Operator: Thank you. And our next question has come from Rolf Bulk with New Street Research and please go ahead.
Rolf Bulk: Yes. Thank you for taking my question. I had a question on your 2023 CapEx budget and your fab build-out plan. You, earlier on in the conference call, you talked about the build-out cost of hats in the U.S. being 5x higher versus Taiwan. And in that context, I was wondering if you could talk about the share of CapEx spending that you expect to go towards that build-out versus equipment this year versus last year? Will the larger share of CapEx go to those fab build-outs and if so, how much more? Thank you.
Jeff Su: Okay. Sorry. Rolf, let me try to summarize your first question. His first question is on our CapEx in 2023, and our fab build-out plans. I believe Rolf, you are referring to fab build-out plans overseas, correct?
Rolf Bulk: Yes, exactly. What I am trying to understand is if I think about your CapEx such as for this year versus last year, what share will go towards infrastructure of that build-out, what percentage will go to equipment roughly?
Jeff Su: Okay. So, Rolf wants to know for our CapEx, how much is going to building and facilities, how much is your tools? Rolf, I want to make one correction when our CFO said that the, when you refer to 5x greater, I think our CFO was saying the construction costs are 4x to 5x higher, not the CapEx cost, but nonetheless, Rolf is asking for a breakout, of the CapEx?
Wendell Huang: Well, Rolf, we provide the breakdown of CapEx per year, advanced versus specialty technology, but we do not provide the breakdown between tools and constructions. But as I have said, in the U.S., the construction of building and facilities is probably 5x that of Taiwan. And it lasts for a few years, right.
Jeff Su: Okay. Rolf, do you have a second question? Sorry.
Rolf Bulk: Okay. Thank you very much. Yes, as the second question. Could you talk about the growth that you achieved in your Advanced Packaging segment in 2022? And what growth you are expecting in 2023? And in particular, could you talk about your SoIC products and whether interest in those products is accelerating? Thank you.
Jeff Su: Okay. Thank you, Rolf. So, Rolf’s second question is on the advanced packaging business. What was the growth in advanced packaging last year? And what do we expect the growth to be this year? And then also more specifically in terms of our SoIC technology, what is the outlook or the momentum there?
Wendell Huang: Okay. Rolf, this is Wendell again. In 2022, our advanced packaging grew at a similar rate to our corporate rate. So, it accounted for about 7% of our total revenue in 2022. And we think that in this year, the growth will be also similar pretty €“ well, slightly lower than the corporate, it will be probably flattish for the back end.
Jeff Su: Okay. Thank you, Rolf. Alright, in the interest of
Rolf Bulk: Thank you very much.
Jeff Su: Thank you. In the interest of time, maybe we will take questions from the last three participants. Operator, can we move on to the next participant, please.
Operator: Sure. The next question is come from Charles Shi with Needham. And Charles, please go ahead.
Charles Shi: Okay. Thank you for taking my question. I just want to ask a little bit about the 20% R&D expense step-up in this year. Can you provide a little bit more detail what the incremental R&D expenses are going to be directed at? Well, for one thing, if I understand correctly, your N3 R&D team are going to move on to the N+2 node if we are seeing nanometers current end node, or is there any other incremental R&D spending this year you are expecting to be around design enablement of as packaging, specialty technology. Can you kind of give us a sense where the big step-up is coming from? Thank you.
