Tim Archer: Yes. I think that it’s still a little bit out in the future, I mean, you could go look at our customers’ road maps and what they’ve said publicly, and I think that’s probably the best way to put timing on it. I think what we’re trying to highlight is the fact that our — if you think about the challenges across almost every device, we’re becoming more and more convinced that the technology solutions to those challenges involve vertical scaling, they move to 3D and you’re seeing that backside power, advanced packaging, gate all around. These are — it is something that is playing extremely well to our strengths in etch and deposition. And so timing is hard to predict, but the certain — relative certainty of those changes happening is quite high.
Unidentified Analyst: Got it. And a quick follow-up for Doug. What should we think of a normalized or normal deferred revenue level?
Doug Bettinger: Yes. Mehdi, in the past I’ve suggested maybe something around $1 billion is a normalized level and we’re somewhat elevated from that. the longer we remain elevated, maybe the normalized level picks up a little bit, but I’ll leave that statement, what I said, maybe roughly $1 billion.
Unidentified Analyst: Okay. Thank you.
Operator: Thank you. And our next question today comes from [Chris Caso] (ph) with Wolfe Research.
Unidentified Analyst: Yes. Thank you. Good evening. This question is about where your lead times delivery times are now and generally your ability to react when demand ultimately returns. You made some comments before that your customers you think would need to see some significant improvement before they started spending. Does this mean they have some — a little bit of luxury of time to see things get a bit better before they start calling you and increasing orders.
Tim Archer: Yes. I think that if we were to go back and talk about lead times compared to pre-COVID, I would say that generally still extended, but for a variety of reasons. I mean I talked about the investments we’ve made in our supply chain and our manufacturing facilities. A lot of that has to be more responsive, but I think we will be able to respond when realistically when demand starts to come back. Now in certain areas, it’s a little tighter than others. And I think that’s where, again, we still continue to work very closely with our customers to make sure we have good forecast as we talked about. High bandwidth memory has been an area that I think has been in tighter supply. And the good thing about the investments we made in our global operations is that in certain cases, we’re able to respond a little bit more quickly than customers have urgent needs.
Unidentified Analyst: Got it. Thank you. As a follow-up. If you give a little more clarity on the extra week you’re expecting, I think it’s in the March quarter, both on — do you expect a revenue impact from that extra week? And what do you expect the cost impact to be?
Doug Bettinger: Yes. Usually, you don’t really see much of a revenue impact, frankly. You kind of manage based on what customer wants when. But I know for sure, with an extra week, 14 weeks instead of 13, you got more salary expense, you’ve got more time to use project materials and whatnot. I don’t know. I didn’t give you a specific number, but I think it’s pretty well chronicled about there. When people have a quarter coming in like this, how much spending grows just because of it. I’m not going to put a number on it, but just think about 14 versus 13.
Unidentified Analyst: Got it. We can do the math. Thank you.
Tina Correia: Operator, we have time for one more question, please.
Operator: Yes. Our final question will be from Sidney Ho with Deutsche Bank. Please go ahead.
Sidney Ho: Thanks for squeezing me in. In the past, you guys talked about memory spending recovery will go in several phases from increasing utilization to tech upgrades and then capacity expansion. One of the memory customers talk about converting some of this excess capacity to address the advanced note. Are you seeing that dynamics happening across other memory suppliers? And how does that change your view in terms of the timing of capacity expansion?
Doug Bettinger: Sidney, you were breaking up a little bit. I think you were asking about the cadence of when utilization comes back, what we think will happen, I think that was your question. And I think what I would tell you, first, spares comes back. Second, you’ll see upgrades, and upgrades will have to happen obviously, some of the customer base has taken some things offline. So there’s a spend that needs to occur to get that back online and up to speed and then eventually new equipment gets purchased. That hasn’t changed.
Sidney Ho: Okay. So my question was more about some of your customers actually trying to convert some of the excess capacity to address the advanced notes, meaning that it seems like the timeline is compressed. Are you seeing all the memory suppliers doing that?
Doug Bettinger: We don’t talk about any one customer or another, but that will show up in that upgrades commentary that I was talking about, the stuff that gets taken offline eventually needs to get upgraded. That’s the upgrade spend in CSBG.
Sidney Ho: Okay. That’s it. Maybe last question for you. Given your position in gate-all-around, has your timeline changed at all in terms of when do you expect to see gate-all-around related revenue as compared to three months ago? Maybe just remind us when that is going to happen? And what are the leading indicators you watching to gauge that timeline. Thanks.
Tim Archer: Well, yes, it’s — I don’t know that our timing on gate-all-around around has changed much from three months ago. I think that, again, it’s a means of scaling device performance and device performance is something is important to our customers and their [indiscernible]. So we’re just engaged with customers to make sure our tools get qualified into those new nodes and when they decide to ramp them, then we’ll be ready as well.
Sidney Ho: Okay. Thank you.
Tim Archer: Thanks, Sidney.
Operator: Thank you. And this concludes our question-and-answer session. I’d like to turn it back over to the management team for closing remarks.
Tina Correia: Thank you, operator, and we appreciate everyone for joining. Thank you for your time today.
Operator: Thank you. This concludes today’s conference call. We thank you all for attending today’s presentation. You may now disconnect your lines, and have a wonderful day.
