Lumentum Holdings Inc. (LITE) 2017 Q3 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Q3 Lumentum Holdings Inc. Earnings Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.

各位女士、先生，大家好，歡迎參加 Lumentum Holdings Inc.第三季（Q3）財報電話會議。（接線員指示）提醒各位，本次會議將被錄音。

I would now like to introduce your host for today's conference, Mr. Chris Coldren, Vice President, Strategy and Corporate Development. Sir, you may begin.

現在我想介紹今天會議的主持人，策略與企業發展副總裁 Chris Coldren 先生。先生，您可以開始了。

Thank you, Bruce. Good morning, and welcome to Lumentum's Third Quarter Fiscal 2017 Earnings Call. This is Chris Coldren, Vice President of Strategy and Corporate Development. Joining me on today's call are Alan Lowe, President and Chief Executive Officer; and Aaron Tachibana, Chief Financial Officer.

謝謝你，Bruce。各位早安，歡迎參加 Lumentum 2017 會計年度第三季財報電話會議。我是策略與企業發展副總裁 Chris Coldren。今天與我一同參與電話會議的有：總裁暨執行長 Alan Lowe，以及財務長 Aaron Tachibana。

This call will include forward-looking statements, including statements regarding the markets in which we operate, including trends and expectations for products and technology, purchasing trends, Lumentum's expected financial performance, expenses and positions in our markets. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our current expectations. We encourage you to review our most recent filings with the SEC, particularly the Risk Factors described in our 10-Q filing for our fiscal third quarter ended April 1, 2017, which will be filed today.

本次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，包含產品與技術的趨勢與預期、採購趨勢、Lumentum 預期的財務表現、費用以及我們在各市場中的地位。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出現重大差異。我們建議您查閱我們最近向美國證券交易委員會（SEC）提交的文件，特別是我們截至 2017 年 4 月 1 日之 2017 會計年度第三季 10-Q 申報文件中所描述的風險因素，該文件將於今日提交。

The forward-looking statements we provide during this call, including projections for future performance, are based on our reasonable beliefs and expectations as of today. Lumentum undertakes no obligation to update these statements except as required by applicable law. Please also note, unless otherwise stated, all results and projections are non-GAAP. Non-GAAP financials should not be considered as a substitute for or superior to financials prepared in accordance with GAAP. Our press release with our third quarter fiscal 2017 results is available on our website, www.lumentum.com, under the Investors section and includes additional details about our non-GAAP financial measures and a reconciliation between our GAAP and non-GAAP results. Our website also has our latest SEC filings, which we encourage you to review, and supplementary slides relating to today's earnings release. Finally, a recording of today's call will be available by 11:30 a.m. Pacific time this morning on our website.

我們在本次電話會議中提供的前瞻性陳述（包括對未來表現的預測）係基於截至今日我們合理的信念與預期。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，所有結果與預測均為非 GAAP。非 GAAP 財務資訊不應被視為 GAAP 編製之財務資訊的替代或更優者。我們關於 2017 會計年度第三季業績的新聞稿可於我們網站 www.lumentum.com 的投資人專區取得，並包含我們非 GAAP 財務衡量指標的更多細節，以及 GAAP 與非 GAAP 結果之間的調節表。我們網站亦提供最新的 SEC 申報文件（建議您查閱），以及與今日財報發布相關的補充簡報投影片。最後，今日電話會議的錄音將於今天上午 11:30（太平洋時間）在我們網站上提供。

Now I would like to turn the call over to Alan for his comments and third quarter business highlights.

現在我想把電話會議交給 Alan，請他發表評論並分享第三季的業務重點。

Thank you, Chris. At Lumentum, we are focused on accelerating the speed and scale of cloud, networking, advanced manufacturing and next-generation 3D sensing applications with our photonics technologies. Our strategy to invest in growing markets, develop the best products and technology and foster the closest relationship with our market-leading customers is succeeding. Since our last call, we have made very good progress on our strategic goals in each of our markets. Our revenue from 100G QSFP28 transceivers nearly quadrupled in the third quarter. We grew our ROADM revenue and shipped record levels of next generation TrueFlex ROADMs.

謝謝你，Chris。在 Lumentum，我們專注於透過光子技術，加速雲端、網路、先進製造以及下一代 3D 感測應用的速度與規模。我們投資於成長市場、開發最佳產品與技術，並與市場領先客戶建立最緊密關係的策略正在奏效。自上次電話會議以來，我們在各個市場的策略目標上都取得了非常良好的進展。第三季我們來自 100G QSFP28 收發器的營收幾乎成長至四倍。我們的 ROADM 營收成長，並出貨創紀錄水準的下一代 TrueFlex ROADM。

Our commercial lasers business returned to growth, and we achieved major milestones on 3D sensing products for mobile device applications. To answer the inevitable question and not to keep you in suspense, yes, we have received volume 3D sensing production orders for delivery in the September quarter. However, like many in our industry, we have some near-term headwinds. Late in the third quarter, we saw demand from China slow significantly. Before last quarter's call, we anticipated some softness in China. We expected demand to pick up late in the quarter and increase into the June quarter. This did not happen. Demand from our Chinese customers continues to be at significantly lower levels than we saw in the first half of our fiscal year.

我們的商用雷射業務恢復成長，且在用於行動裝置應用的 3D 感測產品方面達成了重要里程碑。為了回答大家勢必會問的問題、也不讓各位吊胃口：是的，我們已收到 3D 感測量產訂單，將於 9 月季度交付。然而，與產業中許多公司一樣，我們短期內也面臨一些逆風。在第三季後段，我們看到來自中國的需求顯著放緩。在上季電話會議之前，我們預期中國會有一些疲軟。我們原本預期需求會在季末回升，並在 6 月季度進一步增加。但這並未發生。來自中國客戶的需求仍顯著低於我們在本會計年度上半年所見的水準。

Third quarter revenues were $255.8 million, up 11% relative to a year ago. Optical Communications revenue grew 10% year-on-year. Commercial lasers returned to growth with revenues of $39.7 million, up 20% year-on-year, driven by increases in both fiber and micromachining lasers. During the third quarter, we started shipping our new higher-performance Gen 3 fiber laser and recognized our first revenue.

第三季營收為 2.558 億美元，較去年同期成長 11%。光通訊營收年增 10%。商用雷射恢復成長，營收為 3,970 萬美元，年增 20%，主要由光纖雷射與微加工雷射的成長所帶動。第三季期間，我們開始出貨全新高效能的第三代（Gen 3）光纖雷射，並確認了首筆營收。

Telecom revenue increased 3% quarter-on-quarter despite seasonal factors and softer-than-anticipated demand from China late in the quarter. We saw strong demand outside of China, particularly in North America, driven by metro and datacenter interconnect applications. ROADM revenue increased 5% sequentially and our newer TrueFlex ROADMs achieved new record levels. TrueFlex ROADMs represented more than 80% of total ROADM revenue. We had a higher mix of blade-level ROADMs products in the third quarter compared to the second quarter due to the increased metro demand.

