Applied Optoelectronics, Inc. (NASDAQ:AAOI) Q2 2023 Earnings Call Transcript

Thompson Lin: Well, without going into too many details that would be difficult to disclose publicly due to our relationship there. I think your observation that Microsoft has been investing heavily. It’s a very apt explanation. The fact that the AI is really driving their network needs right now is extremely important to them and keeping up with the demand there is very, very critical to their operations. And so they’re definitely adding a lot of optical modules, a lot of interconnect modules now and their expectation based on the contracts that we’ve supplied in terms of active optical cables certainly would indicate to us that they expect to continue to see strong demand mainly driven by AI applications, although certainly, the sort of general purpose compute is also a part of that.

And it would seem to imply that that’s expected to be a pretty strong demand for Microsoft for several years, at least, as we noted in our prepared remarks, I mean if you kind of look at some of the forecasts that we’ve received from them and the contractual — the minimum contractual levels of manufacturing that they’ve asked us to prepare, that would imply revenue of $300 million plus over the next few years just in those products. not counting existing other types of business that they might have. So it’s a pretty sizable opportunity for us.

Tim Savageaux: Great. Thanks very much.

Thompson Lin: Thank you.

Operator: At this time, I will turn the call over to Dr. Thompson Lin for closing remarks.

Thompson Lin : Okay, thank you for joining us today. As always, we want to extend a thank you to our investors, customers and employees. We will continue to support. We look forward to seeing many of you at our upcoming investment conference and update you our next earnings call.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.