Lumentum Holdings Inc. (LITE) 2020 Q1 法說會逐字稿

Good day, everyone. And welcome to the Lumentum First Quarter Fiscal Year 2020 Financial Year Conference Call. As a reminder, today's call is being recorded for replay purposes through November 7, 2019. I would now like to turn the conference over to Mr. Jim Fanucchi of Darrow Associates. Mr. Fanucchi, please go ahead.

大家好。歡迎參加 Lumentum 2020 會計年度第一季財報電話會議。提醒各位，今天的電話會議將錄音，供重播至 2019 年 11 月 7 日。現在我想把會議交給 Darrow Associates 的 Jim Fanucchi 先生。Fanucchi 先生，請開始。

Thank you, Adam. Welcome, everyone, to Lumentum's First Quarter Fiscal 2020 Earnings Call. This is Jim Fanucchi from Darrow Associates, assisting Lumentum with its investor relations. Joining the call today from the company's management team, we have Alan Lowe, President and Chief Executive Officer; Wajid Ali, Chief Financial Officer; and Chris Coldren, Senior Vice President of Strategy and Corporate Development.

謝謝你，Adam。各位好，歡迎參加 Lumentum 2020 會計年度第一季財報電話會議。我是 Darrow Associates 的 Jim Fanucchi，協助 Lumentum 的投資人關係事務。今天與會的公司管理團隊成員包括：總裁兼執行長 Alan Lowe；財務長 Wajid Ali；以及策略與企業發展資深副總裁 Chris Coldren。

Today's call will include will include forward-looking statements, including statements regarding the markets in which we operate, including potential market sizes; trends and expectations for products and technology, including product development and projected new product releases; purchasing trends and demand for our products; our expected financial performance, including our guidance, expenses and position in the market, as well as statements regarding our recent acquisition of Oclaro. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our current expectations.

今天的電話會議將包含前瞻性陳述，包括關於我們所營運市場的陳述（含潛在市場規模）；產品與技術的趨勢與預期（含產品開發與預計新產品發表）；我們產品的採購趨勢與需求；我們預期的財務表現（含財測、費用與市場地位）；以及關於我們近期收購 Oclaro 的相關陳述。這些陳述受風險與不確定性影響，可能導致實際結果與我們目前的預期有重大差異。

Lumentum encourages reviewing our most recent filings with the SEC, particularly the risk factors described in our filing with the Securities and Exchange Commission including the company's quarterly report on Form 10-Q for the fiscal quarter ended September 28th, 2019 to be filed with the Securities and Exchange Commission later today; and Lumentum's 10-K for fiscal year 2019 ended on June 29th. The forward-looking statements provided during this call are based on Lumentum's reasonable beliefs and expectations as of today. Lumentum undertakes no obligations to update these statements, except as required by applicable law. Please also note, unless otherwise stated, all results and projections discussed on this call are non-GAAP. Non-GAAP financials should not be considered as a substitute for or superior to financials prepared in accordance with GAAP.

Lumentum 建議各位查閱我們最近向美國證券交易委員會（SEC）提交的文件，特別是其中所述的風險因素，包括公司截至 2019 年 9 月 28 日止會計季度的 Form 10-Q 季報（將於今日稍晚向 SEC 提交）；以及截至 6 月 29 日止的 2019 會計年度 Form 10-K 年報。本次電話會議中所提供的前瞻性陳述，係基於 Lumentum 截至今日之合理信念與預期。除非適用法律要求，Lumentum 不承擔更新這些陳述之義務。另請注意，除非另有說明，本次電話會議所討論的所有結果與預測均為非 GAAP。非 GAAP 財務資訊不應被視為依 GAAP 編製之財務資訊的替代或更優。

Lumentum's press release with the first quarter of fiscal 2020 results is available on its website at www.lumentum.com under the Investors section and includes additional details about our non-GAAP financial measures and reconciliation between our historical GAAP and non-GAAP results. Lumentum's website also contains our latest SEC filings and supplementary slides relating to today's earnings release. And the company encourages you to review these documents. In addition, a recording of today's call will be available by 11:30 a.m. Pacific Time today on our website.

Lumentum 已在其網站 www.lumentum.com 的「投資人」專區發布 2020 會計年度第一季業績新聞稿，其中包含我們非 GAAP 財務衡量指標的更多細節，以及歷史 GAAP 與非 GAAP 結果之間的調節表。Lumentum 的網站亦包含我們最新的 SEC 申報文件，以及與今日財報發布相關的補充簡報投影片。公司也鼓勵各位查閱這些文件。此外，今天電話會議的錄音將於今日太平洋時間上午 11:30 前後在我們的網站上提供。

Now I will turn the call over to Alan for his comments on first quarter market and products highlights. Alan?

現在我把電話交給 Alan，請他就第一季市場與產品重點發表評論。Alan？

Thank you, Jim. Good morning, everyone. Our strong first quarter performance underscores our continued progress toward our long-term strategic and financial goals. A revenue mix richer in new and more innovative products, increased scale and acquisition synergies all helped drive sequential and year-on-year improvements in gross margin and operating margin. In particular, improvements in Telecom and Datacom margins helped first quarter non-GAAP gross margins expand significantly to more than 457% for the first time ever.

謝謝你，Jim。各位早安。我們第一季的強勁表現，凸顯我們持續朝長期策略與財務目標邁進的進展。營收組合中新增且更具創新性的產品占比提高、規模擴大以及併購綜效，皆有助於推動毛利率與營業利益率在季比與年比上改善。尤其是電信與數據通訊毛利率的改善，協助第一季非 GAAP 毛利率大幅擴張，首次突破 457%。

We believe we have sustainable technology and market leadership positions across the markets we serve. These have been attained through successful investments in R&D over many years and more recently enhanced by M&A. We have irreplaceable experience and learnings developing and ramping new and innovative products and in some cases years ahead of our competitors. We continue to invest strongly in R&D to extend our leadership positions. Our increased scale resulting from organic growth, share gains and the Oclaro acquisition allows us to invest more in new technologies and products.

我們相信，在所服務的各個市場中，我們具備可持續的技術與市場領導地位。這些地位是透過多年成功的研發投資所取得，並在近期透過併購（M&A）進一步強化。我們在開發與量產新穎創新產品方面累積了不可取代的經驗與學習成果，在某些情況下甚至領先競爭對手多年。我們持續大力投資研發，以延伸我們的領導地位。由有機成長、市占提升以及收購 Oclaro 所帶來的規模擴大，使我們能在新技術與新產品上投入更多資源。

For example, our current investment in R&D is more than 30% higher than before the Oclaro acquisition despite having reduced the number of combined product lines. This higher investment level helps us accelerate the time to market on key customer programs, including those in new, longer timeline opportunities such as 3D sensing and LIDAR for the automotive market.

例如，儘管我們已減少合併後的產品線數量，但目前的研發投資仍較收購 Oclaro 之前高出 30% 以上。更高的投資水準有助於我們加速關鍵客戶專案的上市時程，包括 3D 感測以及汽車市場的 LIDAR 等具較長開發週期的新機會。

Now for further details on the first quarter performance. Revenue increased 11% sequentially and 27% year-on-year. 3D sensing was the primary driver for -- of sequential growth and contributed significantly to year-on-year growth. Our industrial and consumer product lines which include 3D sensing were up 92% sequentially and 26% relative to the prior year. Year-on-year growth was driven by winning strong share in a larger market as customers are incorporating 3D sensing in a higher percentage of their product offerings compared to last year.

接下來提供第一季表現的更多細節。營收季增 11%，年增 27%。3D 感測是帶動季增的主要動能，並對年增亦有顯著貢獻。我們的工業與消費性產品線（包含 3D 感測）季增 92%，較去年同期成長 26%。年增主要來自於我們在更大的市場中取得強勁市占，因為相較去年，客戶在其產品組合中導入 3D 感測的比例更高。

During the first quarter, we saw multiple customers launch new products, incorporating front and world facing 3d sensing capabilities. These product introductions demonstrate the increasing appeal of 3D sensing for biometric authentication, computational photography and augmented and virtual reality. We have shipped more than a 0.5 billion 3D sensing lasers to date. This is an amazing accomplishment and our experience is a valuable advantage that is difficult for our competitors to replicate. Customers around the world know they can count on our proven and unrivaled reliability and volume capability.

在第一季期間，我們看到多家客戶推出新產品，納入前置與後置（world-facing）的 3D 感測功能。這些產品發表顯示 3D 感測在生物辨識驗證、計算攝影，以及擴增與虛擬實境方面的吸引力日益提升。截至目前，我們已出貨超過 0.5 十億（5 億）顆 3D 感測雷射。這是一項令人驚嘆的成就，而我們的經驗是一項寶貴優勢，競爭對手難以複製。全球客戶都知道，他們可以信賴我們經驗證且無可匹敵的可靠度與量產能力。

Our R&D teams are very busy working with customers on their future generations of 3D sensing needs. We expect that customers over the next 12-months will incorporate additional 3D sensing capabilities in their products, which should result in significant growth in our addressable markets. Related to 3D sensing, since our last call, we have provided additional samples of photonic devices for the automotive market including laser assemblies for high-performance LIDAR applications. While significant revenue is several years away for many of these applications, we are very optimistic about both the market opportunity and our ability to win customers with our unique capabilities.

我們的研發團隊正非常忙碌地與客戶合作，滿足其下一代 3D 感測需求。我們預期在未來 12 個月內，客戶將在其產品中導入更多 3D 感測功能，這應可帶動我們可服務市場（TAM）顯著成長。就 3D 感測相關而言，自上次電話會議以來，我們已為汽車市場提供更多光子元件樣品，包括用於高效能 LIDAR 應用的雷射組件。雖然其中許多應用距離產生顯著營收仍有數年時間，但我們對市場機會以及憑藉我們獨特能力贏得客戶的能力都非常樂觀。

Looking to the second quarter, our guidance contemplates 3D sensing declining more than 20% sequentially, which is larger than the seasonal declines we experienced last year due to this year's earlier ramp.

