Greg Smith: So I’ll take the lead time, and then I’ll pass it off for the percent of turns to Sanjay. The lead times, if you go back about a year, our lead times were running out past 26 weeks out to 39 weeks, we were way oversubscribed. And right now, we’ve managed to be able to tighten up the supply chain and get us to the point where our lead times are running in the 16-week timeframe, and we’re aiming in the short term to get those down to something that’s closer to 13 weeks. That’s probably where we’re going to be sitting. But again, that’s sort of an average lead time. We will be maintaining some — an ability to work within lead time for particular high-priority orders. And so going into a quarter, we will probably have a very good idea about the majority of our revenue but we will have some ability to do book-ship.
And I don’t know, we’re scrambling through the papers to make sure we give you a good answer for the turns question here. It’s actually kind of fun to watch. So have you gotten to the right page yet?
Sanjay Mehta: Sure. Yeah. Hi, a little bit of context. Obviously, with very long lead times, looking out a quarter we’d be mainly booked. And then there’s always the rescheduling and stuff drops in and just the tactical kind of shifts back and forth. But overall, for the business, we see it at like 25%, 30% and then dropping down into semi test, that is in the 15% to 20% range, which we’re now starting to see that, that kind of book-ship is starting to become a little bit more increasing and increasing over time. As we — as you’d expect lead times coming down, people are going to place the orders when they believe they need them. And that’s when we get the POs.
Toshiya Hari: That makes sense. Thank you. And then as my follow-up, a question on China. Your peers in WFE on the front-end side of things, they’re seeing 40% to 50% of their revenue come from customers in China. I think your business peaked at about 20% China a couple of years ago, and I think the most recent quarter, you were in the low teens. With new customers and existing customers expanding capacity, is China a potentially a growth area for you guys with the time lag over the next, call it, 24 months? Or is there a reason to believe that your exposure there could stay low in given competition or what have you? Thank you.
Sanjay Mehta: Sure. Hi, it’s Sanjay. I’ll take kind of the first half and provide some context about our current China kind of revenue. And then maybe, Greg, if you want to take the second part of the potential growth competition. So just to provide in context, right, in 2022, 15% of our revenue is in China. In ’23, year-to-date, we’ve got about 12% of our revenue from China. And that 12% — about 1/4 of that 12% is really from Robotics, production board test and LitePoint. 75% is from our semi test group and about 60% of that semi test, I know a lot of percentages, but 60% of that 70% is from indigenous Chinese customers and 40% is from multinationals. So the indigenous component is roughly about 5% of our overall business really tied to semi test.
Greg Smith: And so I’ll talk a little bit about the growth trends. If you decompose the business that we have in China right now, probably the part of the segment that’s heaviest investment for us is really in memory. And we expect that to continue to grow. There’s significant capital investment, WFE investment going into memory in China, and we have very good exposure to that. And there’s also a significant growth in analog and power for automotive and industrial in China, and we serve that segment very well with our Eagle Test platform. The biggest headwind that we have in China is we are unable to sell test equipment into Huawei. That’s by US regulations. And frankly, that takes the biggest single chunk of the test TAM in China out of our — off of the table for us. So we’re in there. We have a great team in China. We’re competing for all the business that we can go after. And so we’re hoping to kind of hold and potentially grow from where we are.
Toshiya Hari: Thank you for the color.
Operator: Our next question comes from the line of Brian Chin with Stifel. Please proceed with your question.
Brian Chin: Hi, there. Good morning. Thanks for letting us as a few questions. Greg, maybe taking your starting point, which is modest growth in the test TAM — semiconductor test TAM next year in calendar ’24. A couple of questions. What kind of market share gain might you expect given maybe the initial expected profile of test spending next year? And also what kind of semiconductor IC unit growth or demand underpins your initial forecast for next year?
Greg Smith: So right now, when we roll it up, we think that our overall ATE share is probably going to be flat to slightly up next year. No dramatic shifts from where we are. And I think there may be a bit of a tailwind because if the — and that will depend on sort of the strength of the mobility recovery. So that’s probably the biggest x-factor in terms of where share goes. Now in terms of IC unit growth, I don’t have the data at my fingertips in terms of what our current expectations are. I think it’s typically — I’m almost there. Yeah. So we’re looking at — probably — yeah. So unit growth was actually down this year, and it’s coming back slightly, but it will still be below the units back in 2022 by our best guess. So the thing that’s really going on is even though the units will be sort of at or below the peak that they had in 2022, the complexity growth that’s happened since 2022 will drive test capacity requirements.
Brian Chin: Got it. Got it. And is there any particular end markets where you see that sort of that unit gap filled better in terms of the complexity increase?
Greg Smith: I’m sorry, could you repeat that?
Brian Chin: Thinking about sort of the high watermark semiconductor shipments in calendar ’22, given some markets maybe won’t retest that unit level. Where is the complexity increases or quality control increases big enough to sort of fill that gap?
Greg Smith: Yeah. So the biggest lever there is the degree to which advanced processors move to 3-nanometer technology. So it’s really in the digital space. There are some tailwinds as more of the compute segment moves towards chiplet-based design. That’s about a 10% to 20% tailwind on the amount of test that’s required. And another area that is — that complexity really helps is the more complex devices that are going into an automotive environment, it has a much higher test threshold than other markets. So high-performance processors for ADAS applications, those have very high test intensity for the same number of transistors is the same thing going into a phone. So that’s where we’re really looking for some sort of a complexity tailwind, I guess.
Brian Chin: Okay. Got it. Maybe for my second question then just — and maybe for Sanjay. I know maybe January is when you guys like to sort of refresh your thinking the most in terms of forward financial targets, but given sort of the more subdued initial outlook for calendar ’24, what is sort of your initial thinking in terms of the calendar ’26 financial model?
Sanjay Mehta: Yeah. Great question. Every year, we go through a process where we go through a strategic planning process in Q4. It culminates with a review with our Board in January. And then we share an update to our earnings model. And we’re just starting to go through that process now. So I think the first quick answer is, sit tight. We’ll share that with you in January. But let me provide a little bit of color to your question. We still have conviction in the overall key drivers and fundamentals of the model in test and in Robotics. I think Greg talked a little bit about them, we’ve narrated them. So in the — over the mid and long term, we have conviction. Obviously, in the short term, the visibility is very muted and very cautious.
