Paul Pickle: Yeah, I wouldn’t say it’s — the orders are piling up, the design-ins are piling up and we anticipate the orders piling up. We did see a nice bookings increase this quarter. So it’s early on in that trend, it will strengthen this next year as it rolls out but, ECOC was a nice validation on a few fronts. I think you might have seen some of the press releases that we put out. But just had some amazing feedback that came back from that. Our 200-gig single lambda devices, very well received, very well positioned and the industry does have a decision on which data center architectures they’re going to implement, every Hyperscale hesitancy to do a little bit differently, but the bottom line is, it really doesn’t matter what direction they go, re-timed, direct, it’s all going to add up to additional SAM and growth for us even, it could be a bit more explosive, if they choose a particular route.
But overall, it’s just a very nice frothy environment and so we would start — be starting the discussions in terms of capacity, securing the capacity for this next year that would be happening today, and then orders would follow.
Harsh Kumar: And if I can ask one last one, do you think, Paul, that you are done cutting at this point in time, reached a pretty happy threshold, if you will.
Paul Pickle: I’d say my goal was, I intimated that we probably had another $40 million to go. We did do that at this point. We pulled out $140 million out of the business and that was done thoughtfully with historical budgeting exercise. So if you go back in time, you look at 2017, you look at what the budgets were at those appropriate stages. And I think everything kind of comes down to just continual refinement and improvement at this juncture. I’m comfortable with the cuts that we made, anything that we do will just be to refine and improve our chances for growth in the future.
Harsh Kumar: Great. Thank you, Paul. Thanks, Mark.
Mark Lin: Thank you.
Operator: And the next question comes from the line of Cody Acree with Benchmark. Please proceed with your question.
Cody Acree: Yes, thank you guys for taking my question. The next one, I guess just a follow-up to Harsh’s question, Paul what other segments you said you’re reviewing today that you believe are near the bubble to require less investment going forward?
Paul Pickle: So, I’d say that I’ve got — I’ve got to practice or cadence in my management that I have always implemented, I review everything on an annualized basis. So, if we don’t have good projects to invest in, we don’t — we don’t just assign budgeting to business units just because they had it before. So, every project requires a justification, every project would have an opportunity attached to it. So, at this point, I scrutinize everything on a regular basis. Obviously, I can look at market expansion in certain areas and certainly feel a lot more comfortable, the risk profile associated with that investment, but we would look to as we kind of pull back OpEx overall, we’d look to re-fortify the beachheads. If those beachheads have — have some, let’s say, some sunsetting attached to them, we would look to take those investments and put them in other areas that are a bit stiffer topline growth.
Cody Acree: Thank you for that. And I guess secondly, just if you can summarize the improving demand that you’ve noted in the press release about your high-end consumer business and data center, how much of that is for near-term visibility for the current quarter, in the next six months and to what detail can you provide that’s offsetting those two businesses. I think your guidance for both was flat to sequentially down.
Paul Pickle: Yeah. That is correct. I’d say data center came in a bit — a bit higher in Q3 than we fully anticipated. When I — when I speak to improving demand, I’m really not talking about revenue, I’m talking about end-market consumption. So that’d be direct shipments plus POS and so you just have to kind of qualify that. To me, that’s the best measure of where our business is going and it eliminates all the channel inventory noise. So when I say we have an improving demand, it’s — it’s modest sequential improving demand that has been for the most part, improving over the last four quarters. That, I’d look to see corresponding booking rates, that 13-week trailing average booking rates that match that and I’m seeing that correlation. So, anything that I’d give you is not forecasted, it’s in the rears, it’s in the rearview mirror, it’s demand continually sequentially improving demand that we’ve seen over the last four quarters at least.
Cody Acree: All right. Thank you very much.
Operator: And the next question comes from the line of Scott Searle with Roth MKM. Please proceed with your question.
Scott Searle: Good afternoon, thanks for taking my questions and sneaking me in. Nice job on the restructuring efforts. Paul, maybe go back to modules, it sounds like you don’t necessarily need any sort of a formal exclusion list on Quectel to win business because it seems like customers are diversifying away from that anyway, but I’m wondering, I don’t think I heard any comments on that front. Is there an update on that front, and it sounds like based on the normalization of that business at around $260 million or so, that you’re basically running at less than half that rate right now. When would you expect normalization on that front? I think last quarter you talked about the middle of calendar ’24, is that what we should still be thinking about? So in the second half of ’24 we’re getting back to levels like that before you start to add on some incremental Quectel business.
Paul Pickle: Yeah, I was trying to give you color in terms of what the calendar year is going to do for us. So if you do the math on that 260 and kind of tipping my hand when I — when I think that this is going to recover and I put it in the second half. So this is after some feedback from customers, what we expect as well as some additional uptake from new design-ins. So on the — on the exclusion list front, no, we don’t need Quectel, FiberCom to be officially excluded in order to benefit from this, we are benefiting from it. We will continue to benefit from it. I think it as, even if the China Select Committee came out tomorrow and said okay, everything is fine, we’re not going to put them on the list, we’re still going to benefit from this, there has been enough shift because of the overall tensions that exists with China and the US, especially around networking equipment, and it’s been going on for years.
So, it’s just now finally coming to a head where people are not willing to jeopardize their Company’s business on the basis of using a particular supplier that might be $0.10 cheaper just doesn’t make any sense. So, we’re getting a lot of pickup, not to mention we have good relationships with Qualcomm. I come with those relationships, because of the previous work done in compute and so we’re leveraging that in order to pick up very heavily on those leads, and I should mention that we also sell quite a few Sony chipsets with the LPWA modules as well and have a fantastic relationship there.
