Soitec SA
PAR:SOI
US |
Fubotv Inc
NYSE:FUBO
|
Media
|
|
US |
Bank of America Corp
NYSE:BAC
|
Banking
|
|
US |
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
|
US |
C
|
C3.ai Inc
NYSE:AI
|
Technology
|
US |
Uber Technologies Inc
NYSE:UBER
|
Road & Rail
|
|
CN |
NIO Inc
NYSE:NIO
|
Automobiles
|
|
US |
Fluor Corp
NYSE:FLR
|
Construction
|
|
US |
Jacobs Engineering Group Inc
NYSE:J
|
Professional Services
|
|
US |
TopBuild Corp
NYSE:BLD
|
Consumer products
|
|
US |
Abbott Laboratories
NYSE:ABT
|
Health Care
|
|
US |
Chevron Corp
NYSE:CVX
|
Energy
|
|
US |
Occidental Petroleum Corp
NYSE:OXY
|
Energy
|
|
US |
Matrix Service Co
NASDAQ:MTRX
|
Construction
|
|
US |
Automatic Data Processing Inc
NASDAQ:ADP
|
Technology
|
|
US |
Qualcomm Inc
NASDAQ:QCOM
|
Semiconductors
|
|
US |
Ambarella Inc
NASDAQ:AMBA
|
Semiconductors
|
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
52 Week Range |
70.1
169.5
|
Price Target |
|
We'll email you a reminder when the closing price reaches EUR.
Choose the stock you wish to monitor with a price alert.
Fubotv Inc
NYSE:FUBO
|
US | |
Bank of America Corp
NYSE:BAC
|
US | |
Palantir Technologies Inc
NYSE:PLTR
|
US | |
C
|
C3.ai Inc
NYSE:AI
|
US |
Uber Technologies Inc
NYSE:UBER
|
US | |
NIO Inc
NYSE:NIO
|
CN | |
Fluor Corp
NYSE:FLR
|
US | |
Jacobs Engineering Group Inc
NYSE:J
|
US | |
TopBuild Corp
NYSE:BLD
|
US | |
Abbott Laboratories
NYSE:ABT
|
US | |
Chevron Corp
NYSE:CVX
|
US | |
Occidental Petroleum Corp
NYSE:OXY
|
US | |
Matrix Service Co
NASDAQ:MTRX
|
US | |
Automatic Data Processing Inc
NASDAQ:ADP
|
US | |
Qualcomm Inc
NASDAQ:QCOM
|
US | |
Ambarella Inc
NASDAQ:AMBA
|
US |
This alert will be permanently deleted.
Hello, and welcome to the Soitec FY '22 Q3 Sales Call. [Operator Instructions] I'd now like to hand over to our host, Paul Boudre, CEO, to begin the call. Thank you.
Thank you, operator, and welcome to Soitec's conference call dedicated to the publications of the third quarter revenue of our fiscal year 2022. This is the quarter covering the period from the 1st of October to the end of December '21. I'm Paul Boudre, Soitec's CEO. Together with me on this call are LĂ©a Alzingre, our CFO; and Steve Babureck, our VP of Strategic Office and Investor Relations. Our Chairman, Eric Meurice, is also with us on the conference call today, and we would like to take this opportunity to answer any governance-related questions during the Q&A. So let's focus on the business and the record quarter we have achieved in Q3. In Q3 '21, we achieved another very strong performance that further reinforces our confidence in our ability to deliver our fiscal year '22 guidance. I'm very pleased to report that we achieved EUR 208 million in revenues. Or in other words, the highest quarter in Soitec's history. This year revenue was at 40% plus on a reported and on an organic basis over Q3 last year. On a sequential basis, it represents a 7% growth, excluding currency impact over Q2 '22. Sequential growth was entirely driven by 300-millimeter sales, which went up by 13% over Q2 '22, driven by a strong performance from FD-SOI as well as other 300-millimeter products. So this is our sixth consecutive quarter of sequential organic growth since the low point achieved in Q1 '21 at the beginning of the COVID-19 crisis. This record level in Q3 brings our first 9 months '22 revenue to EUR 581 million. This is also a record in Soitec's history. Nine months '22 revenues is up 48% on a like-for-like basis, up 44% on a reported basis compared to the first 9 months of fiscal year '21. 150-, 200-millimeters wafer sales were up 26% at constant exchange rates. 300-millimeter wafer sales were up by 77%, also at a constant exchange rate. So let's now look at the drivers behind this strong revenue performance. So we continue to enjoy a strong tractions across all our 3 end markets. Mobile communications is still by far our largest end market and a key driver of our performance. Our revenue growth continued to be boosted by the deployment of 5G and the increase in Soitec's products content in every 5G smartphones, which enable highly efficient mobile communication. This mainly benefits our RF-SOI, POI and FD-SOI products. We continue to leverage the recovery of the automotive industry, which is very positive for both Power-SOI and FD-SOI products. Finally, our revenue in smart devices also increased, driven by strong sales in FD-SOI and Photonics-SOI wafers. To match higher customer demand across our end markets, we have further increased our productions. As you know, we are progressively adding capacity in Bernin 3 in Singapore. The