Anthony Stoss: Okay. And last question for me. Over the last year or so, with the MaxLinear proposed deal do you felt that some of your customers were opting or thinking about moving to their own internal solutions or external? Seems, like they’re reengaged. I guess I’m trying to figure out, if you lost share in terms of designs maybe for I don’t know 2024 or something, just based on the MaxLinear deal and the pause that that may have created.
Wallace Kou: Yes. From our legal counsels — but we cannot comment any of MaxLinear’s related question. But I think that as you know very well for any conventional M&A it definitely has a certain impact for the customer. If the customer do not understand, the potential buyer so they have some fear and concern. I cannot give you, how that really impacts for our business. But definitely every company have some gain, have some loss. But overall, we will continue to gain market share and with more opportunity And especially after July 26 we do see the momentum become stronger.
Anthony Stoss: Perfect. Thanks, Wallace.
Operator: Thank you. Our next question comes from the line of Suji Desilva from ROTH MKM. Please go ahead, Suji.
Q – Suji Desilva : Hi, Wallace. Hi, Jason. So congrats, on the progress here. So the eMMC UFS market smartphone you had very strong results this quarter you’re guiding for that. Just can you give us a sense of the sustainability of the recovery in the end market and the demand perspective versus — is the channel restocking? And are channel inventories typical levels now? Or are they actually leaner than typical?
Wallace Kou: Yes. Let me comment about the smartphone market based on my — our view. The channel inventory has become normal and in a healthy position. We definitely see growth rebound for both eMMC and UFS products. And we also see we will gain more share for the UFS in 2024. And although, I think in managing particular customers they have internal controller but that’s the UFS 4.0 for next year primarily still see UFS 3.1 as well as the 2.2 for 4G smartphone. And we see we’ll have more customers jumping into the market and that’s why we are able to gain market share. And in addition, we are working directly with the smartphone maker to tailor certain soft firmware and to specify for certain requirements that gave us advantage compared with even NAND maker to provide the solution for a specific customer. So we’re very happy for our position. I think in certain detail, if we are able to we will release during the next quarter or two.
Q – Suji Desilva: Okay, Wallace. That’s helpful. And then my other question is on the operating expenses. Jason I think you talked about the R&D being elevated for the next two to three quarters. Can you give a sense of what it comes back to after that in the second half 2024? Is it back to sort of the $40 million level in the second quarter? Or just trying to understand, what it reverts to after the elevated spend in the next three quarters?
Jason Tsai: Yes. It’s — we’ll obviously provide more color on that in the next earnings call, but it will temper back a little bit. As we said, the total investment cost for each of these 6-nanometer products is north of $15 million. Obviously, all of that not that entire cost is beared in one single quarter. It does get spread out over several quarters depending on the timeframe of the investment process into that new controller. So it will step back a little bit in Q3 and Q4 next year, but we’ll provide more color on that in next quarter — next earnings call.
Wallace Kou: I can give you addition — I’ll give you some reference. 6-nanometer tape-out normally that probably is about 30 to 40 — it will be two times to 3 times more expensive than 12-nanometer tape-out. And we believe after the three 6-nanometer tape-out we won’t have any 6-nanometer tape-out within a year. But we do have additional 12-nanometer, 28-nanometer tape-out quarter-by-quarter. So, definitely operational expense will go down, but versus scale it depends on product how many products we’re going to tape-out. So, I think we’ll give you more color when we have the next quarter or next year guidance.
Q – Suji Desilva: Okay. Thank you, Wallace. Thank you, Jason.
Operator: Thank you. Our next question comes from the line of Gokul Hariharan from JPMorgan. Please ask your question Gokul.
Gokul Hariharan: Yes, hi. Thanks for taking Wallace and Jason and congrats on the good rebound in the numbers. My first question is could you give us a little bit of a kind of a backdrop in terms of how your market share situation is right now for client SoC controller? Just to get an update after almost a year or more than a year in terms of their market share is? And also you did allude to some of the design wins in enterprise and data center. Could you give us a little bit of a color on what is the size of the opportunity there? And what is the nature of engagement you have? Is it still mostly the PCIe Gen5 controllers for enterprise market? Or are there previously you had tried open-channel controllers for certain segments of the market. So, just wanted to understand what is the approach to kind of tap into the enterprise market and data center market size?
Wallace Kou: All right Gokul. Thank you. Great to talk to you again. Regarding the our client market share we continue to maintain a stable market share around 30%, maybe up and down a little bit, but I think we’re gaining market share continuing for 2024. But regarding the data center, I think the major enterprise product we’re shipping meaningful still SATA. And our PCIe really we focus on PCIe Gen5 because Gen4 controller we’re not able to show meaningful financial results and it’s not cost competitive. But PCIe Gen5 MonTitan we are in a very good position we believe worldwide show meaningful financial results by end of 2024 and more meaningful in 2025.
Gokul Hariharan: So, could you give us a sense of how big this enterprise and data center market size is? I think I remember a few years back when you started talking about this you indicated that it is similar size to the client SSD market in terms of controller revenue size. Any updates on how big the market is given data center demand has clearly grown since then? : Gokul it’s Jason here. Yes look we’re seeing a good traction today. We’re working with a number of data center and enterprise customers around the world. But it’s still early. We’re going to start sampling this quarter. It’s too early to say how big that opportunity is at this point. As we get closer to launch as we have more concrete and better visibility we’ll be able to provide more additional details at that point. But right now it’s just a little bit early.
Gokul Hariharan: Okay. Got it. And one question on pricing. Could you talk a little bit about how pricing has evolved in the last 12 months or so? Clearly pricing seems to have come off from the $4 to $5 kind of average client SSD controller ASP that you had? And do we need to wait for Gen5 to really come through on the client SSD controllers for you to start potentially seeing some price increases coming through? Do you need to wait for the next generation for like price increases to come through? Or do you think that you can adjust price as we go along once the market starts getting a little bit better?
