David Williams: Okay. Thanks. And how about — any thoughts on the — what level of undershipment relative to demand?
David Heinzmann: Yes, that’s — it’s a complex equation on that. And it really comes down to looking at what the inventory burn is every month. And then the harder one to get a handle on is the piece that lower POS at our distribution partners. So I wish I could give you a bit crisper answer on that. It’s a challenging one to kind of put our arms around at this point because we — while we can tell you exactly what it is on the inventory burn at our distribution partners, we can’t get that pure visibility at the OEM customer or EMS customers. So it’s a little more challenging to give you great visibility on that. And it’s hard for us to have fantastic visibility as well.
David Williams: That’s fair. Thanks for the color there. And then just lastly here. I think last quarter, you had pointed to maybe the semi inventory being cleaned up coming out of the fourth quarter. But it seems like now maybe it’s more of a demand issue. And if you’re looking across that, is that still kind of a fair way to think about it that it’s demand driven as inventory is clean? Or is there still some excess you’re thinking up and maybe a little softer in demand? Thank you.
David Heinzmann: Yes. Within the semiconductor piece of our business, we have two pieces. We have our protection semiconductor business, which behaves a lot more like our passes and there’s still some excess inventory in the channels to work our way through. On the power semiconductor side of things, we really were talking probably more about backlog at our sites as opposed to excess inventory because there has not been a lot of excess inventory on the power semiconductor side of things. We have cleaned up a lot of that backlog, and we’re back to more normal sorts of lead times on the power semiconductor side, which itself brings down then our shipping levels. And then in addition to that, we would see that there is softness in the industrial markets.
We’re seeing that with a kind of broad-based industrial side of things there, where we’re seeing that softness. We’re not alone in that. I think a lot of our peers are seeing that as well right now. And that’s — think about things of industrial automation in areas like that, where they’re seeing some of that slowness at this point in time. So we’ve got both the lack of backlog cleanup to drive as well as a little slower demand there, but not so much an inventory overhang in that side.
David Williams: Great. Thanks so much for the color. Appreciate it.
David Heinzmann: Thanks for your questions, David.
Operator: Your next question is a follow-up from the line of Christopher Glynn from Oppenheimer. Your line is open.
Christopher Glynn: Yes, thanks. I just wanted to ask about a comment you made about HVAC signs on the bottom there. I think that’s primarily the Hartland acquisition, but are the signs — what is that? Is that like a much more pressured 1Q than you expected? So almost by default, it’s the bottom? Or what’s kind of the contour behind that comment?
David Heinzmann: Yes. I think the comments behind that are really — and they’re primarily driven out of the view of residential HVAC space, which is a heavier piece of the Hartland Controls business, where, as you’re aware, the inventory of our HVAC customers’ inventory in the channel with their distribution, things like that has been pretty elevated, which has certainly dampened demand on that. It feels like signals we’re getting from some of our customers that they’re beginning to clean up some of that inventory. And so there’s a bit of view of positive trend on inventory — or on demand orders on us from that side. It’s not snapping back. That’s not what I’m talking about, but it feels like it’s kind of found the bottom a little bit there.
Christopher Glynn: Okay. And then wondering if you put any more color on the electronics book-to-bill being greater than one? Was it materially so? And are the bookings kind of projecting normal lead times as opposed to the different behaviors in ’21 and ’22?
David Heinzmann: Sure. Yes. Yes. Absolutely, they’re reflective of normal lead times. Our lead times are quite normal across our electronics business at this point in time. So they’re reflective of that. And when we talk about the book-to-bill being above one, that’s specific to the passive part of the business. The power semi business is below one. But the passive side of it, yes, it’s about 1.1, which is actually a pretty nice step. So it’s — and again first time we’ve seen a positive book-to-bill there in seven quarters. So we find — we look at that as a signal that the bottom has been found and we’re about to get to the end of the inventory burn. And we really are starting to see more short cycle orders, which is also another sign for us when you get short-cycle orders coming in.
Christopher Glynn: Great. Thank you, Dave.
David Heinzmann: Sure. Thanks for your follow-up, Chris.
Operator: That concludes our question-and-answer session. I will now turn the call back over to David Kelley for some final closing remarks.
David Kelley: Thanks, everyone. We look forward to also speaking with you at the May 6th, Oppenheimer Virtual Industrials Growth Conference. The June 4th Stifel Cross Sector Insight Conference in Boston and also the June 5th Baird Global Consumer Technology and Services Conference in New York. Have a wonderful day. Thank you.
Operator: This concludes today’s conference call. Thank you for your participation. You may now disconnect.
