Thank you and welcome everyone to FormFactor’s Second Quarter 2020 Earnings Conference Call. On today’s call are Chief Executive Officer Mike Slessor; and Chief Financial Officer Shai Shahar. Before we begin, Jason Cohen, the company’s General Counsel will remind you of important information.

Thank you. Today the company will be discussing GAAP P&L results and some important non-GAAP results intended to supplement your understanding of the company’s financials. Reconciliations of GAAP to non-GAAP measures and other financial information are available in the press release issued today by the company and on the Investor Relations section of our website. Today’s discussion contains forward-looking statements within the meaning of the Federal Securities laws. Examples of such forward-looking statements include those with respect to the projections of financial and business performance, future macroeconomic conditions, the benefits of acquisitions and investments, the impacts of the COVID-19 pandemic, the impacts of regulatory changes, the anticipated demand for products, our future ability to produce and sell products, the development of future products and technologies and the assumptions upon which these statements are based. These statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed during this call. Information on risk factors and uncertainties is contained in our most recent filing on Form 10-K with the SEC for the fiscal year 2019 and our other SEC filings, which are available on the SEC’s website at www.sec.gov and in our press release issued today. Forward-looking statements are made as of today, July 30, 2020, and we assume no obligation to update them. Also as an aside, since this is an entirely remote earnings call for us, please bear with us on any audio delays or issues. With that, we will now turn the call over to FormFactor’s CEO, Mike Slessor.

Thanks, Jason, and thank you everyone for joining us today. FormFactor delivered second quarter results that were near carbon copy of our first quarter, again validating our target financial model. These results were a testament to the dedication, resilience and commitment of our worldwide team, and I’d like to start our call by recognizing and thanking our 2,000 plus employees for their contributions to this impressive performance. Although the top-level financial results are similar, the underlying path to achieving the second quarter was very different than the first quarter. During the second quarter, we experienced no significant shutdowns or disruptions in our internal operations and external supply chain, allowing us to steadily increase factory output in a safety focused and socially distance manufacturing environment. This enabled us to exceed the outlook we provided on May 6th, and deliver revenue of $158 million, only $3 million less than the first quarter. In our Foundry and Logic probe card business, we again experienced strong demand from multiple customers that continues into the current quarter. This demand strength is coming from several end market drivers including acceleration of 5G handset pilot production as well as continued work from home infrastructure spending. Our large microprocessor customer continues to ramp new designs and increased capacity for both client and server chips on both the 14 and 10 nanometer nodes. Despite our recent announcement of delays in eventual 7-nanometer production, we are currently engaged with this customer in significant 7-nanometer R&D activity and are excited about helping enable the adoption of advanced packaging technologies that are planned to be a prominent part of this node. 7-nanometer production was not planned in the near future and in the interim, we expect new designs to continue to release on the 10-nanometer node. As a reminder, probe cards are…

Thank you, Mike, and good afternoon. As you saw in our press release, our second quarter revenue was within the revised outlook range we announced on July 1st. These are impressive results, especially in light of the impact of COVID-19, which required a gradual reopening of our California facilities during Q2, following a temporary shutdown during the last two weeks of March. These results show FormFactor’s agility and ability to deliver to our customers, while safeguarding employees and supporting our supply chain partners. There are also compelling evidence of our ability to perform at our long-term target financial model across nearly all lines of our P&L. FormFactor’s second quarter results were similar to the first quarter. Revenues were $158 million, a 1.8% sequential decrease from our Q1 revenues and a 14% year-over-year increase. Probe card segment revenues were $134 million in the second quarter, a decrease of $1 million or less than 1% from Q1. System segment revenues were $24 million in Q2, a decrease of $2 million or 8% from the first quarter, driven mainly by lower sales to universities and institutions that were impacted by COVID-19. Within the probe card segment, robust demand for Foundry and Logic continued, with revenues increased 3% from Q1 to $109 million comprising 69% of total company revenue in Q2, up from 66% in the first quarter. DRAM revenues were $19 million in Q2, a decrease of $6 million from the first quarter and were12% of total quarterly revenues as compared to 15% in the first quarter. DRAM demand continues to be down in large part due to customers absorbing purchases made in several 2019 high revenue quarters. Flash revenues of $5.4 million in Q2 were $1.1 million higher than in the first quarter and were 3.4% of total revenue in Q2, slightly…

Thank you. [Operator Instructions] Our first question comes from the line of Craig Ellis with B. Riley, FBR. Your line is open.

