Ruben Roy: Jim, you said you like to talk about Avant. So I was going to ask another question on Avant and specifically around the pipeline and your comment on the pipeline at this point being significantly larger than kind of the same time line for Nexus. And the question is, I think, if I remember correctly, the initial Avant SKU was — had a feature set, I guess, that was targeted towards Edge processing and potentially Edge AI. Is that sort of the area, where you’re seeing most of the design activity? Or at this point, has that broadened for whatever reason, if it has, if you could maybe talk about that a bit?
James Anderson: Yes, thanks, Ruben. I’ll never get tired of talking about Avant. So no problem with asking another question on Avant. Yes, so as I said, we are seeing really good growth of the pipeline. And actually, Edge AI applications are some of the initial growth that we’ve seen in the pipeline and where we expect some of the initial revenue to come from in the initial ramp. And that actually has more to do with the sequence of the products coming out. When we launched the Avant platform about a year ago, the first device family that we launched along with the platform was the Avant-E and E actually stands for Edge. And the Avant-E was actually optimized more around Edge applications, things like doing artificial intelligence or inference processing at the Edge in lots of different applications, industrial applications, automotive applications, other applications as well.
And so because that was the first product family that we launched and the first samples that we delivered to customers, that will be the first product that begins to deliver revenue. And so that’s where — and because that product is more optimized around Edge applications, Edge AI in general, that’s where the kind of initial design win pipeline started to build, and that’s where the first revenue streams will — we expect to start to generate. Now the follow-on device families of Avant-G and X, we’re very excited about those products as well. And as I shared earlier, we’ll launch those at the developers conference in December. Now those will address a range of other applications that we’re excited about, too. And we’ll certainly talk more about that at the developers conference in December.
And so stay tuned. Well, you’ll hear more about that in December.
Ruben Roy: Got it. Great. Okay. So if I could ask a quick follow-up. I don’t think you’ve talked about client-side PCs. I don’t think you mentioned it this quarter or maybe not last. Maybe you can give us an update, especially with some new processor SKUs coming out and some excitement around potentially AI-centric notebook computers being done. Is there an opportunity for you folks with either content gains? Or are you seeing any design activity around that front at this point? Or is it too early?
James Anderson: Yes. In fact, thank you for asking that. Happy to touch on that. Yes, in client, we continue to view client as a large, a very large system TAM opportunity for us. And we’ve announced a number of customers that we’re already engaged with. In the past, we had announced that Lattice devices and software are used on Lenovo ThinkPad devices, LG Gram Series, ASUS. But there are other client OEMs that we’re working with as well. It’s a little too early to talk about those publicly, but we’re really excited about those engagements. And we’ll definitely share more about that as those get launched and enter production. But yes, Lattice devices, great, are a great solution for doing Edge AI applications in client devices.
In particular, we can help drive battery savings. We can help improve security of the system, a number of different applications that we’re getting designed into. And yes, we continue to see this as a good growth area for the company, and we’ll share additional OEM engagements and design wins as those come closer to production.
Operator: [Operator Instructions]. Our next question comes from the line of Quinn Bolton with Needham.
Nathaniel Bolton: First for Sherri and then an Avant question for Jim. Sherri, on the gross margin as revenue pulls back, is there any sort of significant under-absorption or operations costs that could start to be a factor for gross margin? And then second, looks like at the Analyst Day, or sorry, Investor Day, you set a target for OpEx to be 30% of sales. At the midpoint of guidance in December, it looks like OpEx is going to be about 33% of sales. Is there an upper threshold where you would start to cut absolute OpEx? Or could you see OpEx moving into the mid-30s for a period of time as you invest in the long-term business?
Sherri Luther: Yes, thanks, Quinn. So from a gross margin perspective, the way I would look at it is we’ve contemplated all of those things into the guide for Q4. So 70.5% plus or minus 1%. Now the gross margin expansion strategy that we’ve been executing on now for 5 years or in its fifth year, there are multiple factors there that we’ve talked about in the past that have enabled us to really get value for our products. And some of those do include product cost efficiencies. Jim talked about the software attach, new products mix. There are so many various factors that are built into our gross margin expansion strategy that those are all fully contemplated as part of the guide that we provided for Q4. And again, we believe our gross margin is durable and will continue to drive toward the long-term target model that we put out at our Investor Day earlier this year.
From an OpEx perspective, the 30%, it’s a long-term model, right? That’s our target. And within that, we talked about the R&D, 18% to 20% and SG&A 10% to 12%. So in terms of an upper limit on our OpEx, the way that I would answer that is that we continue to focus on making sure that we’re making the right investments for the company, for the long-term growth of the company. We want to do it in a disciplined way, and we’ll continue to manage the business in that way. We’ve made a ton of progress in terms of all the investments we’ve made with the products that we’ve launched to date. And we want to continue that focus because that’s the long-term growth of the company. And so you can see fluctuations on a quarterly basis, as I mentioned before, from an OpEx perspective, but will still drive toward our target model that we put out at our Investor Day.
