Aart de Geus: Thank you.
Operator: We’ll take our next question from Harlan Sur with JPMorgan.
Harlan Sur: Good afternoon and congratulations on the solid results and outlook. And Trac, best of luck, and thanks for all the support. As you guys pointed out, chip design activity in leading-edge digital is very strong, where you have accelerated compute processors, next-gen networking, switching and routing ships, new ASIC programs. Very strong, but also significant increase in design complexity and more importantly, chip design cycle times, Aart, I’m wondering is the complexity and cycle time dynamic requiring your customers to use hardware emulation and prototyping as an integral part of the verification and software development process versus it being somewhat discretionary five, 10 years ago. And is this what’s helping to sustain the hardware growth into next year?
Aart de Geus: The answer is yes. And another yes. Yes, it does require much more attention to the intersection of hardware and software. And in order to do that, you need simulation that is blindingly fast, and that’s why you use hardware accelerators or we call them emulators or prototyping to be able to do that. But underneath your question, there was another comment, which is really the comment that is it true that complexity still is increasing massively, and the answer is very true, but it’s going to be in a new form, meaning it’s not one chip, it’s multiple chips as close as possible, and it is architectures dedicated to whatever the end markets are. And so the race is absolutely on in all of these dimensions, but it brings a challenge for our customers that by now after many, many decades, have certainly learned how to optimize for performance and power.
They now have to optimize for making it all work: multiple chips, hardware and software, thermal issues. And that complexity is going to drive all kinds of new products on our side, but also necessitates to look to have focus on the entire flow. And that’s why I’m very encouraged by being at the dawn of really multiple new decades of new technology.
Harlan Sur: Thanks for that. And then on your IP business, we’ve got Intel and AMD, they’re now starting to roll out their new processor chips, right, supporting next-gen memory and storage interfaces, right? Strong area for you guys, big DDR5 from memory, PCI Gen 5, CXL for storage. These processors are starting to roll out now. Additionally, you have more of your customers bringing on additional foundries as a part of their diversification and reshoring efforts. I think this should drive higher adoption of your foundational IP as well. So what are the other dynamics that are going to drive the IP business next year? And does this segment continue at strong double-digit year-over-year growth in fiscal 2023?
Aart de Geus: Well, we’ll take 1 year at a time, but there’s no doubt that there’s an opportunity to continue to grow very well. And a greater respect for you mentioning all the keywords of things that we sell. I would add one other category that we alluded to, which is a category that actually looks at the new types of interfaces in these multi-die integrations because those integrations are predicated mostly on one thing; how short and how fast can you make the wires between the chips? And therefore, it’s another form of miniaturization with enormous connectivity between chips. And so these connectors are extremely sensitive to the speed, the voltage and all these things. And so there, too, we are leading in providing the IP that makes this possible. And I think that’s an area that will grow on top of what you mentioned.
Harlan Sur: Thank you.
Trac Pham: You’re welcome.
Operator: We’ll take our next question from Charles Shi with Needham & Company.
Charles Shi: Hi, good afternoon. Thank you for taking my question. I think first question I want to ask is about China. This has been or maybe had been a major bear case on your stock, at least over the last three, four months. And especially after the very, I mean, unprecedented round of restrictions that the USA implemented since the beginning of October. I understand you did qualify that the impact is not material, but it seems to me that investors may still be a little bit skeptical. And maybe can you just give us some sense from your perspective why — what do you see as a reality being nonmaterial versus what the perception among the investment community is being like a China restriction being a major, major bear case for you? Is there any way that you can provide us some perspective why that has been the case? And what do you think that should help investors to really change or, I mean, have a more grounded view about this issue? Thank you.