Yes. Thanks for taking the question and congratulations on the nice execution team. I’ll start with a question for Mike. Mike, I think in your prepared remarks, you indicated that you expected DRAM revenues to improve in the third quarter. I was interested in understanding the magnitude of improvement that the company is saying, would we expect DRAM to get back to what I think some of us would have thought would be a normalized range around $30 million or maybe not quite that robustly as you start the back half of the year?

Yeah. Thanks for the question, Craig. So just to calibrate everyone, recall going back to the fourth quarter of 2019, we had an 11-year high on DRAM revenues. We then expected some digestion here in the first part of 2020 which we’ve indeed seen. But as we move into the third quarter, seeing some real strengthening off the Q2 lows in DRAM probably that in round numbers that $30 million annualized or – $30 million normalized level is a decent expectation for the third quarter. Obviously, this continues to be a turns business and so there is some uncertainty associated with that. But as all of the major DRAM manufacturers sort of begin design releases for both mobile and server on one-Y and one-Z nodes, we’re seeing quite a bit of increased activity, as they begin to ramp those designs in the third quarter. So I think that normalized $30 million level, a good estimate from where we sit in the quarter right now.

Great. And then if I could one more on your prepared remarks. You mentioned advanced packaging a little bit more than I recall the last few calls in reference to things that you’re doing with leading edge Foundry and Logic customers. The question is with that as one of the three areas of strategic TAM expansion focus, are you starting to see an acceleration in activity with your customers there and how should we think about the rate of growth in that part of the business going forward relative to what you’ve seen in the past?

Yes. I mean in general advanced packaging for us, a long-term multi-year secular trend that really increases the opportunity for FormFactor. It increases test intensity and increases test complexity, obviously both trends good for us. I’d characterize the activity is still very early innings. We’re seeing more in the Foundry and Logic space. Recall that a lot of advanced packaging activities that we’ve benefited from previously has been in the DRAM space with high bandwidth memory or HBM. We certainly have seen things like fan-out and some die stacking in the Foundry and Logic space, but you know as I said in the prepared remarks, you know the 7-nanometer node, 5-nanometer node in Foundry and Logic are going to prominently feature some of these advanced packaging techniques for a variety of integration schemes. I’d still characterize it as being you know mostly early R&D and pilot production in the Foundry and Logic space with the arguable exception of fan-out. But this is an exciting opportunity for FormFactor moving forward. They’re really going to drive the growth as customers combine both Moore’s Law advances with the integration and performance advantages associated with advanced packaging.

That’s helpful. And then if I could just ask Shai a question on gross margin. And congratulations to the team for a revenue guidance range that implies the record revenues are possible in the quarter. Shai, the question is on the 44% to 47% range. I think we typically just think about mix is being the primary determinant, but with manufacturing being impacted by changes that are related to COVID, how should we think about the puts and takes that determine the lower end of the range versus the higher end of the range? Thank you.

Sure. So the main element that impacts gross margin continue to be mix. And as I said in the prepared remarks, since we expect DRAM to increase in Q3 and DRAM has a lower margin than Foundry and Logic. So as a percentage of the total revenue, DRAM is going to have a bigger share which means you know it drags the gross margin down a little bit and that’s why the range is 44% to 47% even though we see an increase in revenue.

Thanks guys. Good luck.

Thanks, Craig.

[Operator Instructions] Our next question comes from the line of Brian Chin with Stifel. Your line is open.

Hi. Good afternoon. Nice job on the quarter and thanks for allowing us ask a few questions. Maybe the first question, Flash has been sort of the ancillary market for the company. And so my question I guess is what, if any manufacturing capacity is transferring over while Advantest willing to exit the market? And what gives you confidence you can reenter this TAM at an acceptably high margin level. Also, do you expect any incremental sales from the acquisition in 3Q and is it nearly accretive?

Yes. So, Brian, it’s Mike. I’ll take that one. I think, focused on this acquisition, you know one of the very exciting pieces about it for us is the elements of technology. You know there is a couple of key enabling subcomponent technologies that Advantest had invested in over the years both in terms of the MEMS technology, which as you know is a key enabler for making the individual probes as well as the interconnect technology that then connects those probes up through the printed circuit board to the tester. So one of the more exciting parts for it is the general technology, which we feel is applicable across many of our served markets and product lines in the future. The current revenue, which was about $7 million in 2019 expected to grow a little bit in 2020 is primarily associated with Flash. They’ve got a decent cost structure on this emerging product, but it was going to take some significant investments to really scale that, things like the Design Automation that FormFactor really has, the worldwide support infrastructure the FormFactor already has and so we worked with Advantest to put together a business model for looking how we would help grow this business, and the acquisition seem to make sense. To set expectations it’s going to take us an assessment period to figure out what exactly those investments are, what flash market share we can gain, but there is an exciting opportunity there to grow off the single-digit millions that that product did last year. So we’ll keep you updated as we go through that assessment. But I think overall, when I look at the technology portfolio, we’ve acquired some pretty exciting additions to the FormFactor roadmap.

