Operator: Thank you. Our next question comes from Ananda Baruah of Loop Capital. Ananda, your line is open. Please go ahead.
Ananda Baruah: Hey thanks guys. Good morning and thanks for taking the question. I guess two quick ones, if I could. Chris, you had mentioned with three, it was mentioned in the slide deck with regards to 3D sensing that the demand was softer than anticipated. So was there a production component to that as well and a demand and market component to that as well, and then just a quick follow-up, thanks.
Chris Coldren: Yes, on our end, I don’t think there was any production component limiting us, it was generally focused on customer demand. And I think the factors that we’ve highlighted around customer supply chain disruptions, that really impacted the second quarter being a little bit below where we had originally thought, if you recall, these disruptions maybe began slightly before our last earnings call, but they continued, if you will, through the remainder of the year.
Ananda Baruah: Got it, helpful. And how would you guys characterize the transceiver business right now? And sort of demand is transceivers into end customers and I guess the impact from transceiver inventory that you’re seeing at end customers, and that’s it for me, thanks.
Chris Coldren: Are you referencing Datacom transceivers, Telecom transceivers?
Alan Lowe: It sounds like we lost Ananda. Well, to be clear. Please go ahead.
Ananda Baruah: I am back, yes, I was trying to get it NeoPhotonics specifically.
Chris Coldren: Yes, so I would say that, you’re probably referencing. Yes, ZR transceivers coming out of and DC modules and things are going well on that front. We participate in the transceiver market both by supplying to other transceiver vendors. And that’s the bulk of the revenue participating that market today. But as Alan highlighted, we have our own ZR, ZR+ business with the NeoPhotonics acquisition, good design wins. And our big focus today is leveraging the combined company’s capabilities to bring costs down and drive more design wins. And we anticipate that will be a tremendous growth opportunity for us over the next couple of years given that that ZR, ZR+ markets, going to be a multibillion dollar market, and especially as a transition to 800 Gig long-term tailwinds.
Kathy Ta: Thanks, Ananda.
Operator: Thank you. Our next question comes from Vivek Arya of Bank of America Merrill Lynch. Vivek, your line is open. Please go ahead.
Vivek Arya: Thanks for taking my question. I’m trying to understand whether your commentary about Datacom demand being soft, is that Lumentum specific single customer or single product, I think, or is it a broad commentary on Datacom demand being softer as an industry across the board for most of the year?
Chris Coldren: I would say that it’s more end market softness in the cloud providers. And so for Lumentum, we sell Datacom chips to both the cloud providers as well as the module manufacturers. And as the cloud, as the cloud providers slow the deployment to data centers, they slow the deployment of consumption of Datacom modules. And so, what we’re seeing is, is that inventory being depleted, but the slower growth of cloud that has been very public from those end customers basically slows the consumption of what was originally thought to be much stronger. And so our view on this is it’s a temporary issue that that we’ll get through and very excited about the broadening of products, as we address AI and machine learning. So, I wouldn’t say it’s Lumentum specific, it’s more of end market change that we’ve seen that’s temporary.
Vivek Arya: Understood and for my follow-up, realistically, does your 3D sensing business start to grow with a normal seasonal pattern from September onwards? Or we should still be looking out for any sequential share shift that could prevent that from happening? I just want to make sure that at this point, from what you see, has shares normalize or is there any more to go on a sequential basis as they get to the better second half calendar half of the year? Thank you.
Chris Coldren: Yes, I mean I think that that business will continue to be seasonal, if you will. So we expect going from third quarter into the fourth quarter would decline, and then fourth quarter going into the first quarter would grow. So yes, we would expect that seasonal factors will become more significant than they have in the last couple of quarters where the normalization process has unfolded.
Kathy Ta: Thank you, Vivek.
Operator: Our next question comes from Mike Genovese of Rosenblatt. Mike, your line is open. Please proceed.
