We're about ready to begin here. Thanks, thanks for joining. I'm Tim Arcuri. I'm the semi and semi equipment analyst here at UBS. Very happy to have KLA with this session, and we have Bren Higgins. I think everyone knows Bren. Bren is the CFO and EVP of Global Operations. Bren's gonna say a few things, and then we will have a Q&A. Sure. Thanks, Tim. Always good to be back in New York. I'll make some forward-looking statements. Those statements are subject to risk. In our SEC filings, you can see our risk factors. You can access those from our website. I know we'll talk a lot about 2023. Just wanna spend a minute on 2022. As we headed into this year, we thought that the company was positioned well to grow greater than 20%. We thought we'd see sequential growth for the year. We fast-forward here to where we are. You take the midpoint of our guidance that we provided at earnings back in October, it'll look like the company will be somewhere in the mid-20s in terms of overall growth. Our Semi PC business, which is the process control part of WFE, is gonna considerably outperform the market this year, somewhere greater than 30% against a market backdrop of industry somewhere in the mid to high single digits. We'll see what it looks like at the end here. I think it is reflective of a very strong logic foundry demand environment, investments from our customers at multiple nodes, strong leading edge and competitive environment that we've seen, high mix of designs, process technology changes that have been good for good for process control adoption and intensity. Our EPC business, which is the more than part of KLA, which we're seeing increasing customer focus in that area as customers are looking for new capability and cost improvement in areas beyond just front-end manufacturing. At the beginning of the year, we thought it'd be up somewhere in the high teens. Looks like it's somewhere in the high single digits. We have seen some softness in parts of that business, particularly around PCB as it relates to mobile. Especially semiconductors, it relates to automotive, is a bright spot in that business overall, and as I said, some softening on the mobile side. Service, we outlined in our investor day in June that we would see our service business, our long-term growth expectation would be 12%-14% growth, and service should be somewhere in the mid-teens. Gross margins right around 63%. We thought at the beginning of the year it'd be in that range, plus or minus. We've been able to to hold that despite a lot of the cost pressures that are well known out there from an inflation point of view. Think it reflects the go-to-market value of KLA, the returns our products offer, and, you know, our ability to share in that value with customers. At our investor day in June, we did a we outlined a plan to in 2026, to $14 billion in revenue and $38 in earnings per share, $14 billion ± $500 million, $38 ± $1.50, predicated on a growth rate assumption of the industry at semiconductor revenue at 6%-7% and WFE growing at 7%-8%. We made some affirming capital allocation decisions, $6 million buyback announcement, $3 billion of which is in an ongoing ASR. We increased our dividend as well. We think we're pretty well positioned here moving forward, in terms of where we are in the industry and our expectations as we navigate through what looks like a softening environment in 2023. Great, Bren. Thank you. Let's start out just by looking at the top-down versus the bottom-up as we kind of go into next year. I think you said last week, you were sort of implying that you don't see a huge step down in Q1. If you sort of begin to play out the math and if WFE really is down, you know, 20% next year, I'm not asking you to actually guide for the full year at all, but there begins to be a disconnect versus where, you know, WFE being down that much and not seeing much of a decline in the near term. so, you know, maybe can you talk about what your baseline, you know, as you sort of, you know, sort of plan the manufacturing, plan for the year, how do you sort of think about where you're, you know, planning the normalized WFE to be. Mm-hmm ... and, you know, where your manufacturing organization would actually have to be in that environment? It's an interesting question 'cause when we were going through the earnings process and deciding what we were gonna say about 2023, rather than take a bunch of questions about what it might be, we thought we'd just sort of put a number out there. We said it looked like it'd be down somewhere around 20%, most of the reduction in WFE spending would be in the memory space. We were expecting some reductions in foundry, logic, higher in the sort of trailing edge than the leading edge, less or 20%, above that in memory, less than that in foundry logic. The challenge in thinking through it was if you look at the demand we have and the backlog we have and how our engagement with customers is going, both in terms of our views of this quarter and as we look at, you know, the first part of 23, and juxtapose that against what our customers, particularly in the memory space, were saying publicly, is that they were pretty clear what they were going to do from a WFE point of view. It didn't necessarily match kind of what we were seeing internally. At the same time, it doesn't always, right? There's always some times, you know, in terms of how you engage, sometimes customers, you know, you don't get a lot of lead time when there are changes in plans, and orders don't necessarily get canceled, but you do sometimes end up with some push outs. One of the things that, you know, I said is that as we look at next year, that we thought it'd be down about 20%, and that as we move into the March quarter, that it doesn't really fall off dramatically, that it's more of a