Gregg Lowe: Thanks for the question, Jed. And I’ll kind of talk first about my perspective on this and then hand it over to Neill. So you’re exactly right that we are shipping out of the Durham facilities up to Mohawk Valley and obviously, we have inventory building up there in anticipation of the ramp. So no question about that as we’re trying to get ahead of things. So that’s actually good news. And the way that we have the overhead track system and the storage up there it makes it perfect for that situation, number one. Probably the more important aspect as it relates to buffering for the JP is the ability to ship up to 25%. Right now, we have very high confidence to 25% utilization out of the Durham campus. So that obviously gives us really good confidence.
At this point, in the fab itself, about 75% of the tools have second of a kind tools, and we anticipate that the vast majority of the tools will have second of a kind tools by the June quarter of this year. So that will help debottleneck things because if a tool goes down, it basically stops production if there’s not a second of a kind tool. So that’s kind of what’s happening there. Maybe I’ll hand it over to Neill, if you want to add any additional color.
Neill Reynolds: Yes. So I think, Jed, what that means that there’s no real change to the outlook right now. The key driver here, as we have talked about, is just ramping the revenue to $100 million by December quarter coming out of Mohawk Valley. And clearly, the inventory that we see coming out of Durham and Building 10, gives us good strength and good confidence that we’ll have an available number of substrates to go drive that revenue through. So it will really be about how quickly can we get that throughput through the fab and out to customers over that period. Now one other thing I’ll mention is we also mentioned on the call here is we should be able to see Durham go from 20% to 25% equivalent utilization by December or towards the end of the year.
So what that means is we’ll be able to go above the $100 million a quarter as you get out into kind of that March, June 2025 time frame. So — and then when the JP starts making meaningful substrate deliveries to Mohawk Valley, probably in the back half of calendar ’25, we should have a nice glide path of substrates to support us out through that period. So we feel like, obviously, the demand continues to remain strong based on the customers that we have in front of us and it really just be about ramping, delivering substrates to the fab and continuing to drive productivity and output there.
Operator: Thank you. The next question is from the line of Gary Mobley with Wells Fargo. You may proceed.
Gary Mobley: Hey, guys. Thanks for taking my question. I had just one multipart question. And I know most of the KPIs that you guys provide is on the device side. But in light of the three — the two year-to-date announcements on the weight materials, LTSAs and then as well with the Renesas deal signed last year, maybe if you can give us a sense of the backlog or maybe the cumulative value of live LTSAs for the material side of the business? And the reason I’m asking is I’m just trying to get a sense of whether $95 million a quarter on the material side of the business continues in perpetuity. And related to all this, maybe if you can give us a sense of what the gross margins are like for these recent LTSAs versus previous ones in light of maybe a more competitive environment out there? Thank you.
Gregg Lowe: Okay. Thanks a lot. So a couple of things and thanks for the question. A couple of things. We do have three customers under long-term agreements that did original agreements extended and then extended again. And I don’t know exactly what percentage of the number has been — what the total number of those expansions are, I don’t have that on me. But we’ve most recently extended those agreements with all three of them. So you can kind of think of it we have quite a bit of runway in front of us. We don’t get into the details on that, but you can kind of think about a half a decade is kind of the zip code when we would do these kind of extensions, if you will. With regards to $95 million, that’s certainly going to be the near-term target that you should keep in mind.
Where that will change is when we start ramping the deliveries of 200 millimeter substrates to Renesas out of the JP. That’s when the capacity expansion hits in pretty full steam. In terms of demand for the product and I would say, gross margin proxy for pricing, the demand for high-quality wafers remains very, very high. We constantly have customers saying they would like to get more for us this quarter and next quarter, et cetera. So that’s kind of a normal type thing. And I would say the pricing environment for quality substrates is very favorable for us.
Neill Reynolds: Yes. Let me just add to that. I think that from a margin perspective, I think what we’ve always said is from the materials side, if you look at a long-term goal of 50% margin for the overall business, the materials’ products are already in there in kind of that zip code, so to speak. So as you look out in time, these new agreements that we’re signing certainly support that or even more as you look out into the future.
