George Notter: Got it. Thank you very much.
Alan Lowe: Thanks, George.
Kathy Ta: Thank you, George.
Operator: Our next question comes from the line of Christopher Rowland from Susquehanna. Please go ahead.
Christopher Rowland: Hey, guys. Thanks for the question. One of your competitors spoke of a strong ramp in 800G starting in March. I was wondering if you could kind of describe the shape of your 800G ramp here over the next 12 to 18 months. And they were going to see kind of as a result of this strong growth, sequential growth each quarter of next year. I was wondering if you would see something similar on your horizon.
Wajid Ali: Hey, Chris. Yes, I would say we would see very similar commentary that both from the chip standpoint that we are shipping a lot of EMLs and have very strong demand that we expect continues over the next four-plus quarters as 800 gig continues to ramp. And then from the Cloud Light acquisition, their revenue is, as we’ve highlighted on the call, increasingly focused on 800 gig. And that is in its very early days, that market is just emerging and will continue to ramp up into the future. So yes, we believe the 800 gig portion of our cloud business will continue to grow into the foreseeable future.
Christopher Rowland: Okay. I don’t know if you had a take on sequential growth in each quarter of next year, calendar year. But for my second question, I wanted to talk about kind of custom engagements for laser designs by both system vendors, holistic system and — vendors, but also hyperscalers out there. And I don’t know if it’s possible to break out cloud networking demand, so 51 terabit switches versus AI, but how do you think this mixes out for next year as well? Thank you.
Chris Coldren: Yeah. So, a couple pieces. So, on the last bit with regards to where our products are landing, if you will, AI versus non-AI, we don’t have 100% visibility to that. But our belief is that for the next year, at least, most of the growth or the primary growth in the market is driven by AI-driven applications. And then going back to custom laser designs, or if you will, yes, we are engaged with both, as you said, system providers, if you will, as well as cloud operators directly, hyperscalers. On custom laser solutions as well as now with Cloud Light custom transceiver solutions as AI continues to push the performance envelope and stress from power consumption, latency, and other requirements that are really critical to AI workloads.
And that’s one of the benefits of this combination, that we’re bringing together unique manufacturing capabilities from Cloud Light, bringing together our unique chip manufacturing so that when we partner with customers, we have the full tool chest, if you will, to address the challenges of next generation roadmaps that they’re looking to implement sooner than later.
Christopher Rowland: Thanks, Chris.
Kathy Ta: Thank you, Chris.
Operator: Thank you. Our next question comes from the line of Ananda Barua from Loop Capital. Please go ahead.
Ananda Barua: Yeah, good morning, guys, and thanks for taking the question. Yes, I’ll just stick to transceivers as well. Do you guys see, and this would probably be for Chris or Alan, any latency points or sticking points getting Cloud Light — now that you’ve closed the deal, getting Cloud Light volumes to kind of what you call run rate? Then I have a quick follow-up.
Alan Lowe: Could you clarify what you mean, Ananda?
Ananda Barua: Yeah. So, I mean, I guess is everything in place, is it as simple as just taking the orders in and shipping them out? Or given that — sort of given that they’re newly absorbed into the organization, given that your balance sheet and your kind of street credit, so to speak, may open up new opportunities for them, given the manufacturing capability they have in place, are there things that could be required that could, in the near term, cause some latency to getting those orders out the door as they come in? So just wondering, is the mechanism is it just set up to work smoothly and elegantly right now taking the orders in and send them out, or is there something that needs to be put into place or accomplish near-term to get the orders to run rate revenue?
Alan Lowe: Yeah. I mean, the Cloud Light team is not lacking orders, if that’s what you mean. So I think, as I said earlier, capacity plans and CapEx plans have continued to be able to ramp to the kind of volumes that they had visibility to prior to the acquisition. That said, I do think we will see further demand acceleration and that could take additional capacity in — as well as additional factory footprint. And I think that would be then accelerated with the acquisition and that we have factory footprint that we could expand into today. Given that we’re all of 24 hours into the close and we have a team there now, we’re sorting all that out, frankly, and we hope not to screw it up, frankly. So, they’ve been doing very well.
We’re trying to stay — we’re trying to let them do their stuff and not distract them as they’re going up a very, very steep ramp. But that said, we’re here to help them. And I think the combination is really a winner from my discussions with those cloud customers.
Ananda Barua: Yeah, that’s super helpful. That’s super helpful. And I guess just in that regard, sort of the follow-up would be, given you made two acquisitions in the — you’re sort of in the pluggable space in the last 12 months or so — sort of 12 to — four to six quarters, could you stay active in this area? It’s obviously an area of interest. Do you have everything you need? Or do you think — does it make sense that you could keep looking from a tech perspective?
Alan Lowe: Yeah. I mean we’re always looking. I think our focus is making sure we finish the acquisition synergies of NeoPhotonics, and Wajid talked about that. The back-end factory consolidation is happening now, and we’ll get the benefit of those synergies at the end of this fiscal year, and that’s meaningful. So, we have to finish that and we have to make sure that the Cloud Light acquisition goes up the ramp effectively to meet the demand of what’s going on in the hyperscalers and AI/ML stuff. So, I think we have our hands full today for the next several quarters. But that said, we’re always looking and always interested in what we might be able to tuck-in to give us another competitive advantage over our competition. Chris, do you have anything else to add there?