gradual fall off as we move into the year. I'm not gonna guide the June quarter and beyond, but there is a little of this sort of fun with math that, okay, if it's sort of the gradual decline, what does it ultimately get to as you move through the year? Is there some period of time which could happen, and has happened in the past, where things fall off very dramatically from one quarter to the next? That's the hard part to think through. What we're doing here is, you know, at KLA is we believe back to the point of our plan and some of the constraints that we had over the past couple of years, is we wanna make sure that the company's positioned to be able to sort of meet the business level expectation. Is there a $75 billion run rate out there? That plus whatever flexibility to ensure that we can respond very quickly to an increase in customer demand. One of the challenges we had, and everybody had, as we went into 2021 and as it carried forward into 2022, is some of the supply chain challenges and being able to ramp that supply chain. As we've looked back at that, we've given our growth rate expectations and the structural growth view of the overall industry that we have. We wanna make sure that we're better positioned from a manufacturing point of view to be able to ramp faster. We've been making those investments, and I think we would continue to make those. Of course, you have to adjust to whatever reality that you see in front of you. You know, right now it's a little bit hard to manage. You're operating off of what your customers are telling you, and then you react as you, as you need to. You try to pull the leverage you can, right? In terms of, you know, how many headcount do we have, how do we leverage things like overtime and so on, in terms of how we're managing our own capacity. How do we ensure that our supply chain has a realistic forecast, but at the same time has the flexibility built in to be able to respond faster. We'll have to see as we go here, but that's how we're thinking about it. Got it. Okay. Let's talk about WFE share because this has been a great year for you in terms of WFE share. I can't remember a year. I've covered KLA. I think this will be my 23rd year next year covering KLA. Actually more than that, maybe even 25 years. I can't remember a year where you gained 150 basis points worth of WFE share, which is what you gained this year. You went from 6.3% up to 7.8% this year. Of course, it depends on what WFE you use, but that's the basic math. That's a record high WFE share number for you. Some of that maybe is because of the supply chain problems that your peers had that you didn't have, so maybe that's a little bit inflated. As you kind of think through what is lasting share gain versus what is maybe some more temporal share gain that's a result of some of these, you know, supply chain challenges that they had that you didn't. Sort of how do you think about that dynamic, and maybe what is the right normalized WFE share going forward? Would you say 7% is more normal, not 7.8%? That's a good question. Tim, you're dating me too, 'cause I think we started out in the industry together, back in early 2000s, right? I remember having conversations with you. You were with a few banks ago. Yeah. So a few points on how to think about WFE share overall is that, yes, we saw a step up over the last year. Certainly our ability to execute in the supply chain was a factor in that. I'm really proud of how the team's executed in that overall. When you look at 2023, just a few points to think about. There's always some puts and takes, and I think there's this backdrop of did others have some revenue that ultimately gets recognized this year that would have happened last year? I don't know. I think that the ultimate drivers to the strength of share, and we outlined some of this at our investor day, where I said, "Hey, at least be seven and a quarter percent + moving forward," is that, you know, we believe that there's a step function increase as we've seen the mix shift to logic and foundry. You have to remember that from calendar 2012 to calendar 2018, WFE in logic and foundry was a -3% CAGR. Right. The delays in EUV and the, you know, some of the challenges in terms of roadmaps out there drove a lot of capital efficiency into the industry. Customers were able to reuse a lot of tools. You didn't have the end market designs that are now fairly robust at seven nm and beyond. You didn't have a lot of designs falling through. You had the leaders adopt the most advanced nodes, they move on to the next node, you didn't have the follow-on designs that would consume that capacity. Furthermore, you didn't have technology changes that were significant that forced an upgrade of that capacity, customers were able to use it fairly efficiently. As we moved into 2019, you had the introduction of EUV, and then we saw that the seven nanometer node, this explosion in end market designs. You could have argued we maybe we should have seen it earlier, given the strength of our reticle inspection business, where you have to do reticles for all those designs, and we saw that inflection in that part of the business first. That enabled our. Our customers had a much stronger design environment. That forces them with tighter process windows and managing more designs to adopt process control to greater, at a higher rate. You had more investment in logic and foundry overall. As our customers started to prepare for the five nm node, they had the seven nm node, and in fact, even last year added capacity to it, dedicated to these designs that were coming from their other customers. That was a whole new spend. The ability to migrate was also challenged by the fact that you had the introduction of EUV. All these factors really, in memory, the inclusion of EUV and