Sean Kerins: And Ruplu, I would just add some color to that, which is, look, I look at inventory as a function of customer service especially in this environment. So we really spend as much time as we can to help our customers deliver on their production schedules even as they change. And as you might imagine, there’s a fair bit of change in this environment. But I look at the increase in Q4, for example, I would call it, for the most part, modest. But I think a healthy inventory investment now will set us up for attractive returns in the future.
Ruplu Bhattacharya: Okay. That makes sense. And finally, if I could just ask. I think one concern that many investors have is our margins at their peak I mean, as suppliers lower their prices, I mean, when you see ASP pressure? And how you think about margins. And in that context, if you can give any of your views on how you think margins can trend. But also, do you have cost levers and I guess my question is on general risk management. Like if we go into a recession or a slowdown, do you think OpEx as a percent of sales or as a percent of gross profit still has — you have levers to lower that, meaning you can take more cost out. So just your thoughts on your ability to manage your costs and how you think margins will trend maybe in a deflationary environment or in a recessionary environment? Thank you. Thanks for all the detail.
Sean Kerins: Sure, Ruplu. So of course, I always like to talk more about growth and cost, but I’ll start with the second part of your question, we feel like our OpEx is fairly well managed. As you can see, we landed at historical lows on both a percent of sales and a percent of gross profit basis. We’ve got all kinds of levers in place to make sure that we’re protecting our investment priorities and continuing to work on structural cost over time. You were obviously going to be very surgical in this environment. If things were to slow more dramatically, I think we know where to go. And remember that variable cost in a more recessionary environment would come down substantially. I think to the first part of your question, and it’s the right one, we spend a lot of time looking at how the complexion of our business has changed over the past couple three years, and as the supply/demand market continues to normalize, I can tell you that we feel pretty confident about our ability to retain some of the structural benefits that we built into our model.
So I can’t sit here today and say exactly when the market will fully normalize, but it will, and we’ll reach something that we might call a steady state. When we do, I’m confident that operating margins in our components business are going to land well north of the last long-term target we set for that business. And for those of you that maybe weren’t as involved, that was 5% at the time. I think now we’re looking at something in the range of 5.5%, all the way to maybe six points. So the reason we have conviction around that is because of the structural investments we’ve made over time. And I can talk a lot about engineering resources that help us capture design win margin potential. We think there’s still runway there. I can talk about supply chain capabilities and what that’s doing to help us serve our customers in different and value-adding ways.
I can talk about design services, which are especially interesting to some of our larger OEM customers for which we enjoy really accretive returns. So there’s a real thought behind that statement. And I think while you might want to ask by when, and we won’t commit to a time frame, again, the market’s got to normalize, but we feel really good about the next target range for that business.
