Dave Reeder: Good morning.
Chris Caso: So the first question here is on CapEx for the year and you’ve given some indications of what you expected to share. It seems like it’s responding to some of the industry conditions. And it slows in the second half of the year. Can you talk about — is that more of a push out into 2024, it sounds like the customers still need the capacity. So what you’re not spending from the original plan in ’23 does that start to accelerate as you get into 2024?
Dave Reeder: Yes. So think about the rate and pace of our CapEx as really being aligned with the rate and pace of our customers’ needs, as well as the productivity that we’re actually able to drive. So we’re actually becoming more CapEx efficient. And so the way I would think about it is I would think about some of those CapEx is indeed a push out from €˜23 to ’24. And I would say there’s a portion of it. I’m going to round and use a really rough and tough number here and say kind of maybe 10% to as much as 20% of it where we’ve actually just become more capital efficient. And so those savings will be banked to the P&L. And again, as I kind of mentioned earlier on the call, we are still very much on track to delivering the capacity that we’ve been speaking about for some time and that’s 2.8 million wafers of capacity this year and then more than 3 million wafers of capacity in 2024.
We are still very much on track even with some reduced CapEx and some timing of CapEx being slightly delayed. We are very much on track towards those numbers. Did you have a follow-up, Chris?
Chris Caso: I do. And so with the answer there, it sounds like it’s similar wafer capacity at lower CapEx, which is obviously good. As you go forward, could you give us some more granularity on where you’re spending that CapEx? And there’s a lot of different businesses and a lot of these processes are not fungible. So give us a sense of where that capacity is being targeted to?
Dave Reeder: Sure. The single biggest portion of that CapEx is actually still going towards Singapore and the ramp in Singapore. That’s our new fab there on our existing campus. And so that’s the lion’s share of the CapEx. That said, we are continuing to invest in all the regions with additional CapEx, so we still have some additional CapEx going into Germany. To kind of complete that footprint. We still have some CapEx coming here into the U.S. As Tom mentioned, we do have some customers that are desiring some capacity on U.S. soil and so we’ll be making some of those investments as well.
Tom Caulfield: Yes, let me just add to that. You said some of this capacity is not fungible, some of the capital efficiency David is talking about is to make sure there’s more fungibility between our technology platforms and quarters, so that we can respond to demand where it is at any given time.
Chris Caso: Got it. Thank you.
Operator: Please standby for our next question. Our next question comes from Mehdi Hosseini with SIG. Your line is now open.
Mehdi Hosseini: Yes, thanks for taking my question. Going back to the ASP — wafer ASP. Can you help me understand how the mix is impacting? And how is that compared to ASP like-for-like? And I have a follow-up.
Dave Reeder: Sure. So from an ASP perspective, we’ve been not only mixing up our business amongst end markets or between end markets, but we’re also mixing up our business even within those specific end markets. And so when I look across our end market landscape, and I see our ASP sitting north of $3,000 of wafer in the fourth quarter. There’s within the segments that the single biggest differentiator with regards to ASP is how much GF technology do they use, as well as is it single source revenue business? And so when you look at those two factors, about two-thirds of our revenue in 2022, with single source revenue. In fact, fourth quarter was our highest quarter of single source revenue in 2022 and about 90% of our design wins in 20 22 are single source.
And so as we have customers increasingly being single sourced at GF, on GF technology that deep customer partnership where they’re using more of our technology in their products to help them win in their market. Then that obviously helps us with value capture. Did you have a follow-up, Mehdi?
Mehdi Hosseini: Yes. If I heard you correctly, although — will account for about three — I’m sorry $1 billion of revenue this year, right? Did I hear you correctly?
Dave Reeder: That’s correct. It’ll be approaching $1 billion of revenue in fiscal year 2023.
Mehdi Hosseini: Okay. So that’s like you’re almost 2 times to 3 times higher, compared to ’22? Is that the majority of that, is that driven by single source? Being single source foundry partner? Or is that the technology mix that is also impacting the 2 times to 3 times increase?
Dave Reeder: The majority of that business is single sourced at GF.
Mehdi Hosseini: Okay. Thank you.
Sam Franklin: Michelle, we’ll probably take one more question.
