Charles Shi: Maybe a quick follow-up, Greg. I know that’s a complex subject, how should we think about what’s normality? Is there anything quantitatively, you can point out?
Greg Swyt: No. I think Charles that’s a bit more complex. We have a very complex model that we look at and use various things to look at demand and historical activities. So there isn’t a normal number that we could point to, but as we manage that inventory and we start turning it, then we should see the reserves come back to what we would expect to be normal, not some predetermined amount, but what we expected to be from ongoing run rate standpoint. Not sure I answered that, but, it is a complex model, and there isn’t really a normal number that we could point you to.
Charles Shi: Thanks, Greg. That’s all my questions.
Operator: Next question, Craig EllisB. RileySecurities. Please go ahead.
Craig Ellis: Yeah. Thanks for taking the questions, guys. I’ll just follow-up on, a little bit of Charles’ line of inquiry. Can you help us understand the relative magnitude of the mix and the inventory reserve items that impacted the calendar third quarter’s gross margin and somewhat relatedly. Am I interpreting your comments correctly, Greg, in inferring that reserving issue should exhaust itself by the end of the fourth quarter, could some of carry into, calendar 2024?
Greg Swyt: So, hi, Craig. The excursion we saw you know, from what we had guided to about half of the miss was tied to the to the inventory reserve that we took and then the rest of it is really product mix and some other, some minor changes in the factory, but half of the miss that we guided to was driven by the reserves and as I said earlier, we don’t expect it to be at that same levelof reserve in Q4. So we do expect it to pop back, as we manage through that bubble of the inventory.
Jeff Andreson: Yeah and I think, hey, Craig, its Jeff, just to follow on. I think that’s why we offered some color on even in a similar quarter in Q1 that we think we would be back to that flow through at 25%. So in Q1, it should more normalize. I should say it’s never. It always has some flexibility or variability in it, but, I think we can get back and if you do the flow through based on Q2, you’ll see it be kind of in the low fifteen again.
Craig Ellis: Got it. That’s really helpful, and I’ve missed that comment on one queue. So thanks for clarifying that Jeff and then, Jeff, I wanted to follow-up, on a comment that you made, in the early part of the Q&A when you talked about some share gain potential, that you had coming into the model. That would be beneficial in calendar 2024. Can you talk a little bit more about that? Then, you know, when do we expect it to start?How material could it be through the year, etc?
Jeff Andreson: Yeah. If you look into 2024, it’s I I’d say it’s difficult to size, but it’s, like, I’ll size it in the tens of millions, and it kind of in a full run rate. There’s a couple of things that I can point to, obviously, we’ve been working to add machine content. We’re getting it qualified, but between our inventories and other in the channel, we have to work through that before they go in, but I think you’ll start to see some of that margin accretion, which is why we talked about the 25% flow through going into Q1. We get a full year of the silicon carbide gas delivery systems that we’re delivering to our, initial customer in that space that are going to, actually, you get the full year where, in fact, we had about half a year.So it’s going to more than double, and you’ll start to see that runway kind of increase a little bit and those are some areas where seeing some new wins in weldments, but we’re still working off some of the inventory in the channel.
Craig Ellis: Nice to see that.Thanks so much.
Operator: Next question, Krish Sankar, TD Cowen.
