Xilinx Inc. (NASDAQ:XLNX) Q4 2019 Earnings Conference Call - Final Transcript
Apr 24, 2019 • 05:00 pm ET
(Operator Instructions) Our first question is from the line of John Pitzer from Credit Suisse.
Yes, guys. Thanks, let me ask a question. Victor, in your prepared comments you talked about normal comp cycle, FPGAs get a lot of content at the beginning, and then there's some displacement as the build out continues. I'm curious can you help kind of quantify the magnitude or the timing of when you might expect some of the baseband business that you're winning today moving to ASIC stat?
Yes, thanks. First, I'm glad you modify that with baseband, because radio will going be stronger than ever. And as I said, there going be more radio and we're going to capture more content there. So within the baseband side, again, we historically have always even after ASIC displacement retain some revenue streams from the baseband. And it's very early start at the second half of last year and coming into the beginning part of this year, we still see continued higher than typical revenues.
I'd say kind of difficult to sort of call the exact transition, because obviously that depends on really external factors of which we don't have complete visibility. I think the takeaway is that we build into the fact that we see where we don't have solid persistence that we do expect some of that to roll off, and so it's kind of built into how we think about things. And again, you'll hear more details about FY '20 at Analyst and Investor Day. But it is not unsubstantial however, again, just think about it that we build that into our plans. Okay, so it's not like where we expect to have longer persistence than what would be prudent.
And our next question is from line of Ambrish Srivastava from BMO.
Hi, thank you very much. I had a question on gross margin. I'm going back to the last peak in wireless and around that time. Company gross margin was between 68% and 69.5%, if my historical numbers are right. So the question is, is there something specific to 5G that is more detrimental, and I know your revenues are higher in wireless versus what they were before? And then my quick follow-up, it's a more blocking and tackling, Lorenzo, when you said second half gross margin comes back to a more normal level, or how do you define normal, and does that imply then wireless slows down considerably? Thank you.
So, let me take the first question. So, look first of all, as you said, it's really a very different place in terms of the magnitude and size. And by the way, I want to also clarify, we're far from peaking, right, because this is just a very early stage of 5G. 5G is going to continue on for quite some time, because 5G is very ambitious. I mean, we see 5G being factors larger than 4G over its entirety. And the other thing is that we're talking about very advanced technologies,