Steven Litchfield: Yes, Tim. I mean we talked about in the prepared remarks about that $50 million, and so we’ve grown nicely, right? Two years ago, we were doing less than $10 million. So two years, we’ve grown this to $50 million even in a rough market environment. I acknowledge your point about the timing of it, so certainly the last quarter or so has been tougher. But I guess I would highlight that we’ve got a big North America telco ramping last year. So that’s exciting. More to come, I mean, we’re confident that we can double this business over the next two years. That market also has inventory in the channel. And so we’ve got to get through some inventory headwinds. A lot of this product is new product as well. So that will naturally roll out this year and in the back half of this year, particularly. And it kind of gives us confidence in exiting, call it exiting ’25 around that $100 million target that we highlighted.
Tim Savageaux: Okay. Seems like it should be more than half in ’24, but I’ll leave that be.
Steven Litchfield: We didn’t say how much it would be in ’24.
Tim Savageaux: I realize you didn’t. I wish you would have.
Steven Litchfield: Okay. I get your point.
Tim Savageaux: On infrastructure good growth year this year, obviously driven by wireless and you are obviously facing some tough comps from the first half of last year, I think in microwave. So I assume you think infrastructure will continue to grow. My question was going to be what can growth accelerate, and I think that might be a challenge on a percentage basis coming up 30, but you grew $40 million in absolute dollars in ’23. Can you do that again in ’24?
Kishore Seendripu: It depends a lot on how much wireless holds back in the first half of this year, because whatever wireless is giving up, so to speak, and the softness that we’re seeing in the telco infrastructure spend, optically will be picking up the slack, the data center business. So I really think it’s the mix of factors between optical, wireless being the two big ones Ethernet and storage accelerators will definitely be new growth drivers. So I’m hopeful it’s positive related to last year. But it’s on a — what I call a steep edge. So it could really do better. But we expect definitely flat or better compared to ’23.
Tim Savageaux: Excellent. And then last question from me is, to the extent that that makes infrastructure your largest segment in ’24, which unlikely to be the case. What are the implications there for gross margins? And do you expect some mix related uplift in margins as a result of that? And that’s it for me.
Steven Litchfield: So you’re absolutely right in identifying that infrastructure is higher gross margins. And so as infrastructure becomes a bigger part of the portfolio and continues to grow, yes, we will see gross margins improve. I think as I think about gross margin puts and takes in 2024, I mean, look, we’re going to see some challenges in the first half of the year for sure, as we kind of work through with the lower revenue numbers, some modest pricing pressures. I mean, typically that’s not a big portion of our business. But in these downturns, it can be a little tougher. All that being said, very confident that as infrastructure grows as a percentage of the business that we will certainly see movement back towards that kind of mid 60 point that we’ve highlighted.
Tim Savageaux: Okay. Thanks.
Steven Litchfield: Thanks.
Operator: Thank you. Our next question is from Ananda Baruah with Loop Capital. Please proceed with your question.
Ananda Baruah: Hey, guys. Yeah, thanks, good afternoon. Thanks for taking the questions.
Steven Litchfield: Hey, Ananda.
Ananda Baruah: Hey, Steve, hey Kishore. I guess the first one Kishore is and, yeah, Steve as well. Any context you can provide — this is really on the 400-G and 800-G solution. Any context you can provide on where you are with qualifications? And I guess anything you can provide on how it is you think about your qualification — like, I guess, really the TAM, your TAM opportunity, qualification, TAM opportunity, kind of over the long-term, in that business? And then I have a quick follow-up also.
Kishore Seendripu: So you’re referring to the optical PAM4 data center business. Really speaking, we talked about all reports indicate with some level of uncertainty and what is all AI phenomenon does in terms of exploring the market to be bigger. They expect in three years from now, the business about 40 million units or so of DSP transceivers being sold, which is PAM4 DSPs and that’s about anywhere — let’s assume over $1.5 billion of addressable silicon. We plan all our activities around 20% to 25% market share of the business. But that entire business is composed of two components. One is the legacy 200-gig, 400-gig PAM4 DSPs and 800-gig PAM4 DSPs. Our expectation is 60% of that business, let’s call it, close to $1 billion of addressable TAM in three years from now.
And we plan that a good victory would be for us to have 20% of that business, 20%, 25% of the business in the first phase. So I think from that, you can extrapolate that the design win pipeline should from a bottom-up basis, should be aligned to the top line expectations, give or take a year. So you’re looking at that — ultimately, how big can our optical business be. And in this current generation of product offering, we expect it to be anywhere between $150 million to $300 million of revenue, right?