儘管存在季節性因素，且季末來自中國的需求較預期疲弱，電信營收仍較前一季成長 3%。我們看到中國以外地區需求強勁，尤其是北美，主要由都會網路與資料中心互連應用所帶動。ROADM 營收較前一季成長 5%，而我們較新的 TrueFlex ROADM 達到新的紀錄水準。TrueFlex ROADM 佔 ROADM 總營收的 80% 以上。由於都會網路需求增加，第三季相較第二季，刀鋒（blade）層級 ROADM 產品的組合占比更高。

Nearly all major telecom product lines were up quarter-on-quarter. Pump laser revenue was down slightly due to increased ROADM blade shipments, but this is because we continued to be constrained by our pump laser capacity in the third quarter.

幾乎所有主要電信產品線皆較前一季成長。泵浦雷射營收略為下滑，原因是 ROADM 刀鋒出貨增加；但這是因為第三季我們的泵浦雷射產能仍受到限制。

Submarine revenue, which is project based and tends to be lumpy, also dipped in the third quarter. Datacom revenue decreased 43% quarter-on-quarter, primarily due to slower demand from China for our CFP2 products. Demand is strong for our QSFP28 transceivers, which led to a nearly fourfold increase in QSFP28 revenues. QSFP28 products share the same manufacturing capacity as our CFP2 products. Growth was capped by capacity limitations and our ability to pivot our supply chain in favor of QSFP28 during the quarter.

海底（Submarine）營收屬於專案型、通常較為波動，第三季也有所下滑。數據通訊（Datacom）營收較前一季下降 43%，主要因中國對我們 CFP2 產品的需求放緩。我們的 QSFP28 收發器需求強勁，使 QSFP28 營收幾乎成長至四倍。QSFP28 產品與 CFP2 產品共用相同的製造產能。由於產能限制，以及我們在該季度將供應鏈轉向 QSFP28 的能力有限，成長受到抑制。

Given the significant average selling price difference between CFP2 and QSFP28 transceivers, 100G transceiver revenue declined despite an increase in unit shipments. Also lower-speed 10G and 40G Datacom revenue continued to decline as expected. Industrial and consumer revenue, which consists primarily of revenue from 3D sensing and laser diodes for fiber lasers was up $3.8 million or 45%, sequentially. Our next-generation 3D sensing products are tracking very well to our plans. We have already been approved to begin volume manufacturing for our first consumer mobile applications, and we have received volume production orders for delivery within the September quarter.

鑑於 CFP2 與 QSFP28 收發器之間存在顯著的平均售價差異，儘管出貨量增加，100G 收發器營收仍然下滑。此外，較低速的 10G 與 40G Datacom 營收如預期持續下滑。工業與消費性營收（主要由 3D 感測以及用於光纖雷射的雷射二極體營收構成）較前一季增加 380 萬美元或 45%。我們的下一代 3D 感測產品進度非常符合計畫。我們已獲准開始針對首個消費性行動應用進行量產，並已收到將於 9 月季度交付的量產訂單。

These are very exciting milestones and our 3D sensing team has done a great job in getting us into this leadership position. We continue to have strong engagement from a broad base of 3D sensing customers, both in the consumer electronics and automotive markets. We expect 3D sensing to be a significant growth driver over the coming years.

這些都是令人振奮的重大里程碑，我們的 3D 感測團隊在協助我們取得此領先地位方面表現出色。我們持續獲得廣泛的 3D 感測客戶群高度投入，涵蓋消費性電子與車用市場。我們預期 3D 感測在未來幾年將成為重要的成長驅動力。

Looking to the fourth quarter, we expect continued soft demand from China, which will cause a decline in telecom revenue. While we are hearing about some modest tenders related to ROADM networks in China being awarded recently, we believe that there is sufficient inventory at our customers to satisfy any short-term surge in demand during the fourth quarter. We expect our Datacom revenue to be up in the fourth quarter driven by strong demand for QSFP28 transceivers and capacity additions. Despite the near-term softness in demand from China, we remain confident about our longer-term outlook. While we don't provide guidance more than 1 quarter at a time, we expect the demand from China will increase in the first half of our fiscal 2018 and 3D sensing should add meaningful revenue in our next fiscal year. It is an exciting time at Lumentum as our photonics technology is increasingly a critical enabler of leading-edge communication, industrial and consumer applications. Our investment in new products and technology positions us well for future trends.

展望第四季，我們預期來自中國的需求將持續疲弱，這將導致電信營收下滑。雖然我們聽到中國近期有一些與 ROADM 網路相關的小型標案已完成授標，但我們認為客戶端仍有足夠庫存，可滿足第四季任何短期需求激增。我們預期第四季數據通訊（Datacom）營收將上升，主要受 QSFP28 收發器的強勁需求與產能擴增所帶動。儘管短期內來自中國的需求偏弱，我們對長期展望仍保持信心。雖然我們一次僅提供 1 季的指引，但我們預期中國需求將在 2018 會計年度上半年回升，而 3D 感測應會在我們下一個會計年度帶來可觀營收貢獻。對 Lumentum 而言，這是一個令人振奮的時刻，因為我們的光子技術正日益成為尖端通訊、工業與消費性應用的關鍵推動者。我們在新產品與技術上的投資，使我們在未來趨勢中具備良好定位。

Demand continues to grow for bandwidth across the world's datacenters and communication networks, including those in China. New submarine cables are being built and lit up around the world. In addition to traditional communication service providers, cloud operators are increasingly driving new deployments of optical networks and submarine cables. Hyperscale datacenters have started to transition to 100G.

全球各地的資料中心與通訊網路（包括中國）對頻寬的需求持續成長。全球各地正在建置並點亮新的海底電纜。除了傳統的通訊服務供應商之外，雲端業者也日益成為光網路與海底電纜新部署的主要推動力量。超大規模資料中心已開始轉向 100G。

New ROADM-based networks -- network deployments are in their early stages globally. China is taking their first steps in their initial ROADM deployments this year. We are working with all of our customers on even newer platforms that incorporate higher performance, smaller and more cost-effective ROADM solutions. We believe that we have the best ROADM products available today and new products -- and a new product pipeline that will further our leadership position over time.

