Matt Murphy : Sure. Yes. Let me answer the second one first. The answer is we feel very good about that revenue stream. Part of it is, if you remember, Ross, we went from talking about the $400 million and $800 million to actually talking about, call it, $400-plus million $800-plus million because we had gotten additional design wins that created a little bit of a buffer as well because I think even if we hedge it for next year and the volumes don’t quite achieve what we would have thought, we actually had one additional business that gives us some comfort around that. So — but I would say all the programs are on track. We are fortunate that despite the changing environment, I would say we are absolutely head down in trying to take out multiple new products right now that need to ramp up in very significant volume next year.
And I’m personally involved in these with our customers to ensure we’re meeting their schedule, and we’re doing everything possible to get there. So that’s the good news that the programs are still on track. And I think that’s a good thing. The percentage — I think your other question was what was the percentage of data center revenue that’s in storage?
Ross Seymore : Other way around, if storage falling is the headwind for data center, just to level set people, you had 30% roughly of your business in storage or in data center?
Jean Hu : Yes, Ross, maybe I can help you. Yes, I can help you with that. In general, the way to think about this, our storage business, it’s probably about 1/3 of the data center — total data center business; average, right, not a particular quarter. But of course, when we go through the inventory correction, as Matt mentioned earlier, that’s going to be the largest drop piece for the inventory correction.
Operator: Our next question comes from Harlan Sur with JPMorgan.
Harlan Sur : Matt, you talked about the impact on a more muted cloud CapEx spend on your overall data center business. Most pronounced in storage, but you do have compute, you’ve got networking, you’ve got optical products as well. And looking specifically at your cloud optical connectivity segment, which obviously is PAM4 DSP, your color solution. If I look back at the last cloud spending slowdown, which was in 2019, both of these segments combined grew about 35%, 40%, right? Granted, this was still in the early innings of the 200, 400 gig upgrade cycle. But part of it is also very strategic in nature because your customers are still trying to enable better performance through higher networking speeds. So I guess kind of two questions. Near term, is the team dealing with inventory issues in these particular optical products? And then looking into next year and the team see continued growth in cloud optical?
Matt Murphy : Yes. Great. Thanks, Harlan, for the question. And you’re right, it is a little bit of a different situation than a few years ago where that was fairly nascent technology, really ramping up hard in an inflection curve. That being said, we still see strong adoption of 800 gig. We’ve seen strong momentum in 400ZR in the new platform. We — and we expect that overall optics is going to grow next year. That being said, I would say in the fourth quarter, part of the adjustment would be in that area. But I think that’s a shorter-term thing. And again, because to your point, it’s so strategic, we anticipate that optics is going to continue to grow. And by the way, we’re heads down on new product development there as well because for the next generation of high-end 51.2T switches, you’re going to need the associated optics with that, which then moves from 800 gigabits per second to 1.6 terabits per second.
And so that’s an ongoing new product development activity we have. So lots of activity in that area. Super exciting, but it’s a little bit of a different environment than 2019 just because there has been more broad adoption, but we do feel good about it.