DRAM, which was another step function for us, drove us from this low 6s into the mid 7s. As we look at where we are today, in every other down WFE year, KLA's always outperformed, and we always outperform because usually what drives the reductions in WFE is in memory, which isn't our strongest market in terms of process control intensity. Customers always invest in their roadmap. There's certain products at KLA that get purchased no matter really what's happening with the top-line environment. Furthermore, in this current cycle, we've seen demand for certain products like our Broadband Plasma optical inspection products have really inflected. It's been likely the fastest-growing market in WFE, or certainly one of them, over the last few years, and it's the largest business in the company. It's a $2 billion run rate. As I look at 2023, it's an enabling product, but I actually think it grows into next year, and its lead times are very long, and it's gated by some meaningful supply chain issues that affect us very similarly to what we see in lithography. You have the normal dynamic of just enabling purchases to enable roadmaps, but then also this inflection. With the mix changing as a% of the total, that tends to be to logic foundry, that tends to be favorable for KLA. We also, if you look at our market share, our market share has grown 350 basis points since 2019. We expect we'll gain some share this year. I think there's a share element also within process control that is favorable. The final thing is I think that is something we'll see is that there's infrastructure investment in China that's happening to enable wafer infrastructure, reticle infrastructure, and that's an aspect of WFE that some of our peers aren't as exposed to. There's a lot of legacy projects in China, and so they need wafers, they need reticles, and being able to source them from the merchants out there has been somewhat problematic over the last few years. That's incremental investment also for KLA that I would expect to see. Long story short, when you add up all the puts and takes, and we'll see how it plays out, I think we're operating from a new level, and I feel pretty good about our ability to maintain this kind of mid-sevens moving forward. You think even as we look, again, this is out into 2024, you know, who knows what happens then? There's this school of thought that there's a bunch of this deferred WFE that your peers get, that is, you know, part of WFE this year that your, you know, peers get that then won't get repeated for them the, you know, following year. You think even as you look out into 2024, you think that your share should sort of stay in the mid-7s? I think so. Look, if you have a huge growth year in memory investment and logic relative to logic and foundry, that puts pressure on process control intensity. I think some of these puts and takes will play out, though. I think, as we said in Investor Day, I think 7.25%+ is what we thought we'd be driving to moving forward. We're sort of in that mid-sevens now, and I feel pretty good about our ability to maintain that going forward through a combination of a lot of the things I talked about. Great. Let's talk about China. Mm-hmm. Maybe we can start by talking about how to handicap exactly what is lost from the restrictions and how you think about some of the puts and takes are around this whole concept of gross versus net, because obviously there could be some add back, there could be some licenses granted, there could be some companies that are in the red zone that can move their process node into a green zone. Can you just talk about that? I think it's gonna be very fluid as a result of that, right? Because the predictability, even if that can happen, and our customers are actively trying to work through some of those issues in terms of engaging with not just us, but also engaging with the government about, you know, what are they really doing from a technology roadmap point of view. The challenge will be predictability of if there's a change, you know, and an opportunity to get licenses as it relates to some of those roadmap adjustments when that might happen. We tried to size it between $600 million and $900 million when you just add up the actual direct impact of in 2023 of all the systems. A, a portion of that, about 10%-15% of it is service. There's a bit of a service headwind too that's happening in China. As I was saying earlier, when you look at where most of the investment has been, and if you look at this infrastructure investment, when I look at my native China business overall, I actually think it's likely down, inclusive of the impact of some of the government regs, I think it's likely down less than the overall market based on what I see today. It gives you a sense of some of these other things that are happening there. It could be one of those swing factors in WFE, back to your point about the impact and maybe relatively less for a company like KLA than maybe a more process-centric peer company that maybe has the benefit of deferred, but a bigger loss in China. Right. Back to some of these moving parts as you look at 2023 and overall share of WFE. Obviously, we actively engage with the government. We're in full compliance with the rules as they're stated, and we'll see moving forward. Certain tools we'll be able to reallocate to other customers. That assumes that eventually, as you keep pulling stuff forward, that if you're able to continue to do that, then you're driving WFE up, right? I think if that happens, then yeah, you'll be able to reallocate and we'll end up with a higher WFE number. In terms of direct impact, it's really hard to, beyond the way I described it, to get into more details than that. Obviously, there's a desire to use non non-U.S. suppliers. You know, generally