Topic: Q1 2026 gross margin outlook and seasonality
Key points:
Q1 seasonality is unfavorable (revenue typically ~10% below Q4); Q1 2026 calendar is shorter than normal 91 days, similar to 2025 trend.
Lower capacity reservation fees in H1 will pressure gross margin; utilization will decrease due to capacity reduction and equipment transfer in some fabs.
No specific reason to deviate from normal Q1 seasonality; H2 2026 expected to see inventory normalization and growth in silicon carbide, ADAS, and MEMS.
Mgmt stance: Neutral — acknowledges H1 headwinds (seasonality, lower fees, capacity cuts) but sees idiosyncratic growth drivers in H2, though booking confirmation needed.
Q7 — Janardan Menon
Topic: Power & Discrete profitability recovery and manufacturing inefficiency duration
Key points:
Power & Discrete segment margin was -15% in Q3; recovery drivers include higher revenue to load infrastructure, silicon carbide transition from 6-inch to 8-inch (200mm) in 2026, and next-gen SiC performance gains.
30–40 bps gross margin impact from manufacturing inefficiency (mask duplication for process qualification) will continue through H1 2026, peak then decline, but persist into H2.
Silicon carbide 2025 is a transition year (lower volumes, inventory correction from main customers); 2026 growth expected from Europe and China rectification programs, while maintaining stable market share.
Mgmt stance: Cautiously optimistic — expects top-line recovery and profitability improvement in 2026 via volume, technology migration, and cost leverage, but inefficiency costs linger through H1.