciate the call.

Thank you very much. Very good question. Thank you.

Thank you.

Now we'll go and take our next question. And the question comes from the line of Cody Acree from Benchmark Company LLC. Your line is open. Please ask your question.

Yes. Thanks guys for taking my follow ups. Maybe Russell, if I can just get a quick clarification there on mobile and then I'll look at another one.

That's what you said, Cody, you broke up a little bit. Just a quick clarification on your statements on mobile. Into the high teens. Is that just your Android piece or your Android plus your iOS piece? That's everything. I don't have it broken down right in front of me, but that's everything that we serve.

Okay.

And then any help with your comments about first half to second half acceleration, any way to help weight The year [indiscernible] highly weighted in the second half. Just joking, cutting.

Yes, I think the Q1 reasonable quarter year over year. Certainly meeting slightly above expectations whatever. But in Q2, we said quarter over quarter growth. But then we expect very notable measurable growth in the third and fourth quarters. As Orin had stated, we don't really want to give a long term guidance at this point. As far as revenue increase, when we went into 2024, you were in that the same call a year ago, And I was asked if I expected year over year growth and I said I would be highly disappointed if we didn't. And last year was a very tough year. But and that was off of a Q1 that was not so robust. And we did have the year over year growth. If you were to ask me about year over year growth this year, I certainly expect year over year growth and market year over year growth. If it's not clearly a reasonable amount of number that's adding to the revenue this year would be more than disappointed. So the second half should be very strong. How strong it's not going to be breaking this orbit, but it'll be market increases against the first quarter for sure.

And something that I think we'll all be proud of to be able to report Very good, very helpful. And then maybe for Orin, if you could just talk about your OpEx expectations especially as we go into the first half spending, but any comments on the full year would be helpful as well. [indiscernible] expect the baseline of OpEx as was released in Q4 to stay flat. During the year, it's fixed cost.

And Agrata is already baked in the numbers. So we don't expect increase Any seasonal increases?

No, no. It's fixed cost. So they are pretty much linear over the year.

So no pay raises? That's what I'm hearing.

To employees. Should be if there will be, there should be offset by efficiencies, right?

Okay, excellent. Thank you. Thank you. And now we're going to take our last question for today. And the question comes to the line of Richard Shannon from Craig Hallum Capital Group, LLC. Your line is open. Please ask Tower question.

Great. Thanks for taking my follow-up here. It's in the Tower bucket here. Russell, if I if I took good notes here, and clearly I haven't in part in other parts of the call here, but I think you said you were targeting growth in the power management business. Does this include both the Tower IC and discrete that you've previously talked about separately? Or is it just in the Tower AC bucket? I'm not sure what the terminology means here. [indiscernible] I said that the discrete business would be down year over year. [indiscernible] And the Tower IC itself will be up year over year. That's our target.

Okay. And then Tower discrete would be down.

Okay. And if we put those together collectively?

Should be up.

Should be up, okay. Fair enough. That's all for me. Thank you.

Thank you very much. Thank you.

There are no further questions for today. I would now like to hand the conference over to speaker, Russell L. Wang, our CEO for any closing remarks.

Thank you for your interest. Thank you for the good questions. Enjoyed them.

It really is a very exciting time and we're I think performing very well to market needs. And market changes. So much has happened, so much news just recently. Impacting data center impacting potential data center architectures. In general, where we're at and what we're doing within the infrastructure space is leading edge with very key customers We expect that it will maintain being a very strong market for us.

With [indiscernible] Multiple generation activity is going on with the leaders. To maintain leadership there.

We backfilled that with very strong power management activities that will continue to grow. Very strong demand now being qualified and further generation developments in a very high capacity factory in Albuquerque, New Mexico. And then we have other base technologies that continue to provide good margin revenues such as the CIS not necessarily huge growth engines, but also not necessarily something that's requiring a lot of resources Within that, a new serve market with Backplane for OLED on silicon. We expect that to be a very big growth engine for us in coming years. And prototyping this year as I had stated earlier the transcript. We have strong customers extremely good technologies, within RF mobile specifically RF SOI and we look forward to that continuing to grow Very excited about the activities in EGRATE the customer qualifications, continuous qualifications there. And hitting high level utilizations in that factory within this year. So all in all, I think we're in very, very good position.

Maybe one bit of added color that I can give.

It's maybe obvious from the call, But when we talked about sequential quarter over quarter growth, we also see within that Q1 greater than Q1 twenty twenty four, Q2 greater than Q2 twenty twenty four, Q3 greater than Q3, and Q4 greater than Q4. So within that, if that helps your modeling, that's something very real. And that shows that it is market increases where we think again the greater than for Q3 and Q4 should be substantially greater than So with that, I'd like to end the call and say [indiscernible] We're very excited about where we're at we're going, opportunities in front of us. And to continue to share the excitement and achievements with you throughout this year. You very much.

Have a nice day.