KLA as a differentiated supplier, we tend to have less exposure to that, but there's always that exposure if you're a customer and you're trying to get parts that are products that you can't get from somebody that's domiciled in the U.S. Got it. Can we talk about process control intensity generally? It used to be that process control intensity in foundry logic was about 50% higher than memory. Memory process control intensity has been actually ticking up recently. You know, you come out with some new tools to address that. You do, if you look at your share of memory WFE, your share of memory WFE has actually gone up a little bit. Can you talk about process control intensity and maybe specifically what's happening in memory that's causing memory process control intensity to tick up a bit? Sure. No, it's a great question and something we spend a lot of time on. The transition from 2D NAND to 3D NAND was a good inflection for process control intensity. It does, to your point, it is about half of what logic and foundry is for specific reasons, right? You have more commodity parts, you have repair and some redundancy in memory, for those reasons, customers don't inspect and measure as frequently as they do in a logic environment. As you move from 2D to 3D, you move to vertical structures. Those structures required more metrology 'cause you think about you're measuring, you know, different angles, you're measuring trench depths, you have to measure wafer flatness. You also saw more inspection for process tool monitoring to try to make sure that process tools are very clean before they start to process. We've introduced new capability that we've been, you know, trying to drive into production over the last few years of some new X-ray technology that can do high aspect ratio measurement and channel hole measurement through the stack, which has, we've been able to drive from an R&D point of view, but trying to get it into production and therefore higher volume purchases has been a bit elusive for us. That's what we've seen in memory, or in flash, and we've seen that continue to. We saw that step function up, and we're seeing it kind of drifting up a little bit. In DRAM, as I mentioned earlier, you've had the introduction of EUV into DRAM, and so there's infrastructure around inspecting and qualifying and ensuring that the reticle fidelity is maintained through the process. Customers have had to purchase some of that capability from us, and so that was a contributor also in the last year or so. Certainly as you see more design shrinks, you see more EUV layers, it does create the opportunity for us in memory to see a little bit more increase. I think it's never gonna be like a high-mix logic foundry intensity would be. There's some opportunities, and if we can solve some of these unique problems, it does create opportunities for us. Great. Can we talk about EPC? Mm-hmm. Maybe can you just talk about some of the macro drivers that are driving the EPC business? I think, you know, there's a lot of volatility inside of FPD and inside of the, you know, PCB businesses. Maybe just look out a little bit and sort of, is this a double-digit grower, EPC over time? How... And, you know, what are some of the, you know, two or three biggest drivers for the growth of EPC over the next few years? Yeah, no, it's a great question. If I just take a step back and go back to the decision to acquire Orbotech, which is the biggest part of PCB, but there are other parts of KLA that were merged into that group, was that we wanted to move in and look for opportunities where our customers were doing a lot in the front end, was getting prohibitively expensive to continue to drive most of their innovation and capability there, and so you were seeing this evolution in the packaging space. You were also seeing this broadening in specialty semiconductor that made the Orbotech acquisition a unique asset. We got three businesses, what we were looking to do is could we take businesses that exposed us to a broader SAM in an area where our customers were going, that we had market-leading positions, that there was technology evolving over time, we could take that market-leading position and get more out of it through our operating competencies and process, our KLA operating model. We went we drove meaningful synergies out of the business, about 2x, we talked about this in our investor day, about 2x of what we had originally targeted, tried to position the business such that we could grow, on the revenue growth, we could grow the profits at KLA corporate level incremental operating margins. We've been able to do that over the last couple of years too. Not every business carries the same margin profile, but if we can find the ability to differentiate in market-leading positions with evolving technology, that will drive the incrementals very similar to the rest of KLA. I think we've been able to do that, and like I said, we got the synergies. I think we've done pretty well from an operating performance point of view. The PCB business has had some weakness in the mid-end of PCB. There's the low-end commodity where there's less participation from KLA. In the mid-end, it's just principally around mobile and mobile devices. That's where we've seen some weakening. You have the advanced part of PCB, where you start to get in the substrate part of it, where it integrates into advanced packaging, which was the most interesting part of that business for KLA. We believe that as you start to see pitches and density shrinks and density of lines and spaces shrink in the boards and the integration in the package, that it moves towards a higher technology solution where we could leverage other capability within the company. We're moving down that road. We have some new products that will come out at the