So I think that our outlook is, as Vince said, is really end market units driven and we have not yet put in a number nor have we received indicators from our supply chain partners that we should be making adjustments based on any disruption that could come from the negotiations that are going on right now.
Vincent Roche: Yes. I think one other thing, Chris, to note is that, in general, there’s more and more silicon value in cars every year, and that’s true of ADI. We’ve got the switch to the electrification, which is, again, in pretty much the early stages of adoption. So there are some great growth drivers that will somewhat transcend the malaise, the economic malaise. But we still expect, overall, as Prashanth said, we’ve got many growth drivers that Automotive will continue to be the one of the better growth areas for ADI for the foreseeable future.
Chris Danely: Great. Thanks, guys.
Vincent Roche: Thanks, Chris.
Operator: Thank you. Our next question comes from Harlan Sur with JPMorgan. Your line is open.
Harlan Sur: Hi. Good morning. Sorry about that. So in Q3, disti was down, was about 62% of sales. It was down about 4.5% sequentially. So that’s less than the total business. Shipments to our direct customers came down around 8%. So maybe you guys can just discuss the shipments and excess inventory dynamics around both for Q3 and here in Q4. Is the excess inventory situation a little bit more pronounced than direct customers? And maybe similar to your disti customers where you have systems in place to monitor sell-through? Like how do you monitor the levels of sell-through and inventories at your direct customers?
Prashanth Mahendra-Rajah: Yes. Great. Okay. So let’s do a couple of pieces on that. First, as a reminder, for a distribution company to do business with ADI, you have to give us your sell-through data on a weekly basis in arrears via electronic data feed. So we know exactly where our distribution guys are doing business, and we use that to run the company, as Vince always said, we run it on a POS basis. We said in the third sorry, in the second quarter earnings call, we said that we had gotten a little ahead of ourselves in China and that we intended to undership China. In the third quarter, we have done that. We are now intending to undership all markets generally in the fourth quarter to continue to bring the channel level inventories down.
We have limited direct data visibility into our end customers inventory levels, except for those customers where we have consignment. But what we do have is the which you don’t have access to is we can see the sales data of our products into our broad set of publicly external customers and their corresponding revenue growth. And our team builds correlation data based on that to tell us how we’re doing versus how their growth is. And that’s what Vince was referring to that we have seen that their growth is accelerating versus our growth to them, which is why we have confidence that we are undershipping their end market demand, allowing them to pull inventory levels down, which, of course, it is safe to do so because now we can get our products to them within 13 weeks.
Michael Lucarelli: Yes. Prashanth that’s a great point you made the less lead times is the best indicator of what our customers’ inventory levels need to be. if a customer can get product quick, they need to hold a little less inventory. So our lead time is improving is helping us give us better visibility into what the customers need to hold and what they’re holding.
Vincent Roche: Yes. I think Prashanth said earlier, 85% of our total portfolio now is available in less than 13 weeks. Big, big change since this time last year.
Michael Lucarelli: Thank you, Harlan.
Harlan Sur: Thank you.
Operator: Thank you. Our next question comes from Toshiya Hari with Goldman Sachs. Your line is open.