good news, therefore, came from a very satisfactory ramp-up of the production in these 2 sites. Bernin 3 for the production of 150-millimeter POI in Singapore, with higher production of 300-millimeter SOI wafers. In the meantime, our other facilities in Bernin 1 in 200-millimeter and Bernin 2 in 300-millimeter continue to operate at full capacity. So let's now dive deeper on our Q3 figures and look at sales by revenue type. Sales of 150-, 200-millimeter wafers reached EUR 86 million. Compared to Q3 last year, this is an increase of 33%, excluding currency impact. Revenue growth was driven by higher volumes. Sales of RF-SOI 200-millimeter have increased compared to Q3 last year. Sales of Power-SOI were much higher than in Q3 '21 as we continue to benefit from the rebound in the automotive market. In addition, we are recording a strong surge in 150-millimeter POI wafer sales, driven by the growing demand for filters, 5G smartphones. So if we look now at our 300-millimeter business, we recorded sales at [ EUR 116 million ] in Q3 '22. This represents a 51% increase, excluding the currency effects compared to Q3 '21. It counts as a direct result, the sharp volume increase in Singapore and a higher output in Bernin 2. The level of RF-SOI 300-millimeter cells has been growing very fast, reflecting our strong leadership on this segment and highlighting the relevance of our anticipated capacity expansion plan. We also achieved a very strong quarter in FD-SOI, confirming the rebound initiated in Q3 '21. Our FD-SOI technology is expanding into our 3 end markets. i.e., smart devices, automotive and industrials as well as mobile communications, especially in 5G millimeter-wave modules. Regarding Imager-SOI for 3D sensing applications, sales remained almost at the same level as in Q3 '21. Finally, sales of photonics for data center were much higher than in Q3 '21, confirming the solid trends that we have experienced since Q4 '21. To complete the review of our sales revenue from Royalties and other revenues went slightly down from EUR 7 million in Q3 '21 to EUR 6 million in Q3 '22. So on the back of this strong performance, we are confidently confirming our guidance for fiscal year '22. We expect fiscal year '22 sales to reach around $975 million. This represents an annual growth of around 45% at constant exchange rates. We also expect our fiscal year '22 EBITDA margin to reach around 34% with a potential upside to reach 35%. So now that we have reviewed our numbers. Let me highlight a few key events that took place recently. First, we received our first purchase orders for SmartSIC prototypes from [indiscernible]. Second event, which we already discussed in our previous call was the acquisition of NOVASiC to strengthen our silicon carbide wafer technology. This company specializes in polishing and refreshing wafers, which will support our SmartSIC industrialization road map. We announced the acquisition at the end of November, and we fully completed the closing of the transactions at the end of December. The third related -- the third event relates to our commitment to reduce our greenhouse gas emissions. We aim to comply with the global warming limited to 1.5 degrees Celsius in line with the objectives of the COP21 Paris Agreement on climate change. Our commitment includes specific targets regarding our direct emissions, Scope 1 and Scope 2 as well our indirect emissions, Scope 3. Early December, we received a science-based target initiative certification, which attest at Soitec's CO2 emissions reductions targets are in line with the levels required to limit global warming to 1.5 degrees Celsius. These designations are the most ambitious available under the SBTi process. Early January, we announced a research also -- we announced a research collaboration agreement with the Institute of Microelectronics in Singapore, which is part of the Agency of Science, Technology and Research, so-called A*STAR. The collaboration is designed to develop next-generation silicon carbide semiconductors to power electric vehicles and advanced high-voltage electronic devices. Finally, we also announced that our subsidiary, Dolphin Design, is going to open a processing center within our facilities in Singapore. Dolphin's branch will be dedicated to edge computing and artificial intelligence. So now that we have covered the business, I want to say a few words about my succession plan. The announcement last week has prompted numerous questions from stakeholders, so let me clarify a number of points. The succession planning process was undertaken by the Board of