展望第二季，我們的財測假設 3D 感測營收將季減超過 20%，由於今年較早開始拉升（ramp），因此降幅將大於我們去年所經歷的季節性下滑。

Turning to our Telecom and Datacom product lines. Transceiver customers who purchase our high performance laser chips serve both the Telecom and Datacom markets. Because of this, starting with the first quarter in our commentary on this call our earnings slides and our 10-Q, we are now combining our Telecom and Datacom product lines.

接著談我們的電信與數據通訊產品線。購買我們高效能雷射晶片的收發器客戶，同時服務電信與數據通訊市場。因此，自第一季起，在本次電話會議的評論、我們的財報簡報投影片以及 10-Q 中，我們將電信與數據通訊產品線合併呈現。

In the first quarter, Telecom and Datacom revenue was down 8% sequentially, but was up 40% from the prior year. More than half the sequential decline was due to the discontinued low margin product lines we've previously discussed. The remainder of the sequential decline was primarily due to lower shipments of non ROADM products to Huawei and the expected decline in submarine revenue we highlighted on our prior call.

第一季電信與數據通訊營收季減 8%，但較去年同期成長 40%。季減幅度中超過一半，來自我們先前討論過的已停止供應之低毛利產品線。其餘的季減主要是因對華為的非 ROADM 產品出貨較少，以及我們在上一通電話會議中提到的海底（submarine）營收如預期下滑。

Growths of ROADMs were flat sequentially as on the net supply and demand is in equilibrium for the time being. With that said, we remain constrained on many of our highest end ROADMs products. Revenue from Telecom and Datacom products that are being discontinued totaled $19 million in the first quarter. We expect this revenue to effectively decline to zero over the next two quarters with the majority of the remaining decline occurring in our third fiscal quarter. Excluding this discontinued product lines, telecom transmission revenue was up nicely on a sequential basis and demand is strong.

ROADM 的成長在季比方面持平，因為就淨供給與需求而言，目前暫時處於均衡狀態。即便如此，我們在多項最高階的 ROADM 產品上仍然受限於產能。第一季來自即將停產的電信與資料通訊產品之營收合計為 1,900 萬美元。我們預期該營收在接下來兩個季度將實質下降至零，其中大部分的剩餘下滑將發生在我們的第三個會計季度。排除這些停產產品線後，電信傳輸營收在季比方面有不錯的成長，且需求強勁。

First quarter revenue was impacted by our ability to increase output on coherent modules to meet customer demand. We have previously highlighted that strength in telecom transport is often a leading indicator of future strength in demand for transmission products. We are now seeing an increase in demand for telecom transmission products after a lengthy period of telecom transport strength.

第一季營收受到我們提升相干模組（coherent modules）產出以滿足客戶需求之能力的影響。我們先前已強調，電信傳輸設備（telecom transport）的強勁表現往往是未來傳輸產品需求走強的領先指標。在電信傳輸設備長期強勁之後，我們現在正看到電信傳輸產品需求的增加。

Sales of chips to transceiver customers grew 13% sequentially to a new record level. We have strong engagement from new and existing customers for chips including for 5G wireless network applications. Based on the continued strong growth expected in global network and datacenter traffic, an optical infrastructure needed to support by 5G wireless networks. We believe the market for our Telecom and Datacom products should be strong on a multi-year basis. We are well-positioned with our industry-leading products and deep customer relationships. We believe we benefit from global bandwidth expansion regardless of who builds or supplies the networks.

對收發器客戶的晶片銷售季比成長 13%，創下新高紀錄。我們在新舊客戶方面對晶片（包括 5G 無線網路應用）都有強勁的合作與導入動能。基於全球網路與資料中心流量預期將持續強勁成長，以及 5G 無線網路所需支援的光學基礎設施。我們認為電信與資料通訊產品的市場在未來多年應會維持強勁。憑藉我們業界領先的產品與深厚的客戶關係，我們具備良好定位。我們相信，不論由誰建置或供應網路，我們都能受惠於全球頻寬擴張。

Our next generation products are critical to our global customer base and include high-performance DML, EML and pixel products enabling high speed optical transceivers including 400G and above and next generation wireless front hall and access solutions. M-by-N and high port count twin ROADMs. A range of high-performance DCO transmission modules and underlying highly integrated components, and finally, high baud rate indium phosphide components including those for 800 gigabit transmission. Looking to the second quarter, we expect Telecom and Datacom revenue will be up sequentially given primarily by growth in telecom transmission and transceiver chip sales.

我們的次世代產品對全球客戶群至關重要，包含高效能 DML、EML 與像素（pixel）產品，可支援 400G 及以上的高速光收發器，以及次世代無線前傳（fronthaul）與接取解決方案。M-by-N 與高埠數（high port count）的雙路 ROADM。一系列高效能 DCO 傳輸模組及其底層高度整合的元件，最後還包括高波特率（high baud rate）的磷化銦元件，其中包含用於 800Gb 傳輸的元件。展望第二季，我們預期電信與資料通訊營收將季比成長，主要由電信傳輸與收發器晶片銷售成長所帶動。

Now on to lasers. First quarter laser demands softened more than projected due to elevated customer inventory levels, resulting in revenue dipping to $33.8 million. Looking to the second quarter, we expect lasers to rebound to the mid to low $40 million level. Over the long run because of our investments in unique new product and technologies, we believe we have good opportunities for growth driven by new laser product introductions in addition to market growth.

接著談雷射。由於客戶庫存水位偏高，第一季雷射需求較預期更為疲弱，導致營收下滑至 3,380 萬美元。展望第二季，我們預期雷射營收將回升至 4,000 萬美元出頭、約中段至低段的水準。長期而言，因我們在獨特的新產品與技術上的投資，我們相信除了市場成長外，透過新雷射產品導入也將帶來良好的成長機會。

Our commercial lasers business is important to our long-term strategy. It provides us with significant addressable market to grow into and provides us with a level of customer and end market diversification.

我們的商用雷射業務對長期策略相當重要。它為我們提供可大幅拓展的可服務市場（TAM），並帶來一定程度的客戶與終端市場多元化。

Throughout my remarks, I've highlighted the significant progress we have made toward our strategic and financial goals. Over the past several years, we have made significant investments in new products, markets, design wins and M&A. We believe these investments position as well for the future. At Lumentum, we are releasing the power of light to create a brighter future and it is a very exciting time for all of our stakeholders.

在我的發言中，我已強調我們在達成策略與財務目標方面所取得的重大進展。過去幾年，我們在新產品、市場、設計導入（design wins）以及併購（M&A）方面進行了大量投資。我們相信這些投資使我們在未來具備良好定位。在 Lumentum，我們釋放光的力量以創造更光明的未來，對所有利害關係人而言，這是一個非常令人振奮的時刻。

I would especially like to thank our employees for their hard work that has put us in such a great position. I will now hand it over to Wajid.

我特別要感謝我們的員工，他們的辛勤付出讓我們處於如此有利的位置。接下來我把時間交給 Wajid。

Thank you, Alan. Good morning, everyone. I'm pleased to be discussing our strong first quarter results. Net revenue for the first quarter was $449.9 million which was up 11% sequentially and 27% year-on-year. GAAP gross margin for the first quarter was 37.3%. GAAP operating margin was 13.3% and GAAP diluted net income per share was $0.61. Again GAAP results include the impact of restructuring, write-downs, amortization of intangibles and other charges related to the acquisition and our actions to attain acquisition synergies.

謝謝你，Alan。各位早安。我很高興與各位討論我們第一季的強勁成果。第一季淨營收為 4.499 億美元，季比成長 11%，年增 27%。第一季 GAAP 毛利率為 37.3%。GAAP 營業利益率為 13.3%，GAAP 稀釋後每股淨利為 0.61 美元。再次說明，GAAP 結果包含重組、減記、無形資產攤銷，以及與收購相關的其他費用，並包含我們為達成收購綜效所採取行動的相關費用影響。

First Quarter non-GAAP gross margin was 45.8% which was up 690 basis points sequentially and 550 points year-on-year. As Alan noted, the strong year-on-year gross margin improvement was helped by improvements in Telecom and Datacom margins, as well as acquisition synergies. Non-GAAP operating margin for the first quarter was 27.3% which was up 830 points sequentially and 340 basis points year-on-year, driven by higher gross margins. Non-GAAP operating expenses totaled $83.3 million or 18.5% of revenue. SG&A expense was $37 million; R&D expense was $46.3 million.

第一季非 GAAP 毛利率為 45.8%，季比提升 690 個基點，年增 550 個基點。如 Alan 所提，年增毛利率的強勁改善受惠於電信與資料通訊毛利率提升，以及收購綜效。第一季非 GAAP 營業利益率為 27.3%，季比提升 830 個基點，年增 340 個基點，主要由較高的毛利率所帶動。第一季非 GAAP 營業費用合計為 8,330 萬美元，占營收 18.5%。銷售、一般及行政（SG&A）費用為 3,700 萬美元；研發（R&D）費用為 4,630 萬美元。

Non-GAAP net income was a $111.4 million for the first quarter and includes $2.6 million of net interest expense and tax expense of $8.7 million. Non-GAAP diluted net income per share was a $1.44 based on a fully diluted share count of $77.6 million. We ended the quarter with cash and short-term investments of $831 million, an increase of $62 million relative to the prior quarter. This week we made a voluntary $150 million principal repayment under a term loan B facility. The impact of this prepayment will be an improvement in our other income of approximately $4 million or $0.05 at the EPS level on an annualized basis.

第一季非 GAAP 淨利為 1.114 億美元，其中包含 260 萬美元的淨利息費用與 870 萬美元的所得稅費用。非 GAAP 稀釋後每股淨利為 1.44 美元，係以完全稀釋後股數 7,760 萬股計算。本季期末現金與短期投資為 8.31 億美元，較前一季增加 6,200 萬美元。本週我們在一筆 B 類定期貸款（term loan B）融資項下自願償還本金 1.5 億美元。此項提前償還的影響，按年化基礎計算，將使我們的其他收入改善約 400 萬美元，或在每股盈餘（EPS）層面約增加 0.05 美元。

Turning to segment and product line details. First quarter optical communication segment revenue at $416.1 million increased 17% sequentially. Within our optical communication segment, Telecom and Datacom revenue at $248.1 million was down 8% sequentially. Industrial and Consumer revenue at $168 million was up 92% sequentially due to higher 3D sensing revenues.

