And that should be a level for which you think you would get back to kind of that 30% gross margin level? I know there’s a lot in that, but I’m just trying to think about some of the variables, looking out just not this current quarter, but beyond.
Dave Mosley: Thanks, Aaron. I’ll give it to Gianluca to answer. I think as I look in at the tactics of what’s going on right now, I think it’s dangerous to say what changed quarter-over-quarter and extrapolate from there. You can draw straight lines, but I’m not sure that – like whether we take a deal at the end of a quarter or not is a good way to think about what’s going to happen over the long haul. We’ve said that pricing needs to go up or stabilize, depending on the different capacity points, the product transitions that we’re going through, whether or not suppliers still want to stay around for a certain product line. I mean, there’s a lot of different things to unpack there, to your point. Relative to our manufacturing capacity, we talked about 25%.
Of course, that’s not perfect across every single factory we have, nor is it perfect across the supply chain. And we’re only as good as our weakest link. We have to make sure those weakest links are still well cared for. And so that’s largely what’s driving that. The ability to go put that capacity back online would – is severely hampered because it’s not just the capital, if you will, that we haven’t invested in enough for peak capacity, but it’s also the people we’d have to bring back. I mean, unfortunately, our people and a lot of people in the supply chain have been dramatically taken down. So do you want to add something, Gianluca?
Gianluca Romano: Yes, Aaron, you were asking about the price per terabyte in particular in Q4. That is a result also of the mix. So we have a reduction in cloud. That, of course, is our higher capacity that usually has the lowest price per terabyte, but also the lowest cost per terabyte. And we have an increase in VIA. So mid-capacity drives with, again, higher price per terabyte and a little bit higher cost per terabyte. So there is a mix that is impacting, of course, when the volume is not very high. Just a few exabyte difference in the different segments can swing those price and cost per terabyte.
Aaron Rakers: Thank you.
Gianluca Romano: In terms of capacity, Aaron, the 25%, I would not take the peak of where we were probably more than a year ago. We have done a lot of restructuring, a lot of adjustments. And as they said, we will need time to eventually rebuild that capacity also in terms of employees.
Dave Mosley: Yes. We don’t need to get back to the full capacity in order to get back into our margin model because we’ve taken so many cost actions across the business. I think we’ve been very, very aggressive on that, knowing that our footprint had to change. I think we’ll be able to scale much better from a margin perspective as some of the demand comes back.
Aaron Rakers: Thank you.
Operator: The next question comes from C.J. Muse with Evercore ISI. Please go ahead.
Kurt Swartz: Hi, this is Kurt Swartz on for C.J. Thank you for taking my question. Open to delve into generative AI implications for both HDD and SSD demand. What is the perceived time line for storage demand uplift as data creation accelerates? And is there any concern regarding more workloads moving from HDD to flash within an AI data center paradigm? Thank you.