Directors as part of its normal duties. The entire process began about 2 years ago, in view of identifying potential candidates to take over the CEO role in 2022 when my current mandate ends. Internal candidates were identified with my help. I was indeed a candidate for my own succession. In parallel and with my knowledge, the Board of Directors engaged an executive search firm to identify and recommend external candidates. At the end of that process, the Board of Directors decided that Pierre Barnabe was the best candidate to lead Soitec into the next era as CEO. I fully respect the Board decisions to prepare for the future. I'm very proud of our achievements under my leadership, the fantastic company that Soitec has become. Thanks to do the accomplishments, a very promising growth [ story lies ] ahead with the right people to drive it from inside, excellent supplier relationships and great partnerships with our customers to support those ambitions. The Board and I have always worked together. However, our occasional divergences on tactics, we have always been completely aligned on Soitec's strategy. We all have an overwhelming shared interest in the continuity of Soitec's strategy and its success. So together with the executive team, I will, of course, do everything in my power to ensure a smooth transition with Pierre Barnabe and position Soitec to continue delivering the kind of performance we have been sharing with you in recent years. As you have heard from the Board, the ambitious strategic targets we set during our last Capital Markets Day remain unchanged. We are on track to reach $2 billion revenue by fiscal year '26 with an EBITDA margin about 35%. With this, I will leave the floor to Eric Meurice, who will join us for the call. Thank you, Eric, for being with us. And Eric, if you want to take the lead, the floor is yours.
Thank you very much, Paul. So first of all, I would like to start by congratulating you and the team for the great financial results. These are exceptional results. Regarding the question of succession, I confirm that the Board followed a thorough 2-year process of in-depth assessment of the 3 options. The first option was renewal of Paul. Second option was the promotion of an internal candidate, and the third option was the hiring of an external. Result of the assessment led to the choice of Pierre Barnabe. The decision was approved by a large majority of the Board members and unanimously among the independent directors. There, he was considered the ideal choice to be the next CEO, he has the skills, the experience Soitec needs for its next stage of development. Specifically, he has the experience needed to bring a company from sub-$1 billion to a multibillion-dollar revenue company. He has an impressive track record of team building and an in-depth knowledge of semiconductor end markets, application and [indiscernible] and complex ecosystem. He is certainly very, very complementary to the team. We are -- indeed, I am very much so sorry that the process, which delivered this non-expected solution, compounded with emotion, led to the overall reaction that we've seen. Paul has been fundamental to Soitec's recent success and has done a fantastic job turning the company around and positioning it on a very ambitious growth path. Board is extremely confident that in Pierre Barnabe's ability to deliver on the trajectory. Finally, Paul, I know it's a bit early, but I really wanted to thank you very much for everything you've done and for the commitment you have expressed to support the transition. On this side, give you back...
Thank you, Eric. Thank you very much, Eric, and this ends our opening remarks. So we are now ready to take your questions.
[Operator Instructions] Our question today comes from the line of Aleksander Peterc from Societe Generale.
I guess the first question would actually be on governance, on the succession, if I may. If you could just give us a clear reason why -- for the timing of this change, which visibly took everyone by surprise, and I think the surprise element was quite negative to your share price development. So did you take this into account? And why there was no external warning or explanation on this change, which was clearly a surprise? And then the second issue is what makes you think that it's good to hire someone who's actually seen, I don't know, right or wrong, as an outsider of the semiconductor industry? It's quite rare to have someone not from the industry heading a semiconductor company. So if you could give us a reason why you didn't choose an industry insider.
