“Supply will go up in the second quarter. It is going to go up every quarter now going forward.”

In context

“bviously, all the supply right now—or the lion’s share—is internal. We do expect to win external customers over time. Our captive capacity and advanced packaging are important differentiators as customers think multiyear. Operator: Certainly. Our final question for today comes from the line of Aaron Rakers from Wells Fargo. Your question, please. Aaron Rakers: Yes, thanks for taking the question. On the supply side, I think in prior quarters you suggested you were reallocating some supply of wafers from client to data center, and the notion was that Q1 would be the peak degree of constraint. As you rolled out your guidance for this current quarter, how would you frame the level of constraints you see in the guidance this quarter, and does the back half improve dramatically? David Zinsner: Supply will go up in the second quarter. It is going to go up every quarter now going forward. We were certainly at our lowest point in terms of supply in the first quarter relative to the rest of the year. What we were able to do in the first quarter was go through finished goods inventory and find opportunities to sell product we did not think we would be able to move. It was either de-spec product or legacy product we had shelved, and then we worked with customers and found opportunities for them to leverage that technology in their systems. That helped a lot. I am not sure we have that benefit in the second quarter. We will scrutinize finished goods inventory to see if we can find some opportunities, but for the most part, what we are relying on for volume growth Q2 versus Q1 is increasing supply. John Pitzer: Do you have a quick follow-up? Aaron Rakers: I do. As a follow-up, o”