新的 ROADM 架構網路——全球的網路部署仍處於早期階段。中國今年正邁出其初期 ROADM 部署的第一步。我們正與所有客戶合作開發更新的平台，納入效能更高、體積更小且更具成本效益的 ROADM 解決方案。我們相信我們目前擁有市面上最好的 ROADM 產品，以及新的產品——並且有一條新產品研發管線，將隨時間推進進一步鞏固我們的領導地位。

Manufacturers around the world are increasingly using advanced laser-based techniques. Leaders in next-generation consumer electronics, virtual and augmented reality as well as the automobile industry are looking to laser-based 3D sensing to enhance capabilities and enable new applications.

全球製造商正日益採用先進的雷射技術。次世代消費性電子、虛擬與擴增實境，以及汽車產業的領導者，正尋求以雷射式 3D 感測來提升能力並開啟新的應用。

I will now hand it over to Aaron for more details on our financial results and our guidance for the fourth quarter fiscal 2017.

接下來我將把時間交給 Aaron，請他更詳細說明我們的財務結果，以及 2017 會計年度第四季的指引。

Thank you, Alan. Net revenue for the third quarter was $255.8 million, which increased 11% compared with the same period last year, and decreased 3.5% sequentially due to softer demand from China and seasonal effects from annual price reduction. GAAP gross margin was 32.1% and decreased 70 basis points quarter-on-quarter. GAAP operating margin was 5.3% and GAAP diluted net loss per share was $0.92. The GAAP diluted net loss per share includes the impact of a $0.94 loss per share from a noncash unrealized loss on the derivative liabilities for both Series A preferred stock and convertible notes, and also the noncash effective interest on the convertible notes.

謝謝你，Alan。第三季淨營收為 2.558 億美元，較去年同期成長 11%，但因中國需求轉弱以及年度降價的季節性影響，較前一季下滑 3.5%。GAAP 毛利率為 32.1%，較前一季下降 70 個基點。GAAP 營業利益率為 5.3%，GAAP 稀釋後每股淨損為 0.92 美元。GAAP 稀釋後每股淨損包含：A 系列優先股與可轉換公司債之衍生負債的非現金未實現損失所造成的每股 0.94 美元損失影響，以及可轉換公司債的非現金有效利息。

Our third quarter non-GAAP gross margin was 34.4%, which increased 220 basis points compared with the same period last year. The year-over-year increase was driven by a 330 basis-point improvement in Optical Communications gross margin.

第三季非 GAAP 毛利率為 34.4%，較去年同期增加 220 個基點。年增主要由光通訊（Optical Communications）毛利率提升 330 個基點所帶動。

Non-GAAP operating margin for the third quarter was 12.6%. Our operating margin increased 380 basis points year-over-year from the gross margin improvement and operating leverage from higher volume. Non-GAAP net income was $30.8 million, an increase of 56% compared with the same period last year. Non-GAAP earnings per share was $0.49 based on a fully diluted share count of 63.4 million compared with earnings per share of $0.32 last year.

第三季非 GAAP 營業利益率為 12.6%。受毛利率改善與出貨量提升帶來的營運槓桿影響，我們的營業利益率較去年同期增加 380 個基點。非 GAAP 淨利為 3,080 萬美元，較去年同期成長 56%。以完全稀釋後股數 6,340 萬股計算，非 GAAP 每股盈餘為 0.49 美元，去年同期每股盈餘為 0.32 美元。

Third quarter earnings included $500,000 of other expense and $900,000 of tax expense.

第三季獲利包含 50 萬美元的其他費用，以及 90 萬美元的所得稅費用。

Now for some additional details. Optical Communications revenue was $216.1 million, an increase of 10% over the same period last year, driven by a $24.9 million or 18% increase in telecom revenue, a $500,000 or 4% increase in industrial and consumer, partially offset by a $6.5 million or 14% decrease in Datacom revenue. Although Datacom revenue declined 14% year-over-year, our 100G transceiver revenue increased 29% and our revenue from QSFP28 transceivers grew over 560% over the same period last year.

接著補充一些細節。光通訊營收為 2.161 億美元，較去年同期成長 10%，主要由電信營收增加 2,490 萬美元（或 18%）所帶動；工業與消費性產品增加 50 萬美元（或 4%）；但部分被數據通訊（Datacom）營收減少 650 萬美元（或 14%）所抵銷。雖然 Datacom 營收年減 14%，但我們的 100G 收發器營收年增 29%，而 QSFP28 收發器營收較去年同期成長超過 560%。

Optical Communications gross margin at 33.1% increased 330 basis points compared with the same period last year, as a result of higher volume and mix of products. Commercial Lasers revenue was $39.7 million, an increase of 20% compared with the same period last year. Third quarter Commercial Lasers gross margin was 41.3%.

光通訊毛利率為 33.1%，較去年同期增加 330 個基點，係因出貨量提升與產品組合改善所致。商用雷射（Commercial Lasers）營收為 3,970 萬美元，較去年同期成長 20%。第三季商用雷射毛利率為 41.3%。

Operating expenses totaled $55.7 million or 21.8% of revenue compared with the same period last year of $53.9 million or 23.4% of revenue. R&D expense was $34.2 million and SG&A expense was $21.5 million.

營業費用合計 5,570 萬美元，占營收 21.8%；去年同期為 5,390 萬美元，占營收 23.4%。研發費用為 3,420 萬美元，銷售、一般及行政（SG&A）費用為 2,150 萬美元。

In the third quarter, we raised $450 million with an issuance of convertible notes. The notes have a coupon of 25 basis points, a 32.5% premium to our closing price prior to the date of issuance and a 7-year maturity. The additional cash strengthens our balance sheet and we will use the proceeds for general corporate purposes, which may include capital expenditures, including -- manufacturing capacity expansion and working capital. Our cash balance was $577.9 million at the end of the third quarter, and represented an increase of $422 million sequentially.

第三季我們透過發行可轉換公司債募集 4.5 億美元。該債券票面利率為 25 個基點，較發行日前的收盤價溢價 32.5%，到期年限為 7 年。新增現金強化了我們的資產負債表，我們將把募集資金用於一般公司用途，可能包括資本支出，其中包括——製造產能擴充與營運資金。第三季末現金餘額為 5.779 億美元，較前一季增加 4.22 億美元。

Capital equipment additions were approximately $40 million in the third quarter. During the quarter, we purchased a facility in Thailand for $10 million. This facility will provide Lumentum with additional capacity to support long-term growth initiatives. The outsource model using contract manufacturing partners continues to serve us well. Going forward, we intend to utilize a combination of both external partners and internal capability.

