Nick Doyle: And then you really, you called out advanced computing in the opening remarks. I was just curious if anything, any a lot of headlines about this LK-99, anything related to superconducting driving, any sort of interest from customers?
Thomas Sonderman: Yes. So, clearly, it was a very exciting opportunity, we’ll call it with LK-99. But having been in this industry for many years, I think it’s going to take a lot of work to turn that initial discovery into something that will be hitting the market, so to speak. I think if you look at other superconducting photonics platforms geared towards AI and quantum computing, a lot of momentum is being made every day. So, we’re going to pay attention of course to all elements. There are many different avenues to reaching a quantum computing capability, and SkyWater feels like we’re uniquely positioned to help our customers enable that. And AI really is about quantum. That’s where you begin to really see the benefits and we’re very excited to be right at the heart of that.
Operator: [Operator Instructions] Your next question comes from the line of Natalia Winkler with Jeffries. Your line is open.
Natalia Winkler: I wanted to follow up on the consulting fees. Steve, would you mind kind of explaining a little bit more on those and how should we think about them going forward as well maybe beyond this year?
Steve Manko: Like I mentioned in the call earlier, we had $2.5 million of fees that came through this quarter, which Tom had been talking about over the course of the year, looking at our business model, trying to ramp our model in the mix that we have with high volume as well as ATS, we’ve been focusing on bringing a more perfected mix and model to the market. So, 2.5 million of fees, transformation fees were incurred during this quarter. As I also mentioned, I would expect that we would incur similar fees in the third quarter as we keep progressing with this transformation for the Company leading into 2024 to take full advantage of the opportunities that are before us. There’s another component separate from that where we incurred $1.3 million of fees.
Those fees were going towards, what I’ll generalize as CHIPS application processing. We don’t expect that $1.3 million to occur again in the third quarter. However, the CHIPS application process is a new process for all of us. As we get more information coming through with the various applications that are potentially out there, as well as follow-up questions coming through, we may incur additional fees in the future, but we do not expect that to be recurring in the third quarter of ’23.
Thomas Sonderman: Let me just add.
Natalia Winkler: Thank you.
Thomas Sonderman: Just one comment, I think again, having spent a lot of time in the industry, if you look at Steve’s comment, we’re looking at about 2.2 to 2.5 in CapEx. If you add that another 2.5 for this business transformation that is underway, that’s $5 million. That’s 7% of our overall quarterly revenue. And when you look at other semiconductor companies to have that level of investment especially given our strong ATS component, I think we are in a very nice position to not only transform the business but continue to exploit this model, this CapEx light model by leveraging the investments we’re getting from our ATS customers. So, relatively speaking, spending 5 million to create the capability that we have to really differentiate in the industry, continue to outgrow the industry and really capture the irreversible momentum we believe we have at SkyWater, I think is something that that certainly at SkyWater we’re very proud of.
Natalia Winkler: And then just as a follow-up, I wanted to ask one more question on that advanced computing. If you could possibly help us understand, what would be the competition? If your customers are not using you or if somebody is not using SkyWater, like what are the options for those customers? Would that that be developed in-house or would the larger foundries also be pursuing this market giving kind of the lucrative nature of the opportunities relate to AI?