Okay, interesting. So some IP synergies you know even beyond Flash, but of them I mean it’s like a $200 million, $250 million kind of TAM just for Flash in itself.

That’s right. And I think you know our primary focus here is to understand those technology synergies early, you’re right. The overall Flash TAM is something like $250 million where we hold relatively small share. This will probably help sort of gain share there, but again some of the technology elements are very exciting for the broader FormFactor market space, not just in Flash.

Okay, great. Thank you. And then maybe turning back to Logic for a moment. In the past, you know delays in your NDU customers technology roadmap has increased some volatility of your revenue and really for that matter, the entire supply chain. You did provide some puts and takes in your prepared remarks, and it sounds like demand remains out in the 3Q, but presently I know it’s just kind of hard math maybe to put you on the spot out here. But when you tally up sort of the increased 10-nanometer activity, you know the increased incremental advanced packaging opportunity and maybe minus a push out of 7-nanometer. In calendar ‘21, do you think this could be somewhat of a push from a revenue perspective? Any sort of thoughts incrementally would be helpful.

Yeah. Certainly an interesting question, because as you know there are a lot of puts and takes. You know a couple of things that have really driven this business to strong levels in recent quarters and even recent years. You know we’ve had this overlap of the 14-nanometer and the 10-nanometer node with this customer continuing to aggressively release designs on both of these nodes. We’ve also had what – it feels like a pretty fundamental increase in wafer test intensity, trying to drive more test content to the wafer level closer to the fab, that obviously drives up the overall wafer test and probe card spend and that’s a theme we’ve seen across the Foundry and Logic space, but with this customer in particular. 7-nanometer in ‘21, I think for us, by and large remained a development activity. So in ’21 probably not too much of a tailwind, but I do think you know as we look to longer-term these elements of node overlap, probably some reduction in the test intensity as yields go up and the node strategy stabilizes, a little bit. I don’t know whether it’s a push. But I do think, you know reasonably comparable levels are not a bad expectation at least as far as we can see through the rest of ‘20 into ‘21. I'll give you the usual caveat that with a turns business where lead times are well within a quarter, you know our visibility remains very limited. But some of those trends we talked about as the puts and takes remain mostly intact I think as we go through the longer-term future.

Okay, great. I appreciate the thoughts, Mike. Thanks again.

Thank you. And our next question comes from the line of Amanda Scarnati with Citi. Your line is open.

Hi. Thanks for taking the question. Mike, just going back to sort of this Intel conversation and you touched upon this a little in your prepared remarks, but if Intel were to switch over to sort of an outsourced manufacturing position for 7-nanometer or beyond, how do you think that would impact your business? Or do you think it’s sticky enough what you do with Intel that it would have you know limited impact on it?

Well, I think it’s sort of an interesting data point on our fundamental customer strategy, right? If you look back to FormFactor several years ago, we really didn’t have a very strong foundry business. In fact, I think it’s characterized – it’s fair to characterize it is pretty weak. We made a strategic initiative to become a key supplier of the world’s leading foundry, so that you know if any of these shifts in manufacturing strategies from any of our customers, whether they be microprocessor IDMs, fab-lite customers, fully fabless customers, those events and shifts we want those to be agnostic to us. So I think it’s still early and sort of everybody figuring out what the impact of potential manufacturing strategies are for our largest customer, we really feel like we have our bases covered now that we’re significant share and a key qualified supplier for the advanced nodes at the world-leading foundry.

And then just on the capacity constraints. Can you expand a little bit more on the impact that that had within the quarter and if it’s leading to any sort of significant backlog going into the September quarter? And when you expect that new capacity to be able to come online?

