Joe Quatrochi: That’s helpful. And then just as a follow-up, I know you’re going to — you’ll file your 10-Q probably tomorrow, but any color on where the RPO stood exiting in the quarter?
Bren Higgins: Yeah. And so RPO was down about $200 million. I expected you to ask that question, Joe. So yeah, $200 million quarter-to-quarter and with about 50%. So that takes you to about $10.6 billion, 45% to 50% of it to ship beyond 12 months. And then within that, we have about just short of $800 million in customer deposits.
Operator: Thank you. Our next question comes from CJ Muse with Cantor Fitzgerald.
CJ Muse: Yeah. Good afternoon. Thanks for taking the question. I guess first question, can you speak to domestic China? And I guess to what degree ’23 was helped by bare wafer and reticle inspection and your thoughts on how that progresses in ’24? And I guess with the mix shift to perhaps maybe incrementally more DRAM. And I don’t know in terms of the really core legacy, some shifts there, how you’re seeing your kind of implied market share ’24 versus ’23?
Bren Higgins: So for China, CJ, I think overall, for China, it looks pretty flattish year-to-year. We did benefit from the infrastructure investment that I talked a lot about over the course of the last year or so. I would expect that part of the business to come down some as some of the digestion is happening more so on the wafer side than the reticle side. And so that obviously will get made up by what I would expect to be slightly higher foundry. I think the memory piece will shift to potentially ship to another customer. So I could see that being flattish overall. So we feel pretty good about the trajectory of China. There is some lumpiness given our ASPs. But I think through the year, it will be relatively consistent across the quarters, notwithstanding the timing of certain fab projects and construction schedules complete and so on.
And then I think we’ll start to see the percent come down as we move into the second half as you see other customers drive our expected growth as we move through the second half of the year. What was the second part of the question?
CJ Muse: No. You covered it. I guess for my follow-up, as you think about kind of second half stronger than first half, how would you kind of rank order leading edge foundry logic versus DRAM in terms of the key drivers for you?
Bren Higgins: I think leading edge will be — we’ll see some growth in the year. It will be, I think, a fairly modest growth as we continue through the year. I would say, I’m just kind of looking quickly here, I would say that it is reasonably balanced across the year. So I would think that we’ll see — I would expect to see DRAM probably be — actually, I think it’s going to be pretty balanced as well from a leading edge DRAM point of view. So I think it’s pretty balanced on both fronts. And then just ticking up a little bit as you move into the second half.
CJ Muse: Thank you.
Operator: Our next question will come from Krish Sankar with TD Cowen.
Krish Sankar: Yeah. Hi. Thanks for taking the question. I have two of them too. One is, I was just kind of curious Rick, if you can kind of give color how to think about China revenues this year ex EPC?
Richard Wallace: Well, Bren just covered that, but in the last question, but essentially flattish. I mean that’s the general view for China this year. Flattish a little less infrastructure than we saw, especially and wafer vertical continues to remain basically level at this current run rate.
Krish Sankar: Got it. And then just as a quick follow-up. If I look at kind of like value optical inspection and you said that revenue should start improving over time. Where is the lead times today for them today versus, let’s say, three months or six months ago and where do you expect them to go over the next few months?
Bren Higgins: Yeah. I’ll start on that. On optical inspection, so we’re still constrained on Gen 4 in terms of demand relative to our supply. I would expect to see supply increase this year. And that’s part of our business, I would expect to do better than overall market as we move into ’24. We have, right now, I think we’ve seen some normalization around Gen 5 lead times, which tend to be somewhere between seven months and nine months. But Gen 4 is still out over a year or so, but new capacity coming online. I think not enough for what we expect over the next year to 1.5 years. But then we have another tranche of capacity that will come online as we move into the ’26 time frame. So we feel pretty good about what we have in terms of overall capacity, both within the – within KLA and our facilities, but also within our supply chain to support the growth that we expect as we move into ‘25 with more meaningful WFE growth.
And then as we target 2026 financial plan that we laid out back at our Investor Day in ‘22.
Krish Sankar: Thank you very much.
Operator: Our next question will come from Brian Chin with Stifel.
Brian Chin: Good afternoon. Thanks. I want to ask a few questions. Maybe just mix someone might have asked this earlier in the queue. But taking your WFE sort of outlook for flat to modest based on your ’23 base level, flat to modest growth this year, relative to sort of the pickup and maybe your revenue and WFE being sort of in the second half but kind of modest, right? You probably would need to see an acceleration in the back quarters of the year in order to kind of get to say even towards the mid — the low to mid-single digit kind of growth that you’re talking about for WFE at the moment. So I’m kind of curious, do you see Process Control intensity type of profile of spending this year sort of neutral in terms of WFE, you think intensity is higher or lower, relative to, again, that profile of spending this year? And then how does that reflect in your revenue?
