Steve Daly: Yes. Thank you for the question. So we think it is possible, and there could be some upside. But with that said, we are taking probably a little bit more of a conservative view just coming off of Chinese New Year. We haven’t really €“ people are sort of getting back to work. We have been monitoring the inventory levels within the channel in China, and we’re seeing some positive trends there. But quite frankly, we think it’s way too early to call which way China is going to go over the next three months to six months. But I do think there’s the potential of it improving. There’s also the potential that things will remain at a muted pace. So the way we’re going to counter that is we’re going to continue to introduce products.
Obviously, we’re going to focus on North America and Europe. But also when China really starts to open up and we can send more and more of our staff into China to engage with customers, we think that will be the activity that really ignites better growth and stronger revenue for MACOM. The COVID overhang has really slowdown and hampered our ability to engage customers directly. Today, MACOM has about just under 100 employees in China. We operate in four different cities. These are typically sales and application centers that are visiting customers, and they’ve been doing a great job keeping MACOM in front of customers, but we also feel like we need to rotate our business development folks and application engineers and to drive that growth. So if that happens towards the middle of the calendar year, we think good things will fall from that.
David Williams: Great color. Thanks so much for that. And then maybe for my follow-up is just around the data center and any areas of particular weakness or maybe strength that you’re seeing and maybe anything from a customer or even areas that are better or worse. So we’re just kind of color there would be helpful, I think.
Steve Daly: Yes. So just one point I want to make about the data center in our revenues this year because we are hearing a lot of €“ and seeing a lot of negative trends inside the data center. But our €“ we actually think our revenue will be reasonably strong this year because a lot of the products we couldn’t ship last fiscal year will roll into this fiscal year. And so that will provide a growth opportunity for MACOM. And that includes many of our Crosspoint switches that had complex packaging or substrate materials included in the product. So supply chain is improving. That’s helping our revenue this year for the data center. Outside of that, I would say, generally speaking, the short-reach, NRZ platforms that we’re on, whether it’s AOCs, like SR4 AOCs or CWDM4, these markets or these applications have been relatively weak.
That has been offset by an increase in our PAM4 activity in business. So for example, we’re seeing reasonable growth in DR1 and SR4 for PAM4 applications. So it’s €“ I would say there’s a mix. It really depends on the customer, where we’re positioned at that customer. For example, we had a very large platform we were in last year, a DR4 application that we know that revenue won’t be in our forecast of this year. So things are constantly moving depending on the market environment and which of our customers are winning business. And then the last thing I’ll point out is that we do feel like, in general, there is a significant amount of inventory at our customers and at our customers’ customers. And so this will also provide a bit of a headwind for a lot of our electronic devices, CDRs, drivers, TIAs, things of that nature.
