Timothy Arcuri: Okay. Great, Brice. Thank you.
Operator: Thank you. One moment for our next question. And our next question comes from the line of Joe Quatrochi from Wells Fargo. Your question please.
Joe Quatrochi: Yeah, thanks for taking the question. I was wondering if you could help us understand just relative to that long term mid high single-digit growth for ICAPS. What did it grow in fiscal ’23? And then as we look into ’24, how do you think about just leading edge recovery of spending, offsetting the declines in ICAPS?
Brice Hill: What was the second part? Joe, can you repeat the second part?
Joe Quatrochi: Yeah. Just the recovery of leading edge foundry logic offsetting the weakness in ICAPS.
Brice Hill: Okay. So on the first — on the first part. I think we’re still hearing different estimates of what semiconductors might be in 2023 from a growth perspective. What we’ve been saying from an equipment perspective is the growth was very high. So we described that in ’22 at 40% plus and we’ve said it was faster in ’23 from an equipment perspective. So, the actual semiconductor is obviously not growing that fast. But the equipment market, in preparing for the growth going forward, that’s the approximate rate that we see. And then on the leading logic side, and offsetting ICAPS, again, our Q1 guidance, actually ICAPS is very strong, continues to be strong in our Q1 from a sales perspective. We do see lower utilization.
We have seen some pushouts. So we’re expecting that it won’t be as strong a year as it was in ’23, although still very strong. And where we’ll see some offset is growing; leading logic, because leading logic has been lower, the past few quarters and we expect that to pick up through the year as new node investments, especially with Gate-All-Around start to ship in earnest.
Gary Dickerson: Yeah. The other thing I would add is that, as I said earlier, we’re really well-positioned for the major inflections. If you look at foundry logic, Gate-All-Around, spending starts to ramp in ’24. We’ve been gaining share in DRAM and we’re well positioned for those inflections. And as Brice said, packaging was strong in ’23. We believe it’ll still be strong in ’24, and we’re positioned to capture more than 50% of the spend in all of those different packaging architectures as they ramp in ’24. So again, all of those areas will continue to be strong for Applied in ’24 and beyond.
Joe Quatrochi: Thank you.
Operator: Thank you. One moment for our next question. And our next question comes from the line of Joseph Moore from Morgan Stanley. Your question please.
Joseph Moore: Great. Thank you. You’ve talked about seeing some of these trends in ICAPS that have you thinking that there might be some deceleration. And you talked about China being good in DRAM and DRAM coming down. The China portion of ICAPS, should we be thinking about the utilization of those foundries? To the extent that we’ve seen that, it was already low and they were spending a lot, the utilization is coming down, they still seem to be spending a lot. Do you see that as a lead indicator for your part of the business?
Brice Hill: Hi, Joe. Thanks for the question. I think utilization in China and utilization for ICAPS in general did come down a little bit this cycle. That’s definitely visible from a global perspective. When we think about what’s happening in China, we have a broad customer base that are, serving all of the different end markets. And so our perspective is — our perspective is, they are probably — they are working on ramping their yields and coming up to, mature product yields over time. So I think this is partly, just a statement of where they are in the maturity curve of each of these product — or projects. When we think about the market as a total, it’s a long list of customers, it’s a number of fab projects, that are being installed across the country.
We think about the total capacity that’s being put in place and the goal of being self-sufficient from a chip production perspective, and they’re a long way from that, but we think we’re — they’re committed to that as a whole. They have incentives in place to do it. So we view that market will be, a stable part of our portfolio going forward.
Gary Dickerson: Yeah, Joe. This is Gary. Also, as Brice said, if you look at the efficiency of the spending, it’s going to be less, especially with those new customers for many years. So the wafer starts versus the output, the yields are going to be much less from a device standpoint. So again, that’s going to impact the overall output. And we think, again, the gap there with their domestic demand will keep that market healthy for a number of years.
Brice Hill: Yeah, Joe. And just to finish my thoughts, sorry, I missed one point. We do think the lower utilization, and we’ve seen some push outs in the ICAPS business. This is a global statement. We do think that that’s a signal that it’ll be slightly less, than the roaring growth we’ve seen the last two years. And that’s why we’re saying it’ll be a strong year. It just won’t be as strong as what we saw in ’22 and ’23.
Operator: Thank you. One moment for our next question. And our next question comes from the line of Sidney Ho from Deutsche Bank. Your question please.
