Alan Lowe: Yeah. I mean, I think what we said is we expect to exit the calendar year 2025 at greater than $500 million of company revenue. So, if you look at where we are today, at midpoint of just over $300 million to exit rate of calendar ’25 of $500 million, that’s a meaningful increase. And it won’t be linear between now and then because I think we still have a couple of quarters of inventory burn-off in telecom, and the qualification work that has to happen in new sockets for datacom. And as you’re — from your first question on the 200-gig per lane, a lot of the products we’re going to launch are going to be 200-gig per lane out of our Nava facility. So that’s really a late calendar ’24 and into calendar 2025. So, not a lot of big volume in the December quarter, but more meaningful in the March and June quarter as we ramp up those qualified products. Does that answer your question, Christopher?
Christopher Rolland: Thank you so much. That does. Thank you, Alan.
Alan Lowe: All right. Thanks.
Kathy Ta: Thanks, Chris.
Operator: Thank you for your question.
Christopher Rolland: Thanks, guys.
Operator: The next question — oops, sorry about that. The next question comes from a line of David Vogt with UBS. Your line is now open.
David Vogt: Great. Thanks, guys. Can you guys hear me?
Kathy Ta: Yes, we can.
David Vogt: Hey, thanks, Kathy. So, I have two questions. One longer term in terms of this trajectory to get to this $500 million run rate. Just kind of the way that we’re trying to pencil in the numbers, obviously, it looks like your telco — core telco business needs obviously a steep recovery as well. And given that customers are taking longer to place orders and digest, I’m just trying to get a sense for, where are you going to see the growth or how are you thinking about the growth to come back in the core telecom side? And given the strength — the second question is, given the strength in the datacom that you just laid out, how does it affect gross margin given the manufacturing capacity that you’re adding is clearly skewed towards datacom — potential datacom customers going forward? Are we still thinking about this consistent with what Wajid laid out at OFC? I’m just trying to get a sense for how you’re thinking about that. Thanks.
Alan Lowe: Yeah. I’ll take the telecom question and I’ll let Wajid comment on the gross margins. Yeah, as I said, I think we have a couple of quarters at a minimum of burn-off of telecom inventory and really exacerbated by the slower telco spend. That said, on the new products, like the higher speed, 130 gigabaud, 200 gigabaud and highly-integrated ROADMs, there is no inventory. And so, as for instance, the three China carriers deploy their next-generation networks, those ramps are well underway today and don’t have that burden of inventory. So, I’d say there’s really two aspects of our telecom business, all those new products that are ramping today, but at a — from a small base and then growing fast. But — and then those other products that are still in the channel, by the end of the calendar year, I’d say, that those are probably taken care of, and that gives us confidence in the strength of telecom in calendar 2025 as that inventory has burned off.
Wajid, do you want to comment on the…
Wajid Ali: Yeah. No, from a gross margin standpoint, pretty much what we laid out at OFC contemplated the type of product mix we were expecting to get to a nearer-term model as well as a longer-term model. So, I think that those gross margins that we laid out pretty well hold under what Alan spoke about with the $500 million a quarter exiting run rate for next year.
David Vogt: So, the shift in telco out a little bit doesn’t have an impact? Just trying to think through that.
Wajid Ali: Well, it’s — I think the timing of the telco return as well as the step function increases we’re expecting to see on the datacom side, will line up together. Now, we’ll probably have a little bit of a tailwind because 200G revenues will come in before — 200G EML chip revenues will come in before some of the transceiver revenue will, just given where we are in the qualification cycle between the two products. So, there might be a quarter or two where we’re on the higher end of that model because of that. But when the revenues do kick in for those transceiver products, we will start to see a normalization of the margins back to the model we presented at OFC.
Alan Lowe: Yeah. I think just to echo what you said earlier, Wajid, the consolidation of our two Japanese wafer fabs in the first half of fiscal ’25 will certainly help gross margins as well.
Kathy Ta: Thanks, David.
Operator: Thank you for your question. The next question comes from the line of Ananda Baruah with Loop Capital. Your line is now open.
Ananda Baruah: Yeah. Good afternoon, guys, and thanks for taking the question. I guess, yeah, two on datacom quickly, if I could. With the expansion that you’re — the capacity expansion in your Japan fab, at least anecdotally, any context you can share with regards to where you think that business ultimately can go relative to what you were thinking prior to inventory digestion a couple of years ago? And then, I have a quick follow-up. Thanks.