第三季資本設備新增投資約 4,000 萬美元。本季我們以 1,000 萬美元在泰國購置一處廠房。該廠房將為 Lumentum 提供額外產能，以支持長期成長計畫。採用委外模式、與代工製造夥伴合作，持續為我們帶來良好成效。展望未來，我們計畫同時運用外部夥伴與內部能力的組合。

Now on to our guidance for the fourth quarter of fiscal 2017, noting again that all projections are on a non-GAAP basis. We project net revenue for the fourth quarter to be in the range of $220 million to $235 million, with operating margin in the range of 9% to 11% and earnings per share to be in the range of $0.30 to $0.40.

接下來是我們對 2017 會計年度第四季的指引，再次提醒所有預測皆以非 GAAP 基礎呈現。我們預估第四季淨營收介於 2.20 億至 2.35 億美元之間，營業利益率介於 9% 至 11% 之間，每股盈餘介於 0.30 至 0.40 美元之間。

Now I will turn the call back over to Chris to begin the Q&A session.

現在我將把電話交回給 Chris，開始問答環節。

Thank you, Aaron. I would like to ask everyone to limit discussion to one question and one follow-up. Bruce, let's begin the question-and-answer session.

謝謝你，Aaron。我想請大家將討論限制在一個問題以及一個追問。Bruce，我們開始問答環節。

(Operator Instructions) And our first question comes from Patrick Newton from Stifel.

(接線員指示) 我們的第一個問題來自 Stifel 的 Patrick Newton。

Alan and Aaron. I guess, just 2 questions. First on the China side. Given kind of lack of visibility now, do you have any thoughts on when China trends could turn positive? And if we think about the current China revenue that's baked into June quarter guidance, and assume no rebound, would you anticipate a return to sequential growth in your Optical business, excluding lasers and 3D sensing in the September quarter?

Alan 和 Aaron。我想問兩個問題。第一個是關於中國。鑑於目前能見度不高，你們對中國趨勢何時可能轉為正向有任何看法嗎？另外，如果我們考量目前已納入 6 月季度指引的中國營收，並假設沒有反彈，那麼在 9 月季度，若排除雷射與 3D 感測，你們是否預期光學業務能恢復季增成長？

Patrick, I think the visibility in China is pretty tough right now. Like I said in the prepared remarks, we are seeing 2 small tenders for ROADM deployments in the provincial networks. But I would expect that the first half of our fiscal '18 to rebound from where we are today. The question in my mind, does that happen in the September quarter or is there a continued bleed-off of inventory during that quarter, and then a rebound in December quarter. And at this point in time, it's too hard to say.

Patrick，我認為目前在中國的能見度相當艱難。如同我在事先準備的發言中所說，我們在省級網路看到兩個小型的 ROADM 部署標案。但我預期我們 2018 財年上半年會從目前的水準回升。我心中的問題是：這會在 9 月季度發生，還是該季度庫存會持續消化，然後在 12 月季度回升。而就目前而言，這很難判斷。

And then the potential to grow if China remains flattish from current levels in the September quarter with the rest of your optical business?

如果中國在 9 月季度仍維持在目前水準附近持平，那麼你們其餘光學業務是否仍有成長的可能？

Oh, certainly, we'd expect so. Yes.

噢，當然，我們預期會。是的。

Great. And then on 3D sensing, it's great to hear that you have volume production orders in hand. I'm curious if you could help us understand the potential revenue contribution in the September quarter, or any color on the magnitude of revenue potential in FY '18. And then I think that capacity is somewhat of a concern. I'm sure you don't want to talk about specifics. But if the ramp of this product is successful over the next 12 months and given you're talking about multiple OEMs and automotive, can you help us think through how we -- how capacity needs to come on relative to current levels? Does it need to increase by a factor of 2x or 3x? Any color there would be appreciated.

很好。接著談 3D 感測，很高興聽到你們已拿到量產訂單。我想了解你們在 9 月季度可能的營收貢獻，或是對 2018 財年營收潛力規模有任何補充說明。另外我認為產能多少是個疑慮。我知道你們可能不想談太多細節。但如果這個產品在未來 12 個月成功放量，且你們提到多家 OEM 與車用領域，能否協助我們思考：相較於目前水準，產能需要如何提升？需要增加到 2 倍或 3 倍嗎？若能提供一些方向性的資訊將不勝感激。

Sure. I mean, we're at very low levels this quarter. The orders that we received for the September quarter are multimillion units. We expect that to continue to grow. And we're bringing on capacity at our partners this quarter and into early next quarter that we believe should suffice to be able to meet the initial ramp. And then we'll reevaluate as we make progress with other of our customers. I think our partners and we have invested sufficiently for the existing ramp and are bringing capacity online as fast as we possibly can to meet the ramp.

當然。我的意思是，我們本季的水準非常低。我們收到的 9 月季度訂單是數百萬顆（multimillion units）。我們預期這會持續成長。而我們本季以及下季初正在合作夥伴端導入產能，我們相信足以滿足初期放量。之後，隨著我們在其他客戶端的進展，我們會再重新評估。我認為我們與合作夥伴已對現有放量做了足夠投資，並正以我們所能做到的最快速度讓產能上線，以滿足放量需求。

And any commentary around revenue potential?

那對於營收潛力有任何評論嗎？

Yes. At this time, Patrick, I think it's tough to say. We'll certainly give guidance in our -- 3 months from now for our September quarter. And we can give you some color directionally, but as I said in the prepared remarks, we expect significant revenues in fiscal '18 from 3D sensing. But it's too early to quantify.

有。Patrick，就目前而言，我認為很難說。我們當然會在——三個月後——針對 9 月季度提供指引。我們可以在方向上給你一些補充，但如同我在事先準備的發言中所說，我們預期 2018 財年 3D 感測將帶來可觀營收。但現在要量化仍為時過早。

And our next question comes from Simon Leopold from Raymond James.

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

I just wanted to see if we could clarify what happens in the mix in the June quarter in the Optical Communications segments, Datacom, Telecom. Given that you've already had a very significant sequential step down in the Datacom, I'm just wondering how to think about the components in the June quarter relative to the guidance. Maybe if you can give us a little more color on CFP2 versus ROADM, what you're expecting?

我想釐清一下 6 月季度在光通訊事業部門（Optical Communications）中，Datacom 與 Telecom 的組合會如何變化。鑑於你們的 Datacom 已經出現相當顯著的季對季下滑，我想了解相較於指引，該如何看待 6 月季度的各項組成。也許你們能就 CFP2 相對於 ROADM 的預期提供更多說明？

I would say that Datacom is expected to be up as we've brought on more capacity to meet the needs and demand for QSFP28. So I expect the June quarter Datacom to be up. Telecom will be down mainly due to the China slowdown that we saw start really in March and continue through the beginning of this quarter. Lasers flattish, but pretty exciting times as we've brought on our new Gen 3 fiber laser and start to ramp that into a meaningful way this quarter. And then 3D sensing up slightly, but not significant revenue from the June quarter.

