Randy Abrams: Okay. And the second question, just on actually two areas that came up in the remarks. The R&D, the over 20% increase. If you could give a feel like what’s mainly driving that additional step up, is it the development cost for the new nodes, the packaging? Or is it some now expanding R&D into new geographic areas? And if I can fit in the second part, just the tax rate, Taiwan was hyping a pretty big program of CapEx and R&D, but tax breaks, but your tax rate is going up from 11% to 15%. Is that alternative minimum tax or global tax? Just want to understand why not any benefit from that?
Jeff Su: Okay. So Randy’s second question, I guess, is sort of two parts financial related. First, we €“ our CFO said, our R&D spending will increase about 20% year-on-year. So Randy wants to know what is driving behind that? Is it customer going overseas? Is it more technology development as a technology leader, etcetera? And then the second part, he wants to understand the guidance of effective tax rate of 15% given the recent legislation passed in Taiwan. Why is it not lower?
Wendell Huang: Okay. Randy, for the first question, we’re the technology leader, and we intend to continue to maintain the leadership. Therefore, we are devoting more and more resources in R&D, including people and other kind of resource. That’s the reason why our R&D expense will increase in 2023 and probably beyond. The other thing about tax in 2023, part of the tax exemptions €“ or incentives in Taiwan have expired. Without the new amendments to this industrial innovation, the statute of industrial innovation, our tax rate would have become between 18% to 19%. With this new amendment, our tax rates will drop to about 15%.
Jeff Su: Okay. Does that answer your question, Randy?
Randy Abrams: Yes, that does, I mean this mid-term R&D do you think the rate stays at this level or could go up one more? That’s my final one. Thank you.
Wendell Huang: From what we are seeing at this moment, we expect the R&D to revenue ratio to be between 8% to 8.5% in the next several years.
Randy Abrams: Okay, thank you, Wendell.
Jeff Su: Thank you, Randy. Operator, can we move on to the next participant, please?
Operator: Sure. And our next question is come from Bruce Lu with Goldman Sachs. Bruce, please go ahead.
Bruce Lu: Okay, thank you for taking my question. The first question is focused on the overseas capacity expansion. So I think you just mentioned that even though we cannot disclose it, but the cost is definitely higher for the overseas capacity, but the management believes that the margin will stay the same. So I mean €“ I think I asked this question back to 2019, the manager was talking about the pricing will be the same across the board regardless of geographical locations. So what has changed now? So with the different pricing, can we say the overseas capacity will generate a similar return on profitability throughout the cycle? So €“ or what is the benchmark you’re looking for when you set of the different pricing scheme?
Jeff Su: Okay. So Bruce from Goldman Sachs actually, his question is regarding €“ first question regarding overseas expansion. His question is we said overseas costs are higher, yet that €“ so his question is in regards to our pricing. Are we a higher price overseas? Or if it’s overall? And what is the benchmark that we use when we go overseas in terms of financial returns and price? Is that roughly correct, Bruce?
Bruce Lu: Yes, that’s correct.