end of this year and into early 2024 that is encouraging from an advanced packaging point of view. Specialty semiconductor is has also been a nice growth business this year compared to last year, and we segment our reports, so you can, you know, see some of this data as we report it. You. We acquired some niche process businesses that enabled us to, A, to run the process business in a way that we wanted to, but also be able to engage with customers at a higher level and differentiate in the markets that we think we can do that. They design specifically for some of these markets around RF, power, and advanced packaging. We've been able to go in and execute there, and those markets have inflected, and so it's been a very good business overall for KLA. We have some new products in the packaging space, like plasma dicing as an example, where they've used mechanical or laser saws, which kind of create fractures in the package substrates that this is a cleaner way of singulating wafers. There's opportunities there. Obviously, automotive is a big part of that, working with specialty substrates like silicon carbide and gallium nitride, there's parts of the business that are process tools that do etch and deposition for those substrates. Automotive generally, we've been able to take the channel within EPC, engage with customers, drive some standards into the automotive ecosystem, leveraging both inspection metrology with some unique machine learning that we've attached to those tools to not only look at electrical parameters and performance, but also reliability, which is a big problem in auto. Coupled with this, the specialty semiconductor part of the business. We've seen our auto business triple in the last, you know, three years. It's about $700 million across specialty, but also the inspection and metrology parts of it. Flat panel is a more challenged business. Not as much value for yield management there. We have seen some growth. We tend to be, you know, more in the technology buy area of flat panel display. Over time, we would expect as you move to more semiconductor-like processing, like MicroLED, for example, that might create an opportunity for us to engage in a higher value area. What really drove our acquisition was really to think about those opportunities that I talked about. We did what we needed to do to ensure the flat panel business is positioned for those inflections, but at the same time, not necessarily a negative for the company in terms of profitability. EPC grew about 10% this year. Yeah, it should. Yeah. Of course. Give or take. next year, I mean, I have it modeled barely growing, but what's your outlook for EPC next year? I think it's flat, maybe it's down a little bit. I think it's probably down. A lot of it will be dependent on this issue and how quickly we see PCB. One hand, we felt the pressure in that business earlier, so we might actually come out a little bit later. It's also predicated on some of these product launches that I mentioned. Especially Semi PC should grow next year, so that part of EPC should be positive. Yeah, I think it's less than the declines in WFE. Whether the whole thing grows or not, sort of flat, maybe flat to down a little bit. Got it. Let's talk about the balance sheet for a second. You've always had one of the most optimized balance sheets around. You did the special, you know, years ago. We're now dating ourselves. But you tend to think or you've tended to think a little differently about the optimization of the balance sheet than I think some of your peers have. And, you know, you have a lot of cash. You've got, you know, $2.9 billion worth of cash. How do you think about optimization of the balance sheet from here? What is the minimum cash balance? You know, would you be comfortable taking cash lower? You know, how should we think about capital return over the next few years? Well, I appreciate the compliments earlier. I think sometimes companies don't realize how much value gets trapped in how you finance a business and how you allocate the capital that it generates. We've, at KLA, felt like, look, to get all the capital the business generates valued is we've got to deploy it well and be fairly explicit about how we do it. Certainly there were reasons for us to take a permanent tier debt, which we upped a little bit to basically get back into our target range, given the growth of the business back in June to finance the ASR. Our belief that, you know, 1.5x-2x leverage is appropriate amount of leverage given the level of business that or given the type of business we have, the characteristics. Service being one of those drivers that provides a fairly predictable and sticky revenue stream, predictable earnings stream, that gets you comfortable with not only debt service, but also dividend levels. It's about, you know, putting the cash to work either back into the business, pursuing strategic opportunities, all that juxtaposed against the alternative of returning the capital to shareholders. That sort of guides our decision-making process at KLA. I think that, you know, when we have pursued M&A opportunities, it bests the alternative, and that's how we think about it. We put the capital back to work in terms of a steady return strategy. We've raised the dividend 13 years in a row, so we think a balanced approach is the appropriate way to think about it, and growing the dividend in line with the growth rate expectations of our cash flow. If we believe that we can grow the top line 9%-11% over time, and we can grow our earnings one and a half times that revenue growth rate, that we ought to be able to grow the dividend, you know, 10%-15% per year. That's how we generally think about it over time. That you have to be committed to growing it and have an explicit strategy to get it valued. We