Yeah. I mean maybe I will deal with the second part of the question first. So as we told people in the past, inside our existing footprint, we’re by and large capacity constraint, right. We’ve produced a high as near $180 million in revenue in Q4 ‘19, as we work through the first half of 2020 with different shutdowns and then social distancing, obviously you know reduced revenue levels. The second quarter, you know we were fortunate to not have any significant shutdowns, but we got off to a pretty slow start too, right, we were just re-ramping and bringing people in and learning how to manufacture in this environment, as where some of our suppliers. I think exiting the quarter, it’s hard to use the word normal in this environment, but I’d say operationally we’re by and large back to normal and on run rate basis operating at you know essentially the outputs, the throughputs, the cycle times that we want to with a couple of exceptions here and there. So if we look longer-term, you know we’re not pushing much of the backlog – significant backlog into Q3. It’s more than normal demand profile. But that’s what’s motivated us to go purchase an extra shell for building, start to outfit it, spend the CapEx to slowly build capacity, so that we don’t find ourselves constrained. You know we’re obviously quite bullish about some of these trends like 5G and advanced packaging, and we want to have at the very least the optionality to have the capacity in place to go capitalize on those opportunities and grow our revenue.

Great. And then the last question for Shai, just on the operating expenses. How quickly does that sort of ramp back up, and this might be something that you’re going to talk about at the Analyst Day in a couple of weeks. But the revenue came down or the OpEx came down quite a bit this quarter on sort of one-off charges potentially. When does that kind of revert back and should we see a step-up as we kind of go through the back half of the year?

Yes. I think it’s a good observation. And if you look at our outlook for Q3, and you do the math from you know the gross margin down to the EPS, you will notice that we expect higher OpEx in Q3. Probably in the range of $46 million to $48 million versus the $41 million in Q2. And these increases you know it can contribute to few things. First of all, we have the acquisition that we announced today, they are you know adding to our OpEx. With higher revenue and performance in Q3, we expect higher performance-based compensation. We also had our annual salary raise in the beginning of the quarter – currently in the beginning of the quarter, travel is expected to pick up in Q3 after you know almost completely shut down in Q2. Some of our R&D teams are you know in addition to working remotely are going back to the office or to the labs. So we expect to see some ramp up of R&D projects and materials. And we also have a significant investment in information technology, mainly in hardening security but also related to our ERP consolidation project, which we’ve talked about before. So some of these elements are one-time in nature like the IT investment. Some are variable and structurally like the performance-based compensation and some have a more you know permanent nature like the salary wages. And as you noted, we’ll get into more details of you know rest of the year longer-term, et cetera in the Analyst Update we’re going to do later in August.

Okay. Thank you.

Thanks, Amanda.

Thank you. Our next question is from David Duley with Steelhead Securities. Your line is open.

Yeah. Thanks for taking my question. Mike, it’s probably for you. As far as test intensity goes, I think Teradyne made a big deal on their most recent conference call about increased test intensity across the board, not only with the APU chip but with many other parts. I was just wondering what you’re seeing as far as test intensity goes and does the increased tester intensity translate directly to probe card intensity as well, plus or minus or how should we think about that?

Yeah. So I’ll amplify what you just said, obviously, given that we’re the interface between the ATE equipment built by Teradyne and Advantest and the customer chips on the wafer, there is a pretty direct correlation between the test intensity they see and the volume of required probe cards. You know there’s a variety of things driving this. You know 5G is a really good example. When you look at the complexity of testing some of these 5G chips, you know the frequencies involved, the brand new yield fallout modes that are involved, the use of advanced nodes which by themselves are probably not yielding, where customers would like them to be, you end up having a variety of factors that are driving the need for more and more test. The other nice thing obviously about testing at the wafer level for our customers is to get the answer faster. They avoid putting more manufacturing time, more dollars into a chip that’s not going to yield once it gets to the final package state or in the advanced package with some other chips. So I think there are some fundamental advantages to driving test intensity up at the wafer level. We along with people like Teradyne and Advantest through our performance are able to enable more of that, but some of it’s just driven by the complexity of the silicon, that’s running through new applications like 5G and advanced packaging.

And along those same lines, do you think – when you think of the overall growth rate of the probe card market you know would – this – these trends help increase the overall growth rate or do you have an idea about the incremental growth caused by the move to advanced packaging?

Yeah. There are many things driving the advanced probe card growth rate, and certainly what we’ve seen historically and what various forecasts either by us or by various market prognosticators indicate is, that the advanced probe card market is growing faster than the semiconductor market overall, primarily for those reasons right. Test complexity, advanced packaging, really driving more and more tests especially at the wafer level, which means more probe cards. This is going to be a fairly prominent topic at our August 18th call, we’re going to take a step back and look at our served markets again with everyone. And you’ll see that some of these drivers that are upping both complexity and intensity are producing above market growth rates for the high end of advanced probe cards where we lead.

