Steve Daly: Right. Well the — as in Q3, we will see the same behaviors in Q4. It will be primarily Industrial and Defense and Data Center driving the bookings growth or recovery, let’s say. We still see tremendous weakness across many of our telecom and segments, cable test and measurement, 5G, these are still very weak, don’t expect recovery in the fourth quarter. And in terms of the products its certainly many of the products that we’ve talked about in the past, a lot of our MMIC products, a lot of our high-end GaAs and GaN products for military applications, there’s a wide range of those really supporting the growth within the defense sector. When we think about 2024, the growth drivers from a product set point of view would certainly be GaN.
GaN is — we think 2024 will be a great year for us. We launched the .14 micron process about 6 months ago into production. And our teams are in the process of getting their first design wins, which will turn into production next year. Certainly on the data center side, we think in 2024 there’ll be more high data rate applications coming to bear and potentially ramping up. And then in the telecom area, the only real bright spot for us right now is what we’re doing in the SATCOM market, both on the ground side and on the satellite side.
Operator: Thank you. And our next question coming from the line of Harsh Kumar with Piper Sandler. Your line is open.
Harsh Kumar: Yes. Hey, Steve and Jack. I had a quick one. Steve, when you talked about your long-term drivers, you mentioned the order of Telecom, Industrial and then Data Center. As you try to get to your $1 billion goal by FY ’26 or early FY ’27, is that how you’re thinking about growth to that $1 billion number? Or was that just a random order? And if I can flip the question, if that’s not the correct order, what is the correct order as we think about?
Steve Daly: Yes, so that is the correct order and that’s the way we think about it. But we’re oftentimes wrong. More often wrong than right when we make forecasts. So you have to take that with a grain of salt. But when we look at our R&D spending, and we look at the projects that are in our pipeline and where we want to position the company, we see that there’s a lot of variability within the telecom space that is very attractive to us. And so we like the diversity, we like the long tail of customers that we can approach, and it plays to a lot of our strengths. So we do end up spending a fair amount of our R&D dollars, developing chips for that end market. Obviously, the A&D [ph] market is another great market for us. I think — as I think I mentioned on the — in the script, Q3 was a record for our I&D segment, and this year we’ll have great year-over-year growth for the full year.
And we expect more good things to happen next year and the year after that, as we start to bring into production some of the new programs that we know were designed into. And the smallest piece of our business is the data center. I realize we get probably the most questions about the data center. But as I highlighted, we do have a narrow focus in the data center where we focus on analogue solutions for short reach, where we can insert high performance connectivity chips, or lasers and detectors. That is our strategy there. So that’s a fairly narrow focus strategy.
Harsh Kumar: For [indiscernible] we get things wrong all the time too, so I wouldn’t be too hard on yourself. For my follow-up, you’re seeing some pretty good pickup in the data center space. The kind of trend you’re talking about typically don’t go away in a quarter or two. So is it a fair assumption to think that the activity in 100 — I’m sorry, the activity in 400 and 100 should stick around for a handful of quarters as you look maybe past the next quarter, and a little bit more beyond.
Steve Daly: It is possible, and it’s very difficult for us to say. And we have certainly seen in the past examples where our programs ramp up very quickly and then they ramped down very quickly. So we have to be cognizant of that. So while we’re certainly excited about all the great things we’re doing with — within the data center, we also recognize that it can be a very volatile business.
Operator: Thank you. And our next question coming from the line of David Williams with Benchmark. Your line is open.
David Williams: Good morning. Thanks for taking the question. See, just quickly, I guess on the magnitude of the inventory depletion that you still see needs to happen in the channel. And you’ve talked about, I think you’ve mentioned tremendous a few times. So it sounds like fairly heavy level of inventory digestion still needs to happen. But just wondering your thoughts that for us?
Steve Daly: Yes, sure. I’ll make a comment and then certainly, maybe Jack can add to it. And as everybody knows, the cycle — the manufacturing cycle times for many of our products can be in the range of 6 months, maybe longer, maybe shorter, depending on the fab in the technology. And as everybody knows, just two quarters ago, we had a run rate of $180 million. So when you’re looking at our inventory today, and you relate that to sort of $180 million run rate, you can see that we are, as Jack said, carrying excess inventories at today’s level, but if — but not necessarily, for maybe one or two quarters ago. So we are going through a digestion period where we need to move that inventory out into the market. And part of what we’re also doing is making sure that our channels are not carrying excess inventory. And so we are definitely managing that down, we want to see more depletion. And, Jack, maybe you can add to that.