Alan Lowe: Yeah. We’re still adding capacity. We had a record EML shipment last quarter. And then, as we ramp the 200-gig per lane product that certainly will grow the revenue without necessarily growing units, although we do plan on growing units further. So, I think that there’s no reason that, that kit couldn’t be a $300 million a year type run rate and more, given that we’ll be providing both EMLs as well as CW lasers and VCSELs — datacom VCSELs for the multimode transceivers.
Ananda Baruah: That’s more context than I’d even hoped for, Alan. I appreciate that. And the follow-up is, for the $500 million kind of December ’25, kind of guide or at least guideline, how many — all things [indiscernible] on the telco business, how many qualifications with Tier 1s or Tier 2s, I guess, whichever way you think is useful to think about it would be necessary? I’m just trying to gauge how conservative your qualification assumptions might be in that $500 million. Thanks a lot.
Alan Lowe: Are you talking about datacom or telecom?
Ananda Baruah: Datacom. Yeah, how many incremental hyperscalers…
Alan Lowe: Datacom.
Ananda Baruah: …or Tier 2, like — yeah. Thanks.
Alan Lowe: I mean, it doesn’t take many. If we land three, I’d be very, very happy, and we’re working with more than that. So, I think from my perspective, we have to bet $500 million on the engagements that we’re in. And I think we’re positioned to do quite a bit better than that given the customer pull and the desire to have a U.S. headquartered company with manufacturing outside of China. That’s why we’re being aggressive with respect to putting in place the capacity needed for these customers.
Ananda Baruah: That’s great. I appreciate it. Thanks a lot.
Operator: Thank you for your question. The next question comes from the line of Tom O’Malley with Barclays. Your line is now open.
Tom O’Malley: Hey, guys. Good afternoon. Thanks for taking my question. I wanted to focus on just what’s built into the ramp here on the datacom side. So, you guys have talked about some big opportunities that you could potentially win that gets you to that $500 million run rate through the end of this year and into next year. But I want to understand what you have visibility to right now. You talked on the last call about a transition at your existing customer. And I know that you’re saying that the datacom downtick is related to telecom. But are you seeing further weakness there? Are you baking in a return to growth with that customer? And how good is your visibility with the existing customer such that you get comfortable around the growth profile that you’re laying out already?
Alan Lowe: Yeah, Tom. We’re not going to comment on specific customers, but I’d say as I mentioned earlier, our expectations are a slight uptick in datacom revenues in the September quarter and then more rapid increase in the December and into calendar 2025 as the new products at 1.6T really start ramping into — very late this year and into calendar 2025. I wouldn’t say that we have everything locked up, but certainly indications of interest and customers spending time with our engineering teams, customers taking visits to Thailand and to our wafer fab in Sagamihara, Japan, and they don’t do that if they’re not intending to partner with us. And so that’s what gives me confidence. And when I have purchase orders, I’ll have a lot more confidence, but that’s where we are today.
Tom O’Malley: Helpful. And then, my second one is kind of a broader question just on the evolution of 200G per lane and 1.6T. So, you’re talking about the lasers coming first, which kind of aligns with what we’ve been hearing, but like in terms of the broader systems, it seems like it’s more middle of ’25, maybe even second half of ’25. And there’s really only two customers that can do that even in that timeframe. So, can you talk about why you would be able to ship in the kind of December quarter? Do you see actual production shipments of 200G per lane in Q1 of ’25? Or are you just seeing kind of token shipments in Q4 that really get to volume maybe in the second half of ’25? I just want to understand your view of the timing of 200G per lane. Thank you.
Chris Coldren: Yeah, Tom, let me try to help out here on maybe confusion of fiscal year or calendar year here. Certainly, we have today, as we’ve highlighted, the laser components, other optical components that are in qualification with other either transceiver manufacturers or AI infrastructure providers. Those qualifications will continue and we expect that those customers will be in a position later this calendar year, so i.e., the beginning of our fiscal ’25, they will be in a position if all other parts of the ecosystem are able to start ramping up. Even if they do start ramping up in that timeframe, obviously, it doesn’t overnight become the predominant set of volumes. And so, we do expect through calendar ’25, a continual ramp of both the components and the transceivers.
