Charles Shi: Thanks, Brice.
Operator: Thank you. One moment for our next question.
Michael Sullivan: Yeah. And operator, we have time for two more. Thank you.
Operator: Certainly. Our next question is a follow-up question from the line of Stacy Rasgon from Bernstein Research. Your question please.
Stacy Rasgon: Hi, guys. Thanks for letting me slip one more in here. I wanted to explore just a little more the tradeoff between the leading edge and the ICAPS next year. So, I know you said ICAPS is down, foundry logic or leading edge foundry logic, so I am thinking, you said it would sort of offset some of it. Are you thinking that the overall foundry logic, at least for a WFE standpoint, is up, down, or flat in ’24 versus the ’23 levels, given those dynamics?
Brice Hill: Hi, Stacy. It’s Brice. Yeah, we didn’t make a call on that. You kind of heard probably the components. I know probably everybody wants us to make a call, but what we’re saying is, we have a very strong Q1 still in ICAPS. The dynamics in Q1, assuming things play out as we’re forecasting, will be similar to Q4. You’ll have a strong DRAM market. You’ll have a strong ICAPS market. But we know that there have been some pushouts and there is lower utilization in ICAPS. So we’re expecting that market to not be the same, as strong as it was in ’23. When we flip and look at leading logic, leading logic is weak in Q4 and it’s weak in Q1 also that same dynamic. And we know that new technologies will be ramping, including Gate-All-Around. So we’re expecting that to, help throughout the year. Whether that’s bigger or smaller than, whatever happens with ICAPS, we can’t tell yet, but we’ll just have to let that play out.
Stacy Rasgon: It sounds like neither one is dominating over the other, though. Is that a fair way to characterize?
Brice Hill: Yeah. I don’t think you can make — yeah, it’s not easy to make a call at this point.
Stacy Rasgon: Got it. Thank you.
Brice Hill: Thank you.
Operator: Thank you. Then our final question, one moment for our final question. And for our final question, we have the line of Jed Dorsheimer from William Blair. Your question please.
Jed Dorsheimer: Hi, thanks, and thanks for letting me squeeze one in here. I just — quick two parts. I just want to confirm the pushouts that you started to see in ICAPS. Do you — is — can you comment on the end market? Was that auto related? And then second, the investigation. I know you don’t want to get into any detail or can’t there, but it seems like that’s also in the ICAPS. Can you confirm those two? Thanks.
Brice Hill: Yeah. On the second, Jed — thanks for the questions. On the second, I just can’t add any commentary to, what we previously discussed with respect to the legal matter. On the first one, there’s definitely mixed inventory situations and mixed reports on all the different ICAPS markets. Actually, where we would point is probably being the slowest at this point is industrial. What — just to add a comment for you. On the auto side, I would say that it may be slower from a unit perspective, but because of the density of, chips in EVs and even newer cars, we’re not expecting much weakness in the auto market. So I guess that’s the way I would think of that.
Jed Dorsheimer: Great. That’s helpful. Thank you.
Brice Hill: Thank you.
Michael Sullivan: Okay. Thanks, Jed, for your question. And Brice, with that, would you like to give us your closing thoughts?
Brice Hill: Thanks, Mike. From a year end and closing perspective, I really like the sustainable operational progress our teams have made. Our Semi systems business grew in a down year and our services business also had a record year, proving its resilience, just like it did in 2019. The R&D investments we’ve been making in collaboration with our customers put us in a great position for the next wave of inflection spending. We now have a line of sight to market share of over 50% across Gate-All-Around, Backside Power, and Advanced Packaging. At the same time, we’re increasing gross margins and generating strong free cash flow, and this sets us up for increasing shareholder distributions. I hope I get to see many of you at the Wells Fargo Conference in Southern California. In the meantime, for those of you in the US, we hope you enjoy a safe and Happy Thanksgiving. Now, Mike, thank you. And let’s close the call.
Michael Sullivan: All right. Great. Thanks, Brice. And we would like to thank everybody for joining us today. A replay of today’s call is going to be available on the IR page of our website by 5 o’clock Pacific Time. Thank you for your continued interest in Applied Materials.
Operator: Thank you, ladies and gentlemen for your participation in today’s conference. This does conclude the program. You may now disconnect. Good day.
