Phil Gallagher: Yes. Well it’s not noise. It – there’s certainly some reality to the competitive nature of what’s going on in automotive. Again, this past quarter, we just did not see that and we still see it pretty positive. The auto strike, we really didn’t see any real effect on that, at least to date. And it sounds like they’re working to resolve some of those. But again, when you look in automotive, in total, it’s just – we’re not overexposed. It’s maybe 15%, 16% of our business is – approximately or something along those lines. So it’s not like 50% or 60%. So even if there is a slight tick down, it’s not going to have a huge effect on us. And we also look at transportation beyond just automotive. It’s got to – we put in that bucket transportation, it’s golf carts, dump trucks, trains, e-bikes, so – which is battery and a lot of that semiconductor. So we kind of broaden that vertical as well.
Ken Jacobson: Got it. Appreciate the colors guy.
Phil Gallagher: Thanks, Joe.
Operator: Thank you. Our last question is from William Stein with Truist Securities. Please proceed with your question.
William Stein: Great, thanks for taking my questions. I want to offer my congratulations and also add on to Matt’s comment. I was surprised to see the Avnet logo on the Diamondbacks. But all good stuff. I have a couple of questions. First – and I apologize if you had touched on this already. But I think you said in automotive or transportation as a strong end market. And I even think you cited industrial, at least in Asia, as a relatively stronger end market. These have been sort of the standout weakening end markets among the semi suppliers as the – as we progress through earnings season early so far, but enough to have said it that it’s been pretty significant misses actually. And I wonder if you’re not seeing the same trends, is this a matter of you think inventory in the channel that you guys – that you’re not ordering as much from the suppliers? Or is it inventory at end customers? Or any clarification on this would be really helpful.
Phil Gallagher: Yes. Let me give a shot at that. Yes, transportation, if you look at globally, was up modestly Q-on-Q and up year-on-year as well for us. And industrial, first of all, it’s really a broad – so it maybe depends on how people define industrial. It’s our largest segment by a long shot. So it’s really a long tail. And if you look at some regions, it’s stronger than others. I think what we said in the script, we called out that it’s moderating though. We definitely see some moderation in industrial. So we did call that out, William, and that we saw it. So we saw a stronger strength in transportation than we did in industrial. And then we called out defense/aero. It was a little softer in September, but we don’t expect that that’s going to continue to be a growth market as well.
We separate that out from industrial. But it depends – it just depends on the market – the submarkets within industrial because it’s so broad. And that’s why I keep talking about the mixed signals because there’s still some nice pull on demand, and there’s others that are just a little over-inventory. But I think they’ll be burning that off, like I said, through the first half calendar 2024.
William Stein: Great. And the follow-up, recently, WT Micro acquired Future. And that’s a pretty unusual, rather large combination of competitors. And I wonder if the company has any view as to whether that would increase or decrease competitive pressures. And any description of the sort of change in competitive dynamics that you anticipate from that or ones that you’ve already seen? Thank you.
Phil Gallagher: Yes. Thanks, Will. Thanks for your comments. We don’t make comments on the competition nor certainly that merger. We want to focus on our execution and our operational focus and just continue to deal with our suppliers, who we value greatly and our customers. I think we do that, we’ll be fine. So you got – we already compete with WT in Asia, and we compete with Future in the West. So they’re going to combine together. We’ll see how that works out. But in the interim, we’re stable and balance sheet solid, and we want to continue to drive growth with our current suppliers and customers. I wish them luck.