Okay. Final one for me and I’ll pass it on to someone else. Can you take a guess as to as far as sub 10-nanometer processes coming out of the foundries? What percentage of parts do you think are going into a true advanced package at this point?

Some of that’s a bit of a nomenclature question too, because advanced packaging means different things to different people. We’ve tried to be you know a little bit more conservative in our definitions. So you know things like fan-out, things like HBM, not regular flip chip, we view the former is advanced packages. So something like fan-out.

Agree.

My guess is we’re somewhere around 50% of the overall wafer outs with the advanced nodes are again integrated with some of these – some flavor of advanced package like that. Obviously, if you look at our key customers, they’re pushing more and more of the technology burden at 7 and then 5 and below that, on to some of these advanced packages. So we would expect that attach rate to increase over time.

Thank you.

Thanks, David.

Thank you. And our next question is from the line of Tom Diffely with D.A. Davidson. Your line is open.

Okay, thank you. Thanks for taking my call. So I guess carrying on the capital intensity question, when you see a second or third generation chip on the same node, say 10-nanometers, are you actually seeing a decrease in test intensity at this point or is it just fairly high level?

Certainly, our experience has been, it’s still at fairly high levels. You would expect a decrease over time as the fundamental yield of the node increases. You know the first designs out on the node typically are relatively low-yielding and so we’re going to require more test, just to get a given number of good die out, but also to debug and reduce those failure modes. But we’ve seen test intensity hold up pretty well as we’ve gone through, for example, the 10-nanometer node, because you know each new design has its own subtleties associated with its yield failure. So over multiple years, the node like 14-nanometer, which is now, I don’t know, seven or eight years old, certainly the test intensity was much higher at the start of a node than it is now. In general, with some of these advanced nodes, we do see the intensity diminishing but not diminishing in a really significant way, kind of holding in here.

Okay. So Mike when you look back at the delay of the 10-nanometer ramp initially a few years ago that caused a couple of quarters of pain for you. Was that just driven because it was a last-minute delay and there weren’t other designs that 14-nanometers to take its place and that was just a waiting period? Or was there something more to it that caused the big dip in business for you?

Yes. And I – Tom, I think you’re talking about sort of the early part of 2018, if I recall. That was really problematic because of the last-minute nature of it sort of designs that were planned for the 10-nanometer node. Once the 10-nanometer node were delayed, it had to be respun on the 14-nanometer node and that caused between one and two quarter delay in our business as that reshuffling of our customer roadmap took place. I think if you look at the current 7-nanometer situation, obviously we were not on the verge of 7-nanometer production here. And so quite a bit different situation than 10-nanometer which were – where we experienced the change right on the verge of the planned production ramp of that node.

Okay, that’s helpful. Thanks. And then finally, when you look at the ramp that you’ve seen on the Foundry business with more fabless customers go into leading edge. I guess I’m surprised, we haven’t seen a Foundry become a 10% customer yet. Maybe just a quick update on how the ramp is going for you?

Yeah. I guess I qualitatively characterize it as we’ve been within striking distance of a 10% level over the past couple of quarters. So you know this is a significant business for us that continues to grow. Obviously at these kind of levels like aggregate revenue levels for the company, the bar gets higher to become a 10% customer, as we continue to diversify the business and win business around. So, I guess, I’d say stay tuned, given you know where this business is in the concentration of this business and how it’s growing on multiple designs for multiple applications. I would expect to see it in the 10% list in the relatively near future.

Okay. Thanks for your time.

Thanks.

Thank you. And our next question comes from the line of Robert Mertens with Cowen. Your line is open.

Hi, this is Robert Mertens asking on behalf of Krish Sankar. Thanks for taking my question. Maybe first question for you, Mike and then I have one follow-up. Just expand on the earlier capacity question, when thinking about supply constraints earlier in the year and as capacity has come back online. Do you see this as common throughout the whole industry? And then do you think there is an opportunity once you start building out capacity in the future that FORM could take some share gains from any supply constrained competitors?

