Rafael Lizardi: Yes, no, thanks, Chris. So broadly speaking, our inventory targets have not changed over the last six, nine months through this cycle. So we still have some ways to go, clearly less than we did six months ago. But we still have some ways to go on that front. At one point, I talked about $4 billion to $4.5 billion worth of inventory. So that’s in the ballpark, and we just finished just shy of $4 billion. But as far as when, underutilization bottoms, that’s going to depend on revenue expectations. And at this point, we’re only, as always, we only give one quarter at a time. So we’ll see where we are 90-days from now and we’ll tell you about that.
Dave Pahl: Yes, maybe I’ll just add that our target inventory is set really by device. It’s — we look at things like how many customers are buying the product, what the buying patterns look like, how long it takes us to manufacture the product. So it’s really a bottoms up plan built on that very, very specifically. So that’s what drives that target overall and we want to have inventory position to support growth over the long-term. This is a side comment. So, a follow-on, Chris?
Chris Danely: Yes, thanks guys. I guess just a little bit of color on the end market commentary, thanks for that. On the industrial side, it sounds like most of the downside is due to excess inventory, not demand. I was hoping you could confirm that? And then with automotive weakening, is there any reason why automotive wouldn’t fall under the same issues that the industrial end market/inventory would as well?
Dave Pahl: Yes, so I’ll start and Rafael if you want to add anything. I would say that the demand signals that we get from customers are orders that they place, whether that’s either directly or through consignment feeds. So that’s the data that we can see. We actually can’t see their inventory levels. We can anecdotally, as we see a market like personal electronics is down 30%, 40%. We know handsets and PCs, that market hasn’t gone down as much as that. So we know anecdotally that we’re shipping below demand. So we believe that, that’s what’s going on in industrial. We have customers who have told us that they have built inventory and plan to correct that. So having a real clear picture of what their demand looks like and their channel inventories look like isn’t something that we can see directly overall.
So and the comment on automotive, we know that customers there did want to build inventory. And we believe that they’re in a good position now, so it wasn’t surprising that we saw a sequential decline there. So thanks Chris, we’ll go to the next caller please.
Operator: Our next question comes from the line of Tom O’Malley with Barclays. Please proceed with your question.
Tom O’Malley: Hey, and thanks for taking my question, guys. I just wanted to understand the linearity of the industrial and automotive declines? When you set out in the quarter, baked into your expectations, were you kind of looking at these two businesses, both a little bit better than they came in or was one a bit worse than the other versus your expectations? And then just in terms of the timing of the quarter, it looks like your finished goods inventory went up a bit more than your other buckets. And I just wanted to understand, is that just because later in the quarter customers were signaling some weaker trends or is there any reason behind the dynamic there? Thank you.
Rafael Lizardi: Let me start with the second part of the question. And Dave, you want to take the first one? No, the second part, that’s just a reflection of our ability to build those inventory buffers that we were talking about. And what you’re seeing there is on the finished goods side. That’s one, Dave alluded to earlier, that’s one set of targets that we have. That’s at the finished goods level. Remember, we have 100,000 different parts, and the vast majority of those are what we call catalog, which means they sell to many, many customers. So we want to build a certain finished good level for each one of those parts. But we’re also building at the chip level. Think of you know a chip can go into two, three, 10 different finished goods so it works out well to have some chip level inventory operationally, but you also have want to have finished goods. So that’s what you saw there.
Dave Pahl: Yes and by end markets, Tom, our guidance, as you saw, where our revenues came in, we were, I think, less than 1% from the midpoint of the guidance range. So the business came in about as we expected and nothing unusual versus our expectation in industrial or automotive overall. So… do you have a follow-on for that?
Rafael Lizardi: No it’s two part question. Yes, that counts as good.
Tom O’Malley: Yes.
Rafael Lizardi: Okay.
Tom O’Malley: All right. Thank you. We appreciate it. Thanks.
Dave Pahl: Next caller, please.
Operator: Our next question comes from the line of Ross Seymore with Deutsche Bank. Please proceed with your question.
Ross Seymore: Hi, guys. Just wanted to ask about the product side, the analog versus embedded. Embedded had a significantly better year, dropping 3% versus the analog down 15%. I know there’s very different end market exposures for those, but were there other competitive dynamics, pricing dynamics, strategic focus dynamics, anything else to explain the difference between the performance of those two segments?
Dave Pahl: Yes, Ross, I think your instincts are spot on that the first lens to look at things is through the end markets and embedded has is heavied up in industrial and automotive, so revenues there were stronger for a longer period of time. The second consideration is that embedded relies on foundry wafer supply more heavily. Most of our analog businesses done internally. So there the constraints lasted longer and have now been resolved and are behind us, so that created some of the lag between there as well. So, and as you know, our CapEx plans and spend will have more of our wafers overall built internally, which is inclusive of embedded. You have a follow-on?
