Brian Chin: Okay. Great. Thank you.
Brice Hill: Thank, Brian.
Operator: Thank you. Please standby for our next question. Our next question comes from the line of Timm Schulze-Melander of Redburn.
Timm Schulze-Melander: Hi, there. Thank you very much for taking my question. I wanted to ask about longer-term R&D intensity. You mentioned about the higher CapEx for the EPIC R&D center and just thinking about the mix of the business, a third of revenues from ICAPS probably intuitively a lower R&D intensity. The other two-thirds leading-edge logic and memory, as you say, is more materials intensive and maybe higher R&D to sales intensity. Just wondering what we should expect the net of those two factors to be on a kind of multiyear view, please? Thank you.
Brice Hill: Yes. Thanks, Timm. Well, our spending at this point is 18.1% of revenue. It’s a little bit higher than our model, but we’re very comfortable with our spending level. We put about 66% of our spending, two-thirds towards R&D. And we are fully focused on the roadmap. So when we think about the business, we think about the longer-term trajectory of the business. Our perspective is, we’re investing in a secular positive trend. We think about semiconductors growing high mid-single digits, so 6%, 7%, 8%, 9%. We think there’ll be — it’s becoming more complex to build those semiconductors, which drives more equipment, so that’s an additive function. We also think that Applied, looking forward, designing for the inflections with our customers will gain share on top of that.
So we think there’s an additive function between the market growth of semis, the higher complexity of the equipment, and then the increased intensity from materials engineering and Applied’s participation. So all those things add up to a significant growth rate. And so, what I would expect is, the spending level you see today will focus on maintaining approximately that spending level as we identify the best R&D projects to work on as we go forward. And then I would also highlight that just for investors who are working on their models, we’ve held our spending flat for pretty much three quarters and we said we’ve been very conscientious and very focused on strategic hires only. As we move to Q1, so the first quarter of our fiscal next year, we’ll see our normal pay rate cycle, and we’ll see our normal raise of spending in that cycle.
So I just wanted to highlight to people that that’s what they’ll see if they’re modeling that function.
Timm Schulze-Melander: Super helpful. Thank you.
Operator: Thank you. Our next question comes from the line of Charles Shi of Needham & Company.
Charles Shi: Hey, thanks for taking my question. I want to ask, your largest customer in Taiwan talked about CapEx leveling off on a dollar basis. Wonder what’s the impact that you might be seeing in terms of your revenue coming from that particular customer in 2024 and beyond. And any preliminary thoughts on the relative outperformance of WFE maybe in ’24 by segment, meaning leading-edge, foundry logic, ICAPS, DRAM and NAND? Thank you.
Brice Hill: Okay. Thanks, Charles. All I can say about any particular customer, but especially leading-edge customer is that we’re current on their forecast. So, we understand at an account level what they’re forecasting in the future. They’ve all started as we went through the supply chain crisis, we’re getting better visibility into the roadmaps top to bottom. So, we have that — we have a good perspective on that. In general, we haven’t called a number for WFE in ’24 — for our business in ’24. I just highlighted in the prior question that our view of the long-term growth of the market, sort of what guides our investments, et cetera. What we have said for next year is that we expect the ICAPS business to be stable. So that growth is durable, if you will.
