David Weigand: Yeah, so I’ll just echo what Charles said, we’re looking at a number of different things, Jon, and we — but we are mindful of not having further dilution, as Charles said. So, we’re — but we’re looking at a number of different opportunities. And the reason we have to is because we need more working capital for growth. And the reason that our cash flows were not — did not — were not as strong as last quarter was simply because we grew by so much. So if you — when you grow by over $1 billion dollars in quarter, you’ve got to have additional working capital. So that’s the plain and simple fact.
Charles Liang: Our inventory had been growing more than $1 billion.
David Weigand: Yes.
Charles Liang: And we are continuing to grow.
Jon Tanwanteng: Got it, thank you very much.
Operator: Our last question will be from Nehal Chokshi with Northland. Your line is now open.
Nehal Chokshi: Yeah, great, thanks for the follow-up question. And I actually have two follow-up questions. First, at the September quarter earnings call I think you guys said the capacity was around $18 billion, that’s up from $15 billion to June 2023 quarter. What’s the driver of that actually increased capacity or increased ASPs. And then, in relation to that, your full-year guidance that implies a June Q guidance of around $4.7 billion, that implies that your annualized capacity is reaching $19 billion. And so as your capacity is increasing. Is this largely a mix-driven like-for-like ASP driven or how has your capacity actually gone up prior to Malaysia coming online?
Charles Liang: Yeah. I mean our ASP gradually continued to grow while that unit number will grow much faster from now on now I guess. So that’s why we need more capacity.
David Weigand: And one thing I’ll add Nehal is that in December, we shipped over $1.7 billion — $1.8 billion. And so that alone establishes a $19 billion capability.
Nehal Chokshi: Okay. And then my other question is that typically going into the March quarter revenue is seasonally down Q-o-Q, guiding to be up Q-o-Q. Usually when the revenue is down seasonally quarter-on-quarter, your cash conversion cycle goes on a Q-o-Q basis, this March quarter because you’re projecting a Q-o-Q revenue increase, does that change your expectations on cash conversion cycle seasonality dynamics?
Charles Liang: Well. Yeah, because of the demand, it is very strong. So we believe this March quarter will be a strong quarter as well. David, is there anything to add to that?
David Weigand: Yeah, so it really comes down, Nehal to timing. When we receive inventory and when we ship out, so as I mentioned in the December quarter, you can have big activity even within a month, within the quarter, and so that will affect your metrics.
Nehal Chokshi: Okay, I’m talking about the December quarter, your cash conversion cycle was actually a lot better than what we had expected. And yes, I recognize there consumption of cash, but it was at least a lot better than what we had expected. Was that actually better than what you had expected given the significant revenue upside that you had delivered here.
David Weigand: It absolutely was, yeah. Yeah, we had some that some customer prepayments and things which helped us out.
Charles Liang: Yeah, also when economies of scale [Multiple Speakers] grow, we can more efficiently leverage our inventory as well.
Nehal Chokshi: Okay, great. Congrats guys. Thank you.
Operator: That concludes today’s conference call. Thank you all for your participation, you may now disconnect your line.