我會說 Datacom 預期會成長，因為我們已增加更多產能以滿足 QSFP28 的需求與需求量。所以我預期 6 月季度的 Datacom 會上升。Telecom 會下滑，主要是因為我們看到中國放緩在 3 月真正開始，並延續到本季初。雷射業務大致持平，但相當令人振奮的是，我們已導入新的第三代光纖雷射，並在本季開始以更有意義的方式放量。而 3D 感測會小幅上升，但 6 月季度不會有顯著營收。

Great. And then just my follow-up on 3D sensing. Is there any thoughts you have on the competitive landscape? I think what you've said in the past is that, one key aspect of your advantage is -- working through the partnership fab is your ability to ramp volume. If you could provide us maybe some thoughts on your competitive position in 3D sensing?

很好。接著我想追問 3D 感測。你們對競爭態勢有什麼看法嗎？我記得你們過去提到，你們優勢的一個關鍵在於——透過合作夥伴晶圓廠（partnership fab）——具備快速放量的能力。能否分享一些你們在 3D 感測的競爭定位？

Sure, Simon. As I've said all along, I think we have selected partners that know how to manufacture at high volume and the combination of our partnerships and our design capability to design the kind of products that our customers need, really put us in a leadership position. I think we're off and running, and I think we're significantly ahead of our competitors, so we should be able to capture a good share of the business as it comes on in the September and December quarters.

當然，Simon。我一直以來都說，我們選擇了懂得如何進行高量產製的合作夥伴，而我們的合作關係加上我們的設計能力——能設計出客戶所需的產品——確實讓我們處於領先地位。我認為我們已經啟動並順利推進，而且我認為我們明顯領先競爭對手，因此在 9 月與 12 月季度業務放量時，我們應能取得不錯的市占。

And our next question comes from Alex Henderson from Needham & Company.

下一個問題來自 Needham & Company 的 Alex Henderson。

So if we were to ignore China altogether and just take that out of the mix, can you give us some sense of what the rate of growth in Telecom might look like sequentially outside of China, so that we can at least have a better gauge of what the ambient demand conditions look like in rest of the world?

如果我們完全不考慮中國、把它從組合中拿掉，你能否讓我們了解一下 Telecom 在中國以外的季對季成長率可能會是什麼樣子，至少讓我們更能掌握世界其他地區的整體需求狀況？

I haven't studied that in detail, Alex. It's a good question. But I think we're seeing normal growth demand from North America as expected. And in fact, if you look at different countries in Asia, like India, for instance, is driving very strong demand. Europe is looking okay to a little bit better-than-expected. So I think, outside of China, business is good for Telecom. And then you couple that with the Datacom hyperscale growth in demand as the 100G transition is happening, things looks pretty good outside of China.

Alex，我沒有針對這點做很細的研究。這是個好問題。但我認為我們在北美看到的是如預期的正常成長需求。而且事實上，如果你看亞洲不同國家，例如印度，就帶動非常強勁的需求。歐洲看起來還可以，甚至略優於預期。所以我認為，在中國以外，Telecom 的業務表現不錯。再加上 Datacom 超大規模（hyperscale）需求成長，隨著 100G 轉換正在發生，中國以外的情況看起來相當不錯。

And on the pump laser side, I assume that you're adding capacity pretty aggressively there. Can you give us some sense of what the capacity adds looks like to address the tightness that you're experiencing in supply? And the assumption that ROADM's ramp as Telecom ramps in China eventually kicks in?

在泵浦雷射（pump laser）方面，我假設你們正在相當積極地擴增產能。你能否讓我們了解一下，為了緩解你們目前供應吃緊的狀況，產能擴增大概會是什麼樣子？以及假設 ROADM 隨著 Telecom 在中國最終回升而開始放量？

Yes. So pumps, we've been adding capacity over the last 1.5 years. We have more capacity coming online this quarter. If you look at it from the December quarter to the June quarter, I'd say it's probably another 20% to 25% of capacity going online. And we think that, that puts us in a pretty good position to be -- have flexibility to meet our customers' demands. We are seeing additional demand from Raman pumps, which is unique and I think positions us pretty well. So I think, overall, the terrestrial pump business is good. And what happened in last quarter, maybe it wasn't clear, was we used a lot more of our pump capacity for internal blade production, and that constrained us for external revenue on pumps. I think we're to the point now that while we're still tight on capacity, as we bring on capacity through this quarter, we should be in pretty good shape.

是的。關於泵浦，我們在過去 1.5 年一直在擴增產能。本季還會有更多產能上線。如果從 12 月季度看到 6 月季度，我會說大概還會有另外 20% 到 25% 的產能上線。我們認為這讓我們處於相當好的位置——能更有彈性地滿足客戶需求。我們也看到 Raman 泵浦帶來的額外需求，這是比較獨特的，我認為也讓我們的定位相當有利。所以我認為整體而言，陸地（terrestrial）泵浦業務表現良好。而上一季發生的事情，也許不夠清楚的是：我們將更多泵浦產能用於內部 blade 產品生產，因而限制了對外銷售泵浦的營收。我認為我們現在已到了一個階段：雖然產能仍然吃緊，但隨著本季導入更多產能，我們應該會處於相當不錯的狀態。

If I could just sneak one last thing in. Any change in the status of the ROADM qualification that your competitors -- that you can see evidence of?

如果我可以再偷偷補充最後一點。就您所見，有沒有任何跡象顯示競爭對手的 ROADM 認證狀態有變化？

I think it's a better question to ask them. But we're focused on making sure we meet our customers' demands, and I think we're doing a very good job of that. I haven't seen anything that would indicate that we're losing any share at either of our major blade customers.

我想這個問題問他們會更合適。但我們專注於確保滿足客戶需求，我認為我們在這方面做得非常好。我沒有看到任何跡象顯示我們在兩個主要刀片客戶那邊有流失任何市占。

And our next question comes from Rod Hall from JPMorgan.

下一個問題來自摩根大通（JPMorgan）的 Rod Hall。

And I appreciate the clarity on 3D sensing. I've just got a few follow-up questions on that and also, obviously, on China. I'd like to just understand, Alan, you're talking about multimillion unit orders for the September quarter. When do you start delivery on that? Can you give us any idea? Is that representative -- what you're talking about in September and what you'll eventually guide for, is that going to be representative of kind of full-volume capacity? Or are we talking about 0.5 quarters' worth? Just help us understand when that volume ramp starts. And then, are we at full-volume output in the December quarter? So that's the first question. The second question on 3D sensing is, could you help us understand what you think your share position is now? I know it's hard to know, but given you now have orders, do you have a feeling for where your share position stands on that? And then on China, just coming back to that, I just want to understand how conservative you think you've been on China in your guidance for June. Particularly, and I don't know if you want to comment specifically on this, what you're assuming for Huawei. And you say you've seen these tenders starting to come through. Do you think there's a little bit of unlocking in terms of the Chinese movement? Any other color that you can give us from the carriers there would be helpful.

