Tim Arcuri: Yes. No, I guess I was just going to say, just to put like a fine point on it, whatever the TAM is, you’re saying that you’re going to outgrow the TAM this year?
Bertrand Loy: That’s right. And that’s what we’ve done. I mean that’s the reason why we have established that growth algorithm is we recognize that the industry is notoriously hard to predict. And our goal and our commitment is to outpace the industry by that 3 points to 6 points. And this year, we said that, that range is going to be 4 points to 5 points.
Operator: Our next question comes from Charles Shi with Needham.
Charles Shi: I just want to ask a little bit more on the industry-level CapEx expectation for this year. Maybe let me start with the observation of your numbers, first, because I did notice while MS does seem to be off the bottom, if I look at your pro forma numbers for the past 5 quarters. But MC, AMH, both is have a little bit more exposure to CapEx side, and they seem to take a little bit there in Q1. And I also noticed that you did going out fluid handling in one of the weakness areas, which I believe is probably more on the infrastructure side. So I get that you are expecting the full industry CapEx to be flat to modestly up, but between infrastructure and any equipment, do you have a little bit different view there between those two? Maybe infrastructure does sound like it may be temporarily under pressure in Q1, but I just want to get a little bit of sense on a full year basis. What do you see there?
Bertrand Loy: If I look at AMH specifically, where you have actually those 2 components, I mean we sell fluid handling components that go into the new fab construction projects, and then we sell FOUPs that are really more tied to 2 lens. So fluid handling has been actually relatively steady, and that’s really a function of all of the major new fabs construction projects that have been announced and have been — that we’ve witnessed around the world. The FOUP business, on the other hand, actually has contracted. I mean we had a very — still relatively robust demand for our FOUP early in 2023. I mean we came into 2023 with a fair amount of backlog for our FOUP products. That backlog has dissipated. So the FOUP business has been relatively slow and has not recovered.
And we expect actually that we have reached bottom in Q1 of this year, and we expect actually to see gradual recovery in that particular product line for the balance of the year. So again, a sharper decline in the product lines that are WFE-related and less of a decline for the products that are new fab construction dated?
Charles Shi: And what’s the outlook for the full year between infrastructure, CapEx and equipment? What do you see?
Bertrand Loy: So right now, we expect relatively steady infrastructure-related demand. And we expect to see some uptick in WFE-related demand in the back half of the year.
Operator: And our next question comes from Christopher Parkinson with Wolfe Research.
Harris Fein: This is Harris Fein on for Chris. So I mean we’ve seen a lot of grants for new fabs in the U.S. over the last few weeks. I guess, at what point during the construction process for those fabs wood customers start to come to you for FOUPs, filtration systems, things of that nature? And then I guess related to that, how are you feeling about Colorado Springs receiving funding? I guess, what could that look like?
Bertrand Loy: Yes. So let’s talk first about the shape of the opportunity when new fabs are being built. So typically, we start by selling fluid handling solutions. I mean those solutions are used in the sub-fab chemical loops. So we see those opportunities really early on when new fabs are being built. It’s then followed by the large gas purification systems that those advanced fabs will need. I mean all of those advanced fabs are using much greater volumes of processed gases requiring more advanced purities. So those systems are really key to achieve that. And then it will be the FOUP fleet, and the fleet is usually delivered at the time the tools are getting into the fabs, right? And then we’re going to start actually seeing demand for filters and chemistries when the fabs are gearing up for the ramp.
So that’s the way you should think about it, essentially 3 different waves of opportunities for us. When it comes to our investment in Colorado, we filed our application last year. We’ve been in constant dialogue — constructive dialogue with the CHIPS Program Office. We believe that this investment in Colorado is clearly in line with objectives of the administration, an objective that is not just to onshore advanced semiconductor manufacturing but also to make sure that the critical components of the ecosystem will be manufactured here in the U.S. And again, what our plans are for Rock Reman, which is the name of the site in Colorado, fits squarely that objective. So that’s probably as much as I can tell you. I would just say that obviously, the more incentives we can have and the sooner we can have access to those incentives, the easier it will be for us to accelerate our phase one and then potentially phase two if it’s to investment in Colorado.
Harris Fein: And for my follow-up, I know DRAM is not a huge part of your business today. There’s some talk around memory customers as they ramp HBM, maybe being a little bit more disciplined than they’ve been in the past, keeping some capacity off-line. But at the same time, die sizes are getting larger. Yields are becoming a little bit more of a challenge for them. I guess it would be good to hear your perspective on how you see that dynamic playing out.
Bertrand Loy: Yes. No, it’s a great question. So I mean, of course, we will benefit from the increase in wafer starts driven by increased demand for HBM. But an HBM chip is essentially a DDR5 chip. I mean the core memory cell is the same. And what it means is that we don’t have an additional wafer content opportunity with an HBM chip. We think that this is going to change because we know that all industry participants are now really very focused on improving the performance of the core memory cell. And to do that, they are turning to EUV. And they’re also considering adopting some 3D architectures in the overall DRAM architecture, all of which will open up a number of new opportunities for us in terms of photoresist filtration, in terms of EUV parts and then, of course, in terms of advanced materials and etching chemistry. So again, today, we are enjoying the increase in wafer starts. And in a few years from now, we will enjoy the increase in content per wafer in DRAM.
Operator: And we will take our last question from Chris Kapsch with Loop Capital Markets.
