What is the current growth rate of the semiconductor business 
ng.
And if you look at the size of our inventory versus the size of our cost of goods sold or revenue quarterly, you can see that we run pretty close to just-in-time through our entire supply chain. And we've been able to do it and sustain that. And so what we're reporting to you like 20% year-on-year growth on semiconductor components is, in our view, a pretty decent reflection what is truly end demand needs out there. All right.
Next question.
Operator
The next question comes from Timothy Arcuri of UBS. Your line is open.
Timothy Arcuri -- UBS -- Analyst
Thanks. Hock, I guess I wanted to ask you what you think the long-term growth rate is of your semiconductor business. You're sort of trending to the high teens this year, but that's kind of due to easy comps and you have the compressed iPhone launch and the pull forward of some of these technologies due to the pandemic. So once this all sort of normalizes, what do you think is the right long-term growth rate for the business? Are you still thinking 5%? Or do you think maybe just given the strength of the bookings recently that it could be better than that? Thanks. 
Hock Tan -- President and Chief Executive Officer
That's a hell of a question, and I'll tell you this. Right now, we're in the midst of a very strong demand, and that's also created perhaps, as we all know about, a severe imbalance between demand and supply, demand and supply works to catch up. But if you look at it long enough, I think the dynamics underlying -- the fundamental dynamics underlying the semiconductor industry hasn't yet changed. At least I haven't seen it change.
So, Tim, that's the best answer I can give you, which is I haven't changed my thinking, if we look over the next 10 years, how this industry will behave because it is a relatively mature industry. It's evolutionary. Technology is still evolving, which is great for us. And it keeps getting better and better.
But it's evolving. Disruption, as people like to say in this industry, is less of an event. It's evolutionary. And I have not seen anything that tells me there's a fundamental change.
Timothy Arcuri -- UBS -- Analyst
Thanks.
Operator
Thank you. Our next question comes from Craig Hettenbach of Morgan Stanley. Your line is open.
Craig Hettenbach -- Morgan Stanley -- Analyst
Thanks. Hock, just given the ongoing strength in free cash flow and improved balance sheet, can you just talk about your thoughts on the M&A environment and also -- and/or buybacks, how you're thinking about cash deployment as you go forward?
Kirsten Spears -- Chief Financial Officer
Yeah. I'll take that one. This is Kirsten. Relative to capital allocation, first and foremost, we're dedicated to paying 50% of our free cash flows to our shareholders.
And so that would be first. Secondly, M&A, if we can -- accretive M&A, it would be the second objective. Then thirdly, stock buybacks, and at the end, there would be debt repayments. So I think that's how we're looking at capital allocation in that order.
There isn't anything yet on the M&A front that I can talk about. But if anything does come up, we'll let you know.
Operator
Thank you. Our next question comes from Blayne Curtis of Barclays. Please go ahead.
Blayne Curtis -- Barclays Investment Bank -- Analyst
Hey, good afternoon to you. Just curious, a little more detail on the gross margin. It's a record gross margin. Any color on product or segment? And then I guess as you look forward here, if you could describe what you're still dealing with in terms of excess costs due to COVID and then how to think about it as enterprise comes back.
Should that be additive to the gross margin?
Kirsten Spears -- Chief Financial Officer
I expect gross margin next quarter to be about the same as it was this quarter. And then as you know, at the end of the year, we're expecting wireless to come back in for the normal ramp that we have. And so the margins will come down a bit toward the end of the year. But at this point, I see us being able to sustain the margins that we experienced this quarter, mostly coming from networking and 
ng.
And if you look at the size of our inventory versus the size of our cost of goods sold or revenue quarterly, you can see that we run pretty close to just-in-time through our entire supply chain. And we've been able to do it and sustain that. And so what we're reporting to you like 20% year-on-year growth on semiconductor components is, in our view, a pretty decent reflection what is truly end demand needs out there. All right.
Next question.
Operator
The next question comes from Timothy Arcuri of UBS. Your line is open.
Timothy Arcuri -- UBS -- Analyst
Thanks. Hock, I guess I wanted to ask you what you think the long-term growth rate is of your semiconductor business. You're sort of trending to the high teens this year, but that's kind of due to easy comps and you have the compressed iPhone launch and the pull forward of some of these technologies due to the pandemic. So once this all sort of normalizes, what do you think is the right long-term growth rate for the business? Are you still thinking 5%? Or do you think maybe just given the strength of the bookings recently that it could be better than that? Thanks. 
Hock Tan -- President and Chief Executive Officer
That's a hell of a question, and I'll tell you this. Right now, we're in the midst of a very strong demand, and that's also created perhaps, as we all know about, a severe imbalance between demand and supply, demand and supply works to catch up. But if you look at it long enough, I think the dynamics underlying -- the fundamental dynamics underlying the semiconductor industry hasn't yet changed. At least I haven't seen it change.
So, Tim, that's the best answer I can give you, which is I haven't changed my thinking, if we look over the next 10 years, how this industry will behave because it is a relatively mature industry. It's evolutionary. Technology is still evolving, which is great for us. And it keeps getting better and better.
But it's evolving. Disruption, as people like to say in this industry, is less of an event. It's evolutionary. And I have not seen anything that tells me there's a fundamental change.
Timothy Arcuri -- UBS -- Analyst
Thanks.
Operator
Thank you. Our next question comes from Craig Hettenbach of Morgan Stanley. Your line is open.
Craig Hettenbach -- Morgan Stanley -- Analyst
 Thanks. Hock, just given the ongoing strength in free cash flow and improved balance sheet, can you just talk about your thoughts on the M&A environment and also -- and/or buybacks, how you're thinking about cash deployment as you go forward?
Kirsten Spears -- Chief Financial Officer
Yeah. I'll take that one. This is Kirsten. Relative to capital allocation, first and foremost, we're dedicated to paying 50% of our free cash flows to our shareholders.
And so that would be first. Secondly, M&A, if we can -- accretive M&A, it would be the second objective. Then thirdly, stock buybacks, and at the end, there would be debt repayments. So I think that's how we're looking at capital allocation in that order.
There isn't anything yet on the M&A front that I can talk about. But if anything does come up, we'll let you know.
Operator
Thank you. Our next question comes from Blayne Curtis of Barclays. Please go ahead.
Blayne Curtis -- Barclays Investment Bank -- Analyst
Hey, good afternoon to you. Just curious, a little more detail on the gross margin. It's a record gross margin. Any color on product or segment? And then I guess as you look forward here, if you could describe what you're still dealing with in terms of excess costs due to COVID and then how to think about it as enterprise comes back.
Should that be additive to the gross margin?
Kirsten Spears -- Chief Financial Officer
I expect gross margin next quarter to be about the same as it was this quarter. And then as you know, at the end of the year, we're expecting wireless to come back in for the normal ramp that we have. And so the margins will come down a bit toward the end of the year. But at this point, I see us being able to sustain the margins that we experienced this quarter, mostly coming from networking and 