David Williams: Thanks so much, guys. I appreciate it.
Operator: Thank you. Our next question is from Suji Desilva with ROTH MKM. Please proceed with your question.
Suji Desilva: Hi, Kishore. Hi, Steve. Can you guys hear me?
Steven Litchfield: Hey. Yeah. How are you, Suji.
Suji Desilva: Great. Good. Sorry about the last time. So I know Steve you guided the 1Q to decline sequentially across all the segments. I’m wondering if you could give us on which ones you might expect to decline more or less just a ranking would help.
Steven Litchfield: Yeah. I mean, we’re not going to rank them. And all of them are down. I mean, where the — if I think a little bit of color, I mean infrastructure as we’ve talked about the wireless infrastructure business was super strong, kind of the first three quarters, and we had talked about a kind of a two to three quarters low there as that ramps back up. And so that’s kind of going as planned. Optical business is doing exceptionally well. We’re seeing some accelerated orders there. So that’s pretty exciting. But again, that’s very backend loaded. So, first half of the year we kind of grind higher and we’ll definitely see it pick up quite a bit in Q3 and Q4. The broadband business and connectivity business for that matter, I mean, down in Q1 and I think it will still struggle in Q2.
Won’t give you a direction, but then there will — as that inventory clears, we’ll start to see some improvements. Industrial multi markets held up extremely well, but there’s some crosscurrents out there that would definitely expect to see that down in Q1 and then hopefully kind of bounce along the bottom as you get through some inventory and grow out of that in the back half of the year.
Suji Desilva: Okay. Thanks Steve. And then my other question is on the channel inventory, just some follow ups from before — prior questions. It just sounds like maybe Kishore going to your comments that some of the guys are looking to take inventory below typical levels. Maybe you kind of lean it out. Is that — was that what you’re implying in terms of what the posture is of the channel on the customers right now, I just want to make sure I heard that clearly.
Kishore Seendripu: Absolutely correct. The bias is toward overcorrection. So the question is, how much inventory is naturally in excess. And we’ve been talking about in the last earnings call I expect — I said that maybe another six months of it left. Now if they go, they lean a little harder on it, then some bleeding happens into Q3, as Steve mentioned. But we have enough growth drivers here, especially the infrastructure. There were — optical revenues did not exist, practically zero in Q4. And now we have said that we should see tens of millions of revenues in 2024. That means that we’ve got to be a healthy growth happening in Q1, and we expect that momentum to continue. And then we got some other production ramps happening, and that could be a very nice growth driver.
So basically, there’s a lot of motion going on. But if you look at my prepared remarks, right, the real big growth opportunities are in terms of product cycle commencements are in optical, right? And then we have — once the telco softening sort of recovers, but still on the backhaul we expect in the latter of the year the revenue to pick up. And then we have our storage accelerators. There were barely any last year. Now they’re going to be a pretty strong driver. And then you have Ethernet connectivity and some new design win ramps that will start in the PON side. So I think I’ve listed out in the prepared remarks in a sequence of importance, I think that should provide you color. That’s a very healthy product cycle ramp commencement happening now that should stand good stead for a few years to come.
Suji Desilva: Okay. Thanks, Kishore. Very helpful color. Thanks, Steve.
Steven Litchfield: Okay.
Kishore Seendripu: Thanks, Suji.
Operator: Thank you. Our next question is from Christopher Rolland with Susquehanna. Please proceed with your question.
Christopher Rolland: Hey, guys, thanks for the question. So your commentary, I guess, around PAM4 ramping in mid-’24 and then more next year. Can you talk about DSPs versus selling into AECs transceivers AOCs, these kind of special programs that you talked about? Tell us kind of where these are going. And then if you could, what is your value prop? Are you guys faster or are you lower power, are you competing from a cost dynamic, how are you differentiating in this market to gain traction. Thanks.
Kishore Seendripu: Thanks, Chris. Yes, you’re absolutely right. The optical is turning a corner here, we got a few other — few more calls that are in the last phases, hopefully we get through that expeditiously. But like we said earlier, right, if this year we’re doing the teens to $30-odd million of revenue in optical we’ll be in a very good place next year. And so we are feeling increasingly bullish. Like I said, that the value proposition is very, very clear, right? It is — we are the only 5-nanometer, production-ready 800-gigabit PAM4 DSP in the market and even for 400 gigabit PAM4. So naturally, the advantages that accrue we did our lower power and cost excellence comes from multiple factors. One is higher levels of integration, but integrated laser drivers and lower power reduces the bill of material cost of the customers’ modules.