感謝你對 3D 感測的說明很清楚。我有幾個後續問題，關於這個以及當然也關於中國。Alan，我想了解一下，你提到 9 月季度會有數百萬台（multimillion unit）的訂單。你們何時開始交付？能否給我們一些概念？你在 9 月所談到的、以及你們最終會給出的指引，是否代表接近滿載產能的出貨量？還是說只相當於 0.5 個季度的量？請幫我們理解這個量產爬坡何時開始。另外，到了 12 月季度，我們是否已達到滿載產出？這是第一個問題。第二個關於 3D 感測的問題是，你能否幫我們理解你認為目前的市占位置？我知道很難判斷，但既然你們現在已有訂單，你是否對市占位置有一些感覺？再回到中國的部分，我想了解你們在 6 月季度指引中對中國的假設有多保守。尤其是（我不知道你是否願意具體評論）你們對華為的假設是什麼。你提到已看到這些標案開始出來。你是否認為中國市場的動能有一些解鎖的跡象？若能提供更多來自當地電信營運商的資訊，會很有幫助。

Sure. Well, starting with the 3D sensing, these multimillion-unit order -- orders are just the initial orders. We expect to be receiving orders on a weekly basis moving forward to cover our lead times. As I said in the prepared remarks, we have been approved to start volume production. And so we are ramping production to be able to achieve the volumes that our customers need in the short term. And you can imagine the cycle time of 3D sensing for us is a few months. And so given that we're in production today, you can determine when the production ramp starts, and given a 13-week lead -- cycle time. So we'll be ramping through the quarter, and in the December quarter, we'll be at full-volume production capability, assuming the program goes as we expect. As far as share is concerned, it's hard to tell. But I think given the attention that we're getting and the volume orders that we're receiving, I think we're in a very, very good position relative to our competitors and are getting more than the majority of the share of the business at the initial ramp. Does that answer your question on 3D sensing?

好的。先從 3D 感測開始，這些數百萬台的訂單——這些訂單只是初始訂單。我們預期接下來會以每週為頻率持續收到訂單，以涵蓋我們的交期。如同我在事先準備的講稿中所說，我們已獲准開始量產。因此我們正在拉升產能，以便在短期內達到客戶所需的出貨量。你可以想像，我們 3D 感測的製造週期時間是幾個月。所以既然我們今天已在生產，你就可以推算量產爬坡何時開始，並考量 13 週的交期——週期時間。我們會在本季度內持續爬坡，而在 12 月季度，假設專案如我們預期進行，我們將具備滿載量產能力。至於市占，很難判斷。但我認為，考量我們獲得的關注度以及收到的量產訂單，我們相對於競爭對手處於非常、非常有利的位置，並且在初期爬坡階段拿到超過多數的業務市占。這樣有回答你關於 3D 感測的問題嗎？

Yes, that's helpful.

有的，這很有幫助。

Okay. And then on China, how conservative are we? I don't know that you can be too conservative, given that it's -- the visibility is pretty tough. So I -- I've always anticipated being surprised by China. And I think we're trying to take an approach that even if business were to come back, I don't think that that's going to drive incremental volume for us over our existing plan in the June quarter. It could drive business in the September quarter over and above the current levels, but I think it's too early to state that at this point in time.

好的。那關於中國，我們有多保守？我不確定在這種情況下你還能有多保守，因為——能見度相當差。所以我——我一直預期中國會帶來驚喜。而我認為我們採取的做法是：即使業務回來了，我也不認為這會在 6 月季度相對於我們既有計畫帶來額外增量出貨。它可能會在 9 月季度帶來高於目前水準的業務，但我認為現在要下結論還太早。

And our next question comes from Troy Jensen from Piper Jaffray.

下一個問題來自 Piper Jaffray 的 Troy Jensen。

Congrats on the 3D sensing order. I guess, my first question, I'd like to know for the volume 3D sensing, is it multiple flavors, as in different power VCSELs, or is it just one?

恭喜拿到 3D 感測訂單。我想第一個問題是，關於 3D 感測的量產，是否有多種規格（flavors），例如不同功率的 VCSEL？還是只有一種？

Troy, I think we are under all sorts of confidentiality agreements with our customers. I'd prefer not to say what the number of different chips we're providing or the applications. Suffice it to say that we're very well positioned with this lead customer. And I think the fact that we've got volume production orders for production ramp in September places us pretty good. So I'd prefer to stay away from any of the details.

Troy，我想我們與客戶簽有各式各樣的保密協議。我比較不方便說我們提供多少種不同晶片或其應用。只要知道我們在這個領先客戶上處於非常有利的位置就好。而且我認為，我們已取得 9 月量產爬坡所需的量產訂單，這讓我們的處境相當不錯。所以我希望避免談任何細節。

All right. Totally understand, I just had to ask it. And how about just a follow-up on the QSFP28. I'd just be -- wanted to know, I'd like to know, what percent of the business you think is going into Web 2.0 versus the network equipment companies? And then maybe the number of hyperscale customers that you have for QSFP28?

好的。完全理解，我只是必須問一下。再追問一下 QSFP28。我想了解，你認為這項業務有多少百分比是出貨到 Web 2.0，相對於網通設備公司？另外，你們 QSFP28 的超大規模（hyperscale）客戶數量大概有多少？

Troy, this is Aaron. So in terms of the third quarter, it was less than half. And here in the near term in the June quarter, it's still going to be a little bit less than half. But it's going to -- it's continuing -- continuously growing in terms of what's going to hyperscale.

Troy，我是 Aaron。就第三季而言，少於一半。而在近期的 6 月季度，仍會略低於一半。但它會——持續成長，往超大規模客戶的比重會不斷提高。

And the number of hyperscale wins?

那超大規模客戶的得標數量呢？

We haven't said the exact number, but there are several.

我們沒有說過確切數字，但有好幾個。

And we're engaged with all of them. So whether we're in production today or about to be qualified, I think it's just a matter of time.

而且我們與他們全部都有在合作接洽。所以不論我們今天已在量產，或是即將通過認證，我認為只是時間問題。

And our next question comes from Michael Genovese from MKM Partners.

