Ananda Baruah: That’s great context. Thanks a lot guys.
Kathy Ta: Thanks Ananda.
Operator: Your next question comes from the line of Tom O’Malley from Barclays. Please go ahead.
Tom O’Malley: Hey. Good morning and thanks for taking the question. I just wanted to square just a couple of comments you have made. So, I think that in response to Ananda’s question, you talked about getting back to a greater than $200 million run rate in the Datacom business. But then on – a question about Q2 in the fiscal year in December, you talked about just a moderate sequential increase just given the fact that you don’t have the capacity and you said, hey, maybe in retrospect, we would have not taken down capacity as much. So, just to kind of put those two in perspective, if you look at this coming fiscal year, are you guys going to be able to get back to the levels that you saw in fiscal year ‘23? I think you started the year around $50 million. Is that something you will be able to get to, or is capacity going to hold you back really until the back half of calendar year ‘24, which would be your fiscal year ‘25? Thank you.
Alan Lowe: Yes. I would say, it’s certainly not a lack of demand that would get us there. So, I would say that in calendar ‘24, there is certainly enough demand. The question is, can we get the capacity back up, given that ASPs are down? So, we have to actually produce a whole lot more chips to get to that $50 million run rate. But that said, the gross margin on those chips are still very, very solid. So, we are anxiously driving the team to grow the output. And you are right, we took down capacity more than we should have. But at the time, it was the right thing to try to drive the underutilization. But I would say that the cycle time on Datacom chips is such that starting wafers today, it doesn’t really impact the next four months, so it is a long cycle time.
We are working on that as well. And that’s why we are trying to dampen the expectations of rapid growth in the December quarter for Datacom, but we are expecting to see an uptick in Datacom in the December quarter.
Tom O’Malley: Got it. That’s helpful. And then just on the technology side, and this may be just a broader question, but I just wanted to hear your take here, is if you look at the early days of AI here, there is obviously some drivers that are pointing more towards EML. But clearly, there is a lot of drivers that are porting more towards VCSEL and you guys are looking to ramp that product. I guess the question is, if you look at the market for lasers today in AI, how would you split out the percentage of lasers that are being used between VCSEL, CW and EML? And do you think that just given that maybe there are some more VCSELs early on, that you are missing out on some of that opportunity, or if it’s the other way around, just any color would be helpful there. Thank you.
Chris Coldren: Yes, I would say from the end-market opportunity and unit quantities, the VCSEL arrays and basically short reach and long reach, that’s really what we are talking about, are not that different from a volume standpoint. So therefore, that’s – and being a leader in the EML, so that indicates why that VCSEL is such a good opportunity for us to grow in addition to just market growth to grow share. In terms of CW, CW and EML sort of compete with each other a little bit in that certain silicon photonic architectures are able to do the needed distance or reach that EMLs at the lower end do. So, there is a little bit of cannibalization for zero sum between those two, but that’s why we introduced and have both sets of products. Now that said, EMLs will lead the transition to the 200 gig per lane. And so we expect the EMLs to really be the workhorse of the longer reach AI links.