接著說明各事業部與產品線細節。第一季光通訊事業部營收為 4.161 億美元，季比成長 17%。在光通訊事業部內，電信與資料通訊營收為 2.481 億美元，季比下滑 8%。工業與消費性營收為 1.68 億美元，因 3D 感測營收較高而季比大增 92%。

Optical Communication segment gross margin at 46.1% increased 780 basis points sequentially and 580 basis points year-on-year. Our Laser segment revenue at $33.8 million decreased 29% sequentially. First quarter Laser's gross margin was 42%, a decrease of 150 basis points due to lower revenue.

光通訊事業部毛利率為 46.1%，季比提升 780 個基點，年增 580 個基點。雷射事業部營收為 3,380 萬美元，季比下滑 29%。第一季雷射事業部毛利率為 42%，因營收較低而下降 150 個基點。

Now on to our guidance for the second quarter. The projections we are providing today are on non-GAAP basis and are based on our assumptions as of today. We project net revenue for the second quarter will be in the range of $445 million to $460 million. This revenue projection includes Telecom and Datacom increasing sequentially, primarily driven by telecom transmission and chip sales to transceiver customers. Industrial and Consumer declining significantly due to a greater than 20% expected seasonal decline in 3D sensing demand. And Commercial Lasers increasing sequentially as customer inventory levels are more normalized.

接著說明我們對第二季的財測指引。我們今天提供的預測以非 GAAP 為基礎，並基於我們截至今日的假設。我們預估第二季淨營收將落在 4.45 億至 4.60 億美元之間。此營收預測包含電信與資料通訊季比成長，主要由電信傳輸與對收發器客戶的晶片銷售所帶動。工業與消費性將顯著下滑，原因是 3D 感測需求預期出現超過 20% 的季節性下降。商用雷射將季比成長，因客戶庫存水位更趨正常化。

We project second quarter operating margin to be in the range of 24% to 26% and diluted net income per share to be in the range of $1.20 to $1.35. These projections incorporate an approximate share count of 78 million.

我們預估第二季營業利益率將落在 24% 至 26% 的區間，稀釋後每股淨利將落在 1.20 至 1.35 美元的區間。上述預測納入約 7,800 萬股的股數假設。

With that, I'll turn the call back to Jim to start the Q&A session. Jim?

那麼，我把電話交回給 Jim 來開始問答環節。Jim？

Thank you, Wajid. (Operator Instructions) Operator, let's now begin the question-and-answer session.

謝謝你，Wajid。(接線員指示) 接線員，現在開始問答環節。

(Operator Instructions) And your first question comes from line of Rod Hall with Goldman Sachs.

(接線員指示) 你們的第一個問題來自高盛（Goldman Sachs）的 Rod Hall。

Yes. Hi, guys. Thanks for taking the question. So my -- I guess my opening question is with regards to the telecom demand. You had said that outside of the discontinued products you've seen good demand growth. Could you elaborate on what type of demand there you've seen? I know you're talking about transmission, but can you give us any more color regionally or project wise on that that might help us understand what's going on out there in the telecom world since CapEx generally has been pretty weak?

是的。嗨，各位。謝謝讓我提問。所以我——我想我的開場問題是關於電信需求。你們提到，除了已停產的產品之外，你們看到不錯的需求成長。能否更詳細說明你們看到的是哪一類需求？我知道你們談到的是傳輸，但你們能否在區域或專案層面提供更多細節，幫助我們理解電信領域目前的情況，因為整體而言資本支出（CapEx）一直相當疲弱？

Yes. Rod, thanks for the question. This is Alan. I think as you said the telecom transmission demand is very strong; datacenter interconnect is very strong. 10-gig tunable is very strong as well. And I think it's pretty broad-based globally. It's hard to tell where that product ends up, but I think datacenter interconnect is a key driver for a lot of that, but I think metro build-outs as we've deployed all those telecom transport nodes that the metro build outs are filling out those transmission lines with coherent ports that drives both coherent ACO modules, as well as our components.

是的。Rod，謝謝你的問題。我是 Alan。我想如你所說，電信傳輸需求非常強勁；資料中心互連（datacenter interconnect）也非常強勁。10G 可調式（tunable）同樣非常強。而且我認為這在全球範圍內相當普遍。很難判斷這些產品最終會用到哪裡，但我認為資料中心互連是其中很重要的驅動因素；同時，隨著我們部署了所有那些電信傳輸節點，城域（metro）建設正在把這些傳輸線路用相干（coherent）埠填滿，這同時帶動相干 ACO 模組以及我們的元件需求。

Okay, great, thanks Alan. And then my follow-up is with regards to handsets terminals. I just wanted, I know that you had commented that non ROADM shipments to Huawei were down, but I'm wondering if you could talk a little bit about the handset shipments there? And what's -- how the dynamics are going? I know that they lost share in Europe but then they've been refocusing on China. And then just more broadly what's going on with Android in terms of 3D? Are you seeing others coming in to fill that void that exists now because of Huawei in Europe and so on with 3D models of their own?

好的，很棒，謝謝 Alan。接著我的追問是關於手機終端。我想確認一下，我知道你們評論過對華為的非 ROADM 出貨量下降，但我想請你們談談手機端的出貨情況？以及——目前的動態是如何？我知道他們在歐洲市占下滑，但之後又把重心轉回中國。另外更廣泛地說，Android 在 3D 方面目前情況如何？你們是否看到其他廠商在歐洲等地因華為留下的空缺而進來，以自家的 3D 模組來補位？

Yes. Our comment regarding non ROADMs revenue being down was specific to Telecom and Datacom. Our 3D sensing with Huawei was actually up I believe slightly and we're seeing broad adoption and very active design-ins for next generation of Android handsets using 3D sensing. So we're pretty optimistic with the outlook on Android as a whole.

是的。我們關於非 ROADM 營收下滑的評論，是針對電信與數據通訊（Telecom and Datacom）業務。我們與華為的 3D 感測業務我相信其實是略有成長，而且我們看到下一代採用 3D 感測的 Android 手機有廣泛採用與非常積極的設計導入（design-in）。因此我們對整體 Android 的展望相當樂觀。

And you guys -- the share loss that you were I think anticipating in December on 3D, it doesn't seem like that's materializing in this guidance. I'm just double checking that.

那你們——我記得你們在 12 月時預期 3D 會有市占流失，但看起來在這次指引中並沒有反映出來。我只是再確認一下。

Yes. We're very comfortable with our share both in the short term, as well as in the long term. We've done a good job making sure that we get our customers what they need, when they need it with the reliability they expect, number one. And number two, a lot of new products are going to get introduced throughout next year, and we're extremely well positioned with our customers' design teams to make sure we're leading the way there. So I think a share is a good thing for us right now.

是的。我們對短期與長期的市占都非常有信心。第一，我們在確保能以客戶期待的可靠度，在他們需要的時間提供他們所需產品方面做得很好。第二，明年全年會推出許多新產品，而我們在客戶的設計團隊中具備極佳的布局，能確保我們在那方面保持領先。所以我認為目前市占對我們來說是有利的。

Your next question comes from the line Alexander Henderson with Needham.

下一個問題來自 Needham 的 Alexander Henderson。

Thank you very much. So I was hoping to talk a little bit about what your expectations are as we go into the New Year in terms of pricing, given you have normally see 10% to 15% price reductions in the first quarter. But it seems like the constraints around ROADMs and pumps may result in that being less of a pressure point this year than traditionally. Could you give any color on that?

非常感謝。我想談談你們對進入新年度後價格走勢的預期；因為通常你們會在第一季看到 10% 到 15% 的降價。但看起來 ROADM 與泵浦（pumps）的供給限制，可能使今年的價格壓力不像以往那麼大。你們能否提供一些看法？

Yes. I mean I think there's been, at least from my perspective some transition with respect to having these annual biddings in some cases that we are now working so closely with our customers that there's -- it's not abnormal to have a multi-year agreement with our customers that have price reductions over time, to make sure that we're working with them to ensure that they get what they need. So I think from a standpoint of expectations for the March quarter having a huge reduction in the area of 10% to 15% on Telecom and Datacom, I don't think that's the new normal anymore. I do think that there's going to be continued reductions, but I'd say on the low end of the scale from the normal would be my expectations.

是的。我的看法是，至少在某些情況下，年度招標（annual biddings）方面出現了一些轉變；我們現在與客戶合作得非常緊密，因此——與客戶簽訂包含隨時間逐步降價條款的多年期協議並不罕見，以確保我們能與他們合作、滿足他們的需求。所以就對 3 月季度的預期而言，在電信與數據通訊領域出現 10% 到 15% 那種大幅降價，我不認為那已是新的常態。我確實認為降價仍會持續，但我的預期會落在以往正常區間的低端。

And then if can follow-up one more question on the shift to transmission seems a little bit of a surprise to me. I would have thought you'd seen more on the ROADMs and pump side driving the upside to the business. It sounds like your Oclaro DCO, ACO products are doing quite well. Could you just give us a little bit more granularity around those because it's harder for us to track?

另外我再追問一個問題：轉向傳輸（transmission）的趨勢對我來說有點意外。我原本以為業務的上行會更多由 ROADM 與泵浦端帶動。聽起來你們的 Oclaro DCO、ACO 產品表現相當好。你們能否就這些產品提供更細的說明？因為我們比較難追蹤。

You mean on the ACOs and DCOs?

你是指 ACO 和 DCO 的部分嗎？

Yes, please.

是的，麻煩。

Yes. In ACOs, we just can't make enough. We have -- as we've said in the past, Alex, transport is a leading indicator of transmission strength and we're seeing that in spades right now. In fact, we saw it last quarter; we weren't able to fulfill our ACO demand and a little bit to our surprise, we weren't able to fill our tunable 10-gig demand. So we're continuing to see a broad range of demand for ACO. And we think there's a long tail in ACO, as well as demand for our DCO products as we start to introduce those into the marketplace.

