And so the demand being increased dramatically. But then due to the pandemic, the supply chain disruption happened. And people during this time, probably changed their strategy or their thoughts on the inventory buildup. So artificially, the inventory has been built up quickly and dramatically. And then the response to the each industry are different. And so they manage the inventory correction also differently. This kind of phenomenon all because of €“ largely because of pandemic, and we don’t think that it will happen again. And in the next 5-nanometer, 3-nanometer, I believe TSMC and TSMC’s customer will be more prudent on planning that what is the demand and also the supply.
Jeff Su: Okay. Bruce, does that answer your second question?
Bruce Lu: Yes, let me follow-up a little bit. I mean C. C. just mentioned external factors, right? So what did TSMC do to avoid the same thing for 5 and 3 in the future for someone like if you are cutting your capacity plan into a more conservative way or something like that? Is that something we should expect in future nodes?
Jeff Su: So Bruce is asking sort of a follow-on. So then with 7-nanometer, how do we avoid the same thing happening at 5 or 3 in the future? Will we cut our capacity? How do we change our capacity planning and build to avoid a similar situation?
C. C. Wei: Bruce, this is a very good question. Actually, let me share with you how we deal with it. In fact, between the N5, N3, the technology node our capacity buildup and with a lot of tools that can be company used by these two nodes. So in fact, for TSMC to build capacity, we put N5, N3 and maybe in the future N2 as a total picture to look at it. And we will keep our flexibility to create or to adjust for the future. So we will be better prepared. That’s what I can tell you.
Bruce Lu: That’s good to hear. Thank you.
Jeff Su: Thank you, Bruce. Operator, can we move on to the next participant, please?
Operator: Sure. And our next question is come from Gokul Hariharan with JPMorgan. And Gokul, please go ahead.
Gokul Hariharan: Hey, thanks. Happy new year. And let me take my first question on the near-term 2023. So you mentioned first half, we have seen a worse kind of environment compared to 3 months back. Is it mainly HPC data center that has seen further reduction? Or are we seeing it across the board, including smartphone for first half? And also on second half, just putting in rough numbers on your guidance, looks like we are looking for a pretty sharp rebound in second half of 2023, something like 25% to 30% second half versus first half of this year. Could we have some more color on what is that gives you the confidence for such a strong rebound in the second half of the year to get us back to like a flattish revenue growth for the year?
Jeff Su: Okay. So Gokul’s first question is on the near-term outlook. He wants to understand first half, we said the inventory correction in sharper. So he wants to understand what are we seeing in different end market segments? Is the sharper correction driven by data center? Is it smartphone PC? What are we seeing across the different segments first?
C. C. Wei: Well, let me answer the question. The inventory correction actually began last year. And at the peak of the third quarter, and we think the inventory has been picked in third quarter last year and gradually reduced in the fourth quarter, and we did see some inventory reduced sharply recently, and it will continue to be so to first half of this year. So that’s why we say we have confidence that in the second half, the business will rebound. But is that a very strong V shape? We didn’t know yet, but certainly, it’s not a U shape for the business to recover in the second half.
