Greg Smith: I think – this is Greg. Just one additional bit of color. If you think about the seasonality pattern that we developed really for a decade, 2010 through 2021, that seasonality, if you looked at all of our segments with the exception of mobile, there wasn’t a really marked seasonality. Like those automotive, compute, industrial, they kind of chugged along. The seasonality was really driven by the mobile TAM, and that was driven by consumer buying behavior, right, that you needed to have things for the holiday season both – and for Lunar New Year that all of that inventory needed to be built up. And so there was a concentration of capacity that would go in Q2 and Q3. With mobile not driving right now, the seasonality is very, very muted. So I would expect to see that the seasonality will return once the mobile market is stronger, but I don’t think you can use normal patterns to predict the way things will look in 2024.
Krish Sankar: Got it. Got it. Very helpful. Thank you very much.
Operator: Thank you. Next question comes from the line of Joe Moore with Morgan Stanley. Please go ahead.
Joe Moore: Great. Thank you. I wonder if you could talk to the smartphone issues that you just mentioned. Away from your biggest customer, you sort of saw the smartphone suppliers reduce balance sheet inventory by 15, 20 days in Q4. And they talked about doing that again in Q1. So I would expect you to have low visibility, but couldn’t you get some recovery as they stop depleting that much inventory? Is there any kind of nuance in terms of how much of that inventory has been tested already in die [ph] bank, things like that. But shouldn’t we have some optimism that this is going to get better.
Greg Smith: Well, I think we certainly have optimism that it can get better. And that’s basically because we’ve dialed in the bottom. And when you – the way we do this is we typically will look at tester utilization numbers. And frankly, those numbers are all over the map. Some indicators show that capacity is tightening. Other indicators are showing that it’s relatively – utilization is tightening. Others show that it’s relatively flat. Our qualitative checks, when we are talking to people in the ecosystem, they are telling us that capacity is – utilization is getting tighter and it’s forecast to get even – it’s forecast go up from there. So the thing that, that hasn’t done is it hasn’t turned into firm forecast for additional business.
And there is a fair amount of I think the lack of visibility that we see runs all the way through the supply chain. That people are wondering what’s going to happen. People are wondering how well handset sales will recover? And I think it’s really going to come down to the way that the holiday season demand is shaping up. That’s the thing that’s going to be the lever that either turns on some additional spot buys or we’ll have people waiting until 2025?
Joe Moore: It’s very helpful context. Thank you.
Operator: Thank you. Next question comes from the line of Brian Chin with Stifel. Please go ahead.
Brian Chin: Hi, there. Thanks for taking the questions. Just to clarify, maybe firstly, was the third quarter pull-in, was that for AI, compute or – for compute, or for memory, or for both? And just to be clear, your share of the $200 million memory TAM increase, should we think about that being closer to, say, 40% if the emphasis is on wafer sort. And kind of sorry one more part to this. But I didn’t catch this earlier, but if HBM demand is biased to a single customer, do you expect memory sales to be lumpy this year kind of from a quarterly perspective? .
Sanjay Mehta: Yes, I’ll take the kind of the Q3 to Q2. It was, I’d say, mainly in compute and some ADAS that’s accelerated and – just looking up something.
Greg Smith: Yes. So in terms of the TAM increase, we moved the TAM up by $200 million. And I think I think your guess of $40 million is a bit low. I think we’ll be up a bit more than – we’ll get a larger chunk of that up than that, probably in line with our historical share level, kind of 35% to 40% of that TAM increase should probably go to us. In terms of lumpy sales, no, I think actually the memory business is driving – we have deliveries that will be stretching out through the year. And I think the demand is relatively steady and potentially increasing. So I think on a quarterly basis, we don’t expect a lot of memory variation.
Brian Chin: Okay. That’s helpful. And then switching gears to robotics. It seems like your omnichannel and new product focus is driving a lot of this improved momentum in that business. But can you also just touch on the broader environment you’re seeing in robotics, and where, if any, you see sort of macro like headwinds or tailwinds? And less part of that, what vertical or application was that customer that placed the record mirror order? And did that include any of the MiR1200s?
Greg Smith: Okay. So in terms of the macro environment, it’s pretty weak. I mean it was weak throughout 2023, and we don’t see a significant improvement right now in terms of end market conditions. If you look at PMIs, they – some regions are clicking up slightly, but we haven’t really seen that turn into like a hot market. Having said that, we’re in a part of the robotics market that is very, very low penetration. And so we are not – we have seen our business results vary with the macro conditions, and we think that that is indicative of the – that was one of the things that drove us to go and make the changes in terms of adding new products and driving channel development, because we think we’re 5% of the way into something that could be huge, and if that’s the case, then we should be somewhat immune to these cycles.
But if you look – we’ve been looking at like industrial robot competitors and their results this quarter have been pretty meager. Like especially if you look at their incoming order rates, which is more comparable, they have long lead times. We have short lead times, so it’s better for us to compare their orders to our orders. We feel like we are doing far better than they are in these end market conditions, but we’re really focused on kind of controlling our own destiny by finding the things that need support even when the end market is [indiscernible]. One thing that I’ll say is looking at other sort of industrial analyst notes and talking to people in that space, they are expecting improved strength like they think that things are going to get better, not worse.
So I’m optimistic that we’re going to have some macro tailwinds in addition to the plan that we bake, that’s kind of counting on things staying around where they are.
Brian Chin: Right. Great. Thank you.
Operator: Thank you. Next question comes from the line of Gus Richard with Northland Capital. Please go ahead.
