Gross profit totaled $2.06 billion, a year-over-year increase of 54.7%. Gross margin of 47.6%, 60 basis points above the mid-point of the Company’s guidance, increased 600 basis points year-over-year, principally due to favorable pricing and improved product mix, partially offset by the inflation of manufacturing input costs.

Operating income increased 110.1% to $1.27 billion, compared to $605 million in the year-ago quarter. The Company’s operating margin increased 1,050 basis points on a year-over-year basis to 29.4% of net revenues, compared to 18.9% in the 2021 third quarter.

By product group, compared with the year-ago quarter:

Automotive and Discrete Group (ADG):

• Revenue increased in both Automotive and in Power Discrete.
• Operating profit increased by 273.8% to $404.1 million. Operating margin was 25.9% compared to 10.8%.

Analog, MEMS and Sensors Group (AMS):

• Revenue increased in Analog, in MEMS and in Imaging.
• Operating profit increased by 23.1% to $375.7 million. Operating margin was 27.2% compared to 24.3%.

Microcontrollers and Digital ICs Group (MDG):

• Revenue increased in both Microcontrollers and in RF Communications.
• Operating profit increased by 130.3% to $503.8 million. Operating margin was 36.7% compared to 23.5%.

Net income increased to $1.10 billion and diluted earnings per share to $1.16 compared to $474 million and $0.51, respectively, in the year-ago quarter.

Cash Flow and Balance Sheet Highlights

Capital expenditure payments, net of proceeds from sales, were $955 million in the third quarter and $2.61 billion for the year-to-date period. In the year-ago quarter, capital expenditures, net, were $437 million.

Inventory at the end of the third quarter was $2.38 billion, compared to $1.97 billion in the year-ago quarter. Days sales of inventory at quarter-end and in the year-ago quarter were 96 days.