adjusted our cash balance up from $2 billion-$2.5 billion to $2.5 billion-$3 billion. We're managing a bigger business now. We're managing across different markets. Some of what we have acquired is less mature in terms of some of the working capital optimization and so on, and we're working through all that. We think that's an appropriate amount of cash for us to pursue any of our strategic alternatives as they may present themselves beyond, you know, we'll call it a, you know, $1 billion or so, $1.5 billion, then that would require us to go out and raise additional capital, which we could do. We have a $1.5 billion revolver that's partially drawn, but not much there. We think that, given the business and where it operates today, is a reasonable albeit conservative view of what's required to run the business, what kind of cushion do we need to ensure that we can right size in any environment and have enough capital to pursue whatever strategic options may present themselves. We're gonna run our leverage in that target range and flex up as appropriate as strategic options present themselves. We like the businesses we're in, right? Most of what we've done, outside of, from an inorganic point of view, has been more, strategic purchases, some supply chain stuff, things that are more make versus buy to enable the growth of our portfolio, our positioning in WFE and, to support the businesses we're in. Great. I had a question about bookings. I know that you don't tell us bookings, but you had $13.5 billion worth of performance obligations that was in the queue. That's not backlog, but it's backlog without a timeframe, without a, you know, 12-month limit on it. You know, we can basically calculate your bookings. They were down 35% sequentially. Book to bill was about, you know, 1.2, give or take. 15 months worth of backlog is a lot. Do you see some examples of customers, and this is not just a question of you, this is a broad question that I think, you know, may or may not be actually happening, but I get the sense that some customers are placing bookings simply because there is so much backlog and because lead times are so long. Do you, in your customer discussions, do you get any sense that because you go to them and say, "Hey, I have 15 months worth of performance obligations, you know, you can't get a machine until, you know, a year and a half from today." They say, "Well, I don't know what the world's gonna look like a year and a half from today, so I'll just place some bookings just to have something in the queue." How much is the... Just to have something in the queue, how much is that a factor for your quarterly bookings, do you think? No, it's an interesting question, and the quarterly bookings is always a tricky one, and you've also got generally fairly consolidated spend, and you've got high ASP. Sometimes it comes together in large deals in a given quarter. I don't know if that necessarily implies anything, particularly when you have a lot of backlog about the next quarter and beyond. It provides some visibility in terms of expectations going forward. Look, every customer runs through the process when they give an order. As a CFO, look, there has to be a budget. You know, there's certain control aspects of approving things. If you're a customer, you know, not one of our leading customers, one of our secondary customers or a new customer, then you absolutely will have to give an order to get slots. You're right, with extended lead times, at some point, you know, customers are like, "Look, I've run through my process. I believe, based on the, my business, that I will need a tool in a certain timeframe," or they're building a new facility. So they will plan for that. There's always the issue of, as anyone, you don't necessarily know what your business conditions are gonna be at that point. Around certain products, You know, if you run the risk of getting out of line, right? Which is always a challenge for customers, if they were to say, "Okay, well, if I wanna delay, then I either lose that slot. When do I get another one? Does it open up the contract for negotiation around pricing and things like that? There's always those calculations out there that customers have to do ultimately when they get to that point. It certainly gives you some visibility that there was a strong intention to take, you know, take this business in certain timeframes. As I said earlier, we're enabling, so a big chunk of our products are for these enabling products. Some of them are slotted way out into the future because there's just a fundamental gap between what customers want, our ability to supply, and the lead times to get optical components and the equipment to make them, and the raw materials for them is very extended, and we're not the only one in the industry with that challenge. Around those products, those customers, you know, are very strongly committed, I think, to those slots, and it would take a very significant change in the business that would affect kind of their long-term planning around technology roadmaps for them to try not to or to get out of line for those kinds of systems. So there's always, I think, some movement there in terms of how to think about backlog, but I, like I said, I think if you look at what we have, there's a lot more of it that is more tied to products that are more resilient through periods of softness. Got it. We'll just have to see. Now, we also have some customers that are big customers that we work very closely with that never actually give us orders, or they give us orders in a quarterly timeframe, right? I book and ship in the same quarter, so it never goes into RPO. There are some nuances in there. What we did report was thirteen and a half billion or so, and that 45%-55% of it was deliverable outside of 12 