Alan Lowe: And just to note that while these units are about the same, the VCSEL costs that are priced are significantly lower than the EMLs.
Chris Coldren: Yes. So, the market is much larger for the longer reach EMLs.
Kathy Ta: Thank you, Tom.
Tom O’Malley: Thank you.
Operator: Your next question comes from the line of Vivek Arya from BofA Securities. Please go ahead.
Vivek Arya: Thanks for taking my questions. I was hoping you could help us quantify what percentage of your Q4 sales were related to AI? Were they all in lasers or Telecom, Datacom segment? Just where do the AI-related sales show up? And how large were they in the quarter?
Chris Coldren: Yes, I think the primary products going to AI would obviously be our Datacom business. We don’t break that out, but it’s sub-10% of company revenue. That said, we don’t know when we ship an EML to a customer, whether that’s going into an enterprise customer or a cloud AI customer at this point. But what we do expect, and as Alan has highlighted, that the growth we are seeing going forward is primarily AI-driven.
Vivek Arya: So, sub-10% of your Datacom segment is AI or EML related? I just wanted to…
Chris Coldren: No, I would say a very high percentage of our Datacom revenue is EML-related. It’s just that the Datacom business is a smaller percentage of the overall company revenue given it’s a chip-based business. So, lower ASP, high margin, but lower ASP.
Vivek Arya: Alright. And for my follow-up, I am just trying to think about the path back to growth, right? It seems for the overall company, it seems like Q2 will probably – could be in the same range as Q1 and Q3 has in the past tended to have seasonal headwinds, but I don’t know whether the mix now is different. So, is it really fair to think that Q4 is the earliest we should be thinking about meaningful sequential growth, or do you think seasonality and mix could play out differently this year?
Alan Lowe: Yes, I would say seasonality probably doesn’t play as much as it has in the past. And when you look at the March quarter, just given how much less we are shipping into our customers today than they are shipping out. So, I think it all comes down to their inventory levels. And when does that equalization happen, we think that it’s going to take until at least December. But that said, we are going to see some strength in demand for new products. And I talked about the 130-gigabaud, 200-gigabaud type products as well as some new products we have in ROADMs and other, that should drive demand growth in Q1, regardless of inventory situation because they are new products, and they don’t exist in the inventories today. So, I would say it just depends.
Vivek Arya: Thank you.
Kathy Ta: Thanks Vivek. Lara, I think we have time for one more question, please.
Operator: Thank you, Ma’am. Our last question will come from the line of Jeff Koche from Raymond James. Please go ahead.
Jeff Koche: Yes. Thanks guys. Jeff with Raymond James in for Simon. So, one of your big competitors put out a forecast for the Datacom transceiver market basically calling for roughly 5 billion increase from 2023 through 2028. I just want to know what your thoughts on that forecast are, do you think that’s reasonable? And I guess your strategy and your milestones that you are targeting for that business would be helpful.
Chris Coldren: Sure. I think that’s not – I am not familiar with the exact numbers you referenced, but it is not inconsistent with our assumptions around growth in the overall datacom market, particularly driven by AI.