Okay. Thank you, Aleksander. So yes, it did -- there was a surprise. We did this, as I said, [indiscernible] process was obviously done in a confidential manner. You cannot leak which candidate and that the 3 candidates, in fact -- the 3 possibilities were analyzed that could not be leaked or communicated. We probably -- we thought that because it was obvious, and we had made it public, that the CEO's contract would terminate naturally in July '22 that was known probably a long time ago. We thought that it was enough for communication to -- so that the market would know that if we do not announce something, it's because we are working on taking a decision on that subject. So again, our apology if we did not clarify again that we were working on that succession. Regarding the reason -- the fundamental reason, and I know there are conspiracy theory that we are under influence that we have a difference view on strategy with Paul. So Paul has clarified again and again that we share the same strategy, but we are proud of the strategy. We're proud of the Board that we hopefully have contributed a bit -- a number of things on the strategy. So it's absolutely 0 differences here. Second point is the issue of influence. Yes, we -- conspiracy theory again -- we have a Board of, in fact, where we have 5 independents, which I said have unanimously voted for this change. We have indeed 2 from the BPI -- we have one from the [indiscernible]. We have 2 members -- 2 directors from the Chinese company at NSIG. We have one director from a supplier, and we have 2 employees, and we have Paul. So you can imagine that it is difficult in such [ diverse ] board to create the momentum of influence. It definitively was well thought through and debated for 2 years. So why Pierre? In fact, again, very, very simple reason. We think, thanks to Paul and his team, we have a trajectory in front of us of getting very big. Officially, so the numbers, EUR 2 billion FY '26, but obviously, there is more after FY '26. This is a phase, 5 years or so, which will require somebody who we thought had done it already with the capability of growing a mid-sized company to a large-sized company. That is not an obvious skill. We wanted this person to be available at the beginning of the phase, not in middle -- in the middle of the phase, so that he would have ownership of doing it. We wanted also to find somebody who was different, could add value with the team, not subtract, add value. And Paul has been vocal in the newspapers explaining that we needed, in his team, numbers of people with applications knowledge -- market knowledge applications where would semiconductor go. And then we found Pierre with these capabilities. So Pierre is of proper age. Pierre is with proper experience in these applications market. Pierre, with the experience of the size growth and also with the absolutely significant personality of working with the teams, we thought it was the proper choice for the future. So again, our apology that this was clearly misunderstood by the market -- or was misunderstood, I hope. It was also misunderstood by the Executive Committee. But I believe, as now they have started to work with him. We -- they are starting to see the reasoning behind all that. And that at the end, it will be a very good choice for Soitec. But there was no rift respond on any of that. We just were very, very scientists as to the evaluation of the 3 options. Long answer, Aleksander, but I thought it was necessary.
Our next question comes from the line of Jerome Ramel from BNP Paribas.
I have 2 questions. One question is on business. And if you could come back on the announcement you made on the SmartSIC and the 2 first clients. So are we talking about [indiscernible] if you could give a little bit more detail?And second question is on the governance again. We -- I mean, the market had been surprised. We saw the share price reaction. We also read in the press some problem maybe with the Comex. So the question I have is, how is the situation between the Board, the Comex, the customers, the suppliers? How all the ecosystem has reacted to this announcement? And how you see the situation evolving in the coming months?
Thank you, Jerome. So maybe I'll take the first question, and Eric -- Mr. Chairman, you will complement on the second as well. So first, yes, I mean, I already told you that we had a sequence of events on -- regarding SmartSIC. And as we work with many partners around the world, we have studied 2 samples, our prototypes. Now we are getting into a phase where these prototypes are getting real purchase order, and it's a significant step moving forward as we continue to confirm not only the value of our products, but also the quality that -- of the product that we are shipping right now. So that's a very first good news, confirming the trend and confirming the beautiful work that the team is doing with -- together with our partners and customers. Obviously, reinforcing this, I talked about the NOVASiC acquisitions, but I'm not going to come back too much on this. And -- but it has been closed in -- by the end of December. So regarding the ecosystem, basically, I mean, clearly, we know the team has been working crazy like usual. I mean there is no change in the way we interact with our customers. There is no change in the way we work with our supplier. This is very active, and you don't achieve the performance we are achieving because -- not doing anything. So a lot of hard work. But yes, everybody came through a bit of surprise on this announcement. It was not really prepared in advance. So the first reaction was surprise, and we are working on explanations.
