Gary Dickerson: Yes, Joe, this is Gary. Thanks for the question. The multinationals are not impacted today. Relative to their strategies, we’d really rather have them comment on that. So again, just today, they’re not impacted. How they position their businesses geographically, that’s really up to them.
Operator: Our next question comes from the line of Sidney Ho with Deutsche Bank.
Sidney Ho: I want to follow up on the earlier question on the longer-term WFE. As you think about the growth of WFE in the next, call it, three to five years, how do you think about the mix between the different type of tools, that how that could change? Meaning, deposition and edge versus litho versus process control, as you talk to your customers about the roadmap and technology inflections. And I also want to ask about — I assume your served addressable market will continue to expand, but maybe help us understand how much would that grow?
Gary Dickerson : Yes. Sidney, thanks for the question. So if you look at what our customers are talking about relative to their roadmaps, really, there are five big drivers of the technologies going forward, workload-specific architectures. There are new structures, new materials, new ways to shrink, new advanced packaging inflections for our customers. And so what we see, if you look at the advanced foundry/logic road map, you see a tremendous focus on new structures and new materials. The transistor innovations around gate-all-around are essential relative to power and performance. wiring. I talked a lot about wiring. Our largest business is metal deposition and the wires are getting thinner and resistance goes up. So you’re seeing more dollars moving in that direction.
Advanced packaging is an area where we see — for sure, that’s another big — one of the big five drivers for the roadmaps for our customers. And that’s still in the early innings around $1 billion business for us today, over 50% served market for the areas we participate. And so we see that one. That’s an area that will attract a tremendous amount of investment. And relative to competition between customers is very, very important. In memory, you certainly see material scaling in 3D NAND as customers are moving to more layers or other ways to include logic and memory together through different technology inflections. DRAM is moving to high speed. And so you have high-K metal gate and logic-like structures there. So a lot of that investment is moving more towards materials-enabled technologies, and that’s where Applied has really a tremendous strength.
I don’t know, Brice, if you want to add anything there?
Brice Hill : No. Good. Thanks.
Operator: And our next question comes from the line of Quinn Bolton with Needham & Company.
Quinn Bolton: Just had a question with the Chips Act applications expected to be received or submitted beginning sort of the February timeframe. I’m wondering as you look at your ’23 WFE outlook, do you expect to see any benefits from Chips Act spending in ’23? Or do you think it’s really more of a ’24 and beyond before it hits WFE spending?
Brice Hill : We do expect, Quinn, a small, really small amount in ’23. On the equipment side, it will likely really start in ’24 as a number of those projects are — start with construction. There are a few that will start with equipment, but it will really, for us be more the ’24 timeframe.
Gary Dickerson : Quinn, one thing I’d add is that those investments are time bound. And so as Brice said, not so much in ’23, starting in but there are — there is timing associated with those incentives.
Michael Sullivan : Thanks, Quinn. And operator, we have time for two more questions today.
Operator: And our next question comes from the line of Pierre Ferragu with New Street.
Pierre Ferragu : Gary, I’d like to come back to the comments you made about capital intensity and the specifics at the trailing edge part of your portfolio. And so you described there, I think, like three reasons why capital intensity — I mean, two reasons why capital intensity is very high there. I mean, higher than the past. The first one is that there is no innovation going on. So like that drives capital intensity up. And then you mentioned the fact that there used to be like a secondhand market that was feeling the trailing edge that is kind of going away. And my question is there must be also a third element that justifies a very high capital intensity today, which is that we’ve been growing capacity very, very fast this year and last year.
