Richard Martucci: Okay. So in general, our book-to-bill, quarter-over-quarter, we did see in Q3 a below one book-to-bill. Really we expect the year backlog to remain flat pretty much year-over-year. But we still believe that a majority of the strength in the markets in terms of long-term will increase the total backlog. We’re expecting a book-to-bill really around one in Q4.
Chuck Mattera: We’re focused on it, Tim. It’s a critical success factor going forward. So we’re totally focused on it as a team. And we’ll have more to say about ’25 in 90 days from now, but it’s a top priority in the company.
Tim Savageaux: I appreciate it. And just a quick follow-up. I think there was a comment about the customer base broadening out and I believe specifically in 800 gig, but maybe in Datacom generally. And along those lines, I wonder if you can address kind of concentration in Datacom, whether you had any 10% customers overall in the quarter. And what sort of major customers are driving the Datacom segment at this point?
Chuck Mattera: Yes, we report 10% customers once a year, as you know, at the end of the fiscal year, Tim. We won’t have any comments on that. But we can give you just a general flavor for the broadening of the base, which we saw evidence of at OFC with just a tremendous amount of interest from the industry fanning out to additional layers in the market.
Lee Xu: That’s right. We – as of the beginning of the shipment of 800G, we have two major customers that we reported that, and we all know who they are. And now in the past quarter, we have over four customers that’s order significant amount, multi-million dollars from us. And we are also in the past two quarters have multiple design wins of our 800G, various 800G product from short range to long range with the key customers. So we think going forward into FY ’25, the 800G is going to have a much broader customer base.
Chuck Mattera: Great. Thank you, Lee.
Tim Savageaux: Okay, thanks everyone.
Operator: Thank you. One moment for our last question. And our next question will come from the line of Christopher Rolland from Susquehanna. Your line is open.
Christopher Rolland: Hi guys, thanks and congrats on the results. And this may have been answered, but the 500 gig, if you could just talk about the lead times coming down, is that more of like a demand issue or a supply issue? And you guys mentioned a pause for a couple of quarters, is that two quarters? Is that three quarters? And is there like this inventory digestion going on here as well? Is this kind of exacerbating this pause like did a ton of people, was there like an initial rush for 800G AI products and this market just got ahead of itself and people bought a little bit more? I’m just trying to understand this pause a little bit more here, particularly as when it unpauses, it looks like it will be the beginning of the 1.6 market kind of. So just trying to put all those pieces together, it’s demand issues, supply issue, inventory digestion, et cetera.
Chuck Mattera: Yes. Chris, good morning. Can you clarify, you said something about 500G.
Christopher Rolland: Oh, did I say 500, I meant 800, if I said 500?
Chuck Mattera: Okay. Okay. All right. Well, we will try to address that. But for sure, as I said to Tim, that the bookings and building up our backlog is a top priority for the management team. However, as we indicated, we are going to grow again in the fourth quarter and we’re building up this capability to continue to expand our output in 800G transceivers. So Lee, why don’t you give a little more color?
Lee Xu: Okay. Thanks for the question, Tim. First of all, 800G, the lead-time a few quarters ago, people do placed orders for close to a year, and that’s because at that time, neither the material nor the capacity are fully ready. So people are willing to place the longer term orders, secure the capacity, secure the material. Now as we are a couple of – the company is ramping-up the 800G shipment, so capacity is largely there, although we’re still expanding in the next couple of quarters. And then the material lead-time also came down. So that’s why you know, as Magnus, our Chief Revenue Officer said, we see customers placing orders within a shorter lead-time. And that’s – I think that’s very normal in our industry. And that does not change the forecast our customers give us for the future growth of the 800G and related products.
That’s one question that you asked. The other is that you said that there is a pause for products that seem to be below 800G. What we see is that indeed there is some kind of a squeezing out effect as people are putting more money on 800G for AI expansion. There’s some of the CapEx for normal networking is squeezed out. But we do see that in a few quarters start to go back up. But overall, people might switch to 800G for their normal networking in addition to using on AI. So that’s – overall that’s our view of the current marketplace.
Chuck Mattera: Okay. Thank you, Lee.
Christopher Rolland: Great. That was a great clarification. As I think out to the 1.6T cycle, every company in this industry has its different kind of strengths and weaknesses. And there’s probably going to be three technology, laser technologies, VCSELs, EMLs and [SIFO] that are going to address this 1.6 opportunity, particularly the AI opportunity. I just wanted to get a clear picture, what are your capabilities? What are your strengths around these three technologies? And what are your ramp times? Like, for example, you addressed – initially addressing 1.6 with EMLs or SIFO. If not SIFO, like when can you kind of hard move over to SIFO technologies, which I think are a little more cost-effective. Maybe you can talk about where these three technologies kind of intercept 1.6 for you guys?
Chuck Mattera: Okay. Julie, do you want to take it?
Julie Sheridan Eng: Sure, sure. Yes, thanks for the question. Yes, as you accurately said, we can use, VCSELs we can use EMLs. We’ve actually in the indium phosphide domain also introduced our DFB-MZ and we can use silicon photonics. And we have, as you know, for VCSELs and indium phosphide, we design in-house and we manufacture in-house. For silicon photonics, we’re in a – as is common in the silicon industry, a fabless. So we have an internal design team and we use outsourced fabs. And so what we do is we choose the best technology for the product, based on the cost and the performance and because we have access to all the technologies, we can choose the one that makes the most sense. As far as transitioning to 200G, the fundamental basic laser technology is actually very similar.
