Neill Reynolds: Well, I think — thanks, Brian, for the question. So I think as Gregg mentioned, there’s obviously a lot of attention now that we’re seeing 200-millimeter substrates, supporting the fab, the fab ramp and a very way at this point. So a lot of the attention is on the fab itself. We’re working very closely with the fab team with external vendor teams and whatnot to try and solve. But we think are very soluble challenges in the fab right now, to try and get more throughput and through the system, through the up times and cycle times and start getting material on the path. So our anticipation is that we would see an uptick in revenues as we kind of get to the back half of the year. If you take a step back and look at the pieces, maybe just unpack those a bit.
Normally, when we think about revenue guidance, we’ve got about $100 million a quarter out of Durham. $90 million, $95 million — sorry, $100 million a quarter out of Durham for power devices, $90 million or $95 million of material capacity that we’ve got. So the step-up in the back half would be from revenue from Mohawk Valley. We have $10 million to $15 million this quarter, you could see us doubling that again next quarter as well as into Q3. So it really will just depend on not how things play out from a uptime perspective and a throughput perspective in the fab, but we feel that we’ve got good confidence right now based on when the teams are working through the fab and throughput ramp.
Operator: Thank you. Our next question go to Joshua Buchalter of Cowen. Joshua, please go ahead, your line is open.
Joshua Buchalter: Hey, guys. Thanks for taking my question, and congrats on the progress. I wanted to ask about the timeline of the JP actually. So you mentioned it’s on schedule ramping in the fiscal first half of 2025. What should we — how should we expect the cadence of that ramp to look compared to Building 10? And the reason I ask is, it sounds like there is roughly a two-quarter lag between when you get utilization in Building 10 to when you generate revenue. And is that sort of indicative of what we should expect at the JP when that starts up and any initial indications of how much that can contribute in fiscal 2025? Thank you.
Gregg Lowe: Well, I would say — let me maybe kick it off and Neill if you might add a little bit of color to it. The JP is a substantially larger facility than Building 10 and as such as we turn it on, it will turn on pretty decent capability kind of right from the start. It’s on schedule at this point. And obviously, we want to keep it on schedule. So that’s all looking pretty good, but basically, I would anticipate that as we ramp up the JP as I think the amount of capability that will be coming online will actually be quite substantial. And Neill, if you want to talk about the timing.
Neill Reynolds: Yeah. So on the timing, we said kind of back half of calendar next year ’24 in terms of crystal growth out of the JP, which I think is in good shape. Right now the timeline on our expansions are all on track from a timeline and budget perspective. So we feel good about right there. However, I’d also add to that, we’re looking for ways to expand our current capacity beyond 20%, just above that over that time frame. We’ve invested in some satellite sites to help with back-end wafering operations that impacts the operations to help with that. In addition, there’s going to be opportunity, I think, in time. We’ve seen really good performance out of our operations manufacturing team. So yield opportunity, operations productivity improvements and throughput capabilities that could bring us on that 20% or so capability out of Durham.
So we’re working through all those things now, putting in extra capacity where we can, looking for yield optimization and other opportunities from a productivity perspective to bring more capacity online in that period. So we’re trying to take it from a number of angels and we’ll give an update on that as we make more progress as we get into the next year.
Gregg Lowe: So just to reiterate JP is currently on schedule. We’re working with our existing facilities in Durham to increase productivity to give us more than 20% utilization out of the Mohawk Valley fab. And we’re also utilizing satellite sites for backend operations to support the JP as well. So we’re trying to create a little bit of belt and suspenders on JP.
Operator: Thank you. And our next question go to Jed Dorsheimer of William Blair. Jed, please go ahead, your line is open.
Jed Dorsheimer: Hi. Thanks for taking my question. I guess two part or really two questions. I’ll break the rules yet. I guess first is your — it sounds like things are going better at Mohawk Valley, and your underutilization costs of $37 million were actually better than what you guided for or $34 million better than what you guided in terms of $37 million. So I was wondering if you can maybe just talk about the revenue implications in terms of is it a direct one for one? Or is there a lag effect in terms of is Mohawk scales? And then I have a follow-up too.
Gregg Lowe: Maybe I’ll kick it off and then Neill can come talk a little bit about that. It’s — without a doubt we wanted to be ramping Mohawk Valley faster than we currently are and our customers wanted that as well. So we’re not satisfied with the situation. We’re intensely trying to work and so forth. I think we’ve made a lot of really good progress, obviously, Building 10 has been very, very successful. We are also prudently confident that we’ll be able to get these tools with operating the way that they are supposed to and we’ll be able to ramp that fab to 20% utilization in the June quarter.
Neill Reynolds: Yeah. And then just from a numbers perspective, Jed, yes, we did see some benefit on the margins just because of the lower utilization level. Although, I did mentioned, we’re going to be — based on what we’re seeing from the substrate performance on 200-millimeter, we’re going to move as quickly as we can create — put more capacity online. Maybe even faster than we thought initially within the fab and then I think material satellite sites I mentioned earlier. So you could see that underutilization number tick up throughout the year as you start to see it come down back in fiscal 2025. And it’s just really related to adding more capacity given the outlook we’re seeing from a substrate performance perspective, just to give us as many opportunities to supply our customers moving we look out at times, as Gregg said, very heavy demand particularly in the automotive side right now, very intense discussions with customers.
So we’re looking for all the ways we can to satisfy their demand with bringing in more capacity as we look out in time there.
