A：The handset industry is constrained by the availability and pricing of memory, specifically T Ram, as suppliers redirect capacity to HBM for AI data centers. Qualcomm is responding by continuing to work closely with customers and suppliers, and their guidance for the upcoming quarter reflects this industry dynamic.

A：The premium and high-tier smartphone segments are experiencing growth, and Snapdragon is gaining traction with broad OEM adoption. For the upcoming family of premium tier devices, it is expected that approximately 75% market share will be held by Snapdragon, consistent with prior expectations.

A：Key developments include the launch of the first AI-powered smartphone, the Snapdragon 8 Elite, which is seen as a milestone in the transition toward AI-native smartphones. The new chip is important for shaping future mobile experiences, with agents and AI becoming the new UI, and intelligent wearables evolving into personal AI companions.

A：The Snapdragon X 2 is an advanced chipset that provides up to 35% faster single core performance and up to 3.5 times faster multicore performance compared to the competition and previous generations. It also offers up to 5.7 times and 3.4 times faster inferencing versus competitors' NPU and GPU, respectively.

A：Collaborations include a long-term supply agreement with the Volkswagen Group for advanced infotainment and connectivity across multiple vehicle segments, partnerships with various automakers such as Hyundai, Great Wall Motors, and Zeker, and work with technology providers like Rivian Automotive and Bosch's Automated Driving Alliance.

A：The acquisition of Genix enhances Qualcomm's portfolio by augmenting the Dragon Wing Vision portfolio and the Qualcomm Insight platform with its AI-based low-power image signal processing solution, furthering the company's capabilities in advanced computing connectivity and AI solutions for various verticals.

A：The physical AI in the robotics space is expected to grow rapidly driven by advances in edge AI and sensor fusion, with Qualcomm being well-positioned to enable this next frontier of AI.

A：The company continues to develop data center solutions and engages with hyperscalers, cloud service providers, sovereign AI projects, and global partners. They are optimistic about their CPU and innovative AI processing and memory architecture for next-generation inferencing data centers.

A：The company has completed the acquisition of Alpha Wave Semiconductor, adding high-speed wired connectivity technologies, and has also acquired Ventana Microsystems to reinforce its commitment to the RISC-V standard and the development of high-performance RISC-V CPUs for data centers.

A：The memory industry dynamics are causing near-term challenges as demand for memory solutions in AI data centers is impacting memory supply and pricing, leading to cautious business planning by handset manufacturers. This is reflected in reduced chipset orders in the company's guidance due to scaled-back build plans.

A：The company is managing inventory corrections in the March quarter by adjusting to the reduced chipset orders and scaled-back business expectations from major handset manufacturers, anticipating a normalization of conditions when these factors have been resolved.

A：For the upcoming quarter, QCT revenues are expected to be in the range of $8.8 to $9.4 billion with EBT margins of 26% to 28%, reflecting the normal sequential trend.

A：Beyond memory constraints, other factors causing weakness in the handset outlook include a cautious approach by handset manufacturers due to near-term challenges in memory supply and pricing, leading to reduced chipset orders and inventory adjustments.

A：The memory availability issue is limiting Q2's size significantly as customers are adjusting their production based on the available memory.

A：The sequential acceleration in QCT guidance is not attributed to specific Adas wins but rather the continued success of the automotive segment and revenue from new car launches, which has been a consistent revenue driver.

A：In the data center front, everything is going as planned with positive feedback on the company's roadmap and engagements with major hyperscalers and cloud service providers. The volatility in memory has not disrupted customer progress; instead, it has augmented discussions around data center costs and specialized hardware requirements.

A：The company has a dedicated platform for disaggregated data centers that excels in certain workloads like decoding with its distinct approach to compute and memory. The success of this platform and the specialized hardware approach validate the need for a disaggregated data center model.

A：The company is focused on executing on identified milestones, such as adding a new CPU to the roadmap and progressing with AI 250 using a new memory architecture. They are on track with their expectations, with revenues anticipated to start showing in 2027.

