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Maxim Integrated Products, Inc. (MXIM)
Automotive Business Update for Investors Conference Call
December 5, 2017 5:00 PM ET
Kathy Ta - Vice President, Investor Relations
Randall Wollschlager - Vice President and General Manager
Vivek Arya - Bank of America Merrill Lynch
Harlan Sur - JPMorgan
Ambrish Srivastava - BMO Capital Markets (Canada)
Jeremy Kwan - Stifel, Nicolaus & Co., Inc
Ross Seymore - Deutsche Bank
William Stein - SunTrust Robinson Humphrey, Inc.
Previous Statements by MXIM
» Maxim Integrated Products' (MXIM) CEO Tunc Doluca on Q1 2018 Results - Earnings Call Transcript
» Maxim Integrated Products Inc (MXIM) Presents at Deutsche Bank Technology Conference (Transcript)
» Maxim Integrated Products' (MXIM) CEO Tunc Doluca on Q4 2017 Results - Earnings Call Transcript
I would now like to introduce your host for today’s program, Kathy Ta, Vice President, Investor Relations. Please go ahead, Kathy.
Thank you, Jonathan. We’d like to welcome everyone to Maxim Integrated’s automotive business update for investors. I’m pleased to introduce Randall Wollschlager, Vice President and General Manager of Maxim’s Automotive Business Unit, who will be presenting today.
Before I hand over the call to Randall, I would like to note that the audio in today’s webcast will be audible both on the teleconference line, as well as through the video see on our website. Please click on the appropriate link for audio via the teleconference buttons or the computer speakers-only button when joining the slide webcast. This will enable a better synchronization between the audio and slide presentation. However, please expect about a 10 second delay for the slides to advance if you’re listening via teleconference.
For Q&A, for following our prepared presentation, we will use the phone line for our usual process. I would also like to point out that we will not be updating near-term guidance in our call today. And we request that you limit questions to the content of today’s automotive business update presentation. Once we’re done with our slidecast, I will post the final slide deck in our website for your reference.
And with that, let me move to our Safe Harbor statement. During today’s call, we will be making some forward-looking statements. In light of the Private Securities Litigation Reform Act, I’d like to remind you that these statements must be considered in conjunction with the cautionary warnings that appear in our SEC filings. Investors are cautioned that all forward-looking statements in this call involve risks and uncertainties, and that future events may differ materially from the statements made. For additional information, please refer to the company’s Securities and Exchange Commission filings which are posted on our website.
Now, let me turn the call over to Randall.
Hi there. Welcome, everyone. Thanks for your interest in Maxim’s automotive business and it’s a pleasure for me to represent that business. I’ve been with Maxim for over 19 years and I’ve been with this automotive group nearly from the very first days a little over 11 years. And I’ve actually spent 20 years of my career developing advanced mixed board automotive ICs. So I have a long history in automotive.
I actually initially started out in powertrain and safety applications. But when I moved here to Maxim, we actually started out with body electronics and infotainment. So early on, our model was to take our consumer grade products and convert them over to what we call slash V for vehicle. And we used a lot of that IP to gain traction in the automotive marketplace. And then since then, we’ve been developing more and more product lines and expanding our SAM base, as well as our technologies. And we’re confident that the run we’re on is going to continue for quite a few years for sure.
Yes. So early on, we went after infotainment that’s where our strongest product was and some body electronics. And we see the next wave of growth really coming out of electrification, which is a large focus on battery management systems for electric vehicle. There’s also some electrification occurring with converting over mechanical systems or hydraulic systems to electrical. We’re also participating in those events and then also ADAS converted these advanced drivers assistance for us safety-related.
So electrification is really focused on cleaning up the environment and ADAS s really focused on saving lives as kind of how we look at it. And I told you a little bit about our early days in infotainment. One of the things is that for eight years, I ran R&D for our smartphone applications. And it blended that that experience on this software in converting IP over to the infotainment as the vehicles expanded very quickly and providing the smartphone kind of user interface in the standard stack of the car. That business is going to continue to grow as well.
But in today’s call, we will focus more on the electrification and ADAS. Yes. So you can see here that over the last five years, we’ve had a 30% CAGR, very strong. They’re actually outgrowing the market. And you can see that most of it actually is in the infotainment area. But you can see ADAS and electrical vehicles electrification, they are showing up in 2017 forecast. And that’s going to continue to grow at a higher rate than some of the other areas that we’ve been investing in. So that’s why we’re focusing on ADAS and electrification today.
The business is very diversified. I like that – I always like to say that, we hit singles and doubles, so we’re diversified our product lines, as well as customers, as well as technology. I feel good about that. The – you can see here that the electrification or electric vehicles whether they be – this includes hybrids, as well as full EVs and plug-in EVs. You can see here the – from 2017 to 2022, the scare of the vehicles is going conceivably from 5% to a 11%, and actually a tripling of production for electric vehicles. And you can see here by the background, obviously, the air quality is really starting to improve.