Greg Smith: Sure. No, it’s a good question. We’re very cautious about making predictions about 2023. We have a reasonable line of sight, but a lot of uncertainty around even just the first half. In the second half, there are some things that could break our way and could drive both the market larger and our share higher. And there has also been — in 2022, there’s been quite strong buying in compute with traditional customers that has tended to push our share down. So I can’t really give you sort of a target number for share in 2023, but we believe that we’re going to see some share recovery.
C.J. Muse: Very helpful. And then maybe more importantly, as you think about the underlying growth trends for SOC test, can you speak to 2024? And if you kind of had to rank-order the positive drivers for your business, whether it’s 3-nanometer, a recovery in auto, hyperscalers starting to really expand, could you kind of walk through the 3 most important drivers that we should be thinking about into 2024?
Greg Smith: Yes. So I think you hit many of them. So I think that we are more bullish about 2024 than we are about 2023, certainly. There’s — it’s a cloudy crystal ball to try and figure out what’s going on. But the positive drivers, I think you hit an important one, that 3-nanometer is going to have much broader adoption across the industry, and 3-nanometer enables a significant increase in device complexity. That’s always been a really good driver for ATE TAM. The hyperscalers and automakers, we think that, that is going to be a — we tend to think of it more as a share gain opportunity than a real TAM driver. So if you think about — the end market has a demand for a certain number of semiconductors, those semiconductors are going to come from traditional suppliers or these vertically integrated producers.
We think that we have an opportunity to do well with that class of customers and potentially shift some share. Overall, I think I hit kind of the high points around AI, cloud computing, a recovery in mobile and especially increasing semiconductor content in automotive. The one thing that could happen in 2024 is we’re seeing unit declines in smartphones in 2023. And typically, if people take time off, if they slow down their refresh cycle for their phones, the following year tends to have a little bit more positive task to it. So that may also help with the rebound.
Operator: Our next questions come from the line of Samik Chatterjee with JP Morgan.
Samik Chatterjee : I guess for the first one, I know you’re sort of seeing the test market, particularly on the SOC side, being down, particularly in the first half. But — I mean, you called this sort of the early part of a down cycle as well. But when you sort of rely on your experience going through prior down cycles, how would you sort of think about the recovery path between the different pieces here? Like should we expect memory test to sort of rebound sooner? Or are there certain pieces of SOC that you would expect to sort of rebound a bit faster than the others? How should we think about sort of the recovery path? And then I have a follow-up.
Greg Smith: That’s interesting subtlety. So I think your question is really, how should we expect the shape of the recovery? Do we expect it to come first in SOC, first in memory? The first thing that I’ll say is that, right now, it appears that the SOC market is impacted more than the memory market in terms of 2023 TAM. And that’s mainly because of these technology transitions in memory that are driving tester purchases, even though there isn’t a need for more capacity. What that says to me is that, when there is a recovery, it’s probably more likely to be SOC-led than memory-led because there’s sort of a capacity overage in memory that is going to need to be absorbed as the end market for memory recovers. So that’s just my opinion. I think it’s pretty murky. So it could turn out a different way. But I think SOC is likely to snap back a little faster and harder than memory would.
Samik Chatterjee : Okay. And for a follow-up, and I apologize if you’ve discussed this already on the call, I jumped a bit late. But in terms of sort of your expectations for what sounds like a bit better sort of second half versus first half, I mean, is — how much of that is driven by sort of one of the primary customers moving to 3-nanometer? And have you — are you able to provide a split of how you’re thinking about sort of first half versus second half in terms of revenue?
Sanjay Mehta: All right. It’s Sanjay here. Yes, I think from a revenue perspective, right now, our plans in the first half, as we provided, are lower, obviously, than the second half of ’22. And we do expect an increase through the year really tied to IA and including in Semi Test. And we do expect that to occur in the SOC market as well.
Greg Smith: Yes. But we’re not able to sort of predict a 2023 in full, so we really can’t give you an exact percentage, this percent first half, this percent second half. We’re cautiously optimistic that it will be bigger.
Operator: Our next questions come from the line of Brian Chin with Stifel.
Brian Chin: Again, best of luck, Mark. And Greg, congratulations and look forward to working more with you. Maybe first question, just to clarify on the complexity. You outlined again that you expect your largest customer to grow year-over-year and expect — I believe that complexity-driven revenue will occur mostly in the second half of the year. And so while the sizing sounds fairly similar, is this later than you anticipated maybe 3 months ago from a timing perspective? And just how would you describe why that those shipments could occur later towards the second half versus sort of maybe in 2Q, but where I might normally expect it to be concentrated?
Greg Smith: Yes. Thanks, Brian. Yes. I think it is a bit later than we’ve seen in some other years. Our customer always tends to firm up their demand during the second quarter. But oftentimes, they have sort of a directional idea of what they’ll need. I think the combination of softness in the smartphone end market and this technology transition is pushing those decisions a little bit later in the year. But that’s sort of our outside observation.
Brian Chin: Got it. And I mean this is probably just geared up to a plan at the moment, which obviously is subject to change or revision. But do you have sort of a — or could you give us a sense of where test cell utilization is broadly across our device end markets? Maybe where you think it gets to by midyear and where it could end the year, based on your current planning?
Greg Smith: Yes. So it’s — measuring utilization is something that’s challenging to do, and so the absolute numbers aren’t perfectly trustworthy. The thing that we try to do is we try to use the sort of a consistent method to look at it each quarter, so that we can trust the deltas. So if things are moving down, then that’s not great. If things are moving up, then that is a good leading indicator. And what we’ve seen across the fourth quarter of 2022 is that utilization is declining, especially in OSATs. It’s helped — holding up a little bit better inside of IDMs. And we are — we expect it to sort of bottom out around where it is, and potentially, utilization to increase through the back half of this year. But it’s definitely softened in the second half of ’22.
