Timothy Arcuri: Yeah. I mean, I got, it was up, definitely. But I guess just my follow-up on that is, what’s the advantage? If I’m that customer and if your lead times are well inside of that, what’s the advantage if I’m a Chinese customer to booking something that’s going to sit in your backlog but partly on 12 months? I mean, unless I’m worried about export control and maybe, I think, because I have something I’ve given you a down payment that entitles me to get the tool, like is that part of it? I still don’t know why I would park something like way, way beyond your lead times?
Bren Higgins: Well, if you’re a new customer and you have new relationships with us, the demonstration of credibility in terms of, hey, we want this, we want to engage. We want you to put resources in place to support the fab and that takes some time to do so. And then in a lot of cases, that also comes with deposits for a portion of the orders. So I think it comes down to — you don’t want — if you’re one of those customers you want to ensure that when your fab opens, that this isn’t a bottleneck or an obstacle to your ramp in your plant. And in a lot of cases, if they’re newer customers to us, these aren’t or I wouldn’t say that the customers you know are booking orders that far in advance. But there are certain customers that want to make sure that we’re prepared to support their plans. And so they give us orders to ensure that they’re credible on those plans.
Timothy Arcuri: Well, that’s a ton of — ton of customers that we actually never heard of before. Okay, Bren. Thanks.
Operator: Our next question will come from Toshiya Hari with Goldman Sachs.
Toshiya Hari: Hi. Thank you so much for taking the question. I have two as well. The first one is on High-NA. There seems to be a bit of a disconnect among some of your customers in terms of, I guess, their appetite to take tools and to develop using those tools. Curious how you’re thinking about potential insertion of High-NA over the medium to long term and how should we think about the positive impact to your business from an intensity standpoint?
Richard Wallace: Our views haven’t really changed in terms of the timing for High-NA. We’re encouraged to see the shipments of the tools that were well publicized. And I think that’s great. It is going to take a while of course, as with any new technology to get those up and into production. So really haven’t changed in terms of our view of when that turns into pilot and then when it turns to the high volume. But one thing that’s clear is the increased adoption of EUV is good for KLA and the broadening of it, as we see it being more applicable to memory also creates more opportunities, not only just in the reticle space, but because we’re now dealing with the deep activity challenges are greater as they start printing smaller features.
It drives both the number and intensity of the tools that we need but also how they’re run. So you need to run, for example, a BBP tool at a higher sensitivity, which, as you know, requires — we keep adding capability, but it does require more capacity to cover the same amount of silicon to support that. So it’s a very good transfer for process control and one that we’re encouraged by. But from our standpoint, no change, which I guess is really good news because if we look back at EUV, it did delay several times. High-NA seems to be on track with the schedule that has been out there for some time now.
Toshiya Hari: That’s very helpful. Thank you. And then as my follow-up, maybe one for Bren. Just on the display business, so 1.5% of revenue last year. I’m curious, if you could speak to the profitability of that business. I mean, to the extent you do end up, say, selling the business, how should we think about accretion to gross margins and bottom line earnings? Thank you.
Bren Higgins: Yeah, profitability is less than 1.5 – 1.5% of KLA. So it’s 1.5% of revenue, the profitability is less than 1.5% of KLA’s profitability.
Toshiya Hari: Okay. I figure that much, but thank you.
Operator: [Operator Instructions] All right. And we have no further questions in the queue. So I’ll turn the floor back over to Kevin Kessel for any additional or closing remarks.
Kevin Kessel: Thank you, Chelsea, and thank you again, everyone for your time. We know it’s a busy day of earnings, a busy week. We appreciate it. We’ll be in touch with sure all of you over the coming days, 10 weeks. And with that, back to you, Chelsea to provide any final instructions. Thank you.
Operator: This concludes the KLA Corporation December quarter 2023 earnings call and webcast. Please disconnect your line at this time and have a wonderful day.