A：The company views the data center platform as a multibillion revenue opportunity in the future. The impact of memory shortage is expected to be muted in other business segments like automotive, which is less sensitive to price increases. However, the overall size of the market is determined by memory availability, and the premium and high-tier segments are likely to be more resilient to price increases.

A：The shortage of memory is likely to affect the prioritization of product tiers by original equipment manufacturers (OEMs), who are expected to continue focusing on the premium tier due to its growth and the ability to manage costs by passing price increases to consumers, as evidenced by the flat entry market and the premium tier's expansion.

A：The dual ship strategy is a business approach adopted by the company which has been well-received by the market. It involves having multiple tiers within different categories of products, with the premium tier expected to be more resilient, despite the constraints of available memory.

A：The company doesn't break down its business by regions, but considering the volume driven by Chinese Oems and factoring in their market tiers, the exposure is less than what one might expect based on units alone. The seasonality of consumer demand is expected to be consistent with past patterns, where consumers wait for premium tier launches and significant purchases occur during such events. The resilience of the business is thus a question of how supply aligns with this demand, and while there's no demand issue, the challenge lies in aligning supply with it over the next few months.

A：The company has guided for a March quarter revenue of $6 billion for handsets, which is down about 13% year-over-year. This is guided as a reasonable way to model the financial forecast for the rest of the fiscal year, with the understanding that the market is uncertain due to the memory situation. The company has a framework focused on reducing investments in mature businesses and using the funds for diversification priorities, with acquisitions and investments in data centers driving incremental expenses.

A：The QTL segment's performance is tied to the number of handsets that can be built, which is currently uncertain due to supply constraints. The guidance provided for QTL is slightly below what was reported in the last year, which is consistent with the current supply considerations and the potential negative bias on units. The actual performance will depend on how the supply situation evolves over the next several months.

A：The drop in QCT margins is not due to any unexpected event but rather a result of the market adjusting to a new reality where memory availability is a constraint. The company expects gross profit to be large and the gross profit margin to be largely in line with the December quarter. The Opex guidance provided also plays a role in the expected margin contraction. There is a sequential market adjustment, and the premium tier launch schedule typically causes some sequential fluctuations in the Chinese market.

A：The company is still awaiting the Huawei license and is monitoring the situation closely. There is no definitive information on the sticking point for not signing a license with Huawei, and the risk to the business in the event of no license signing is currently undetermined. The company is cautious and is aware of the precedent being set, but an update on the progress or lack thereof was not provided in the transcript.

A：The negotiations with the two companies are still underway and are considered fairly distinct and significantly different, operating on different paths.

A：The company is anticipating a potential sustained shortage and is planning for it by focusing on design-in processes with Chinese customers for their C, X, and T components. They are confident in being qualified with every memory provider and have flexibility regarding new and older versions of memory on their platforms.

A：The company is managing the uncertainty by working with multiple memory providers, including smaller companies, and having flexibility with memory versions. They have a multi-sensor system memory controller, which allows them to adapt to whatever memory is available in the market.

A：The availability of memory for consumer electronics has been below hand, with visible impacts in handsets, gaming consoles, and other devices. The company cannot predict if this shortage will continue into 2027 or 2028, and it depends on how much the data center trend accelerates. The size of the handset market for the fiscal year is likely to be defined by the availability of DRAM.

A：The company expects to address the potential shortage of wafers for leading nodes due to good relationships with suppliers, which allows them to have confidence in having enough wafers to meet demand.

A：A shift in the product mix, with higher volumes in the premium and high tiers, would typically be beneficial for the company as they perform well in those segments.

A：While it is hard to predict, the company notes that larger-scale manufacturers may have a better ability to secure enough memory and make prioritization calls. This issue is likely to be industry-wide, and not exclusive to any one vendor. The company recognizes the current supply constraints but believes its diverse customer base and technology track record could help in navigating the situation.

A：The company believes there is a lot of recognition for their technology and technical capability. They have a broad IP roadmap that allows them to address a range of compute and memory needs from sub-5W to 500W. The company is particularly focused on inference, especially disaggregated applications. Positive feedback has been received from large companies regarding technical and product aspects. The company is confident in their ability to execute and show results with their hardware and ongoing product developments.