Robert Bruggeworth
Chief Executive Officer at Qorvo
Thanks, Doug, and welcome everyone, to our call. Qorvo's fourth quarter results were consistent with the outlook provided during our February 1 earnings call. Looking at our end markets, the quarter played out largely as expected, with lower end market demand in some markets primarily those with consumer exposure and channel inventory consumption with the majority of that being in the Android ecosystem. We made significant progress clearing channel inventory. At the same time, we continued to introduce new products and secure new designs, positioning Qorvo to best support our customers as end markets recover. We are seeing increased strength in customer design activity across our businesses, and we are confident in our ability to grow.
In High Performance Analog, we enjoyed relative strength in power devices and defense markets, offset by our management markets with consumer exposure and inventory digestion and infrastructure OEM. We continue to enjoy broad-based multiyear design win activity that we see contributing to long-term growth. In our Connectivity and Sensors Group, relative stability in automotive during the quarter was offset by continued inventory drawdowns and weak end market demand for WiFi enabled products and cellular IoT. Design activity was strong across a variety of applications, including smart home, precision location, indoor navigation, automotive connectivity, automotive smart interiors and enhanced human machine interfaces. In Advanced Cellular, total Android revenue was up sequentially on the strength of a large customer flagship ramp with record Qorvo content. We believe March was a low point for China-based Android quarterly revenue, and we expect total Android revenue will grow sequentially in June, while channel inventories continue to be consumed. Design activity during the quarter continued to be favorable across all leading smartphone OEMs.
Now let's turn to some quarterly highlights. In High Performance Analog, Qorvo was selected by an industry leader to supply cell-to-satellite solutions that combine a variety of technologies, including multiple RF components and BAW-based multiplexers. These solutions enable low earth orbit based space-to-terrestrial connectivity helping to provide cellular coverage in the hardest to reach geography. We achieved a milestone with the delivery of our first prototype RF multichip modules to BAE Systems under the SHIP contract with the U.S. Department of Defense. Qorvo is leveraging our state-of-art production capabilities in our Richardson, Texas facility to advance heterogeneous packaging integration, and enables significant savings in power, size, weight and cost.
This early milestone showcases the speed and efficiency of our collaboration with our program partners. It is a critical first step towards the goal of reestablishing U.S. leadership in microelectronics and accelerating the modernization of microelectronic systems for next-generation phased array radars, unmanned vehicles and satellite communications.
In our Power device business, we booked a multimillion dollar follow-on silicon carbide inverter order for residential and industrial solar application. The Department of Energy forecasts solar power will make up more than half of new capacity in the U.S. in 2023, and the market for silicon carbide inverters is expected to achieve double-digit compound annual growth rate through 2026. This win complements our ongoing business in automotive charging applications and data centers.
In our Connectivity and Sensors business, we were selected to supply ultra-wideband solutions across multiple verticals, including a next-generation smartwatch, supporting secure car access, Wi-Fi access points enabling indoor navigation, and an additional 2024 flagship Android smartphone. Of note, ultra-wideband design activity for in-car applications has ramped up significantly. We are a member of the Car Connectivity Consortium, and we are proud to be a contributor to the Digital Key Plus program for the Android ecosystem recently announced by BMW. With Digital Key Plus, BMW drivers with compatible smartphones can unlock or lock their car and start the engine without having the key and without removing the phone from their pocket.
In Automotive Connectivity, we collaborated with automotive OEMs and leading third parties to advance smart antennas and next-generation shark fin architectures. We also expanded design engagements related to 5G network access devices with automotive Tier 1. In sensors, we secured a design win to supply force-sensing touch sensors in support of a premium true wireless headset for a leading European OEM. The headset will leverage the ultra-sensitivity of Qorvo's MEMS-based sensors to enable a new industrial design. In Wi-Fi, we secured our first Wi-Fi 7 BAW filter design win and we expanded sampling of our Wi-Fi solutions, enabling full coverage of 2.4, 5 and 6 gigahertz bands for smartphones and consumer and enterprise access points.
In Advanced Cellular, we supported the ramp of a Korean-based smartphone OEM's flagship smartphone with multiple Qorvo placements, including low band, mid-high band and ultra-high band pads as well as secondary transmit, tuning and Wi-Fi. We are pleased to support this customer broadly in their flagship tier, and we are seeing expanding opportunities as they migrate their mass market portfolio to integrated 5G solutions. Across the Android ecosystem, Qorvo was awarded broad-based design wins in support of flagship, mid-tier and mass market 5G devices at the top 5 Android smartphone OEMs. To support new designs, we shipped our first samples of our newest mid-high band pad to an Android OEM, addressing this customer's most challenging performance and size requirements. This is the industry's most highly integrated front-end placement. It combines main path and diversity receive content for the mid and high band. And as we said previously, this product integrates nearly two-times the BAW filter content in a smaller footprint than existing main path only, mid-high band pad architectures. It leverages the reduced size and enhanced performance of our newest BAW and SAW filters. We expect the first smartphone featuring this solution to launch in calendar 2024.
Across the business, we're leveraging investments in best-in-class technologies, introduce differentiated products that delight our customers. We have many growth drivers in our portfolio and design activity has been strong. In HPA, design wins secured in the March quarter span a variety of applications in aerospace, battery management, defense radar, electric vehicles and renewable energy systems. In CSG, we secured new business in automotive connectivity, indoor navigation, smart home and wearables. In ACG, we enjoyed broad representation across all leading OEMs and we are increasing our content in the highest volume flagship phones. We believe we have room to grow at our largest customer, including BAW-based content, and we are a leading supplier to the Android ecosystem where the transition to 5G supports long-term content gains.
Last year, approximately 40% of the roughly 920 million Android smartphones were 5G. And we see Android 5G smartphone unit growth achieving a double-digit CAGR for several years. Over time, we expect HPA and CSG to outpace the growth rate of ACG, increasing our total growth rate and driving leverage as mix increasingly favors our high-growth investment businesses.
I want to thank the team for continued operational excellence. We are introducing new technologies and launching new products to align with the industry's growth drivers and broaden our market exposure. We are seeing increasing strength in customer design activity across our businesses, and we expect improved financial performance supported by content gains and large customer programs. And with that, I'll hand the call off to Grant.