Atif Malik: Great. And then a quick clarification, Doug, on the OpEx. You said R&D will be up year-over-year. I wasn’t sure if that implies total OpEx is also up or SG&A is down to offset the increase in R&D?
Douglas Bettinger: Total OpEx is probably going to be up Atif, R&D will be up more, right? We had 69% of total spending in R&D in the last quarter. That’s a high watermark. But we’re purposefully growing R&D., primarily because of all those inflections that we’ve been talking about.
Timothy Archer: I think the maybe the easiest way to think about it is the lead time for us to develop new products that we need to drive growth is unfortunately a little bit longer than the lead time for our spending revenue. So with an outlook that growth is coming and that we’re entering this next upturn, where there are tremendous opportunities for the company, we feel very confident to invest ahead of that revenue showing up, and that’s I think what we signaled through this year. But with the confidence that we’re going to see that growth in new products and technology investment from our customers.
Operator: The next question is from Toshiya Hari with Goldman Sachs.
Toshiya Hari: The first one on WFE. Doug, I — forget if you mentioned this, but is there a first half, second half sort of bias that you’re willing to share as we think about the trajectory of WFE this year? And more importantly, curious how we should be thinking about your rate of outperformance vis-a-vis the market? You guys have talked about obviously, depth and etch intensity growing across the memory space. You talked about advanced packaging in HBM. HBM things like dry resist. So assuming you’re accurate with your WFE assumption and the market’s up call it, mid- to high singles. What sort of outperformance can we sort of expect from you guys in calendar ’24?
Douglas Bettinger: Yes. Toshiya, I guess the first — I think it’s a little bit second half weighted year this year. I think it’s going to be sort of the slow start to the year, maybe, right? We just guided to essentially flat revenues quarter-on-quarter. So that’s part of what you’re seeing, but we would expect it will be somewhat stronger in the second half. And then overall, we’re not going to give you the individual components between NAND, DRAM, Foundry and Logic, what grows more. I think everything probably grows to a certain extent. When we look at all these inflections so in all aspects of those end markets, we see etch and deposition intensity stepping up as you walk from node to node to node. So that is unchanged.
Toshiya Hari: Got it. And then as my follow-up on China, Doug, you mentioned China as a percentage of your systems revenue to stay elevated in the March quarter. And then you went on to say that, that number should decline as you progress through the year. Is that just purely a function of your other businesses, other regions improving throughout the year? Or are you sort of sensing absolute decline in your China business? And if so, what are some of the areas or device types or applications you’re seeing a slowdown?
Douglas Bettinger: We are not seeing China slowdown. It’s purely just timing of when spending is occurring, honestly. Toshiya, we’ve preferably been using the word, and I think you heard it in both Tim and my comments stable, right? So that’s a consistent description that we have been saying for a while.
Operator: The next question is from C.J. Muse with Cantor.
Christopher Muse: I guess I was hoping you could speak to kind of your vision for what a recovery might look like for NAND and where we might get to on a normalized basis, perhaps in 2025? And then — and if you reflect on perhaps a lower normalized number and think about some of the new areas that you’re investing in, whether it’s memory or advanced packaging or changes in backside power gate-all-around. Is there enough kind of juice there to get you to where you can overall drive that rich WFE intensity and get us back to kind of those peak levels when 3D NAND was first adopted?
Timothy Archer: Sure, C.J. I think the simple answer is, yes, we do believe that. I mean, we’ve — let me address the NAND question first, which — as I mentioned, this year, customers are primarily focusing on technology upgrades and what makes sense. I mean eventually, to drive the type of bit growth that we think we see longer term. Obviously, there are some additions that need to be made, but we’re not forecasting that this year. With each of those technology evolutions, etch and dep intensity rises simply because of the increasing number of layers. And in a technology upgrade, we’ve talked about the fact that Lam captures a much higher percentage of WFE because of the goal that etch and deposition play in the technology upgrade.
