Michael Plisinski: Yes, Brian, so from a lead time perspective, of course in the packaging world, for forever, we had very short visibility, and we would always build to a forecast of projection. So, lead times, somewhat misleading. But I would say around two quarters sort of lead times right now, be given the high demand for the Dragonfly. The second-half expansion is a question right now. I think there’s more certainty in a 2025, another round of expansion. Our customers are looking at their order books and influx and seeing if the capacity they have that they’re bringing online now in the last three quarters, Q4, Q1, Q2, will be enough to get them through the second-half or if they need to add additional capacity.
Brian Chin: Okay.
Michael Plisinski: But we’ve been given more stronger indication that 2025 would be a year that they need to add.
Brian Chin: Okay, got it. But I guess looking at your one-Q guide, sort of your commentary about the full year, looks like you still have, even though you have a harder compare probably than a lot of peers with, maybe one of the few companies guiding for growth in first-half versus second-half last year. It looks like based on overall improvement in the business, you see some pickup in the second-half, although maybe you’re kind of tempering it at the moment?
Michael Plisinski: I’m tempering it at the moment.
Brian Chin: Okay. Fair enough. And then, may be, Mark, a question, additional follow-up on the gross margins. Obviously, advanced nodes is very cyclically depressed, and you’re not calling for that big of a pickup in that business at the moment this year, but you do expect to be in the model, back in the target model. So, it kind of suggests that when, you just get any sort of start pickup, not even close to sort of prior peak levels, but some pickup in the advanced nodes, you should be really comfortable within that target model, probably even exceeding it.
Mark Slicer: Yes, absolutely. I mean, that when we get those numbers back up, certainly things we’re doing now from a cost and operational standpoint are going to accelerate that.
Brian Chin: Yes. And how many points of drag on gross margins is the depressed revenue level in advanced nodes right now?
Mark Slicer: Yes, I wouldn’t comment specifically on that. I would just say, we’ve always stated that advanced nodes was well above company average and the inspection business was at company average.
Brian Chin: Okay. Thank you.
Operator: Your next question comes from the line of Charles Shi with Needham.
Charles Shi: Hi. Good afternoon. The first question I might — I think one quarter ago you were expecting the AI chip packaging related revenue to be up by 50% in Q4. What was the actual number? Because given you did beat your guidance by roughly 10 million, probably it’s a little bit over 50, would be my guess, but I really want to hear what was the actual number?
Mark Slicer: Yes, that’s a good question, Brian. Sorry, Charles, but I don’t have that number in front of me, however, nearly all of the upside we saw in the quarter, if not all of it, was tied to the AI packaging. So, basically that 10 million increases primarily from that.
Charles Shi: Got it. The second question, I think it’s interesting you mentioned the Aspect. I believe I’m being adopted, if I heard you correctly, for AI packaging applications. When I look at the Aspect, it seems like a top-tier OCD systems in your portfolio, and it’s interesting that’s being adopted for packaging. Can you provide a little bit of color of what exactly is that used for?
Michael Plisinski: Well, it has some unique capability. Remember, it was designed to measure the channel holes for 3D NAND, so big, big, high, deep aspect ratio metrology applications for 3D NAND. And you could imagine that there’s some applications similar to that in advanced packaging that the product is being applied to. TSVs, for instance, and some other things that I’m not sure how much is public from our customers.
Charles Shi: Is it more the HBM applications right or more on the logic packing side?
Michael Plisinski: Yes. No, I think, it’s more on the HBM applications right now, yes.
Charles Shi: Got it, got it. So, last year, really, thanks for the color you provided about the trend in this AI side of the business. I want to ask you what’s the status for the HBM in terms of orders. I think when you started seeing all these orders, you started to see from one customer primarily, right, the HBM customer. And then, last quarter you talk about a second HBM customer becomes aggressive. The third one felt like it was still a little bit muted. Was that the same, like one quarter later now, is the status, and when do you think the third guy is going to pick up orders?
Michael Plisinski: We think the third guy is picking up. So, not saying who’s who, but in the shell game of one, two, three, we think the third is also picking up now and investing, and they have some unique technology that they think is going to help give them some market share advantages.
Charles Shi: Thanks, Mike.
Michael Plisinski: You’re welcome.
Operator: Your next question comes from the line of David Duley with Steelhead Securities. If you’re speaking to me, I’m unable to hear you. Please check the mute button.
David Duley: Yes, I’m sorry. I’m on mute. Yes, I’m on mute. I’m sorry. My first question is on gross margins. Just so I understand, it sounds like gross margins will improve without volume or mix because of cost reductions and what you’ve been focusing in on. Is that accurate?
Mark Slicer: Yes, yes.
