Michael Lucarelli : And the question on lead times Ambrish. The lead times actually in the quarter, they have come down. I would say they’re still extremely high and much higher than we want them to get. And Prashanth talked about how he wants to — how he — or we want to increase our inventory to bring down those lead times, but we have some products that are on time and some products that are lead time to 52 weeks. So lead times have come down overall sequentially from 3Q to 4Q, and that’s reflected in kind of our outlook, our backlog, cancellations, everything that we gave you.
Operator: The next question comes from Stacy Rasgon with Bernstein.
Stacy Rasgon : I had a quick housekeeping question and then a broader one. The housekeeping question, you had an extra week in Q1 ’18. So Q1 ’23 would be five years later. Is there an extra week in the guide at all? And on the broader question, you talked about some of the OpEx levers that you have. I think last quarter, you talked about like in a 15% revenue down year, you could keep gross margins above 70. I guess the question is do you still believe that? And what would OpEx do in a scenario like that? What are some of the levers you would pull?
Michael Lucarelli : Stacy, I’ll do the housekeeping. No, I guess our outlook is very, very strong, given you thought it would be a 14-week quarter, it’s not. Our first quarter in ’23 is a 13-week quarter. Our next 14-week quarter will be in 2024. So to repeat the outlook for 1Q is a 13-week quarter.
Prashanth Mahendra-Rajah : Okay. And I think your question really is on the downturn scenario analysis. I’ll just — I’ll restate that, Stacy. We’ve covered that a few times, but we put our gross margin floor out there at 70%, and we did that because we have confidence that we have the levers, given the flexibility of our hybrid manufacturing model and the resiliency of our business that it’s unlikely that we’re going to pass through that. So we’ve tested that at a down 15%. And what we’ve shared with folks in the past is that a down 15% is quite comfortable that we can stay north of that 70% and the OpEx levers for us would be the — about 80% of our OpEx is fixed or less variable in nature, which leaves us about 20% on the levers that we can work with to ensure that we keep operating margins north of 40%.
I will say that for 2023, our commitment is — and as Vince often says, we run this company for the long term. So we are committed to continuing to invest throughout the course of ’23. We’ll, obviously, be mindful of the environment. And if we see a change that warrants us to take action, you can count on us to take action but we — at least for the next quarter, to expect us to continue to make the right decisions for the long-term health of the business.
Stacy Rasgon : It sounds like OpEx ticks up a little bit into Q1 as well, just based on what you just said?
Michael Lucarelli : You read it well, Stacy.
Operator: The next question comes from William Stein with Truist Securities.
William Stein : I’m hoping to hit on the inventory question yet again. You’ve done a very straightforward, good job of explaining to us what’s going on in your own inventory. And it sounds like distribution is still below your target even though on their balance sheets across all their suppliers, it looks like they’re elevated. But we’ve seen other parts of the supply chain, in particular, the manufacturing services companies, which I imagine are a big percentage of sort of your counterparty sales on transactions. And I’m wondering to what degree you’ve scrubbed that half channel, half customer, however you want to look at it, for inventory that could hurt demand going forward?
