Robert Bruggeworth
Chief Executive Officer at Qorvo
Thank you, Doug, and welcome, everyone, to our call. First, the Qorvo team delivered an exceptional June quarter. Revenue, gross margin and EPS were each above guidance. Customer demand during the quarter was broad-based and included recently released product categories including 5G diversity receive modules, MEMS-based touch sensors and Wi-Fi 6E FEMs to name a few. Our R&D teams are relentlessly advancing technologies that enable more complete, integrated solutions and increase differentiation. We are partnering with leading customers, serving them where we are most valued and introducing new products and technologies that expand our addressable markets. We are pleased with ongoing design activity. We are locking in wins and we expect the demand environment to remain robust.
In the smartphone market, 5G devices are adopting new architectures and adding functionality that enhance performance and create new challenges related to current consumption, or space and handset design resources. To address these challenges, handset manufacturers are selecting more highly integrated solutions that deliver superior performance. For Qorvo, the content opportunity in a 5G device increases by $5 to $7 when compared to a 4G device. We expect handset units to grow 5% to 10% this year with 5G doubling to around 550 million units. In 2025, 5G units are expected to be approximately 80% of total units. In other connectivity markets, new applications are proliferating, supported by generation over generation advancements, in Wi-Fi, Bluetooth, Zigbee, Thread, ultra-wide band and other wireless protocols. And a growing number of applications, multiple wireless standards coexist and operate concurrently.
As an example, one of the largest smart home providers recently integrated numerous low-power wireless protocols into its distributed Wi-Fi six router, creating infrastructure for seamless whole home operability. We expect this integration trend to continue. Our expertise in areas including product design, software support and system solutions enable us to simplify our customers' product development efforts, while significantly enhancing the end-user experience. Outside of connectivity markets, the expanding opportunities are driven by a diverse set of underlying upgrade cycles. Brushless DC motors are replacing larger, less efficient conventional DC motors. Solid-state drives are replacing slower and less reliable hard disk drives. And touch sensor solutions are replacing less functional traditional buttons.
We also expect RF-based biotechnology testing will enable central lab performance at the point of care. We expect our first commercial orders for our Omnia test platform by the end of the year. Turning to the June quarterly highlights. In 5G handsets, customer demand for highly integrated modules is expanding. During the quarter, we launched our next-generation complete main path solution, which includes low-band, mid-high band and ultra-high band modules, offering higher output power and enhanced MIMO support for upcoming 5G phones. For the diversity path, we began sampling our first 5G DRX, a sub-6 ultra-high band placement, offering best-in-class receive sensitivity. These main path and diversity path solutions integrate filtering and amplifiers that were formally discrete, helping our customers to save board space, improve device performance and accelerate product development efforts.
Also during the quarter, we announced the interoperability of our family of ultra-wideband products with Apple's U1 chip and the nearby interaction protocol. Qorvo's ultra-wideband solutions provide a superior level of accuracy, reliability, latency and security when compared to traditional technologies like Wi-Fi, BLE and NFC. In addition to remote access to our cars and homes, ultra-wideband will enable new applications in the connected home, indoor navigation, contactless payment, factory automation and other use cases. With more in-house software capability from our recent 7Hugs acquisition, we now offer a complete solution, and we're working with customers on products combining our ultra-wideband hardware with our latest software release, shortening their time to market. We see a growing set of applications for our ultra-wideband solutions and customer design activity is accelerating.
In Wi-Fi for handsets, we secured new reference design engagements with our Wi-Fi 6E FEMs. These chip-on-board FEMs reduce insertion loss and enhanced handset design flexibility versus system-in-a-package solutions by enabling placement closer to the antenna. Leading Android manufacturers are moving from system and package placements to best-in-class RF solutions and Qorvo is winning on the strength of our product design, performance and customer support. In automotive, we achieved record revenue, up more than 80% year-over-year in support of automotive OEMs in the U.S., Europe and in Asia. Growth was driven primarily by the increased demand and expanding connectivity requirements for Wi-Fi, VDX, LTE and 5G. Content growth was also included our touch sensor solutions, which automotive OEMs are using to enable smart interiors. This is a new growth category for Qorvo, and we have secured design wins in support of multiple automotive customers.
To enhance the functionality of our touch sensor solutions and foster new use cases, we've integrated infrared capabilities, a milestone achievement for our sensor team. For the smart home, we partnered with a leading supplier of home mesh networks to introduce the first Wi-Fi six router with integrated BLE, Thread and Zigbee multi-protocol operation. This leveraged our ConcurrentConnect technology. We also secured a BAW filter design win with a leading supplier of high-end audio speakers to support the pairing of Bluetooth Low Energy and Wi-Fi six. As a member of the Connectivity Standards Alliance and an early participant in the upcoming matter connectivity standard, Qorvo stands to benefit as multi-protocol, seamless interoperability drives IoT adoption and growth.
In power management, we released a 40-volt motor control solution that supports the ongoing transition to higher voltage battery power tools. Demand for our motor control and power management products has been very strong, driving growth in applications from appliances and battery power tools to enterprise compute, laptops and gaming. We are seeing demand for brushless DC motors expand into lower-cost power tools and smaller appliances, given the advantages in efficiency, size and reliability. We are also leveraging the configurability of our power management solutions to address new applications in defense and other markets. In infrastructure, we increased shipments to multiple OEMs in support of 5G sub-6 gigahertz massive MIMO and macro deployments in the US, Japan, Korea and Canada.
We also achieved initial design wins supporting a massive MIMO deployment in India, and we secured BAW filter design wins for 3.5 gigahertz and 4.9 gigahertz 5G small cells with a major China based OEM. New product launches, including GaN integrated PA modules for massive MIMO systems and a family of high-efficiency power amplifiers for 5G small cells serving densely populated areas. Across our markets, there are strong secular tailwinds. Connectivity is proliferating and complexity is increasing, which is expanding our growth opportunities. We supply best-in-class products. And our investments in new product areas and differentiated technologies are extending our technology leadership and broadening our reach.As our June results and September guidance demonstrate, end market demand is broad-based and robust, and our outlook is strong.
And with that, I'll hand the call over to Mark.