And I know to Christian’s earlier question, you said it would be 60:40, but I guess it does beg the question with the current bookings, what gives you the confidence towards the low end there? Because you seem pretty confident in — that it’s been conservative and there would only be upside. But I guess what’s giving you that? Is that the sort of verbal commitment that you — that’s happened in the last few weeks with the customers?
Gayn Erickson: Yeah. I mean, I would warn what a verbal commitment really is. We are in constant communication with all of these customers, and our lead customer is [indiscernible] candidly. I’d say that the numbers and the forecasts they’ve given us have been constant for the last 30 to 60 days but on the low end. And so that’s why we have more clarity. I think they have direct visibility of orders that they have from their customers and what that drives in terms of wafer packs and capacity, et cetera. But I will — my personal belief is I don’t think they have perfect visibility. And I think there’s a little bit of reaction to the seeming slowdown. But now, with interest rates recovering and perhaps people getting through their inventory, maybe they’ll be pleasantly surprised on their side.
But, yes, I mean, we’re down to knowing — when we have these forecasts, we know what wafer pack mix it is, et cetera. So we have pretty good visibility. I’d say very good visibility.
Jed Dorsheimer: So two more questions for me. First is, with the inventory that you’ve built, which is good if you get to move to a turns business and a book and chip. But I’m just wondering whether or not that presents a challenge of holding pricing, whether or not if pricing was to erode it all, would that — how should we be thinking about a margin impact and then also with wafer pack versus system?
Gayn Erickson: Okay, there’s a couple of things. So, first of all, on the inventory, the inventory that we built, we believe is — allows us to address the needs across all of the markets we’ve talked about, plus the 2D, 3D sensing, including memory, that we didn’t spend much time spending. That — we built this platform with a mix that basically we can ship to multiple different customers, that gives us the confidence that we bought this material. We’re not going to be writing it down or anything along those lines. So that one is really important. We’ve had a lot of conversation about that. The turns business has the advantage of, you can get an order today and ship a lot in the next month. It has the disadvantage of customers can wait and kind of — try and hold you up.
We’re not and have not been in conversations with people and don’t really entertain conversations of people trying to hold us over a barrel. If you decrease your price, then I’ll place the order or I’ll take a shipment. Candidly, we’ve tried not to do that. I think that’s the wrong answer. Would pricing come down over time? We have not been experiencing that. What we have been doing, and we’ve expressed this to customers, our costs, like everybody else’s costs, increased during COVID but we did not pass those on to our customers, even in the extreme cases when shipping costs were out of control. So we’ve been able to hold our pricing, which, as a vendor, I appreciate a lot. And so, candidly our customers raise their prices on us because we buy their components, but we’ve been able to hold our pricing even in a time when we’re extra competitive and we’ve not been gouging our customers.
And I think that’s really important. By the way, I wasn’t sure if I was going to do this, I’m going to throw this out publicly out here. We are aware of a scenario where an investor approached one of our customers and had some conversation related to, we believe it was a hedge fund that had our — short our stock, we had like a 20% short position, approached one of our customers and was complaining to them about how much money we’re making. They clearly had a vested interest to try and get the customer to try and negotiate our prices down. And I think that’s garbage, but it’s not against the law. But I’m publicly pointing that out there. We did not, as a result, lower our prices or something. But people have all kinds of reasons to want to communicate and I might — by the way, Jed, you just say you’re talking to customers, I’m not accusing you of that please, that is not the case.
But somebody did, and it really upset our customer. And one of the challenges we need to do in being so forthright with all the information is that people use that information against us in sort of the weirdest of ways. But at this point, we are able to maintain our pricing to our customers, maintain good margins, and that includes on our systems and on our consumables and the WaferPaks, which is critically important for us to maintain healthy growth so we can meet our customers’ needs as well. Okay?
Jed Dorsheimer: Thanks for all the color, Gayn. I appreciate it. Look forward to seeing you tomorrow night.
Gayn Erickson: Okay. Thank you, Jed.
Operator: Thank you. [Operator Instructions] The next question is coming from Tom Diffely from D.A. Davidson. Tom, your line is live.
Gayn Erickson: Hey, Tom.
Tom Diffely: Yes, good afternoon. Thanks for the question. Quite a few have been asked already, so I’ll stick to a couple of just industry questions for you, if you don’t mind.
Gayn Erickson: No problem.
Tom Diffely: Curious where we are as an industry, when we talk about power conversion devices in the move from silicon to silicon carbide? And then inside that, where we are from district silicon carbide to kind of multi die systems?
Gayn Erickson: Okay. So it’s interesting, the ISS summit is going on right now, and people have been feeding me slides of what’s going on. And that’s just an industry forum where large players like Infineon and ST, for example, were presenting and they were showing their roadmaps and talking about the importance of silicon carbide and gallium nitride to the power semiconductor industry and how that fit with silicon. Why that’s important is they plus on semiconductor as an example, are not pure plays. They have both silicon IGBT, large businesses, multi-billion dollar businesses, as well as silicon carbide businesses and gallium nitride businesses in the cases of ST and Infineon in particular. So they have I would call it a good balanced opinion about what’s going on because they’re doing both.