Yes. Thank you, Paul. So on my side, if I can comment on the relationship between the Board and the company and the ExCom -- Comex. Yes, we are human. So a bit -- I believe on both sides, there was a bit of bruises. One is a surprise for the team. The ExCom and -- on our side, the reaction, which was sometimes very personal. So yes, a bit of an issue here. But we are all committed to Soitec, and we are all committed extreme -- Soitec. in fact, it's probably why we got this overreaction. So we've started to work together in contact. So we had a number of personal contact. The ExCom has, obviously, the commitment from the Board and from myself to work on all the issues that they have raised. There is nothing hidden. These are issues, we resolve them. We -- but the fundamental part was to bring Pierre into the equation. So Pierre Barnabe has been in contact with the Comex, with members of the Comex, have done this numbers of times. He is working with Paul. At the end of the day, that is what is important is the relationship between Pierre and the Comex. And at this moment, I have only heard positive from the members of the Comex, so this is very good. Also remember that the Board and the Comex only have an indirect relationship. Obviously, we would like both sites to be respectful of our function. And I think that, that is happening, but we're not in direct management of the Comex. So we -- it is important that Pierre has this direct relationship. Also, I was interested to hear of the employees, and you've seen that the [indiscernible] council has been supportive of the fact that we needed to work together with the external solution that we have chosen. So that also have shown a support of the -- this -- the option of bringing somebody from outside, and the fact that we anyway need to work the solution. So I'm fairly comfortable that we've passed the bad time, and now we are in the positive rebuilding.
We now have a question from the line of SĂ©bastien Sztabowicz from Kepler.
Once again, partly linked to governance. Could you please come back on your M&A strategy? Or should we expect any change regarding your M&A strategy, following the appointment of a new CEO? And what kind of technology could be interesting for Soitec going forward? And do you have anything, I would say, already in the pipe? So that would be the first one. And second one is more on the business side because you mentioned on the press release some traction on 5G mmWave. Could you please provide a little bit of outlook on what is happening with mmWave, the adoption of the technology? And also specifically at Soitec, the ramps of mmWave volume for the coming quarters?
I think...
Maybe I'll just start. Okay. I may start, Eric, saying that maybe obviously, on the M&A questions, we don't comment because our plan is really our fiscal year '26 and the target we have shared with you, this $2 billion target, and it's clearly an organic growth basically right today. And so -- and the Board and as well as the management confirm that what we have shared with you is really the plan that Soitec is working on. I'll continue, Eric, and -- on the next questions and if you want to complement, I will...
I fully agree with you. We have to be cautious with M&As because they could be [indiscernible] of the growth, which is clearly identified as being organic. But indeed, at some point in life, we still need to be capable of acquisition of size, and we believe that, again, that we add a talent from a different perspective will be helpful. But indeed, there is no short-term situation here.
Yes. On the mmWave, clearly, I mean, the positive sign, as you know, is that -- and we were hardly working on it. I told you that for at least 1.5 years, FD-SOI -- and not only RF-SOI will be the -- with POI will be a very strong platform to sustain 5G and going into 5G mmWave. But you know that last quarter, the Google phone was also equipped with mmWave based on FD-SOI designed and manufactured by Samsung.So we continue to confirm that the Soitec footprint for smartphone is growing 15% to 20% per year. Remember that 4G smartphone is in the range of 30-millimeter square. You know that sub 6 years is in the range of 50-millimeter square. Now adding mmWave, I mean if you look at the opportunity, you know that it's in the range of 80-millimeter square. So that's the key driver. But the good news is that, clearly, we continue to see that our product portfolios, our ala carte menu, as I said, because depending on which customers' architecture, we have the solutions to deliver on the performance, the power and the cost of ownership for this new wave of innovations.
[Operator Instructions] Our next question comes from the line of Emmanuel Matot from ODDO.
Emmanuel Matot speaking from ODDO. First, what the Board of Directors means about being determined to pursue the highest order of governance? Does that mean that the Board is ready to take further decisions following the share price of the reaction? Second, on silicon carbide. When are you going to take a decision about the location of the fab for that new product? And third, why [indiscernible] other revenue were declining so much during the last quarter?
Paul, I can take the first question, I guess.
Okay.
So indeed, when we saw the list of complaints from the ExCom, we thought it absolutely necessary to review every point of that list and compare to what we do, compare to best practices and making sure that if ever there are issues to resolve, we resolve them. But there are both sides. We also need to clarify to the company what is governance and there is a bit of a communication work. So that's what we have planned to do. We will do it in full, say, focus.
