Tristan Gerra : Okay. And what’s the average duration? And how should we look at how some of those are unwinding later next year or even in ’25?
Thad Trent : Yes. So the number I gave you is the 12 months — from this point forward, 12 months. Now your question is a broader question about LTSAs in general. So the LTSAs go out 3 to 5 years on average, sometimes much longer. It just depends on the customer situation. I think last quarter, we talked about customers coming back, extending LTSAs or expanding LTSAs. So it just — as these things come up for renewal, customers are coming in and engaging. I would say the customers are looking over the long term versus the short term when it comes to the negotiation and the extension of LTSAs.
Operator: [Operator Instructions] Our next question comes from Chris Caso with Wolfe Research.
Chris Caso: Yes. Thank you. I think I’ll just go back to the commentary on silicon carbide into next year. Just some of the questions coming in during the call, there was some uncertainty that I hope we could resolve. So what — my interpretation of what you’re saying is silicon carbide, it sounds like it’s down significantly in Q4, given the fact that it’s a majority of the decline here. But you’re also suggesting that it grows next year and you stay supply constrained. So that would suggest that what you’re implying is some improvement at some point next year in silicon carbide. How do we just reconcile those comments, unless we got some of them wrong?
Hassane El-Khoury: Yes. So the — I guess, I would say the one comment that I believe you got wrong is Q4 in silicon carbide is not down. Q4 silicon carbide is growth from Q3. It is just not at the level that we expected. That’s what drove the mix. So it is not silicon carbide going backwards. With that correction and the ramps that we’re starting — we have in Q3 and will continue to ramp in Q4, plus the breadth of customers that I described, those are going to drive sequential growth through 2024. So silicon carbide is not down quarter — will not be down quarter-on-quarter. Q3, Q4, it will be up, and it will continue to be up in subsequent quarters through Q4.
Chris Caso : That’s very helpful. Yes. Yes. And just moving on to CapEx for silicon carbide as we go to next year. And your earlier comments suggest this is long-term investment. But given the current environment, are there any changes to the investments that you were planning for calendar ’24? Although certainly, it sounds like you’d continue to invest, what do we expect for the CapEx profile next year in light of the change in environment?
Thad Trent : Yes. Chris, in my prepared remarks, I noted that because of our strong performance in silicon carbide being ahead of our internal plans and our confidence in moving into 200-millimeter that we’re actually taking our capital intensity in 2024 down. We had expected the high-teens for 2024. I’m now saying it’s low-teens, and it’s quickly closing in on that long-term target. So we will continue to make investments, but not at the rate that we needed to just because of the performance across the entire manufacturing chain is ahead of schedule and exceeding our expectations.
Operator: [Operator Instructions] Our next question comes from William Stein with Truist Securities.
William Stein : I’m hoping you can discuss the dynamics in the industrial end market. This is where we’re seeing more weakness from other semi companies and similar component manufacturers over the last quarter. The call has been very focused on the change in outlook in silicon carbide, but I’d love for you to discuss trends more broadly in the industrial end market and your expectations as we progress into next year.
Hassane El-Khoury: Yes. So for industrial, obviously, we see the same as a lot of our broad-based peers, so weakness in industrial. However, within industrial, I called out the two areas that we have seen and will continue to see strength. That’s the renewable energy that we talked about earlier with energy storage and so on. And the medical, both driven by very specific trends on the energy storage. Obviously, it is the renewable deployment. Not just not the residential scale, but more commercial scale that’s driving a lot of the strength. And on the medical, it is a very specific trend of accessibility of the continuous glucose and the hearing aid, which is now almost over-the-counter that’s driving a lot of that demand for us.
And given that we have a leadership position here, we’re seeing that strength. So outside of these two, we do see the softness across industrial. 2024, I commented, we don’t expect 2024 to see a very big change in recovery. So you can call it — we’ll call it when we get closer to it. But I don’t have signs that will change the — my view of the trend and outlook.
Operator: Thank you. Ladies and gentlemen, this does conclude the Q&A portion of today’s conference. I’d like to turn the call back over to Hassane El-Khoury for any closing remarks.
Hassane El-Khoury: Thank you again for joining our call. As always, we aim to deliver consistency and transparency in our results, and we thank you for your support along the way. The executive staff and I are incredibly proud of our team’s continued performance, dedication to our customers and commitment to delivering shareholder value. Our employees all over the world are solving complex technology and business problems for customers. Congratulations to the team, and thank you all.
Operator: Ladies and gentlemen, this does conclude today’s presentation. You may now disconnect, and have a wonderful day.