是的。在 ACO 方面，我們就是做不夠。Alex，正如我們過去所說，傳輸（transport）是傳輸（transmission）強勁程度的領先指標，而我們現在正大量看到這種情況。事實上，我們上個季度就看到了；我們無法滿足 ACO 的需求，而且有點出乎我們意料的是，我們也無法滿足 10G 可調式（tunable）的需求。因此我們持續看到 ACO 的廣泛需求。而且隨著我們開始把 DCO 產品導入市場，我們認為 ACO 會有長尾需求，同時也會帶動對 DCO 產品的需求。

Okay. So you're starting to see that the impact of rolling out a lot of ROADMs is driving acceleration in global demand for transport. Is that what I'm hearing?

好的。所以你們開始看到：大量部署 ROADM 的影響正在推動全球對傳輸（transport）需求加速成長。我聽到的是這個意思嗎？

For transmission, yes, absolutely.

就傳輸（transmission）而言，是的，完全正確。

Your next question comes from the line of Samik Chatterjee with JP Morgan.

下一個問題來自摩根大通（JP Morgan）的 Samik Chatterjee。

Hi, good morning. Thanks for taking my question. So you mentioned kind of seeing strength in the telecom group and demand for telecom products. I just want to clarify because you also mentioned ROADMs, you think are kind of in supply and demand is imbalance. So relative to kind of your expectations specifically to ROADMs for the remainder of the year are you expecting that to largely remain kind of sequentially flat, or are you expecting that will continue to kind of ramp up? And then you mentioned kind of differentiated products, so just wondering if you can give us a breakdown of what portion of your ROADMs portfolio do you think is differentiated versus can kind of rise higher growth versus maybe the remaining portion of that.

嗨，早安。謝謝讓我提問。你們提到電信事業群表現強勁、電信產品需求也很強。我想釐清一下，因為你們也提到 ROADM 方面你們認為供需存在失衡。因此就你們對今年剩餘時間 ROADM 的具體預期而言，你們預期它大致會維持季對季持平，還是預期會持續爬升？另外你們提到差異化產品（differentiated products），想請問你們能否拆解一下：你們認為在 ROADM 產品組合中，有多少比例屬於差異化、因此可能帶來較高成長；以及其餘部分大概是什麼情況？

Yes, sure. I think as we said in the prepared remarks, our supply/demand on ROADMs has reached more of equilibrium as a whole. I would say that we're still constrained on the very high end and some specialty products, where we're -- have a sole source position. We just haven't been able to keep up with the m-by-n demand and in some cases the very high port count twin demand. So I think that we're adding some capacity there that should allow us to continue to get our customers what they need. And those are the differentiated products we're talking about.

是的，當然可以。我想如同我們在事先準備的發言中所說，整體而言，我們在 ROADM 的供需已更趨於平衡。我會說我們在最高階以及部分特殊產品上仍然受限，因為我們——處於單一來源供應的地位。我們一直無法跟上 m-by-n 的需求，在某些情況下也無法跟上非常高埠數的 twin 需求。因此我認為我們正在增加那部分的產能，這應該能讓我們持續提供客戶所需。而這些就是我們所談到的差異化產品。

So we're going to continue to invest. We have a whole pipeline of new ROADMs that are going to come out in the next couple years that I think will extend our leadership position there. So I think we're in pretty good shape with our ROADMs. I think in the short term, ROADMs, ROADMs demand is still robust. I'd say that we're -- our expectations are that that it's probably slightly down slightly in the December quarter, but that's more than offset by strong, strong demand in the telecom transmission including ACOs and 10-gig tunables as well as DCOs in 2020.

所以我們將持續投資。我們有一整個新 ROADM 的產品管線，將在未來幾年推出，我認為這會延伸我們在該領域的領先地位。所以我認為我們在 ROADM 方面狀況相當不錯。我想短期來看，ROADM、ROADM 的需求仍然強勁。我會說我們——我們的預期是 12 月季度可能會小幅下滑，但這將被電信傳輸的強勁需求所抵銷，包括 ACO 與 10G 可調式產品，以及 2020 年的 DCO。

Got it. And just on datacom, you're guiding to kind of sequential improvement there as well. I'm just wondering if chip sales are ramping up faster than you earlier expected, because I think at least on our part the expectation was that maybe one more quarter of kind of sequential declines before you saw chip sales kind of overwhelming the declines on the modules. So can you just help me with that?

了解。另外在資料通訊方面，你們也指引該業務將出現某種程度的連續改善。我只是想知道晶片銷售是否比你們先前預期更快爬升，因為至少就我們這邊的預期而言，可能還會再有一季呈現連續下滑，之後晶片銷售才會開始壓過模組下滑的影響。所以你能否協助我釐清一下？

Yes. Just for clarity, in the first quarter we had $19 million of what we call discontinued products, which are our lithium niobate modulators and our datacom transceivers. We expect that to go to zero over the next couple quarters, again with the bulk of that reduction coming in the March quarter. On Datacom chips, our expectations are that it continues to grow both in the December quarter and through 2020 as we are no longer a competitor to our customers in the transceiver market. So we've seen a broad range of customers coming to us to take advantage of our leading edge EML, DML and VCSEL technology and products. So I think we're going to continue to see strength in the chip sales through 2020 especially as the 5G rollouts become more meaningful next year.

是的。為了更清楚說明，第一季我們有 1,900 萬美元我們稱為停產產品的營收，也就是我們的鈮酸鋰調變器以及資料通訊收發器。我們預期在接下來幾季會降到零，同樣地，其中大部分的下降會發生在 3 月季度。在資料通訊晶片方面，我們的預期是它在 12 月季度以及整個 2020 年都會持續成長，因為我們不再是客戶在收發器市場上的競爭對手。因此我們看到廣泛的客戶群來找我們，利用我們領先的 EML、DML 與 VCSEL 技術與產品。所以我認為 2020 年晶片銷售將持續強勁，尤其是當 5G 部署在明年變得更具規模與意義時。

Your next question comes from the line of Blayne Curtis with Barclays.

下一個問題來自 Barclays 的 Blayne Curtis。

Hey, guys. This is Tom O'Malley for Blayne Curtis. I just wanted to ask quickly on the margins, you guys have clearly undergone a transition here to more high quality business and you saw substantial increase here in the September quarter. Can you talk about how you see that going forward? Is this a sustainable level for margins? And longer term is this kind of the right area to think about you guys from a margin profile.

嗨，各位。我是代替 Blayne Curtis 的 Tom O'Malley。我想快速問一下毛利率，你們顯然正在轉型到更高品質的業務，並且在 9 月季度看到顯著提升。你們能談談未來如何看待這個走勢嗎？這樣的毛利率水準是否可持續？以及更長期來看，這是否是評估你們毛利率輪廓的合適區間？

Yes. Hi, it's Wajid. I'll take that question. So on the margins, you've probably seen that our margins have improved quite well both year-on-year and sequentially as well. We talked at the -- at our last conference call about moving our gross margins levels up to the upper portion of 40% to 45% and we felt that it was both our product differentiation as well as the synergy work that we've had with the acquisition, flowing through and executing and improving our gross margins. But generally we have better gross margins in the back half of the calendar year than in the first half of the calendar year, primarily because of 3D sensing but year-on-year, so Q2-over-Q2 and Q3-over-Q3, we do expect to continue to see improved margins, primarily because of the synergy work that we continue to execute on.

是的。嗨，我是 Wajid。我來回答這個問題。關於毛利率，你可能已經看到我們的毛利率無論年對年或季對季都改善得相當不錯。我們在上一次法說會提到，要把毛利率提升到 40% 到 45% 的較高區間，我們認為這來自於產品差異化，以及我們在併購後所做的協同效益工作逐步反映、落實執行，並帶動毛利率改善。但一般而言，我們在曆年下半年毛利率會比上半年更好，主要是因為 3D 感測；不過就年對年而言，也就是 Q2 對 Q2、Q3 對 Q3，我們確實預期毛利率會持續改善，主要因為我們持續執行協同效益工作。

Great. And then my follow-up, for your largest customer in the quarter do you guys give a percentage out or I know that you'd have it in the filing, but could you give it to us?

很好。接著追問一下，你們本季最大客戶的占比，你們會提供百分比嗎？我知道你們會在申報文件裡揭露，但你們能在這裡提供給我們嗎？

We actually don't give that out in the 10-Q. We only name them but we don't actually give the percentages.

我們其實不會在 10-Q 裡提供那個。我們只會點名，但不會實際提供百分比。

Your next question comes from the line of John Marchetti with Stifel.

下一個問題來自 Stifel 的 John Marchetti。

Thanks very much. Alan, I wanted to go back to the comment that you made about sort of transport leading transmission sales. And I'm curious as we're looking out over the next several quarters or year or so, do you actually see transport starting to lag and transmission growing faster? And how do we think about that maybe in the overall mix of the business and does it have a margin impact?

非常感謝。Alan，我想回到你剛才提到「傳輸（transport）帶動傳輸（transmission）銷售」的評論。我很好奇，當我們展望未來幾季或未來一年左右時，你是否真的看到 transport 可能開始落後，而 transmission 成長更快？我們該如何看待這在整體業務組合中的影響，以及是否會對毛利率造成影響？

It's a good question. I don't have a crystal ball, but I'd say we're going to see continued growth in transmission through 2020, and as new networks get deployed or new network architectures get deployed with things like in m-by-n or the very high port count twins, we're going to see ROADM growth return from what may be a flat period here today. So we're -- our expectations are as we continue to introduce new products in ROADMs, that those will be adopted by our network equipment manufacturer partners, as well as the service providers. So I think while there may be a flat period today, our expectations are that ROADM growth continues through 2020. But at the same time transmission now is building out those transmission lines that the transport network since have deployed.

這是個好問題。我沒有水晶球，但我會說我們將在 2020 年持續看到 transmission 成長；而隨著新網路部署、或新的網路架構部署（例如 m-by-n 或非常高埠數的 twins），我們將看到 ROADM 成長從目前可能偏平的期間回升。因此我們——我們的預期是，隨著我們持續在 ROADM 推出新產品，這些產品將被我們的網路設備製造商夥伴以及服務供應商採用。所以我認為即便目前可能有一段平坦期，我們仍預期 ROADM 成長會在 2020 年延續。但同時，transmission 現在正在建置那些傳輸線路，而 transport 網路已經部署了這些線路。

And then maybe just as a follow-up on the chip business. It seemed like it grew a little bit sooner than you were expecting, that demand has come in a little bit more quickly. I'm curious if you can just talk a little bit about how much of that is maybe serving existing customers that you used to be sort of a transceiver provider to or selling to, versus maybe some new customers that are coming in now and buying chips given that you don't compete with them anymore?

