But again, I think 2025, I think the confidence with us and with our customers is that’s going to be a pretty good growth year. So I would expect that some of that has to occur in the back half of our year to support the beginning of their years and their revenue. So I hope that kind of helps you kind of position where we kind of see our year going.
Charles Shi: Maybe the other question I have would be, I mean, between the two largest customers, I think that the prior person ahead of me asked about the Lam Research still carrying a good amount of inventory. Applied Materials, it looks like their inventory level seems to be relatively okay. Do you see a differential in terms of your revenue coming from Lam versus Applied that this year as your revenue to Applied are slightly better than them? The reason why I asked this is I really just want to figure out where the upside of your revenue from the two largest customers is more likely to come from which customers?
Jeff Andreson: Probably some stuff I can’t specifically answer at a customer level. But certainly, our two largest customers had different profiles. And I would say largely around where they were positioned primarily in the memory market. I mean, we do know our largest customer at a very, very high level of market share in the 3D NAND. That recovery is something when that comes back then you would actually probably see that side of our business accelerate faster than foundry logic. Having said that, foundry logic, we view and is remaining fairly strong into next year. We don’t see a massive drop-off in China shipments, and we’re not getting any of those signals from our customer base as well. So beyond that, I don’t want to get too specific around customer profiles.
Operator: Our next question comes from the line of Krish Sankar with TD Cowen & Company.
Robert Mertens: This is Robert Mertens on the line on behalf of Krish. I guess just the first one is, if you had any additional color on the expectations for the component business this year. I know inventory levels have seemed to be a headwind. But if you’ve seen any change over the last few months? And then on top of that, just sort of what the tailwinds from design win ramping would look like this year or if that’s more of a calendar ’25 story?
Jeff Andreson: Maybe the way I would answer the component side of our business is we’re seeing very similar outlooks quarter-over-quarter in the first half for machining. We would expect that starts to go. Weldments will probably run a little longer. They have, I think, a higher level of inventory in the value chain going forward. Our — kind of the totality of our components business, if you kind of went back to the ’21 timeframe, ’22, somewhere in there, probably ran somewhere between 20% and 25% of our business, maybe a little closer to 25%. It’s kind of running kind of mid to high single digits today. So that’s the gap in the mix that we need to recover and that will help us accelerate towards our ultimate goal, which is to get our gross margin up in around 20%.
But that probably will occur in 2025 as we kind of compound our new design wins and the gas panel 2.0, the recovery of our component mix. Now your other part of the question is how do we kind of size some of the wins we’ve already had. And I would probably just say it’s kind of tens of millions of dollars of wins, and we expect a pretty significant uptick of those. And it’s going to help us continue to drive our gross margin back to that 17% when we get kind of north of 225 by the fourth quarter.
Robert Mertens: And then maybe just one more. I know you talked through the next-gen gas panels. I just want to make sure I heard correctly that with those evaluation systems and shipments, you were thinking maybe a low single digit millions in the later half of this year and then the more material revenues should be next year. Did I hear that correct?
Jeff Andreson: You did hear that correct. I mean, anything — we’re qualified. And with success at customers, how fast they move if the market starts to accelerate, obviously, that number will improve, I would imagine.
Operator: Our next question is from David Duley with Steelhead Securities.
David Duley: I was wondering if you could elaborate just a little bit more on your silicon carbide opportunity. I think you have one customer now, and is there a possibility to sign up new customers in the next few quarters? And are there other opportunities for you guys outside of epi in silicon carbide.
Jeff Andreson: So the answer is yes. I think there’s still opportunity for us in the deposition side, call it, it might not be an epi like thing, but there are other companies out there doing other processes that we’ve had some initial discussions with very early stage. I think the bigger opportunity is around the implant side of the business. And those discussions are ongoing. I would say we’ve — in particular, we won a little bit of weldment business, pretty small, but it’s a foot in the door at one of the implant suppliers and we’re going to continue to drive that. And I think that’s kind of where we would probably see kind of an inflection point beyond our initial customer that’s doing the epi silicon carbide.
David Duley: Do you think you can win further epi customers because there’s like, I think, four or five of those guys?
Jeff Andreson: Well, I mean, I think there’s kind of three in total that we’re kind of looking at. And the answer is it’s probably — this year, if we start — we’re just starting the discussions late last year, we haven’t really done any evaluations or gotten deep enough. So it’s not out of the question, but it’s probably 2025 revenue driver versus 2024. 2024 would have to be similar to our new gas box stuff, it’s the beginning of the conversations of what we can do. And when we talk to our customers, they obviously see the breadth of what we can do as a company from gas panels, weldments, machining, and we can manage a lot of their supply chain. And I think that’s how we, in essence, quickly won the first application, which is now kind of multiple generations of tools moving forward with our initial customer.
David Duley: Now I guess the other question I had is — you talked about a second half ramp in your core business. Are your large OEM customers coming in and talking to you about getting ready for this ramp, or it’s just the typical — I’m just wondering if there’s a little bit more than rolling forecast behind the excitement about the second half?
Jeff Andreson: I would say it’s maybe less about the rolling forecast and more about the conversations we’re having in preparation of the growth that they see kind of coming out of Q4 and into 2025. So I think it’s a very consistent message out of our top four customers.
David Duley: So they’re telling you to get ready for a ramp in the back half.
Jeff Andreson: Yes.
Operator: We have reached the end of the question-and-answer session. I’d now like to turn the call back over to Jeff Andreson for closing comments.
Jeff Andreson: Thank you. As Charles kind of noted, today, we won an award from Applied Materials for a supplier excellence award in quality for 2023. This is quite an honor to be recognized by the company and the contributions we have made to our customer over the past year and looking forward to future years. So it’s always great to see these awards occur. I want to really thank everybody for joining us on this call this quarter. I’d like to thank our employees, our suppliers, our customers, our shareholders, for their ongoing dedication and support as we continue to navigate this highly dynamic business environment. We look forward to updating you again on our Q1 earnings call scheduled for early May. Operator, that concludes our call.
Operator: Thank you. This concludes our call for today. You may disconnect your lines at this time, and we thank you for your participation.
