One of the factors on that is supply chain is getting better, lead times are coming down. People don’t need to hold customers OEMs don’t need to hold as much inventory. So we see that sort of adjusting there. But unfortunately, we’re certainly not seeing that in Q2, where we see that growth come back. But we’re going to watch it closely and sort of anticipate in a few quarters here, we’ll start seeing more broad-based demand strength.
Anja Soderstrom: Okay. Thank you. In terms of the gross margin, you’ve been very good at keeping that elevated. And now when you think of the Semi-cap not coming back until 2025, and that’s at a higher margin. How should we think about that gross margin going into 2025?
Arvind Kamal: Hi, Anja. This is Arvind. So let me just start off by saying you can see from our guidance, we guided 10% gross margin. And the things that really underpin that type of margin is there’s a 3-pronged approach. One is, operational efficiency as we build demand, or drive demand into our sites to align the demand part of it. Then there’s the cost actions that we have talked about for a couple of quarters here. In addition to that, there’s also rightsizing, where we don’t have the demand. And then on the third kind of element of this is, the mix of revenue. So when you think about that, that’s where how we get to our 10% and that’s where we think as we look out for 2024, that’s where we’ll be. And naturally, we’re not ready to talk about beyond that horizon, so when we get further into the year, we’ll give you more texture as to how we’re thinking about margin into 2025.
Jeff Benck: Let me just add a little bit to Arvind’s comment, I thought he was spot on. But I also think if you think about the mix with comms being down and even compute being down, they’re lower margin than maybe our corporate average. So that’s helping maybe a little bit on the mix side. We are also aligning expense to revenue. We’ve been pretty disciplined about making sure we have softness, that we’re looking at our resources to really protect profitability even when there’s pressure on things. And then we do expect Semi-cap to help. But until Semi-cap really comes back strongly, we won’t get as much top-line margin help. But right now, we’re just focused on how do we continue to maintain this top of industry margin that we’re enjoying right now.
Operator: [Operator Instructions] We’ll take our next question from Jim Ricchiuti with Needham & Company.
Chris Grenga: This is Chris Grenga on for Jim. Thank you for taking the questions. Could you just provide a bit more color on the share gains with Semi-cap? And is there any particular areas that you would call attention to, or anything else you can add there?
Jeff Benck: Yes. And this was a little tricky because there’s not an infinite number of customers here, particularly on the front-end where we play heavily. But we’ve been working to make sure we get even exposure across logic, and as well as the memory side of things. So that is something that we put a lot of energy into. We’ve also been growing a number of wins with existing customers and continuing to help do more like move to higher-level integration, right? So we might build a frame or machine, a platen or a piece of the solution that the wafer rides on. But we’re also increasingly looking to do more higher-level integration in the cleaning room environment and just really helping our OEMs produce solutions and be more of a one-stop shop, and where we can integrate EMS manufacturing assembly with precision metal machining, that gives us a really unique advantage because not everyone does both the machining as well as the complex assembly side of things.
And so from that standpoint, we’ve just kind of continued to grow wallet share with existing customers and constantly look at adding new logos. We had a new win this particular quarter that was with a new customer in a new region, and we’re excited about that, and that should continue to support the share gain that we’re working through. And one last thing, I might mention some of those wins, we had pretty strong bookings both in ’22 and ’23 in the Semi-cap space kind of before even when the slowdown was just starting back to ’22. And it oftentimes takes a year, 18 months, 24 months. So we’re benefiting a bit from those strong bookings there. And that’s really why you see us probably double the growth rate or half the decline that others are seeing in this space, because we had those wins and they’re contributing to our business today.
Operator: Thank you. We have no further questions at this time. [Operator Instructions]. It seems we have no further questions at this time, I’d like to turn the call back over to Paul Mansky for any closing or additional remarks.
Paul Mansky: Thank you, Dean, and thank you, everyone, for participating in Benchmark’s first quarter 2024 earnings call. Please remember to check the Events section of the IR website at ir.bench.com for updates to coming Investor conferences. With that, we thank you again for your support and look forward to speaking with you soon.
Operator: Thank you everyone. This concludes today’s presentation. We appreciate your participation. You may disconnect at any time.