另外也許再追問一下晶片業務。看起來它比你們預期更早成長，需求來得更快一些。我想請你談談，其中有多少可能是服務既有客戶——也就是你們過去曾作為收發器供應商提供或銷售給他們——相對於現在因為你們不再與他們競爭，而有一些新客戶進來購買晶片？

Yes. I'd say it's a mix of both. I'd say we're getting sales from customers frankly we didn't even know existed, but I'd say it's a broad range of customer interaction and a broadening of our customer base in the chip sales that is pretty exciting.

是的。我會說兩者都有。我會說我們甚至從一些坦白講我們以前都不知道存在的客戶那裡取得銷售，但我會說這是廣泛的客戶互動，以及晶片銷售客戶基礎的擴大，這點相當令人振奮。

Your next question comes from line of Meta Marshall with Morgan Stanley.

下一個問題來自 Morgan Stanley 的 Meta Marshall。

Great, thanks guys. A couple of questions. Just what on the commercial laser business and kind of expecting that business to bounce back, is that better industrial conditions that your main customer is seeing, or just a little bit of context as to why that would improve in the next quarter? And then maybe the second question, noting that the Huawei shipments at the low end were a little bit lower than expectations. Is that inventory? Is that some insourcing? Just any color there would be helpful. Thanks.

很好，謝謝各位。我有幾個問題。首先關於商用雷射業務，以及你們預期該業務會反彈，這是因為你們主要客戶所看到的工業景氣變好嗎？或是能否提供一些背景，說明為什麼它會在下一季改善？然後第二個問題，注意到對華為的出貨在低端部分比預期略低。那是庫存因素嗎？還是有一些內製（insourcing）？任何補充說明都會很有幫助。謝謝。

Yes, I'll take the laser's question. I don't think that we're seeing the light at the end of the tunnel with respect to industrial demand. I think we're seeing that last quarter there was a significant inventory correction at not just one customer but several customers, that had the laser shipments being significantly down, actually more than we had expected. So I'd say that it was just an inventory correction and now we're starting to ship more in line with our customers' shipments out to their customers. And so I think that's the only thing we're seeing on lasers.

是的，我來回答雷射的問題。我不認為我們在工業需求方面看到了隧道盡頭的曙光。我認為我們看到的是，上個季度不只是一家客戶、而是多家客戶進行了顯著的庫存修正，導致雷射出貨量大幅下滑，實際上下滑幅度超過我們的預期。所以我會說，那只是一次庫存修正，而現在我們開始以更貼近客戶對其下游客戶出貨的節奏來出貨。因此我認為這就是我們在雷射方面唯一看到的情況。

Yes, I'll take the Huawei question. So I think the best way to look at our sales to Huawei is in general we're sole source and have a very unique product or capacity has been constrained for a long time, those sales generally are continuing on flattish not growing. Whereas we've seen some decline in products, where there may be other suppliers and perhaps they may have built some inventory over time. But we'd also highlight that they were a significant datacom customer for transceivers and with the exit of that business or ramp down of that business, that is also causing Huawei revenues to decline.

是的，我來回答華為的問題。我認為看待我們對華為的銷售，最好的方式是：一般而言，在我們是獨家供應（sole source）且擁有非常獨特的產品、或產能長期受限的情況下，這些銷售通常會持平延續、並未成長。相較之下，我們在某些產品上看到一些下滑，這些產品可能存在其他供應商，而且他們或許也隨時間累積了一些庫存。但我們也要強調，華為曾是收發器（transceivers）方面的重要數據通訊（datacom）客戶；隨著該業務退出或逐步縮減，這也正在導致華為營收下滑。

And your next question comes from line of Tejas Venkatesh with UBS.

下一個問題來自瑞銀（UBS）的 Tejas Venkatesh。

Can you talk broadly to China demand beyond Huawei, what you're seeing from a tender activity perspective and maybe how other customers are reacting?

能否更廣泛談談除華為以外的中國需求？從招標活動的角度你們看到了什麼，以及其他客戶可能如何反應？

Yes, I think there's a tremendous amount of activity in China on the tender side. I do think anecdotally there are a lot of deployments going on as well. So we're seeing a broad base of demand from not just Huawei, but from other customers, both in telecom and datacom product. So I think it's broad based. And it's, I think, a strong period of deployment of networks today in China.

是的，我認為中國在招標端有非常大量的活動。我也確實從一些零星的觀察中覺得，部署也正在大量進行。因此我們看到的需求基礎很廣，不僅來自華為，也來自其他客戶，涵蓋電信與數據通訊產品。所以我認為這是廣泛性的需求。而且我認為目前在中國正處於網路部署相當強勁的一段期間。

Thank you. And as a follow up, where are you with the synergies?

謝謝。另外追問一下，你們在協同效益（synergies）方面進展如何？

So, it's Wajid here. So at our last conference call, we had said that we were targeting a new synergy level of approximately $100 million as we had already achieved the original target of $60 million. We continue to make progress towards that $100 million synergy target. If you remember, we had said that it would take four or five quarters to get there and we thought that many of the synergies would come in during the tail end of that time period that we had outlined. And it was part of the reason why we felt confident that our average gross margins on an annual basis would move to the upper half of 40% to 45%. Some of which we're already seeing the benefit of in this quarter, as well as in our guide for next quarter. And so we're continuing to track to that, we're quite confident that we'll be able to achieve those targets in the time period that we've outlined.

好的，我是 Wajid。在上一次法說會上，我們提到在已達成原先 6,000 萬美元目標後，正以約 1 億美元的新協同效益水準為目標。我們持續朝 1 億美元的協同效益目標推進。如果你記得，我們曾說大約需要四到五個季度才能達成，而且我們認為許多協同效益會在我們所概述期間的後段才會顯現。這也是我們為何有信心，年度平均毛利率可提升至 40% 到 45% 區間的上半部。其中一部分效益我們在本季度已經開始看到，同時也反映在我們對下季度的指引中。因此我們持續按計畫推進，並且相當有信心能在我們所說明的時間內達成這些目標。

And your next question comes from line of Simon Leopold with Raymond James.

下一個問題來自 Raymond James 的 Simon Leopold。

Great. Thank you very much for taking the question. Two, I'd like to ask. One is just if maybe we could double click a little bit more on the telco datacom trends as we go from December into March. I think one of the things I suspect may be helping December, I want to clarify is maybe some purchases related to the end of life that maybe that is part of the factor of boosting December and leading to a more-than-seasonal decline in March, if you could help with that aspect? And then I've got a follow on. Thanks.

很好。非常感謝讓我提問。我想問兩個問題。第一個是，從 12 月走到 3 月時，能否更深入談談電信與數據通訊（telco datacom）的趨勢？我認為可能有一件事在支撐 12 月的表現，我想確認一下：是否有一些與產品生命週期終止（end of life）相關的採購，可能是推升 12 月、並導致 3 月出現超過季節性的下滑的因素之一？能否就這點說明？然後我還有一個追問。謝謝。

Yes, let me try to answer that. And Chris can correct me. I would say that, again, $19 million of discontinued sales in the September quarter. That's -- it's going to go down in the December quarter and then go down even further in the March quarter. I'd say that we're seeing strength primarily in the telecom transmission side of that as well as the datacom chips and so we went from one record last quarter in datacom chips, we're expecting new records this quarter, and I would expect that in the March quarter we're going to see continued growth on datacom chips. And we did not satisfy the demand on our telecom transmission business in the September quarter, and we're adding capacity. We're still not meeting the demand today of our customers. And so I think we're going to continue to see that in the March quarter.

好的，我來嘗試回答。Chris 也可以補充或更正我。我會說，同樣地，9 月季度有 1,900 萬美元的停產（discontinued）銷售。這部分在 12 月季度會下降，然後在 3 月季度會進一步下降。我會說，我們主要看到的強勁動能來自電信傳輸（telecom transmission）端，以及數據通訊晶片（datacom chips）；因此我們在上一季的數據通訊晶片創下紀錄，本季預期會再創新高，而我也預期在 3 月季度數據通訊晶片將持續成長。另外，我們在 9 月季度並未滿足電信傳輸業務的需求，我們正在增加產能。即便到今天，我們仍未能滿足客戶的需求。因此我認為在 3 月季度我們會持續看到這種情況。

Yes, I think the way to think about it is the datacom transceivers are burning off somewhat linearly. But we have some telecom products that are a little bit more of, I wouldn't say are helping necessarily the end of life products in December. But they drop off much more precipitously in the March quarter. I think also looking to the March quarter, I know Alex asked the question about ASPs, and ASP declines. But it also adds, there is another driver of seasonality in the March quarter. Generally folks are manufacturing in Asia and many in China are customer-level. And therefore their output in that quarter can decline. So I think even in a more moderated ASP environment, we are still going to see seasonality in the telecom datacom world in the March quarter, just driven by holidays in the March quarter in Asia.

是的，我認為可以這樣理解：數據通訊收發器（datacom transceivers）是以某種近似線性的方式逐步消化（burning off）。但我們有一些電信產品，我不會說它們一定是在 12 月幫助了那些生命週期終止的產品。但它們在 3 月季度的下滑會更為陡峭。另外再看 3 月季度，我知道 Alex 問了 ASP 與 ASP 下滑的問題。但還有另一個造成 3 月季度季節性的驅動因素。一般來說，許多廠商在亞洲製造，且不少在中國、而且是在客戶端層級。因此他們在該季度的產出可能會下降。所以我認為，即使在 ASP 環境較為溫和的情況下，我們在 3 月季度的電信/數據通訊領域仍會看到季節性，主要是由亞洲在 3 月季度的假期所驅動。

Great. And then as my follow up, I wanted to see if you could talk a little bit more about your expectations for the 3D sensing market in calendar '20, specifically comments on 5G as a driver for mobile devices, as well as world-facing elements in mobile devices in calendar '20. Thank you.