months. Yeah. Can we talk about China? I'm getting a question about localization efforts in China and where the local vendors stand on process control. I mean, KLA, in as much as a software company exists in the semi equipment world, you're it. You're, you know, really more of a software company. That's where the real expertise is, that's where the secret sauce is. I think it's gonna be very challenging for China to replicate what you do. You know, you're very, very low on the list of, you know, what China can ultimately replicate. Can you talk about some of those localization efforts? Do you see any examples of, you know, local Chinese companies picking off maybe, you know, lagging to your business that you would have, that you know, would've gotten otherwise? No, it's a good question. So far, given the lead that we have, we have a number of competitors who've been competing with us with full access to, you know, a worldwide supply chain and so on for years that have struggled to compete in certain markets. I've got a lot of hardware engineers who would disagree with you about our hardware capability versus software. I think one of the things is, as part of software, is our algo and AI teams, where you can really harness the capabilities of the hardware and the system integration that we ship. One of the big benefits of the Gen4, Gen5 product is we've been able to... I would get a lot of questions from investors about, you know, e-beam versus optical and so on. I think we've seen over the last number of years, because of some of the fundamental limitations in throughput and speed of e-beam, that it's a complementary product and can't really meet production use cases. Our big issues at KLA was, well, you know, you're gonna run out of light. Light hasn't necessarily been our problem. It's sort of harnessing and finding and filtering what's real from what's not, what matters, the signal-to-noise in inspection has been our biggest challenge, which we've been able to resolve a fair amount with some of this capability. With these product lines we've been developing and incrementing for years, we have a very tight and, in a lot of cases, exclusive supply chain. Obviously there's supply IP that's part of what we're able to do along with what we do at KLA. We have the scale to have our own internal design teams. It makes us a fairly formidable competitor. We also you know, compete with a portfolio of products that allows our customers to balance technology and economic motives, and not necessarily have one tool that meets all their needs across. If you're a point product competitor, you have to say, "Okay, this tool can do everything," or there's ways that you can avoid doing that. We can be a little agnostic here in how we do it. Customers can pick and choose depending on where they are in terms of process maturation on their particular nodes. It makes us fairly formidable. We understand the value. We can differentiate. We can share in the value with customers. It drives the gross margin, which I think is the best indication of differentiation. It, it just makes it very hard for, I think, any upstart competitor to break into this space, just given the legacy of, and history of KLA.Of the position that we have in the market. Then can we just. We have about two more minutes left. Can you just talk about, there's all this discussion about legacy process nodes becoming a bigger portion of WFE over time. If you listen to Applied, they'll say that, you know, legacy nodes have gone from 1/3 of WFE now to 1/2 of WFE. Of course, it depends what you call legacy node versus a non-legacy node. Can you characterize the inspection intensity for you in the legacy node versus in the leading nodes? Is it that different? Yeah. Actually, it is very different. When we characterize it, we talk about 28 nanometer and above being legacy, and anything less than 28 nanometer is more leading edge. Most of our business is 75%-80% of foundry logic is at leading edge, and it's in the, you know, three, five, seven nanometers. There's a little bit in that interim space between 28 and, with some specialized offerings from different customers, but most of it is at those most advanced nodes. If you're building a legacy fab, and you're seeing some of your markets inflect around industrial or automotive or communications infrastructure, IoT, those parts of the market, and you're building a part you've been building for a while, and you've got a fairly mature process, you're gonna add capacity. The process control requirements for that are fairly limited. It's working. You just deploy what you've been doing before. If you're doing a design rule shrink change for different capabilities or there are changes around specifications, particularly as it relates to reliability, automotive as an example, and that's causing a spec change in those parts, then that does change how those customers look at their process control strategies. We're less exposed to it, except in those situations where, you know, customers may be experiencing some change in how those parts serve the, that particular market. Some of the logic foundry legacy investment in China has been more upstart and more subscale, so you're seeing a heavier level of investment there. When I aggregate the whole legacy environment, it's more process control intensity is more like a memory fab, where an established, in the established example I talked about, is gonna be somewhere, we'll call it 8% or 9%. The China piece might push it a little bit higher. We'll call it 10% or 11%. You start to blend it out. You're kind of in that 10-ish% versus a high-mix foundry. Leading-edge foundry is more in the mid-teens, or higher teens. Got it. Well, we've run out of time, but, thank you, Bren. Thank you, Tim. Appreciate you having us. Thanks very much.