So that’s AI and that’s a high priority for cloud service providers and people doing stuff on-prem as well. We think data follows behind that. Predicting it is going to be really tough, but we do think that that’s going to be a bow wave at some point. There’ll be competition for the data that actually feeds the AI engines, if you will, right? Right now there’s a big battle to get the AI engines up and running and show those applications as being meaningful. And I think that’s an interesting space to watch. Behind it there’s going to be a lot of data that actually has to feed those AI engines every day, every day, every day. And we think that’s mass capacity infrastructure net positive.
Operator: The next question comes from Thomas O’Malley with Barclays. Please go ahead.
Thomas O’Malley: Thanks for taking my questions. In the deck, you guys mentioned that you were extending your PMR platform into the mid to upper 20 TB capacities. Could you talk about where your original plan was to extend into the mid-20s and where that is now and why you made that decision? Thank you.
Dave Mosley: Yes. Tom, there’s no real change. We’ve been talking about it, I think for about a year. We said we can get PMR into the mid-20s. And the product that we have now, let me – I’ll talk about it very quickly here. We believe that with SMR variants, it can get in the high-20s, the product is in the mid-20s, but it is highly, highly leveraged. It’s almost identical electronics and mechanics that takes us to HAMR. So it’s almost the same product, you swap out the heads and discs for HAMR and a couple other component changes that have to happen. So we’re going to get a lot of leverage from that. That platform has been planned for a long, long time. We called it a 10 disc platform in the prepared remarks. So I have a lot of confidence that we can solution PMR anywhere the customer wants to stay there in the mid-20s or we can go to HAMR variants with the same bag of parts or very, very similar bag of parts.
I do think that there’s a lot of confusion out in the market. I’ll say that this way about what capacity point is it? 24, 25, 26, but there’s customers who need all kinds of different variants and I think that we confuse people frankly by kind of amalgamating all these things. All I will say is that I think those products that we have are very, very competitive in the market. Right now the issue is, if I had it, I’m not going to try to force it into the market, into a space that people don’t need the product simply because it poisons the well for that product, maybe two quarters out or three quarters out for when people do need it. And it would erode the value proposition for the HAMR products when they come. So we’ve got to run the business the way we are right now.
Gianluca Romano: Yes. Let me add that just for clarity, when we say the mid-20s is in the CMR version, if you go to the SMR version of that drive, of course, we are in the mid to high-20s.
Operator: The next question comes from Aaron Rakers with Wells Fargo. Please go ahead.
Shanye Hudson: Aaron, sorry, we can’t hear you.
Aaron Rakers: Yes, guys, sorry about that. Thanks for the question. I just wanted to unpack some of the kind of considerations we should be thinking about in terms of gross margin as we move forward. Appreciating that you’re not guiding explicitly, but I guess first of all, if I look at the pricing discussion, based on the math it looks like your mass capacity dollar per terabyte was up by about 10% sequentially. I guess as we look forward, should we be thinking that the ASP on that basis continues to trend higher? Or how much of that capacity shift have you already kind of imposed price increases upon? And then also, when we look at the capacity shift in total with a 25% reduction in production capacity, do we take prior peak capacity shipment levels and take 25% of that?