很好。接著我的追問是，能否再多談一些你們對 2020 年曆年 3D 感測市場的預期，特別是針對 5G 作為行動裝置驅動因素的評論，以及 2020 年曆年行動裝置中「面向外部」（world-facing）的元件？謝謝。

Yes, Simon. It may be a little easier for me to think in our fiscal year. So I'm thinking fiscal '21. But certainly, we think that there's going to be a reasonably inflection point in the market as we go from fiscal '20 to '21 which is a combination of everything you said, right? We've got world facing coming in a much more substantive manner, so that expands the dollar content addressable by -- in a phone as well as it may be a driver of customers transitioning from having no 3D sensing, to 3D sensing to have that computational photography capability. On top of that, certainly the expectation that 5G could start a broader spending cycle is as certainly I know many of us sitting in the room here have a December 2017 phone and hear that something great's coming in 2020. So I think there'll be some pent -up demand that will drive a cycle there.

是的，Simon。對我而言，可能用我們的會計年度來思考會更容易一些。所以我在想的是 2021 會計年度（fiscal '21）。但可以確定的是，我們認為當我們從 2020 會計年度走到 2021 會計年度時，市場將出現相當合理的拐點（inflection point），而這是你所提到各項因素的綜合，對吧？我們會看到 world-facing 以更實質的方式導入，這會擴大一支手機可觸及的美元內容（dollar content addressable），同時也可能驅動客戶從原本沒有 3D 感測，轉向導入 3D 感測，以具備運算攝影（computational photography）的能力。此外，對於 5G 可能啟動更廣泛的支出循環的預期也是存在的；我知道我們在座許多人都還拿著 2017 年 12 月的手機，並聽說 2020 年會有很棒的新東西到來。所以我認為會有一些被壓抑的需求（pent-up demand）來推動那一波循環。

And then as well the sort of the maturation of the technology and the software, and manufacturing ecosystems to enable customers that may not be as vertically integrated or as advanced in the 3D sensing technology in house, find the technology more accessible. And so I think we start getting out into our fiscal 2021 where the market for 3D sensing can start having at the end of it.

此外，隨著技術與軟體逐漸成熟，以及製造生態系的完善，能讓那些在垂直整合程度上沒那麼高、或在內部3D感測技術上沒那麼先進的客戶，也能更容易取得並採用這項技術。因此我認為，到了我們的2021會計年度，3D感測市場在那個年度末端就可能開始出現起色。

And your next question comes from line of George Notter with Jeffrey.

下一個問題來自Jeffrey的George Notter專線。

Hi, guys, thanks very much. I guess, obviously, the thing that really stood out here in the quarter was the gross margin upside and certainly, I would imagine the mix of 3D sensing was a big piece of that, but obviously other elements, too. You mentioned the synergy piece from Oclaro, certainly the discontinuation of certain transceiver products but can you walk through exactly where the upside surprise on gross margins came from? It would be interesting if you could kind of piecemeal that out for us to some degree? It would be great. Thanks.

嗨，各位，謝謝。我想，很明顯本季最突出的就是毛利率的超預期表現；我相信3D感測的產品組合占比是其中很大一部分原因，但顯然也還有其他因素。你們提到來自Oclaro的綜效，當然也包括停止某些收發器產品；但你們能否說明毛利率超預期的提升究竟來自哪些部分？如果可以的話，希望你們能把各項因素拆開來談一些。那會很有幫助。謝謝。

Yes, I'll start it off, and then I'll pass the Chris or Alan if they want to continue. I don't really think that there was much of a surprise; we expected that synergies would start flowing through in the first quarter from some of the activities that we had we executed, our operations team executed better than we had expected on those synergies. So that's certainly -- had a benefit for us. In the normal part of our business outside of the acquisition, we did see some material cost benefits that were better than expected and that helped us as well. The continuation of some of the product mix items that Alan talked about with us shipping more datacom chips, and obviously the 3D sensing products that you mentioned earlier, both of them had upside for us from a gross margin standpoint. And so I think it was all within the realm of what we thought would happen, but we certainly executed better than we expected and so that did lead to some upside.

好的，我先開頭，然後再交給Chris或Alan，如果他們想補充的話。我不認為有太大的意外；我們原本就預期綜效會在第一季開始反映，因為我們已經執行了一些活動，而我們的營運團隊在落實這些綜效上做得比我們預期更好。所以這確實對我們有幫助。在併購以外的既有業務方面，我們也看到一些材料成本效益優於預期，這也同樣幫助了我們。另外，Alan先前提到的部分產品組合延續性因素——我們出貨更多數據通訊晶片，當然還有你先前提到的3D感測產品——這兩者在毛利率角度都帶來正面貢獻。因此我認為整體都在我們原先預期的範圍內，只是我們的執行表現優於預期，因而帶來一些上行空間。

And moving forward, we mentioned earlier that we continue to expect to see gross margin improvements year-over-year and if you take a look at our Q2 guide, it's not like it was just a one-time event. Year-over-year, if you take a look at the midpoint of our operating margin guidance, that points to higher gross margins versus last year. And even into fiscal Q3 and Q4 as we take a look at some of the synergies that are about to flow through in terms of us getting to the $100 million target, we've laid out there, we continue to expect to see a gross margin improvements year-over-year. So we're executing to our plan and I think it's that execution that's leading to what is viewed as an upside surprise.

展望未來，我們先前也提到，仍預期毛利率將呈現年對年改善；若你看我們對第二季的指引，這並不是一次性的事件。年對年來看，若以我們營業利益率指引的中點來看，代表毛利率會高於去年。甚至進入會計年度第三季與第四季，隨著我們朝先前提出的1億美元目標邁進、部分綜效即將逐步反映，我們仍預期毛利率會年對年改善。所以我們是在按計畫執行，而我認為正是這種執行力，導致外界把它視為一個超預期的驚喜。

Got it. And then just as a -- sorry, just as a quick follow up, I wanted to ask about ROADMs also. I think Chris, you had something to say there.

了解。另外再快速追問一下，想問ROADM的部分。我想Chris你剛才有些想補充的。

It is only that 3D sensing as a percentage of the overall revenue was not necessarily changed the whole lot year-over-year, so I think we had, did well and holding margins on 3D sensing but it was really, everything outside of 3D sensing that particularly in the telecom/datacom space, between the synergies as well as the percentage of revenue from newer and more differentiated products year-over-year was greatly improved and so, there really is kind of that the worst products going down significantly and the goods products going up significantly in the mix within telecom/datacom is a big factor. Sorry, you were talking about?

只是補充一點：3D感測占整體營收的比重，年對年其實沒有太大變化；所以我認為我們在3D感測的毛利率維持得不錯，但真正的改善主要來自3D感測以外的部分，特別是在電信/數據通訊領域——不論是綜效，或是年對年來自更新、更具差異化產品的營收占比提升——都有顯著改善。因此，在電信/數據通訊的產品組合中，較差的產品占比大幅下降、較好的產品占比大幅上升，這是一個很重要的因素。抱歉，你剛才是在問哪一塊？

Yes, just you mentioned again the supply/demand equilibrium in general there, obviously that's a real change and the experience you guys have seen over recent years. Any concerns about an inventory correction potential with customers there? Thanks.

是的，你們又提到整體供需趨於均衡，這顯然相較你們近年來的經驗是一個很大的改變。你們是否擔心客戶那邊可能出現庫存修正？謝謝。

I always have concerns about inventory corrections, but I don't think in this case, because we still are constrained on the very high-end product lines and that's going to become a bigger percentage of ROADMs at significantly higher ASPs in the low end, I'm not so concerned about the long term outlook for our ROADM business or if there's a buildup of inventory. I do think, in talking with our customers there are new metro tenders going on throughout the world and I think there's going to be new greenfield transport networks that deployed in the coming years. So I'm not concerned whether or not the December quarter is a down quarter for ROADMs or not. I think long term there is a demand for ROADMs, especially our highly differentiated ROADMs, so I think it's a good market to be in.

我一向都會擔心庫存修正，但我不認為這次會是問題，因為我們在最高階產品線上仍然受限於產能，而這些產品將在ROADM中占比提高，且相較低階產品有顯著更高的ASP（平均售價），因此我對我們ROADM業務的長期展望、或是否會出現庫存堆積，並不那麼擔心。我確實認為，從與客戶的交流來看，全球各地都有新的都會網（metro）標案在進行中，而且未來幾年也會部署新的綠地（greenfield）傳輸網路。所以我不擔心12月季度ROADM是否會是下滑季度。我認為長期來看ROADM仍有需求，尤其是我們高度差異化的ROADM，因此我覺得這是一個值得投入的市場。

And your next question comes from the line of Michael Genovese with MKM Partners.

下一個問題來自MKM Partners的Michael Genovese專線。

Thanks very much. I'm looking ahead to the March quarter for 3D. Considering the guidance for December, which I think is down more than seasonally normal, and it seems like the unit picture is pretty good; there's not a lot of inventory out there and your share position is pretty good, so wondering how we should model 3D for the March quarter, if it could be not down as much as we would normally think March would be down?

非常感謝。我在看3D業務的3月季度展望。考量你們對12月的指引——我認為下滑幅度比一般季節性還要大——而且看起來出貨量狀況相當不錯；市場上庫存不多，你們的市占位置也很好，所以想請教我們應該如何建模3月季度的3D？是否可能不像我們通常認為的那樣在3月下滑那麼多？

I think, Mike -- it's a little early to be talking about March and on pretty sensing given how dynamic the 3D sensing market certainly is. We share your optimism around units and how our customers are doing but with that said, we've got a long way to go to get through our December quarter and see where customer demand lands, and based on history we know it's difficult to predict 3D sensing that far out.

Mike，我想現在談3月以及3D感測還稍微早了一點，因為3D感測市場確實非常動態。我們也同意你對出貨量以及客戶表現的樂觀判斷，但話雖如此，我們還有很長一段路要走，得先度過12月季度並觀察客戶需求最後落在哪裡；而且根據過往經驗，我們知道要那麼早去預測3D感測是很困難的。

Yes, but I'll give you just one data point. We're working on more programs now than we've ever worked on 3D sensing across a broad range of customers, so I think that's usually a pretty good indicator that customers are counting on us and are going to deploy 3D sensing both in the front and world facing in calendar 2020 and 2021. So I think long term it's a good situation.

