Operator: Our next question is from Ross Seymore with Deutsche Bank. Please proceed with your question.
Ross Seymore: Hi guys thanks. I’m going to ask a couple of questions. I guess for the first one, Dave, I know you don’t want to guide by the segments but you gave the quarter-over-quarters. Could you give us what the year-over-years were by end-market in the first quarter, please?
Dave Pahl: I can do that, yes. So the industrial market was down about 25% from a year ago. Automotive was down lower single digits. Personal electronics was actually up single digits. Comms equipment was down about 50%, and enterprise system was down mid-teens. Do you have a follow-on, Ross?
Ross Seymore: I do. Rafael, you talked a little bit about the trajectory of the grant side of the CHIPS Act — or excuse me, the ITC side and where you are getting the money in over time. Does any of that inflows of cash have a differing impact on the income statement? Or is it just the same, it’s just a matter of timing and when you’re getting that $1 billion as opposed to, I think you said $500 million before?
Rafael Lizardi: Right. No, no direct impact on the income statement. That’s already played in as the lower depreciation and are already flowing through the P&L and in our expectations on depreciation. Of course, having more cash, does have an impact in terms of you have more cash, you’re going to have more interest income. But put that aside, that’s kind of below the profit the operating profit line. So speaking of depreciation, let me give you an update on that. We’ve been talking about depreciation for this year, $1.5 billion to $1.8 billion. That is — we continue to expect that — but we’re more likely to come in at the bottom half of that range. And for 2025, we continue to expect $2 billion to $2.5 billion in depreciation.
Dave Pahl : Thank you Ross. We will go to the next caller please.
Operator: Our next question is from Chris Danely with Citibank. Please proceed with your question.
Chris Danely: Hey, thanks guys. Rafael, just another question on the balance sheet and cash. So you guys have seen the share count kind of flatten out here for the last 4 quarters or 5 quarters and then you’re building cash and increasing your debt. I guess what’s changed? Traditionally, you’ve sort of taken the share count down slowly but steadily. Any sort of changes in the long-term thinking there on cash, usage of cash, et cetera?
Rafael Lizardi: Yes. When it comes to capital management, it all depends, and it depends on circumstances. And at the moment our objective when it comes to — you’ve known us for a while. We return all cash flow – [or cash] (ph) flow to the owners of the company, and we do that over time. But there are times to increase liquidity and to build up cash. So you have seen us over the last couple of years do that and steadily increase the cash on the balance sheet. We finished at $10.4 billion last quarter. And we’ve done that very consciously, right to protect the investments that we’re making, particularly the $5 billion per year CapEx investments in manufacturing because that is the most important allocation of capital has been for the last few years and will continue to be for the next three years. So with that in mind, we’ve had that in mind as we have made overall capital allocation decisions, including the decisions on repurchases.
Dave Pahl: Do you have a follow-on, Chris?
Chris Danely: Yes, thanks Dave. Just another question on China but more on the, I guess, the insourcing side. So some of your competitors have talked about this impacting them. Do you guys see an impact of this on TI? Would or will this alter your long-term, I guess growth expectations or thoughts on your China business? Just any color there would be very helpful. Thanks.
Rafael Lizardi: Yes. So I’ll start and, Dave, if you want to chime in. But as Dave alluded to earlier on the call, China is a very important market. We need to compete there, we do compete there and we compete to win there. China, there — it’s pretty clear that there’s an incentive to design local semiconductor suppliers. I think, that’s what you’re referring to as insourcing. And today, that share, my guess — my sense is 10% to 15% of the local content is sourced by local semiconductor suppliers. I think, the exact number is 12%, the one I saw. So that means there’s another 88% that — that is shared now between U.S. and European suppliers. And our goal is to continue that fight and maintain and gain that share, competing with local suppliers but also competing with US and European semiconductor suppliers.
Dave Pahl: Yes. And maybe I’ll just add in China — in any market, we’ve just got to have the best parts. And when we have that — that means we’ve got to be ahead of competitors, whether that’s on performance, on support, availability and cost. So — and we have customers in every region that are beginning to think about where they’re sourcing products from. So customers that aren’t in China are looking at our — as they describe it, geopolitically dependable capacity. And that’s about 80% of our revenue. The 20% that’s in China, we have customers in China that have and support global markets. And they’re coming and describing our geopolitical dependable capacity and wanting to have access to it because it is very unique. We’re the only ones that are building at scale outside of China and Taiwan capacity. So customers understand that. They understand it both in China, as well as outside. So thank you for that Chris. We will go to the next caller please.
Operator: Our next question is from Joe Moore with Morgan Stanley. Please proceed with your question.
Joe Moore: Great. Thank you. I’ve asked this question before, but it keeps coming up. Can you talk about how you think about pricing kind of more strategically as you contemplate having a decent amount of capacity, more 300 millimeter capacity, more subsidization? Does that change the pricing paradigm at all? Are there markets where you might be more price-aggressive than you wouldn’t be, if any of that were different?
