Ganesh Moorthy: Thanks, Harlan.
Operator: Our next question comes from the line of Christopher Rolland with Susquehanna. Please proceed.
Matthew Myers: Hey, guys. This is Matt Myers on for Chris. I just wanted to circle back on your PSP for a second. I was curious because you guys have said in the past that your PSP is well over 50% of your backlog. I was just curious where that is now, and what the differences are between PSP versus non-PSP backlog?
Ganesh Moorthy: It remains well over 50% to this day.
Matthew Myers: Got it. That’s helpful. And then do you have any updates on utilizations and how they’ve changed in the quarter and kind of what your expectations are going ahead?
James Eric Bjornholt: So really, really no change. The manufacturing facilities are running hard. So we’ve been bringing in a lot of equipment and bringing that online. So no real change to report there.
Matthew Myers: All right. Thank you.
Stephen Sanghi: I mean utilization is essentially 100%, right?
Matthew Myers: Yes.
Stephen Sanghi: Every wafer we can move and every unit we can move to the factory, we’re moving it.
Matthew Myers: Great. Thank you.
Operator: Our next question comes from the line of Vijay Rakesh with Mizuho Securities. Please proceed.
Vijay Rakesh: Yes. Hi, guys. Good quarter and guide here. Just a quick question on the — on inventory levels. I was wondering if you could give some color on what look like at the customer side, if you were to look at the different segments, industrial or orders?
James Eric Bjornholt: We don’t really have that information to share. We just have anecdotal information from individual customer conversations, Vijay. So we don’t get any sort of reporting on inventory being held by any of the end customers. We get that through distribution, and we shared that in my prepared remarks, the distribution inventory was up 3days in the quarter. Outside of that, I don’t have anything else to say. I don’t know if Ganesh or Steve would add anything.
Ganesh Moorthy: The only thing I would say is that we don’t have a customer that is so large that their business or their inventory would change our business materially. You can take any of the customers and if they are public companies, you can do an analysis of what inventory they carry. And we do that, but we don’t know what the inventory is. And in many cases where we are shipping product that is from constrained corridors from legacy technologies that don’t have as much excess capacity. We don’t believe our inventories are what they’re carrying. But honestly, we don’t know and they don’t report the same way as our distribution channel partners report to us.
Vijay Rakesh: Got it. And then on the lead times, obviously, a good thing that they are coming in. But is that a function of broad industry supply improving? Or is it more a reflection of demand? Or how would you parse it? I guess, especially if we look at the different markets, right, every market may be different?
Ganesh Moorthy: Well, you need both sides of that equation, right? So our supply lines are improving. The fact that parts of the industry have slowed down, has opened up capacity incrementally to us. Our lead times are still long. And it’s really — there’s a tremendous amount of work we have to do over the next 6, 9, 12 months to one by one by one, get it back into a range. And we’re still expecting that the 26 weeks is kind of an average lead time. We are going to have some that are longer, some that are shorter than where we go. But directionally, it’s where we want to go. It’s what makes it constructive for our customers to plan better and for us to serve them better.
Vijay Rakesh: Got it. Thanks.
Ganesh Moorthy: Thank you.
Operator: Our next question comes from the line of Chris Danely with Citi. Please proceed.
Chris Danely: Hey, thanks guys. I guess one clarification and a question. You seem to indicate that there was some weakness in China, but I think Ganesh or Steve, you just mentioned that you’re planning for a normal quarter in China in Q1. So any delineation there? And then for the question, you mentioned that some “other customers” have too much inventory. Is there any rhyme or reason there? Any commonality between end markets or geographies? Or is it just sort of spread out all over the place? Thanks.
Ganesh Moorthy: Let me take them one by one. So what I said was that China had weakness in the December quarter, and they were from two different COVID events. First, the lockdowns, then the reopening and the spread of COVID that took place. And that caused havoc at many, many of our customers and where it was at. We are expecting that those are behind us in this quarter, and that’s what the information we have and the early signs we have are. And so a good chunk of this quarter is still ahead of us. We’ve just gone through January, almost 10 days of that were used for the Chinese New Year. And so we have all of February and all of March. And so in that context, we think China will be normal in this quarter. There’s no incremental weakness compared to last quarter.
And in fact, the COVID issues are largely behind where they were last quarter. In terms of customers who have inventory position, this is not something new. We’ve mentioned it in prior quarters as well is that if someone self-identifies as having product that they would like to get later, we will take that information and find other customers to the extent we can who can use that product and are short today so that we match where there is a supply-demand imbalance, but it’s in the customer’s location to be able to do it. And there’s no particular end market where that is giving us grievance, et cetera. Clearly, the whole appliance market is one relative to some of the others where there is more weakness than that. But there’s always going to be customers who can be in any end market who ask for relief to be able to help other customers.
And we will, to the extent we can.
