Hendi Susanto: Kieran, my first question is, is the softness in chip shortage unique to CTS since you have like a custom design products, meaning that I think in general, for the market, the chip shortage is better. Therefore, we shouldn’t expect like any negative surprise outside of that particular chip shortage?
Kieran O’Sullivan: Yes. Hendi, probably the best way to address that is, we have gone through 2 plus years without actually impacting our customers with any shortages. We have obviously had tight situations and qualified and managed substitutions. And we feel bad about this one because it’s in a design that’s going to move into the next-generation design. And the lead time to substitute another part wasn’t exactly the easiest thing to do. So, it’s just the one part that goes into this one commercial vehicle application. And again, we will have it fixed by the end of the quarter, and it’s improving. But that’s the one shortage we are working through. It’s not impacting any other part of the portfolio.
Hendi Susanto: Got it. Yes. And then Kieran, some electronic contract manufacturing and semiconductor companies are expecting positive demand and a continued positive growth in automotive. Having said that, I think those companies are in different places of the transportation supply chain. May I inquire like what is the case of CTS Automotive sales to be flat in 2023 under, let’s say, like the low-end scenario?
Kieran O’Sullivan: Hendi what was the last part of your question, you just broke up…
Hendi Susanto: Yes. So, what is the case of, let’s say, like CTS Automotive sales to be flat in 2023? Like what kind of scenario may contribute to CTS automotive sales to be flat, whether it’s, let’s say, like the SAAR numbers will be significantly worse than what you have stated or like what are some external market situation for your lower end of the automotive sales at the flat year-over-year growth in 2023?
Kieran O’Sullivan: Yes, Hendi, the way we are looking at it a little bit is if you look at the SAAR, it’s one thing we could expect softness in China where the market has been softening for a period of time now. Some people would say a second half pickup in China. We have seen mixed results in Europe. We think North America may be up a little bit to flat. But you are seeing different companies give different views out there in your traditional automotive suppliers. Some are up high-single digits, some are flat, some are slightly down. I don’t have too many down more flat is the situation. And the way we look at it is, obviously, we are impacted a little bit in the first quarter from the shortage, which is a temporary thing. And then as we look at the rest of the year, will China rebound as strong as it should rebound.
That’s one thing that’s on our mind. And what’s going to evolve in the commercial vehicle space, we see it has been robust in the first half of the year, but I am not sure that’s going to hold up for the full year. They would be some of the things that would take us towards a more flat view.
Hendi Susanto: That’s very helpful, Kieran. Thank you. And then Kieran, in electronic vehicles, I think people usually talk about the increase in dollar content, which would be €“ like how should we think about CTS benefiting from increasing dollar content per vehicle? And then would you be able to share the timing of new product introductions.
Kieran O’Sullivan: Hendi, we haven’t disclosed content per vehicle. It’s something we are tracking internally because it’s a key part of how we manage our growth trajectory. We have launched accelerator modules into both electric vehicles and hybrid electric. We have got current sensing that will be launched with the European OEM this year for electrification application. We are very excited about the eBrake. I think we said in our last earnings call, we are in predevelopment activity with a customer. And we are really focused on getting that portfolio as solid as it can be to make sure we are growing with the market as we go forward.
Hendi Susanto: Got it. And then, Ashish, I think the EPS guidance is above my projection. So, can you share more color on gross margin and OpEx for the high end of the EPS guidance.
Ashish Agrawal: So, Hendi, the high end and the low end of the EPS guidance will be fairly consistently mirroring our volume. So, if you look at it from the range of revenue, if we are on the high end, then we would see some leverage on OpEx as well as gross margin. And if we are on the lower end, then we will be focusing on managing costs a lot more carefully as we navigate through a tougher environment. So, that’s what I would point to. We are continuing to focus on pricing. We are continuing to focus on managing the cost side of it. As Kieran mentioned earlier, material cost is still an issue. We are seeing some increases in labor costs. But so far, in terms of managing that equation, we have been able to do that fairly well. And I expect that we will do the same in 2023. The other area that we will be watching carefully is how the currency movements are happening. That impacted us pretty significantly negatively in 2022. So, we will keep an eye on that as well.
Hendi Susanto: Okay. And then Ashish any insight on CapEx, I think CapEx is €“ CapEx was like below your business model in 2022. And I am wondering what 2023 may look like?
