Vivek Arya : I just wanted to clarify. I thought, Brice, you said somewhere that you provided some look for Q2. I don’t think I caught that. And then several of your memory customers that said that their spending could be down over 50% next year. Recently, Micron said it could be down even more than that. Have you noticed almost 50% cancellation of orders from them? Because I’m just trying to reconcile your commentary that sounds outside of China, of course, more benign and more supportive versus just the very horrific guidance that your memory customers are providing. I understand you’re less exposed to memory versus foundry/logic, but still, it’s a reasonable size exposure. I’m curious, has that 50% cut in CapEx translated to any reduction in your backlog or any change in your thinking about memory for next year?
Brice Hill : Okay. Thanks, Vivek. So we’re not giving a guide for Q2. We are highlighting the record backlog and the fact that we’re constrained and the fact that in several equipment lines, we’re behind on customer orders. So we’re going to try to increase output. And I’d say that comment is true for both Q1 and Q2. So that’s as much shaping as we’re providing for Q2. On the memory side, just to kind of click back and think about the overall demand environment, we positioned last quarter that we had a significant amount more demand than we have the ability to supply for ’23. What did happen during the course of this quarter is there is a significant amount of pushouts and reductions in that demand. Now you can see the end result.
We still had solid bookings in Q4. We still — we created a record backlog that’s now disclosed. So I would say that some of those pushouts and some of those reductions were definitely in the memory space. And I wouldn’t — I’m not going to characterize what percentage it was, but I would say that that’s the most affected area in the business in terms of pushouts and reductions for ’23.
Vivek Arya : So you are seeing a 50% type reduction? I’m just trying to align what we are hearing from those customers versus what you are seeing on the ground in your business.
Brice Hill : Yes. Sorry, I can’t quantify exactly what it is. I’ll just say that, that is what — it’s biased, the reductions were biased in that area.
Operator: Your next question comes from the line of Krish Sankar with Cowen.
Krish Sankar : Brice or Gary, I just wanted to find out, you mentioned how lagging edge is still pretty strong, especially auto analog in China. And I wonder like do you ever think that auto analog could be the next to drop? But in other words, if memory is going to be down next year, but lagging edge holds up, what is the risk that lagging edge rolls over in 2024 and you have two years of lackluster WFE?
Brice Hill : Okay. I’ll start, maybe Gary wants to say something. We don’t have a specific guide for what we call ICAPS, our mature node businesses. What we would say is there was significant growth in 2022. And when we think about all the end markets, we think the end markets are mixed. We know some of the consumer markets and even industrial have seen some weakening. But on the positive side, automotive and the power market that feeds EV and solar and other areas has been really strong. So for us, this is a critical market. We’re continuing to invest and continuing to focus in this area, and we would just highlight to investors that the growth has been very strong.