是的，但我可以給你一個數據點。我們目前在3D感測上同時進行的專案數量，比以往任何時候都多，涵蓋廣泛的客戶群；我認為這通常是個相當好的指標，代表客戶倚賴我們，並且會在2020與2021曆年於前置與後置（world-facing）端部署3D感測。所以我認為長期來看情勢是好的。

Okay, thanks for that. And then my follow up on, I'm not sure if somebody has already asked this. I don't think you want to answer it, but I'm going to ask -- it seems important since this is a first quarter you're combining telecom and datacom, to just if you can give a more precise breakout for what it was in 1Q, the mix of telecom/datacom?

好的，謝謝。接著追問一題，我不確定是否已經有人問過。我想你們可能不想回答，但我還是要問——因為這是你們第一次把電信與數據通訊合併揭露，我覺得很重要：你們能否更精確地拆分第一季電信/數據通訊的組合占比？

Well, as we've combined them I don't think we're going to give that level of detail. I guess maybe qualitatively the easiest thing to say is that certainly datacom continues to decline and was consistent with the commentary that we provided on our last call in terms of the magnitude of the expected declines in datacom, driven by the exit of datacom modules.

嗯，既然我們已經把它們合併，我不認為我們會提供那個層級的細節。我想比較容易用定性方式說明的是：數據通訊確實持續下滑，且與我們在上次電話會議中所提供的評論一致，也就是數據通訊預期下滑的幅度，主要是由於退出數據通訊模組業務所致。

Was the $19 million all in datacom, or some of that was from telecom?

那 1,900 萬美元全部都來自資料通訊（datacom）嗎？還是其中一部分來自電信（telecom）？

Yes, some of that was in telecom, lithium niobate modulators so we talked about in prior calls. So it's a mix of datacom modules and lithium niobate but I'd say, the other data point that we gave was that datacom chips were up 13% to a record level so, that's our future in datacom and we're pretty bullish on the outlook of datacom chips.

是的，其中一部分來自電信，也就是我們在先前電話會議中談到的鈮酸鋰調變器（lithium niobate modulators）。所以它是資料通訊模組與鈮酸鋰的混合；但我想我們提供的另一個數據點是，資料通訊晶片成長 13% 並創下新高，所以，那就是我們在資料通訊的未來，我們對資料通訊晶片的展望相當樂觀。

And your next question comes from line of Tom Diffely with DA Davidson.

下一個問題來自 DA Davidson 的 Tom Diffely。

Yes. Good morning -- another 3D sensing question. So it sounds like the competitive environment hasn't really changed that much. I'm just curious though, when you go in and you win a new slot, are you winning mainly because it's your kind of proven volume capabilities or other specific technology advantages as well?

是的。早安——再問一個 3D 感測的問題。聽起來競爭環境其實沒有太大改變。不過我很好奇，當你們拿下一個新的機種/位置（slot）時，你們主要是因為已被驗證的大量量產能力而勝出，還是也有其他特定的技術優勢？

Yes, I'd say there are really three factors that go into winning, winning the business. One is what you indicated, not just capacity, but the proven reliability of shipping a half a billion units with no field barriers is pretty phenomenal and not easily replicated by our competitors. I say number two is our R&D team and their ability to meet our customers' expectations and requirements and timing, as we're working on products today, that will release in 2020, and 2021 and 2022. And so I think our pipeline of new products is phenomenal. And then third is the technology that we're able to provide to our customers as they continue to push the applications to do more with 3D sensing. We're enabling them to do that through the advancements in technology that we bring to market and that differentiates us even further from our competitors as they've been trying to catch up in 2017 products. We're working on 2020, 2021 and 2022 products.

是的，我會說贏得業務主要有三個因素。第一個是你提到的，不只是產能，而是已被證明的可靠性：出貨 5 億個單位且沒有任何現場障礙（field barriers），這非常驚人，也不容易被競爭對手複製。第二是我們的研發團隊，以及他們滿足客戶期望、需求與時程的能力；我們現在正在開發的產品，將在 2020、2021 與 2022 年推出。因此我認為我們的新產品管線非常出色。第三是我們能提供給客戶的技術，因為客戶持續推動應用在 3D 感測上做到更多。我們透過把技術進步帶到市場來協助他們做到這點，這也讓我們相較於競爭對手更具差異化；他們一直試圖追趕我們 2017 年的產品。我們則是在做 2020、2021 與 2022 年的產品。

Okay, that's helpful. And then kind of as a follow up here, what's your current view of the LIDAR market, when does that become a real, meaningful opportunity?

好的，這很有幫助。接著追問一下，你們目前對 LiDAR 市場的看法是什麼？它何時會成為真正有意義的機會？

I think in terms of being meaningful, we're still looking out at least several years. I think as we highlighted in our prepared remarks, we are shipping prototypes and samples to customers in a wide range of customers at a wide range of levels, meaning we have partnerships with folks where we may be supplying laser chips or low level packaged lasers, all the way up to selling a much more sophisticated essentially a coherence of LIDAR module, where we leverage a lot of the photonic integrated circuit capabilities we have as well as leverage our ROADM switching technologies for beam scanning. And so the way to think about the LIDAR market is, it probably doesn't start contributing significant revenue until or out in the fiscal 2022 and 2023 timeframe. But on the other hand, it's a market where the seeds are planted now and you get designed in because the auto manufacturers have very long product development cycles and they sort of freeze their product requirements and their supply base in the now timeframe, but revenue appears several years later.

我認為就「有意義」而言，我們仍然是至少看向未來幾年之後。如同我們在事先準備的講稿中強調的，我們正在向各式各樣的客戶出貨原型與樣品，且合作層級很廣：我們與一些夥伴合作，可能供應雷射晶片或較低階的封裝雷射；也一路到銷售更複雜的、基本上是相干式（coherent）的 LiDAR 模組，在其中我們運用大量的光子積體電路（photonic integrated circuit）能力，同時也運用我們的 ROADM 交換技術來做光束掃描。因此看待 LiDAR 市場的方式是，它大概要到 2022 與 2023 會計年度的時間範圍內，才可能開始貢獻顯著營收。但另一方面，這是一個現在就要播種、並且要被設計導入（designed in）的市場，因為汽車製造商的產品開發週期非常長，他們會在當下這個時間點就把產品需求與供應基礎（supply base）凍結定案，但營收會在幾年後才出現。

And your next question comes from line of Tim Savageaux with Northland Capital.

下一個問題來自 Northland Capital 的 Tim Savageaux。

Hi, good morning and congrats on the great results. Looks like optical com gross margins might have been up 500 basis points plus sequentially. That's an observation, not a question. First question is on the optical com side. I mean when you look to be guiding December kind of solid double digits here and this in the face of some exits in product lines, and in flattish ROADM revenue which suggests a very strong increase on the transmission side. And I guess my question there is, what are you seeing out of Huawei in particular or China in general in that guide? Do you expect that to continue to be flattish and what does that imply about demand, I guess, across the rest of the world?

嗨，早安，恭喜你們有很棒的成果。看起來光通訊（optical com）的毛利率可能較上一季提高了 500 個基點以上。這只是觀察，不是問題。第一個問題是關於光通訊這邊。我的意思是，當你們指引 12 月（季度）呈現穩健的雙位數成長，同時又面臨某些產品線退出，以及 ROADM 營收持平，這暗示傳輸端（transmission）會有非常強勁的成長。我想問的是，在這個指引中，你們特別看到華為或整體中國市場的情況如何？你們預期那邊會持續持平嗎？這又對全球其他地區的需求意味著什麼？

So you're talking about telecom/datacom, right? Because in our optical --

你是在談電信/資料通訊，對嗎？因為在我們的光學——

Correct, sorry, yes, telecom and datacom.

對，不好意思，是的，電信和資料通訊。

Yes. So we're expecting transmission to be very strong. As we add more capacity that's trying to keep up with the growth in demand for our coherent components, coherent modules as well as I said before, 10-gig tunables. We are seeing, I would say that the September quarter was at a very low point for our submarine shipments, we're seeing that pick up a little bit more, and that's a result of our transition out of our CM in China and in to our own factory. Our customer took inventory to make sure they had it during that transition. That is well on track and so we're going to be back to shipping submarine product at the same rate as they're shipping to their customers. And so I think it's transmission, it's submarine and passive products, but I think --as well datacom chips, we're going to continue to see datacom chip growth offsetting some of this end of life product we talked about.

是的。所以我們預期傳輸會非常強勁。隨著我們增加更多產能，以跟上對我們相干元件、相干模組，以及如我先前所說的 10G 可調式（10-gig tunables）的需求成長。我們看到，我會說 9 月季度是我們海底（submarine）出貨的低點，現在看到它回升一些，這是因為我們正從中國的代工廠（CM）轉移到自有工廠。我們的客戶在那段轉移期間先建立庫存，以確保供貨無虞。這項轉移進展順利，因此我們將恢復以與他們對其客戶出貨相同的速度來出貨海底產品。所以我認為是傳輸、海底與被動元件產品，但我想——同時資料通訊晶片也會持續成長，來抵消我們提到的一些產品生命週期終止（end of life）帶來的影響。

Yes, I mean, I think as you know, trying to not dig down into datacom details, but we do expect that that portion of the telecom and datacom will turn the quarter in terms of growth this quarter, meaning that the chip sales will overwhelm transceiver declines. So that headwind that we had in prior quarters will now start to turn to a tailwind on the datacom side. And I think on the telecom transmission side, another point to add is, we've had a lot of design wins on our coherent modules and so -- and customers continue to sell and market those systems. So we've had customers that maybe have been pretty successful and some new customer opportunities that are also driving the tailwind we're seeing in transmission. So it could be not just market growth, but some unique situations where we have some customers that have won some good business that are using our products where maybe the prior versions that our customers' customers were using, were not using our products and that enabled us to get strong growth.