Okay. Thank you, Eric, for the SiC decisions. I mean as I told you, I mean, that the decision will be taken by the end of -- before the end of our fiscal year. I mean clearly, the location has been clearly identified, and we are working now on the details, but the decisions basically are -- will be made before our fiscal year. And clearly, the team -- all the team is focused and working on making sure that the time line, the timing of the -- this new factory will be there for the customer. Regarding the other revenues, basically, it's an impact on Dolphin, the timing of revenue between Q3 and Q4. And this is just a phasing issue. So not a big deal.
We now have a question from the line of Didier Scemama from Bank of America.
Congratulations to Paul Boudre for the amazing execution and track record. And also quite nice to hear Eric Meurice's voice from ASML conference calls. I've got 3 questions. First, on corporate governance for Eric. Presumably, when you interview the candidates for the CEO job, you ask them to lay out a strategic plan. So can you just elaborate a little bit on us, what is it in Mr. Barnabe's plan that really made it the top candidate? And do you anticipate a substantial deviation from the current strategy? Second, on the new fab location, whichever that location might be, do you expect any change in the margin targets that you've set? And lastly, given the initial contracts in silicon carbide, are you of the view that the high single-digit percentage contribution to fiscal year '26 revenue is appropriate?
Didier, thank you for reminding me of the old historic time at ASML. Thank you. So the discussion on the candidates. So we had, of course, 4 candidates external that we looked at 2 semiconductors, 2 without semiconductors. And we did ask what would they see the future. So clearly, Pierre's answer is -- in fact, it's very much what I just told you. He's not to add value on some -- on the material part and the trust the team to be capable of that. But he spent a lot of time in explaining how you build a structured company with more people, and everybody motivated, multi-divisions type of things. So the discussion was more on how to structure a growth rather than I want to do something special into the different segments of the material of semiconductors. Obviously, he then went into explaining the excitement of these supercomputer-type environment where you're talking about the chips, mainly Intel, et cetera, where [indiscernible] But again, he mentioned that, that was not the value that it would bring. And therefore, there was absolutely zero discussion as to changing the strategy of Paul and his team.
Thank you, Eric. Regarding the question of SiC and the fab locations. I mean we have obviously modeled different scenarios and clearly -- the choice we have made clearly matched not only the margin that we are expecting. And the margin on new products is always adding to what we are doing and not subtracting, I mean minimizing the margin. So on this side, we are clearly on the model we shared with you on our fiscal year [ '26 ] trends, and the impact is still today, high single-digit in terms of the revenues. But you know that this is a market dynamic, so we revisit our strategic plan on a yearly basis. We will give you, obviously, more informations in June time frame when we share with you -- will share with you our update on the trend, but a very dynamic market. And the most important for us was to stay on track with the timing. And the announcement of today show that this is -- the traction is there and the quality of the product that we are shipping today as, obviously, for qualifications and evaluations, are clearly on track with what we were expecting.
[Operator Instructions] Our next question comes from the line of Robert Sanders from Deutsche Bank.
My first question, Mr. Eric -- great to hear your voice again. I guess one thing would be interesting to get your perspective is on where Soitec has been lacking in the last couple of years. Obviously, the performance has been great. The strategy seems like no one is disagreeing with that. But it sounds like maybe there's a need for reorganization or there's been some kind of issue that the Board felt with the existing setup. So I'd love to get your perspective on why you've gone for Pierre because it seems like you're emphasizing his organizational skills more than anything to do with this industry expertise. So I'd love to get your perspective on that. The second thing is on FD-SOI. As great as it is that mmWave is adopting FD-SOI. There are discussions that potentially this could be a steppingstone technology for mmWave. So I'd love to get your kind of idea about level of visibility at Qualcomm and Samsung, et cetera. And then the last question is just do -- is the Board really of the view that the existing retention plan for key executives is sufficient? Or does that need to be beefed up? Because obviously, the worry in the market is we're going to see massive turnover now in the Executive Committee.
So Paul, if you can start on the question on the lacking bit.
I will. You start first on the governance, Eric?
