Matt Murphy: Sure. Yes. No problem, Vivek. We’ll treat it as one integrated question. So let me start with the cloud optimized ramp. As I said in my prepared remarks, and you can see sort of what’s happening in the data center area, there is some delay, and there’s some prioritization within those companies on how they’re going to deploy. We feel very good overall about the programs and the lifetime revenue of those programs, but they have, in aggregate, shifted out by a couple of quarters. So if you just assume that the plan for $400 million this year was more back-end loaded as those ramped then the effect of that pushing out by a couple of quarters, we think it probably takes it down by about half. We don’t know quite yet exactly, but just to give you a big round numbers, I think that’s a safe assumption for now.
The other question was around what does the second half recovery look like. I think it’s too early to call it specifically at this point. I mean we’re still seeing a lot of volatility in the business, as you can see from our first quarter guide. But when we step back and look at it from 30,000 feet and we also take the broad indicators from our customers, we do expect it as we said, to start growing from Q2 and beyond. The question is how big is the recovery and what comes back. So it’s a little bit hard to call precisely where that’s going to be at this juncture. And then on gross margins, again, it really comes down to the mix. Historically, if you look, we’ve — the company has actually had pretty stable gross margins. I mean, they’ve moved around a little bit, but in general, that’s been a fairly predictable thing.
You can see based on this downturn we’re going through just the volatility that’s come in relative to the mix. So we see that improving in the second half. Again, I think it’s too early to call the exact trajectory. So just in the abundance of being prudent here, we’re calling it getting up to the lower end of the range. But again, it’s highly dependent on mix, product ramps and what the end markets do. This is the best we know at this time.
Vivek Arya: Thank you, Matt.
Operator: Our next question will come from Toshiya Hari with Goldman Sachs. Please go ahead.
Toshiya Hari: Hi, good afternoon. Thanks so much for taking the question. Matt, I wanted to ask about generative AI and to the extent your customer conversations have evolved over the past couple of months. You talked about the cloud optimized opportunity being pushed out. But have you sensed any change in customer pull as it relates to AI? You talked about your exposure in compute and networking. You also talked about your PAM DSP business, specifically in AI quadrupling last year. Curious how you’re thinking about that business in fiscal 2024? Thank you.
Matt Murphy: Sure. Yeah. I think the — as we said in the prepared remarks, the impact of generative AI and the buzz around that is a real positive for Marvell. The ramp on our 800-gig products really over the last few years was driven by AI clusters and AI applications. So that’s gone very, very well, and we see a tailwind there over time on our optics business. I’d also note, we just announced today our 1.6 terabit per second product, which also has native 200-gig per lane I/O. That’s a real product that’s sampling, and it’s going to go into production, we believe, sometime next year. And again, the big pull there will be because of the doubling of the bandwidth, another ramp for us relative to AI. So that under the hood, despite a lot of the chop in the other businesses, has been a real bright spot for us.
