Operator: Our next questions come from the line of Vedvati Shrotre with Jefferies.
Vedvati Shrotre: So I just wanted to dig in a little bit on the compute SOC side of things. So you mentioned that you’re seeing a lot of digestion that’s going on in the traditional x86 markets, where you have lower share. So does that, in a way, put you in a better position? Are you seeing things — are things different on the hyperscalers versus the traditional x86 architectures?
Greg Smith: So that’s a really good question because 2022 was a terrific year for traditional compute suppliers, and they drove a lot of tester purchases. We are seeing that soften in the back half of the year, and we expect that to remain soft, going into 2023. The new vertically integrated producers, including hyperscalers, are running to it on a different track. They have new parts that they’re designing, that they’re releasing to production. And those parts typically need different tester configurations that are driving capacity in different places than the traditional compute specifiers. So we do think that, that’s going to be a stronger part of the compute market in 2023 than the traditional — there’ll be softness in the traditional market.
Vedvati Shrotre: That’s great. And then for my follow-up. On the automotive side, there’s, I think, portion of your revenues are tied to legacy parts and some would be more on the ADAS side of things. Could you help me understand like what that split is, essentially? Is it a 50-50 split? Or is it more levered to traditional and less towards ADAS or other way around?
Greg Smith: Yes. So it’s definitely a market in transition. If you look back in time, legacy automotive parts, airbag controllers, engine controllers and MCUs, was sort of the majority of that market. And last year, that market would have been in the $600 million to $800 million range. There are new part types, and there are 2 types of new part types. One are ADAS, which are complex digital devices. And the other would be power devices for battery management and for high-power management going into electric motors, in EVs and hybrid vehicles. That part is, in 2022, would probably have been maybe 2/3 of the size of the traditional automotive. Well, actually — so the number that I gave you in terms of the size of the automotive market includes these new classes, and I would say that in 2022, it was probably a little bit more than half in these new stuff that’s growing, the EV and ADAS, and slightly less than half in legacy.
Moving forward, we expect the legacy stuff to track vehicle sales. So as vehicle sales increase, that would increase at a relatively slow rate. But the adoption of ADAS and the transition from internal combustion to electric vehicles is going to drive much higher growth rates in ADAS and power.
Andrew Blanchard : And operator, can we sneak in just one last question, please? Operator Our final questions come from the line of Sidney Ho with Deutsche Bank.
Sidney Ho : I just have one question. So you talked about your largest customer going from less than 10% of sales to, I think, . So call it $300 million, going to low double digits in ’23. So maybe $100 million increase. But that’s still quite a bit lower than in 2021. First, are those numbers right? And second, do you think that this, call it, $400 million range is the correct run rate, going forward, but maybe with less volatility than in the past?
Greg Smith: Yes. So I don’t think I want to comment on the specific numbers. But directionally, I think you’re not wrong. And your comment about smoothing out the troughs, that’s our belief as well. As to what the sort of steady state average is, I think we’re going to have to wait and see. We’re pretty — we have some optimism that, that average is going to be strong because of both new parts coming into the portfolio and the transition of the portfolio of all processors going to 3-nanometer and continuing to march in that way. So that’s — I think that’s kind of our view, that we have some optimism that the peaks are going to be lower, the overall is going to be stronger.
Andrew Blanchard : All right, folks. And we’ve overstayed our welcome. So thank you so much for joining us today, and we look forward to talking with you in the weeks ahead. And those remaining in the queue, I’ll get back to you later this morning. Thanks so much.
Operator: Thank you. This does conclude today’s teleconference. We appreciate your participation.
