Robert Bruggeworth: Yeah, and it’s an interesting one. So we’ve been in the discrete filter market. It’s just not been a huge business for us because we focus more on the modules, as you said. But it’s a very good performing module. It is for 5G, not for Wi-Fi. And I like to use an example, as customers even in that tier of the market are paying for performance. They want the latest and greatest technology from us. And even on a very base product, like a discrete filter, they’re still looking for performance. So we’re pretty excited about those products.
Operator: Thank you. The next question is from Karl Ackerman with BNP Paribas. Please go ahead.
Karl Ackerman: Yes, thank you. Two, if I may. A question first for Grant. With shutdowns of your Florida facility, which I believe was historically SAW, and the sale of Farmers Branch, but also expansion of your Richardson facility, I guess, why wouldn’t gross margins exceed 50% on a lower revenue base than the prior peak as 5G unit volume continue to grow from here?
Grant Brown: Sure. So, those are all productivity enhancements, and then as we talked about, it’s largely a utilization, a function of utilization. So in addition to just shuttering some of those facilities that you mentioned, we’re also producing significantly smaller die. And so we have effective capacity that has grown regardless of the number of wafers. So you can get more die out of a given wafers. So there’s productivity there. And I would say there’s a lot of productivity opportunities for us looking forward as we work into that across the board. So, there’s productivity initiatives that we still have to do, and in terms of why we haven’t achieved 50%, it’s, again, largely a utilization issue.
Karl Ackerman: Sure. Thanks for that, Grant. I guess, Bob, you also mentioned that 5G units would grow over 10% this calendar year. I’m curious if that is done predominantly in mid-range across maybe the China Android OEMs, or is that only from Korean and US OEMs? If you could give us some color on the constitution of the 5G unit growth in calendar 2024, that would be very helpful. Thank you.
Robert Bruggeworth: Yes, thanks for the question, Karl. It’s primarily the Android ecosystem, so it would include all the Android manufacturers, because we’re seeing some of — in China, the manufacturers that are not [indiscernible] also moving into 5G. So it’s a broad comment across the Android ecosystem is what we see driving most of that growth.
Operator: Thank you. The next question is from Srini Pajjuri with Raymond James. Please go ahead.
Srini Pajjuri: Thank you. I guess on your March quarter outlook, pretty solid guide by the way. Bob, just trying to understand the puts and takes by different segments. I think you said HPA is going to grow nicely in March quarter, which seems to imply that the smartphone business is probably seasonal. But based on what you said, it looks like Android is coming back a bit and your content is increasing. So I’m just curious as to why it’s not better than seasonal as we look into the March quarter?
Grant Brown: Sure. Hi, Srini, this is Grant, I’ll take that question. We don’t guide specifically by segment, but our views are incorporated in the total guidance. I will give a bit of color on each. In APG, we expect substantial year-on-year growth despite the typical sequential decline associated with our largest customers fall ramp, partially offsetting that seasonal decline is healthier channel inventories and improving smartphone unit demand in China, as well as the flagship launch by our largest Android customer. In HPA, we also expect year-over-year growth across all the businesses except base station. From a mixed perspective, the more capital intensive end markets we serve, such as base station and some others, including infrastructure, face headwinds due to the interest rate sensitivity of those customers and some of those larger build-outs.
Consequently, defense and aerospace now represents over half of the HPA top line, making that segment a bit more sensitive to the timing of some of those defense programs quarter-to-quarter. In CSG, we also expect year-over-year growth in the March quarter, supported by our WiFi revenue, which we’ve talked about. It’ll be up meaningfully from Q4 last fiscal year. And then slower than expected ramps in IoT-related areas are expected in March, probably persisting through the first half of 2024. Although the auto market appears to be weakening, in general, our secular opportunities there lie in the automotive connectivity areas which are supported by the growing adoption of 5G, WiFi, [indiscernible] and ultra-wideband. I think Dave commented on earlier.
We’ve already announced some significant design wins there in CSG for automotive and smartphone. And we’re targeting additional areas including industrial enterprise and smart home.
Srini Pajjuri: Great. That’s great color, Grant. I appreciate that. And then Grant, on cash flow, very, very strong here. Obviously, you had a little bit of a headwind in the first half with working capital. Now I think that has become a tailwind, but quite impressive nevertheless. Can you talk about how you are thinking about cash flow going forward? I think you mentioned CapEx is going to be relatively small and you also suggested that inventory might come down again. So just want to hear your thoughts on cash flow generation going forward. And then what are the uses for the cash going forward? I guess it looks like you made an acquisition and obviously you’ve been buying back shares. So if you can talk about that, that would be helpful. Thank you.
