Edward Snyder: Great. Thank you.
Operator: Our next question is with Vivek Arya with Bank of America. Your line is now open.
Blake Friedman: Hi. This is Blake Friedman on for Vivek. Thanks for taking my question. First, I just wanted to clarify an answer to previous question. Just exiting this year, did you say that the gross margins would be somewhere in the mid-20%-s? I just want to make sure I heard that right, and it was for the full year? And then secondly as well, that 50% target that you mentioned that remains unchanged, if I look at the last Analyst Day, I believe you had a 50% to 54% gross margin target in fiscal ’27. Is that still the timeframe you’re working at? Or is that 50% target more aspirational longer term?
Neill Reynolds: I think as you bring the facilities to capacity, you’ll be well ahead of any underutilization challenges, obviously, because the facility will be utilized. So over time, it will dissipate. So I think the way you want to think about the timing of the gross margin is as you work into 2024 and 2025, there’ll be a bit of an overhang from underutilization. As we start to bring the factories up, we’ll start to see that come down somewhat. And then we’ll see a faster ramp out in ’26 and then to ’27 as you start to utilize the factors more and get better substrate capacity both out of the Durham campus and outside of Siler City in this year, a trajectory that brings that back up to that level of north of 50% and to get after that ’26 and ’27 timeframe.
Blake Friedman: Great. Helpful. And then just as my follow-up, just kind of thinking from a capacity perspective. I know there’s kind of a lot more of a focus of several vendors entering the market with their own internal capacity. There’s a growing ecosystem in China as well. So I guess from a supply perspective, both from maybe a material standpoint and a device standpoint, maybe just the growing entrance into the market when — from a supply perspective, it starts to become more of a concern.
Gregg Lowe: Yes. Maybe I’ll take that. Obviously, the silicon carbide market growth is explicit right now. And many of the forecasts are that it’s going to have 50% compounded annual growth rate for quite some time. So that’s obviously attracting a lot of new players. We’ve been at this for a long time. And what I would tell you is that a silicon carbide is a tricky technology. It’s very difficult to master. We do have our — many of our materials customers have plans to have their own materials capability and they’ve got different time frames for that. One of them, I think, is expecting to be fully internal by the end of this calendar year. Another wants to be, I think, 40% internal, 60% internal over a long period of time. And we have all of that modeled into our plans in terms of revenue. So it’s kind of fully expected that there would be more materials capability coming online, and we’ve got that baked into our plans.
Blake Friedman: Great. Thank you.
Operator: Our next question is from Colin Rusch with Oppenheimer. Your line is now open.
Colin Rusch: Thanks so much, guys. Could you talk a little bit about the magnitude of the OpEx growth that you’re expecting through the balance of the year and kind of the key areas of focus for that spend?
Neill Reynolds: So from an OpEx perspective, excluding the start-up expenses that we’ll see, that came right in line with where we expected in Q4. So, we’ll continue to invest in R&D and anything really that helps us drive Mohawk Valley up to the 20% utilization exiting the year. So that continues to be a major focus for us. We both see — as we get into Q1, we’ll see some employee-related expenses as well underlying. And then on top of that, we’ll see some of the start-up costs. I think in the prepared remarks, we mentioned about $8 million from — primarily related to the JP in Siler City in Q1. So, as you look out at the end of the year, we’ll see that probably that $8 million double probably by the time we get to the end of the year. So we’ll see some modest pickup in the non start-up pipe expense as we get out of it.
