Kishore Seendripu : Yeah, it’s a good question. So I think we’ve been doing a really good job on inventory as far as bringing it down. But we got to do better and we will continue to do better. We jumped on this pretty quick and going all the way back to the tail end of last year. But unfortunately, the revenue declines just been such that we’ve not been able to get the inventory out as fast as we’d like to. With regard to lead times, with regard to lead times, I would say we’re kind of back to normal. I mean, we’re kind of quoting 16, 18 weeks lead times, which is pretty typical in our business. I mean, there is a couple of businesses that are probably a little faster than that, but that’s kind of our normal. So I wouldn’t say that that is problematic whatsoever at this point.
The backlog – also backlog and bookings so, bookings as I’ve talked about, I mean, have been very low because you had super good backlog for well over a – I don’t know, almost two years now. And so now, I feel like we’re through that adjustment phase where you’re going into a quarter with, whatever, 50%, 60% backlog whereas you, historically you’ve been running for the last two years, you’ve been running at a 100% backlog. And that and that’s changing and that that’s getting back into that normal rhythm. That’s what we’re used to. That’s what we know. And so, actually looking forward to kind of getting back. Some of the uncertainty has been around backlog pushing out of a quarter. That’s really where the problem has been. And so, we’re starting to see that improve.
But to be honest, Steve to the extent that can save you on zero inventory in our books, so that we get the PO bookings going on our customer side. I’ve bet you have all support you on that.
Steven Litchfield: Of course.
Karl Ackerman: Thank you.
Kishore Seendripu : Thanks Karl.
Operator: Our next question is from Ananda Baruah with Loop Capital Markets. Please proceed.
Ananda Baruah: Hey. Yes. Good afternoon guys. Thank you for taking the question. Maybe just, kind of dovetailing right off of that last topic with Karl. It seems like everything you guys just talked about would suggest that new normalized inventory levels with customers exiting this would be the same as they previously were going in? Do you think that that’s based on what you can see a fair – set a fair assumption?
Kishore Seendripu : Yeah, I’m not sure that I followed you on that. I’m sorry.
Ananda Baruah: Well, your customers hold, I mean, they probably view their inventory level, like to them they have what they would interpret is normalized inventory levels. I would imagine. And that looked at the particular way going into 2020 they can change what that looks like, Steve but it sounds like maybe they could change it higher, they could change it lower, they could leave it the same coming out of this. But it sounds like based on what you’re saying, well here’s my thoughts. So does that make sense though? When I’m saying like, they probably say we want to hold some number of weeks of MaxLinear inventory.
Kishore Seendripu : Sure.
Ananda Baruah: Yeah, yeah. So, it sounds like – it sounds like what you’re saying is the lead times are back to pretty typical and you’re at 50%, 60% backlog, it sounds like ship out is meaningfully higher than ship in because you have typical times. So it sounds like they’re operating you guys with typical lead times just working down the inventory to the 50%, 60% backlog. So, that would sort of suggest to me, I just really counterpart to the question, it sounds to me like they’re already working you guys, as if getting you back to pre covet inventory levels. I was just wondering if you have an opinion on where that might settle in. I mean, also informed when you guys inflict.
Kishore Seendripu : Yes. I look, I if I understand your correct – your question correctly, I agree that they, I mean, I think the whole industry sees that lead times have come down and so, they’re waiting and they’re taking more risk. They know they actually kind of – I am not sure if we’re seeing eye to eye on this, but I think customers do have still have. If you look across the industry, they’re still a lot of inventory either in the channel or even sitting at end customers. And so while that is still high, I mean they are still burning that down and – but we’re getting back to those normal times. As I stated, I mean, I think it’s another couple of three quarters. But we are seeing improvements.
Ananda Baruah: Yes and I guess, the question really was do you think that they settle you at lower levels than previously, what things get back to normal do you think …
Kishore Seendripu : Yes, look, yes, I mean absolutely that’s what we see in every cycle. It swings to the other way, right? They will take more risk. They will wait too long. That’s exactly what’s going on right now in my opinion, across the entire industry is that they are waiting, because they either they know, or they think they know that there’s enough inventory out there. And so they’re going to wait as long as they can and nobody is, every one of these customers, their operations guys getting pounded on for having too much inventory. So they’re going to they’re going to not order and they’re going to risk being late. And in this environment where demand is kind of so, so that’s probably okay.
Unidentified Analyst: And then just a quick follow up, Kishore, you mentioned a couple times about the storage accelerators and picking up in ‘24 and then potentially will be robust for a few years. Do you – any context around how impactful those could be?
Kishore Seendripu : It’s very impactful, right. I mean, generally by and large whenever we invested any new product areas, we hope to build at its peak run cycles on there in the $50 million to $100 million per year product infrastructure product. Otherwise the economics don’t make sense. And there’s a rhythm to it. What is the next product going to be billed and that’s one of the things is a sustaining revenue and growth, right self sustaining growth of revenue and revenue. So that is the expectation for this product that it’s going to be something in the $50 million to $100 million per year revenue when it hits peak revenue. So initially you have really rapid growth. Like you said, double next year and maybe grow 50%, 60% in the following year from there.
And maybe it hits the peak point in somebody in the third and the fifth year from now, right? Hopefully the third year, not the fifth year and then it holds there for a long time and we launch new products. And the more important thing and this is where – this is the key point here and maybe you never have a connected the dodge very well here is that there is a place and need for these accelerators in the cloud market, as well. And as the AI and the cloud and the EDGE increase actually doesn’t become essential to it. So right now it investigating partnerships with AI vendors if you will where there could be a joint offering and you’re seeing a lot of what I call openness for that joint collaboration of a joint this thing. And that really is the key to the storage business is the enterprise is going to be a massive consumer of storage.