是的，我想如你所知，我們盡量不深入資料通訊細節，但我們確實預期本季電信與資料通訊中的那一部分在成長上會出現季度轉折，也就是晶片銷售將會壓過收發器（transceiver）下滑。因此，我們在前幾季面臨的逆風，現在將開始在資料通訊端轉為順風。而在電信傳輸端，我想補充另一點：我們的相干模組拿下了很多設計導入（design wins），因此——客戶也持續銷售與推廣那些系統。所以我們有一些客戶可能表現相當成功，也有一些新的客戶機會，這些都在推動我們在傳輸端看到的順風。因此可能不只是市場成長，也可能有一些獨特情況：我們有些客戶贏得了不錯的案子並採用我們的產品；而他們客戶先前使用的舊版本，可能並未採用我們的產品，這讓我們得以實現強勁成長。

And I want to kind of follow up on that point precisely, which is we're hearing a lot about a pretty sharp increase in qualification activity around your CFP-DCO module, really post Cisco-Acacia to some degree. And I wonder if you, I don't know how long that would take to translate into revenue. But I wonder if you could discuss, when you talk about coherent module demand, to what extent that might be playing a factor in this stronger demand outlook and what sort of opportunity that represents for you guys throughout the balance of fiscal 2020 on the CFP-DCO front?

我想就你剛才那點精準追問一下：我們聽到很多關於你們 CFP-DCO 模組的認證（qualification）活動大幅增加，某種程度上是在 Cisco-Acacia 之後。我想知道，我不確定這需要多久才會轉化為營收。但我想請你談談，當你們提到相干模組需求時，這件事在更強勁的需求展望中扮演了多大因素？以及在 2020 會計年度剩餘期間，在 CFP-DCO 方面對你們而言代表什麼樣的機會？

Yes, I'd say that we're certainly seeing a broad base of interest in our CFP-DCO over the last few months as a result of what you said. I'd say we will see a pickup in DCO revenue in the December quarter and then a real meaningful ramp up throughout calendar 2020 as we get qualified at our customers and ship more meaningful volume. So we're putting capacity in today to -- in anticipation of that type of growth throughout 2020.

是的，我會說，過去幾個月我們確實看到如你所說的原因，使得市場對我們的 CFP-DCO 有廣泛的興趣。我會說我們會在 12 月季度看到 DCO 營收回升，然後在 2020 年曆年期間，隨著我們在客戶端完成認證並出貨更具規模的量，將出現真正有意義的放量成長。因此我們今天就在擴充產能——以因應 2020 年整體那類型的成長。

And I think what we're, some of the strength we're seeing today is still ACO-based and that gives us confidence that ACO has perhaps longer legs than many think, if you will, and that their customers are winning new business with ACO-based systems that I think will extend how long the ACO business will remain strong for us.

而且我認為，我們今天看到的一些強勁表現仍然是以 ACO 為基礎的，這讓我們有信心，若你這麼說的話，ACO 可能比許多人想像的更有持久力；而且他們的客戶正透過以 ACO 為基礎的系統贏得新業務，我認為這將延長 ACO 業務對我們而言能維持強勁的時間。

And maybe just to add one thing: in order to make it DCO, you have to be able to make an ACO and the components that go into an ACO and it is actually more complex. And so I'd say that we have credibility in the DCO market. We have components that our customers are designing into 400 gig and even higher data rates in the indium-phosphide high bandwidth products. And so I think from that perspective, our customers can count on us and they are counting on us to be able to ramp up the DCO modules to meet their demand.

另外也許再補充一點：要做到 DCO，你必須先能做出 ACO，以及構成 ACO 的各個元件，而這其實更複雜。因此我會說，我們在 DCO 市場具備可信度。我們有一些元件，客戶正將其設計導入 400G 甚至更高資料速率的磷化銦（InP）高頻寬產品中。所以從這個角度來看，我們的客戶可以依賴我們，而且他們也正仰賴我們能夠擴產 DCO 模組以滿足他們的需求。

And your next question comes from line of Jun Zhang with Rosenblatt Securities.

下一個問題來自 Rosenblatt Securities 的 Jun Zhang。

Thanks for taking my question. So I think we're facing a lot of capacity constraint of the ROADM pump laser and also your laser fab in Japan. So what kind of plan -- the CapEx you're looking at for next year in order to increase the supply? Thanks.

感謝讓我提問。我認為我們正面臨 ROADM 泵浦雷射以及你們在日本的雷射晶圓廠產能受限。那麼為了增加供應，你們明年在資本支出（CapEx）方面有什麼計畫？謝謝。

Yes, I mean, as we said, today we're not facing -- well, we're facing supply constraints on the high end ROADMs. Pumps seems to be okay, as we've completely transitioned out of our CM in China. We had to add extra capacity last year to make that transition smooth and seamless to our customers. So I don't think we have a whole lot of CapEx needs for pump growth, and we can produce a whole lot more pumps today than we could produce a year ago. And then we are spending money in our fab in Japan to grow that output, as we've seen strong demand, but I wouldn't say it's anything abnormal to our historic CapEx and I'd say that our calendar 2020 CapEx plans are probably lower than our calendar 2019 CapEx plans given we had to spend a bunch of money to make that transition from CM in China to our own factory in Thailand, and so I think a lot of that heavy lifting is done.

是的，我的意思是，如同我們所說，目前我們並沒有面臨——嗯，我們在高階 ROADM 上確實面臨供應限制。泵浦雷射看起來還可以，因為我們已經完全從中國的委外製造（CM）轉移出來。為了讓這個轉移對客戶而言順暢無縫，我們去年必須增加額外產能。因此我不認為泵浦雷射成長需要很多資本支出，而且我們今天能生產的泵浦雷射數量，比一年前多得多。另外，我們也在日本的晶圓廠投入資金以提升產出，因為我們看到需求強勁，但我不會說這超出我們歷史資本支出的常態；而且我會說，鑑於我們在 2019 年曆年必須投入一大筆資金，將中國的委外製造轉移到我們在泰國的自有工廠，我們 2020 年曆年的資本支出計畫可能會低於 2019 年曆年，因此我認為大部分艱鉅的工作已經完成。

Okay, thanks. And as in the past you normally gave the guidance for the 3D sensing business, the revenue. So what kind of -- do you still provide data or it's not --?

好的，謝謝。另外，過去你們通常會提供 3D 感測業務的營收指引。那麼你們現在還會提供相關數據嗎？還是——？

I don't we ever provided guidance, sort of numerically on 3D sensing per se. But what we did highlight in our prepared remarks was that sequentially, we expected a greater than 20% decline in our 3D sensing. But I think that's reasonably explicit given we break out our consumer and industrial business and I think it's common knowledge that the industrial piece is substantially less than the consumer piece, so.

我不認為我們曾經就 3D 感測本身提供過數字上的指引。但我們在事先準備的發言中確實強調，按季來看，我們預期 3D 感測將下滑超過 20%。不過我認為這已經相當明確，因為我們會拆分消費與工業業務，而大家也都知道工業那一塊明顯小於消費那一塊，所以。

And your final question comes from line of Richard Shannon with Craig-Hallum.

最後一個問題來自 Craig-Hallum 的 Richard Shannon。

Great. Thanks for taking my questions and fitting me in here. I guess I'll follow up on a couple topics you've had some questions for. So the December quarter you talked about some strength in the telecom part of your business and just want to make sure I caught correctly that it's largely from ACOs and 10-gig tunables, is that -- did I catch that correctly?

很好。感謝讓我提問並把我安排進來。我想就你們先前被問到的幾個主題再追問一下。你們談到 12 月季度電信業務有一些強勁表現，我想確認我是否理解正確：主要是來自 ACO 以及 10G 可調式產品，對嗎——我理解得對嗎？

Yes, those are two main drivers. But I'd say that we're all -- are also seeing coherent components demand increase as we are supplying those components that are in our ACOs and DCOs to customers who are building their own DCOs or line cards for higher-speed, coherent transmission.

是的，那是兩個主要驅動因素。但我也會說，隨著我們向那些正在打造自有 DCO 或用於更高速相干傳輸之線卡的客戶供應 ACO 與 DCO 中所使用的元件，我們也看到相干元件的需求正在增加。

Okay and strength in the coherent makes sense. And you just already discussed the ACO here; the 10-gig tunables is interesting here. Maybe if you could discuss where that demand is coming from -- breadth, regional usage and maybe a little bit understanding of why -- why you think you're seeing strength and will it sustain?

好的，相干方面的強勁表現是合理的。你們剛才也已經談過 ACO；這裡 10G 可調式產品就很有意思。也許你可以談談這些需求是從哪裡來的——涵蓋面、區域使用情況，以及再多說一點你為什麼認為會看到這樣的強勁表現，並且它是否能持續？

Yes, so I think that there are a couple areas. First is certainly in a telecom network as you upgrade the core of the network to higher speed, 100-gig and above, the edge of the network also gets upgraded and so using DWDM technology at 10 gig using our tunables, and we say tunable 10-gig, it's -- these are in very compact asset P plus form factors. So they're finding a lot of applicability at the edge of the network, as well as we're seeing an emerging opportunity as we look to both the cable MSO and wireless markets where they are also finding use for 10-gig and eventually the same 10- gig platform in a sense being turned up to 25-gig.

是的，我認為有幾個面向。首先，當你把電信網路的核心升級到更高速、100G 及以上時，網路邊緣也會跟著升級，因此會在 10G 上使用採用我們可調式產品的 DWDM 技術；我們所說的可調式 10G——它們是非常緊湊的 SFP+ 外形規格。因此它們在網路邊緣有很高的適用性；此外，當我們同時觀察有線 MSO 與無線市場時，也看到一個新興機會，他們也在使用 10G，並且最終在某種意義上把同一個 10G 平台提升到 25G。

Okay, now I'll hand it back over to Alan Lowe.

好的，現在我把時間交回給 Alan Lowe。

Great. Thank you, Adam. Just to close, we want to update you that we regularly discuss our business at investor events. These events are listed on our website in the investor relations section and are regularly updated. This concludes our call for today. We would like to thank everyone for attending and we look forward to talking with you again in another few months. Thank you.

很好。謝謝你，Adam。最後，我們想向各位更新：我們會在投資人活動中定期討論我們的業務。這些活動列在我們網站的投資人關係專區，並會定期更新。今天的電話會議到此結束。感謝各位的參與，我們期待在幾個月後再次與各位交流。謝謝。

And this concludes today's conference call. Thank you for your participation. You may now disconnect.

今天的電話會議到此結束。感謝各位的參與。您現在可以掛線。