Yes, exactly. Yes. Thank you, Paul. So yes, the question of lacking. No, I don't think we should see it this way. There is no criticism or punishment or whatever, it's in the positive sense. The -- we were concerned at the Board that the task at hand is huge. And if we could slightly be concerned about something, was the need for scale of bandwidth, not enough management, not enough international managers -- because there is a conspiracy theory that says we chose Pierre because he was French. Well, we chose Pierre because we could bring potentially all his attention to building up more. And bringing talent from outside and also international and also potentially out of semiconductors. Again, which is what Paul wanted to do also. So I think Paul and I have a full agreement on what it is we need to do. It's just a question of how to do it and how to help the team do that. So really bandwidth, scale, reorg, et cetera, is what we wanted to solve. Retention plan, I think Paul and I are working closely. We clearly have had discussions even before the little crisis with the internal candidate as to the ideas we share about promotion and increasing his scale, his job scale, his responsibilities. Obviously, it's package, et cetera. So all that has been already in the cards and is in the cards. It's not a problem. And then with this, we also discussed, in fact, as of yesterday with Paul, how do -- when that is done, how do we ensure that the team understand extra-organization and how they fit in there. Everybody has, in fact, something positive out of this. So -- but again, we haven't put together the work to ensure that they are aware.
Yes, as maybe a complementary, I will say that Soitec has built a very, very strong management expertise and management team as well. So -- you have seen it over the last few years. But it's based also on very strong processes. So I think it's very solid, right? And I do not see anything shaky on this side. So -- but back to your questions on FD-SOI. I mean you and I have been discussing this for a couple of years. And yes, this is the time, right? I mean we see now FD-SOI confirming that for applications like smart devices, it's really the platform to integrate different functions on the same day. Clearly, a great value add for our customers when used as an ecosystem and not only on stand-alone devices. So we continue to foresee now multiple design wins on this side. On the auto, I mean, this is just the beginning. I mean, we have seen all the applications in new dashboards, but we now -- also now include mmWave with the latest road map that we have seen for radar, for example. So that's also another great opportunity that is used at the beginning. And finally, also for mmWave, this Google Pixel 6, as I discussed and shared with you, that's the first smartphone integrated FD-SOI mmWave commercialized in December. So all in all, I mean, we clearly confirm that the strategic positions for FD-SOI, I mean, as designed -- I mean, for FD-SOI, we have designed basically targets that are clearly untouched by other technology because we clearly, I mean, can check the box for our performance, cost of ownership. And clearly, this is the beginning of something bigger.
We have one follow-up question from the line of Didier Scemama from Bank of America.
Actually, it's a bit of an odd question for Eric. So when you were at ASML, one of the things you did was drastically improved the cash flow of the business. And one could argue that sort of missing it in the equity story of Soitec is free cash flow generation. And obviously, we all understand what it's been lacking. The other bit that you've done is the co-investment program. Do you think any of the things you've done at ASML could be useful for Soitec in the future?
And this is not just to remind me of some successes. Yes, the cash flow management is clearly a responsibility of the CEO. So I am potentially here to help and advice and et cetera. But I'm trying to avoid -- and Paul, at this moment is using the cash for all these investments, which I think is very good, and he has a very good set of [indiscernible] negotiation with the customers to optimize. So far, I think the issue is well managed in my view, and I could not find a smart advice for him on that. For the co-investment program, I'm obviously very proud of that one. It was not easy to get, Intel, TSMC and Samsung to understand that ASML was so important that they had to co-invest, meaning paying the R&D. In fact, you allow me to explain again why we went for an external person. Because we think that market's power is a fundamental. And Soitec is now extremely powerful in this segment of market. And we need to get from powerful to be fundamentally necessary to the big guys. And so this is size, this is differentiation. And when you have size differentiation, uniqueness [indiscernible] market share, that's when you get to have this relationship on the first table of the customer. And yes, there is a bit of a dream of mine on that one. But as I said, I'm not the micro manager [indiscernible] sometimes the press would say. But I have shared these ideas with Paul, and we are all looking at that. And Pierre will probably be taking that ambition, market power, big company, usually recognized, admired by the big customer.
Thank you for all your questions. All questions have now been answered. So I'd like to hand back to our host, Paul Boudre, for any closing remarks.
Thank you, operator. And so thank you all. So as a conclusion, obviously, thank you for your interest and your questions today. The next data in our agenda will be the release of our Q4 '22 revenue on the 27th of April after market close. So this ends our call for today. Thank you for your attention. Thank you, Eric, for participating with us. And thank you, Lea and Steve, and I'll see you very soon. Obviously, we'll continue the road show with Steve as usual. And we are always -- Steve is always there to answer all your questions. Thank you very much, guys.
Thank you.
Thank you very much for joining today's Soitec conference call. You may now disconnect your lines, and we wish you a pleasant day.