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

First question, I just want to ask about ROADMs. It seems like in the March quarter, you had a strong demand in both the U.S. and China, but that China maybe built some inventory, so they're -- that's going to fall off in June. But specifically in the U.S., are you expecting growth in ROADMs in June? Or will it be like before, where the customer kind of shifts to transmission lines for a while before coming back to ROADMs again?

第一個問題，我想問一下 ROADM。看起來在 3 月季度，你們在美國和中國的需求都很強，但中國可能建立了一些庫存，所以——在 6 月會下滑。但就美國而言，你們預期 6 月季度 ROADM 會成長嗎？還是會像之前一樣，客戶會先轉去拉傳輸線一段時間，之後再回到 ROADM？

From the China perspective, I think you've categorized it accurately in that we ship ROADMs by quarter, don't expect to ship very many ROADMs this quarter. As far as U.S. is concerned, we put the ROADM blades in the BMI hubs and they get pulled or they don't get pulled. I haven't looked exactly at where we expect that to go, but I think there's nothing that says it's going to be highly lumpy this quarter compared to last quarter. So I think constant growth would be my expectation.

從中國的角度來看，我認為你的歸納是正確的：我們按季度出貨 ROADM，本季度預期不會出貨很多 ROADM。至於美國，我們把 ROADM 刀片放在 BMI 樞紐（hubs）裡，客戶會拉貨或不拉貨。我沒有仔細看我們預期會走到哪裡，但我認為沒有任何跡象顯示本季度相較上季度會出現非常劇烈的波動。所以我預期會是持續性的成長。

Okay. And then my follow-up is back to 3D. I mean, I think the last time you guys did a call like this, there was some discussion, I can't remember if it was publicly or in the callbacks later. But there was some discussion about a potential $50 million revenue level for 3D sensing in the December quarter in this project. So I guess, my question would be has there been any change to that particular outlook?

好的。接著我想追問回到 3D。我的意思是，我記得你們上一次做這樣的電話會議時，有一些討論，我不記得那是在公開場合還是之後的回覆電話裡。但當時有提到，在這個專案中，12 月季度的 3D 感測營收可能達到 5,000 萬美元的水準。所以我想問的是，對於那個特定展望是否有任何變化？

Michael, I don't know that we gave any specific numbers like that. I think what I did say was that we believe the 3D sensing market for optical components will achieve a $1 billion annual-type market over the next coming years, and that over the next year or so, one can imagine a market that drives $100 million a quarter kind of business. Our share of that's yet to be determined. So I think we'll continue to update you on quarterly calls, but I don't think we've ever said what we expect the December quarter revenues to be.

Michael，我不確定我們曾給過那樣的具體數字。我想我說過的是，我們相信未來幾年 3D 感測的光學元件市場將達到每年約 10 億美元的市場規模，而在接下來一年左右，你可以想像會有一個能帶動每季 1 億美元左右業務的市場。我們能分到多少份額仍有待確定。所以我想我們會在每季電話會議上持續向各位更新，但我不認為我們曾說過我們預期 12 月季度的營收會是多少。

And our next question comes from Tim Savageaux from Northland Capital Markets.

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

I have a question on your comments about internal manufacturing capacity additions, and I'm -- wonder, especially in light of kind of current demand conditions, where that capacity is sort of focused. If there is certain pain points on the comm side or across industrial or even 3D sensing, where that capacity might be focused, and what the timing of that might be, on the one hand. Then in a potentially related follow-up, I don't know if you said -- obviously, you saw some strong uptick on the laser side, the industrial laser side, whether you expect that to continue into June relative to your guidance for the overall revenue line?

我想問一下你們關於內部製造產能擴增的評論，我在想——特別是在目前這種需求狀況下，那些產能主要會聚焦在哪裡。是否在通訊端（comm side）或整個工業領域，甚至是 3D 感測方面有某些痛點，使得產能會優先投入那裡？以及相關時程會是如何？這是一方面。然後一個可能相關的追問，我不確定你是否提到——顯然你們在雷射端、工業雷射端看到相當強勁的上升，你們是否預期相較於整體營收指引，這樣的趨勢會在 6 月延續？

Sure. Tim, in terms of the manufacturing, so we did buy a building in Thailand for $10 million. We're currently in the process of fitting the building up and in terms of getting it ready, with infrastructure, meaning IT systems, networking systems, capability, it take several months to do that. So some of that has been in the works in terms of the preparation. In terms of which specific products. So 3D sensing, I think Alan -- we've noted we're using an outsourced foundry model. This facility in Thailand is going to be primarily used for our base business. In terms of the specific products, we're not in a position to really state which products will be the first to go in. Those are things in the plans, we're working through them at this point in time. In terms of the timing of readiness, we expect to be shipping some initial units out of the factory from a production standpoint early in our fiscal 2018 period, which is the September through the December quarter. In terms of your second question on commercial lasers. So we did achieve $39.7 million in the March quarter. Looking into the June quarter, we believe that the laser volume could be flattish and there could be some variability depending upon customer inventory levels. So it could vary a couple of percent either way in terms of the top line.

當然。Tim，就製造方面而言，我們確實在泰國以 1,000 萬美元買了一棟建物。我們目前正在進行廠房整備，包括基礎設施，例如 IT 系統、網路系統與相關能力建置，這需要好幾個月的時間。因此，部分準備工作一直在進行中。至於會是哪一些特定產品。就 3D 感測而言，我想 Alan——我們已經提到我們採用外包晶圓代工（foundry）模式。泰國這個廠主要會用於我們的基礎業務（base business）。至於具體產品，我們目前不便說明哪些產品會最先導入。這些都在規劃中，我們正在逐步推進。就就緒時程而言，我們預期在 2018 財年初期，也就是 9 月到 12 月季度，會開始從工廠端以量產角度出貨一些初始單位。至於你第二個關於商用雷射的問題。我們在 3 月季度達到 3,970 萬美元。展望 6 月季度，我們認為雷射出貨量可能大致持平，並且會因客戶庫存水位而有一些波動。因此在營收端可能上下變動幾個百分點。

Operator, next question, please.

接線生，請下一個問題。

Our next question comes from Richard Shannon from Craig-Hallum.

下一個問題來自 Craig-Hallum 的 Richard Shannon。

Maybe I'll ask a first question on Datacom. Wondering if you can give us a sense of the mix within that group between the CFP form factors collectively, and QSFP28. I'm assuming QSFP28 is a still well below that. Kind of curious if you can give us a thought process of how long it takes before that crosses over, where QSFP28 is larger.

