Vincent Roche : Yes. I think as well, for the last decade, 12, 13 years, we’ve been treating Industrial as the bedrock of the company. So it gets first call on R&D investments, customer engagements. And never have we been more diverse in terms of geographies, customer coverage, depth of coverage, depth of engagement. So — and also, we have product life cycles that stretch into the decades with very, very stable pricing. So I think all those factors combine to make this an extremely strong business currently, and we’re very, very bullish about the future here as well.
Operator: The next question comes from Joshua Buchalter with Cowen.
Joshua Buchalter : Thanks for taking my question and let me echo Happy Thanksgiving. I wanted to ask about inventory levels and thank you in the prepared remarks for all the color there. I really understand the finished goods and die bank dynamics, along with the lean channel levels, but I was wondering at what range would we be at the point where you’d have to start taking proactive measures to lower inventories? I fully realize you haven’t given an inventory target. But can you help us just directionally understand how you’re thinking about that?
Prashanth Mahendra-Rajah : So let me start with fourth quarter. Balance sheet days are up to about 140 and the channel is flattish, and it’s still below our desired 7 to 8 target. So the growth in inventory that you’re seeing in our balance sheet is coming from a couple of different drivers. Certainly, inflation for our cost of goods, sales growth, which requires us to have more coverage of inventory and then the strategic decisions we made in the prepared remarks. So I do just want to go through that one more time here. So we are temporarily going to hold more finished goods versus putting it into the channel. Because we believe that gives us the flexibility to align the supply with end customer demand across regions and markets.
A bad outcome for us would be to give product to a particular distributor who doesn’t have an end customer demand for that product, where someone else in a different market or geography is in need. Second, the die bank has really been dried out over the last couple of years. And I think I said, at some levels it’s below 50% of where we want it. So die bank for us and for folks who may be less familiar with it, this is a product that has finished the front end, but before it goes to assembly and test. This allows us to get it through the back end in roughly four weeks. So it’s quick turn, and it gives us maximum flexibility to put it across different markets. So investing in the die bank will help us get our service levels, which are critical for us given the focus we have on customer service, critical for us to get those levels back up.
So the result is, expect higher days in the first half, and then it will trend back down as finished goods burn out and the die bank comes to where we would like it to be. So our goal for the inventory is to get our lead times down to our old target, which was roughly 90% of our goods can be shipped within 4 to 8 weeks. And given the long life of our products, we always carry a pretty minimal risk of obsolescence.