Yeah. I think all of us, I’ll speak about sort of the market segments we operate in. But I think you know most suppliers in these segments had to deal with some sort of disruption and reduced capacity in the first half of 2020, came at different times around the different – around the world and in different ways. But I think, I’d characterize our served markets as all being capacity constrained right now. You know things like advanced probe cards and engineering systems are not easy to build, and so there’s only a handful of suppliers including FormFactor that it can really produce into those spaces. You know we’ve made the decision to make some investments to both add capacity over the longer-term. Clearly a 90,000 square foot building is going to offer us significant manufacturing capacity increase, but we’re also not going to do it all at once. We’re going to be fairly gradual about how we outfit this building and the number of tools we add to it to make sure that we keep our supply and demand in reasonable balance. But over the long-term, you know some of the secular growth trends we’ve talked about, we’re pretty bullish that the advanced probe card markets going to continue to deliver market growth outside the semiconductor industry, and we want to have sort of the flexibility and optionality to be adding capacity inside a larger footprint and go with that demand.

Great, thank you. And then just one on the DRAM market. Thinking of the constraints over the next few quarters is the main driver still just the technology transitions or have you seen any early signs of capacity growth within the market?

Yeah. I mean, probe card demand remember is driven by new designs, right. So new chip designs, whether they be on existing nodes or new nodes. So you know a node transition and I think there is a fairly decent understanding among the supply chain that there are some node transitions taking place in DRAM right now that is going to drive probe card demand. And say for us, fewer capacity tends to be less of a driver, obviously if a customer is going to produce more wafers of an existing design, they’re probably going to need more probe cards, but where we see the big spikes in demand for DRAM probe cards is on node transitions and new design releases. And that’s part of what we’re seeing right now that’s helping the relative strength in the third quarter.

Great, thank you.

Thanks.

Thank you. [Operator Instructions] Our next question comes from the line of Charles Shi with Needham & Company. Your line is open.

Hi, thank you for taking my question. This is Charles Shi on behalf of Quinn Bolton. Not sure this question can be better addressed by Mike or Shai, but if I look at your midpoint of your guidance for the third quarter ‘20, it’s about roughly $20 million up sequentially, and if you want us to model like DRAM revenue at roughly $30 million level, that’s about $10 million up. So I have to think that the Foundry and Logic part of the business is probably holding up very well and – or even like grow sequentially by about another $10 million. So I really wonder that whether the strength or even the growth is really coming from the Foundry part of the business or directly coming from your largest Logic customer. And on top of that I think we – you guys talked about, maybe some of the demand from your largest Logic customer could be transitory as we talked in Q4 last year. Are you still thinking about that or you have really changed your view on that, and whether that customer is really going to set a new normal instead of at $30 million, maybe now to $60 million?

Charles, this is Mike, I’ll take that one. A lot of different elements to that question, let me see if I can try and distil it. So sequentially, Q2 to Q3, you’re right, in big round numbers at the midpoint we’re up a little less than $20 million. We already discussed, I think it was Craig’s question, the DRAM was probably going to be around the $30 million level, which would represent again in big round numbers up about $10 million sequentially. So the Foundry and Logic business as well as some of the other businesses, the Systems business continues to do pretty well, all contributing to some level of sequential increase as we go Q2 to Q3. I think where we see particular strength in that mix really is in the Foundry business. So if you think about the seasonality or design release cadence of those businesses, we’re coming up on a time when a lot of the fabless customers are aggressively releasing and ramping designs, primarily to meet, lay your handset release cycles. So you know lots of activity there. You know so lots of different puts and takes that get us from Q2 to Q3, but DRAM and then a little stronger in the Foundry business are probably two of the big elements. Returning to the Microprocessor business, we touched on this a little bit earlier in the Q&A session, I think. You know some of the elements that caused us to be a little bit conservative when we gave – when we talked about Q4 and the strength of that customer. I think probably a little more robust, things like test intensity, there is multiple node overlap probably continues for a long time even as 7-nanometer gets thrown into the overall factory mix, we would still expect 10-nanometer to be around. So I think there are some elements of it that get us above the sort of previous expectation of $100 million annual run rate. I don’t think the run rate we’ve delivered in the first part of 2020 are sustainable at that level, but probably think about it as somewhere in the middle of the $100 million annual run rate. And then the run rate we’ve been operating at the past couple of quarters.

Thank you.

Thank you. And I’m not showing any further questions. I’ll now turn the call back over to Mr. Slessor for closing remarks.

Great. Thanks, everyone for joining us today. We’re looking forward to touching base in a little under a month where we’re going to provide you with a new model update and as I said, take a step back and look at some of our markets and the growth opportunities that are driving FormFactor’s business toward that next target model. Thanks again for joining us and stay safe. Bye-bye.

Ladies and gentlemen, this does conclude the program. Thank you for participating. You may now disconnect.