David Reeder: Yeah, maybe I’ll take that one. Look, we’ll guide one quarter at a time as you know. But with respect to catalysts what are we looking for? Obviously, there’s a little bit of macroeconomic uncertainty in the market just in general. That’s across all end markets. There’s two wars that are ongoing. And so I think just broadly speaking kind of general business environment is one of a little caution. With respect to smart mobile devices specifically, I think the positive takeaway from the industry in general as well as from our customers is that it does not look like inventory is growing any longer. It looks like pretty consistently inventory is coming down. I think we sit around the table and we think about the fact that we wish the rate and pace of that decline of inventory was a little bit faster.
But I do think there’s kind of broad acknowledgment that that inventory is finally starting to decrease. And so that’s quite positive. I think when we think about longer term, we think about things like what are handsets going to do on a year-over-year basis. You’ve seen a couple of years in a row now where handsets have been challenged. I’m just talking global units. And so, will next year be a year in which handsets are flat handsets are up or handsets are down again? I think that will inform us in a pretty meaningful way, the rate and pace of that inventory reduction, which is what we’re all watching in particular for this segment.
Niels Anderskouv: Maybe the only thing, I would add is that we are pleased with our exposure to the premium handsets. And we believe that’s a good position to be in, as we move forward in the…
Thomas Caulfield: Yes. And last thing just to pile on, is part of this global economy, is seeing a revival in China where the spend in the world will be proportional to how fast China could come back and start to have handsets and other consumer devices. Next question, operator.
Operator: Thank you. One moment for our next question. Our next question comes from Joe Moore from Morgan Stanley. Please go ahead.
Q – Joe Moore: Great. Thank you. I wonder, if you could address, we see very significant spending in China on these trailing edge nodes. What do you think is the impact of that on your business, if any? And how do you kind of think about reshoring prospects both in China and from the US kind of looking at that incremental capacity coming online?
Thomas Caulfield: Look, I think for GF, we were never going to be the kind of the me-too supplier. We need to innovate and provide solutions to end markets that are very unique and specific and that customers value it for their solutions. Having a checkbook, and adding capacity and even knowing how to run the capacity, is the table stakes to be a good foundry, but a lot of it is about the innovation you put in whether it’s the different device types, the PDK, the standard cells, the libraries the unique features and IP you build around that. And as long as GF continues to innovate, as long as GF continues to create these solutions, capacity that’s built for more generic type of applications doesn’t conflict with what we’re doing.
And so for us, our goal and our game is to continue to innovate making sure, we start with a very crisp understanding of end markets and particular applications and device types in these end markets, understand where differentiation really matters and make sure we accelerate our time to market for our customers and make sure the capacity we’re putting on, and the capacity we have is going to be fully utilized because we’ve created value for our customers.
David Reeder: Would you have a follow-up, Joe?
Q – Joe Moore: Yes. Sure. Thank you for that. That’s very helpful. How are you seeing the prospects with the sort of smartphone-oriented customers? I feel like, you won a lot of that business four five years ago when you were more of a price leader obviously, you’ve differentiated a lot on the process technology. And there’s a lot of focus on kind of strategic developments in autos and industrial and markets like that. But are those smartphone customers, are you able to kind of build this partnership culture with them and kind of potentially build more durable pricing and business models around that part of your business going forward as well?
Thomas Caulfield: Yes. I wouldn’t say, we won the business because we’re price leaders back in the day. I think there was a differentiation there, and maybe we could have done a better job capturing that bag. I’ll give you a perfect example, Joe. We announced on GTS earlier this year, our 9SW solution, which is the follow-on 8SW. This is a natural extension for front-end module technology. It gives 20% better fixed switching performance, lower power, and smaller area. And that same list of customers that leverage our technology in the front-end modules are lining up behind this technology to lead them to the next generation of 5G wireless solutions. I think you’ll start to see a shift into GF’s millimeter wave solution as well into these handsets.
Just by way of example some of our 55 BCD technology finding new applications in these smartphones. So, I would say that the smart mobile device market very important for GF. It has high volumes. Differentiation matters there because of size and power performance. And they continue to pick and choose the applications again where we have differentiation and our customers choosing us to go win in the marketplace with that.
Niels Anderskouv: I’ll just add 9SW that we announced like Tom said at GTS we’re very pleased with the introduction of that technology the performance we’re getting the performance our customers are getting and the way they’re ramping at it. And 55 BCD continues to be a really, really strong process for audio smart power haptics in the phones, so also very pleased on that front. So, as you see 20% more performance, lower power levels, and also smaller dia area on 9SW, we’re pleased with how that’s rolling out.
David Reeder: Yes, I think the last thing I would add just to build the final piece on there is you have seen us shift where we play in that market. We have very clearly shifted from playing across kind of the lower tier of that market and even the low end of the medium tier of that market. And you’ve seen us focus over the last, let’s call it four years 2020 through 2023, you’ve really seen us focus much, much more on that premium tier. And you’ve correspondingly seeing the ASPs go up or increase in a pretty significant way across — or across that timeline along those years. So, much more of a focus towards the premium. Next question operator.
Operator: Thank you. Our next question comes from Chris Danely from Citigroup. Please go ahead.
Chris Danely: Hey thanks. Just another question on the renegotiation of these LTSAs et cetera for next year. Has anyone tried to renegotiate on price? Or has it just been pure volume? And is it more a push out from like the first half of 2024 into the second half of 2024? Or is anybody pushing anything out into 2025? And then as a result of this your inventories has gone up this year. What can we think about the implications to utilization rates? And how would be your inventory plans coming into next year?
