Jeffrey Jones: Yeah, it certainly does feel like a trough that, as Luis said, we don’t have a lot of clarity on the first half of next year. So we’re just kind of playing that week by week here. As you referenced, Brian, I would just go back to 2021 with much higher revenue, but gross margins were in the 40% range. And so over that time, we’ve made a lot of improvements in reducing costs, primarily in the handler products as well as the contactor products. We’ve had some price increases to cover some of the inflationary costs that we’ve incurred, but again, we’ve done a lot to reduce product costs, improve manufacturing efficiencies, productivity, things of that nature. So now, as I stated in my remarks, revenue down approximately 20% year-over-year, and we’re holding a 47% gross margin, which was essentially the same as last year.
So margin has been very resilient, as you know, recurring revenue carries a higher gross margin. And as Luis stated, that’s less susceptible to the volatility of the cycle. And so that’s obviously helpful as that becomes a higher percentage of our total revenue. And that’s why it’s really a key part of our strategy as well to grow the recurring revenue.
Brian Chin: All right. Great. Thanks for the color. And then maybe for, Luis, a follow-up. It’s the 4Q revenues decline, sort of equal parts, auto and industrial. And in the past, you’ve talked about the composition of your auto revenues being kind of equally distributed across EV, ADAS, and traditional auto. Based on the incremental softness you’re seeing, can you distinguish which of those buckets are more impacted or resilient? Does that give you any optimism regarding either duration or magnitude of the slowdown in those markets?
Luis Müller: Yeah, so I can start from the back here. The distribution across ADAS and EV and everything else auto, it still stays about the same. I think we’re about one-third, currently about one-third on each one of those segments. As far as the drop quarter-over-quarter, we saw really a 6-point drop on the revenue associated with automotive, and a 4-point drop on revenue associated with industrial markets. So in reality you look at this proportion looking at the revenue size, it’s more auto-related than actually industrial related quarter-over-quarter Q2 to Q3. I think the other question is confidence on a go forward basis. Generally speaking, we see many of our auto and industrial customers, they tend to be the same customers by the way, investing significant CapEx in facility constructions this year.
And we’ve been told, the plan is and continues to be to tool up those facilities, because across the board the forecast for semiconductor growth in the automotive market is for a 16% CAGR through 2026, if I’m not mistaken, and industrial is 9%. So the forecast continues to be that both automotive and industrial are the highest growing semiconductor segments to bat on. But the expectation is, facility constructions come in a line, tooling up with those facilities start at some point next year. The hundred million question here is, do we start seeing those orders in Q2 or do we start seeing them already at the late part of Q1? That’s still an open question.
Brian Chin: Okay. Great. Thank you.
Operator: Our next question comes from the line of Krish Sankar with TD Cowen.
Robert Mertens: Hi, this is Bob Mertens on for Krish. Thanks for taking my questions. My first one is just in terms of the test utilization. I know you gave some color on the individual market segments and how those progress through the quarter? But just sort of looking ahead into the December quarter, just trying to think of how you would expect each end market to progress? Is it sort of across the board with the utilization probably dipping down? Or is there any segment that’s been holding up a bit better?
