“Yeah, no. The fall-through that you should expect is in the 75% to 85% that we have guided.”

In context

“starts there. We have the capacity. We may make some incremental investments on the ATs because we are seeing, on the assembly and test side, a little bit of a tighter environment, at least externally. So as you know, we have brought most of our supply internally, and we have that knob as well. We are very excited about the fact that we are prepared. If the market wants to grow at the same rate as Q1, we mentioned 19% year over year, we are ready. If it wants to accelerate, we are ready as well. Mike Beckman: Joe, do you have a follow-up? Joe, do you have a follow-up? Joe Moore: Well, just on my follow-up, on the gross margin aspect of that. Is the incremental gross margin going to look normal, or is there some part of inventory management that makes it lesser or more? Rafael R. Lizardi: Yeah, no. The fall-through that you should expect is in the 75% to 85% that we have guided. That is excluding depreciation over a long term. But on a year-on-year basis, if you look at our midpoint on EPS and revenue, and make the right assumptions on OpEx and other lines, you should get to a reasonable assumption on gross margins, and it will be in that fall-through that we have guided. Operator: Okay. Thank you. Thanks for these questions. Moving on to our next caller. Our next question is from Stacy Rasgon with Bernstein Research. Stacy Rasgon: Hi, guys. Thanks for taking my question. Maybe just to dig into that gross margin point, if I typically think of your OpEx up, what, a couple of points in Q2, I come out with a gross margin implicit in the guidance maybe low to mid 59%, up from 58%. And it is up, I do not know, 100 or 150 bps year over year on a pretty material revenue”