我先問一個關於資料通訊（Datacom）的问题。想請你們談談該業務群內部的組合：CFP 各種外形規格（form factors）合計，與 QSFP28 之間的占比大概如何。我猜 QSFP28 目前仍遠低於前者。也想了解你們的思考：大概需要多久才會出現交叉點，讓 QSFP28 的占比變得更大？

Thanks, Richard. So in terms of the QSFP28 volume, it was almost 50% of the volume in the March quarter. Into the June quarter here, so as Alan had mentioned on prepared remarks, we are ramping QSFP28 form factor, especially for hyperscale. So it's going to grow to be the majority during the June quarter.

謝謝你，Richard。就 QSFP28 的出貨量而言，在 3 月季度幾乎占了 50%。進入 6 月季度，如 Alan 在事先準備的發言中提到，我們正在拉升（ramp）QSFP28 外形規格，特別是針對超大規模（hyperscale）客戶。因此在 6 月季度它將成長為主要占比。

Okay. Great. I must have missed that but thanks for the recollection there. Second question would be on 3D sensing. Any sense of how we can think about what gross margins to expect from this revenue stream either initially, and then how we go over the next several quarters would be great to hear, please.

好的。很好。我可能漏聽了，但謝謝你提醒。第二個問題是關於 3D 感測。能否談談我們該如何看待這條營收來源的毛利率：不論是初期，或接下來幾個季度的走勢，都很希望能聽到一些看法。

In terms of the gross margin on 3D sensing, so -- what we've been saying is it's significantly north of our corporate gross margin average. And it's going to be -- it should be over 50%.

就 3D 感測的毛利率而言——我們一直在說，它顯著高於我們公司整體毛利率平均水準。而且——應該會超過 50%。

And I'd say that we're extremely happy with the current existing yields as we start up the ramp. So there's no reason to believe that the initial ramp gross margin would be anything different than that.

我也想補充，我們對於目前在開始爬坡（ramp）時的既有良率非常滿意。所以沒有理由認為初期爬坡的毛利率會與上述水準有任何不同。

And our next question comes from Doug Clark from Goldman Sachs.

下一個問題來自 Goldman Sachs 的 Doug Clark。

I want to come back to Datacom first, actually. I know you talked a little bit about China being a drag on the March quarter. But could you give us a little bit more detail into kind of what led to the, I think, 43% sequential decline in that business?

我想先回到資料通訊（Datacom）。我知道你們提到中國在 3 月季度造成一些拖累。但你們能否更詳細說明，是什麼導致該業務我想是約 43% 的季對季下滑？

Doug, in terms of the sequential decline, the bulk of that was due to China. So our China business was down close to 40%, sequentially. And most of the CFP2 volume was going into China. So that's the bulk of the decline. We do see recovery here. Not from CFP, but we do see Datacom recovering in the June quarter, primarily because of the transition to QSFP28 for hyperscale. In the June quarter, both CFP2 and QSFP28 share the same capacity, or manufacturing capacity. We were not able to really shift all of that capacity in the March quarter so we weren't able to fulfill a lot of QSFP28 orders. We're doing that now. And we expect QSFP28 to ramp significantly in the June quarter.

Doug，就季對季下滑而言，主要原因是中國。我們在中國的業務季對季下滑接近 40%。而大部分的 CFP2 出貨量都是銷往中國。所以這是下滑的主要部分。我們確實看到復甦。不是來自 CFP，但我們看到 Datacom 在 6 月季度會復甦，主要因為轉向供應超大規模（hyperscale）客戶的 QSFP28。在 6 月季度，CFP2 與 QSFP28 共用相同的產能或製造產能。我們在 3 月季度無法把所有產能完全轉移，因此無法滿足許多 QSFP28 訂單。我們現在正在進行這個轉移。並且預期 QSFP28 在 6 月季度會顯著拉升。

And as a follow-up to that, how long does it take to convert that capacity from one product line to the other?

追問一下，將產能從一條產品線轉換到另一條，大概需要多久？

Yes. So the [tester] conversion is not a big deal. There's components as well as a different wafer that we produce for the QSFP28 to meet the power requirements. So I think we've already pivoted the supply chain and the wafer fab to focus primarily on QSFP28 and the different varieties of short and medium and long reach. So I think we're positioned pretty well to really capitalize on the growth in demand for QSFP28 in the June and September quarters.

是的。所以（測試機）[tester] 的轉換不是什麼大問題。另外也涉及元件，以及我們為了讓 QSFP28 符合功耗需求而生產的不同晶圓。因此我想我們已經把供應鏈與晶圓廠的重心轉向以 QSFP28 為主，並涵蓋不同的短距、中距與長距版本。所以我認為我們已經處於相當有利的位置，能在 6 月與 9 月季度真正把握 QSFP28 需求成長的機會。

Okay. And then I also have one question on 3D sensing, kind of a clarification to a comment prior. I think you said the initial order was for multimillions of units in the September quarter. Does that satisfy the entirety of the September quarter demand? Or do you expect to kind of get additional orders for that period between now and then as well, which could take it into tens of millions of units?

好的。接著我還有一個關於 3D 感測的問題，算是對先前一則評論的釐清。我想你說過，最初的訂單是在 9 月季度、數百萬台等級。那是否已滿足 9 月季度的全部需求？或者你預期從現在到那時之間，該期間還會再收到額外訂單，可能把數量推升到數千萬台？

Yes, we're not going to quantify exactly how much it is, but I'd say that the orders that we have today that we categorized as multimillion units is just the very, very start. We expect orders to be streaming in through this quarter in a meaningful way.

是的，我們不會精確量化到底是多少，但我會說，我們目前手上、我們歸類為數百萬台等級的訂單，只是非常、非常初期的開始。我們預期本季會以相當有意義的方式持續有訂單流入。

And our next question comes from James Kisner from Jefferies.

下一個問題來自 Jefferies 的 James Kisner。

I want to drill into Datacom for a moment again. I mean, you said the majority -- or that you've given volume comments on QSFP28. I wonder if you could talk about proportion of revenue, is QSFP28 over $20 million at this point? How much of the business is still legacy? I think it was below 20% last quarter -- 10 and 40. I just -- longer-term on CFP2, [Clear] has made some comments here that they think this market is really not that big going forward. What do you think the opportunities for CFP2 at this point? Is it kind of on the wane at this point or could there be some more growth there as it recovers?

我想再深入談一下 Datacom。我的意思是，你提到大多數——或者說你已對 QSFP28 的出貨量做過一些評論。我想問你能否談談營收占比：QSFP28 目前是否已超過 2,000 萬美元？業務中還有多少是舊世代（legacy）？我記得上季低於 20%——10G 和 40G。另外——就更長期來看，關於 CFP2，[Clear] 在這裡有一些評論，認為這個市場未來其實不會太大。你怎麼看目前 CFP2 的機會？它現在是在走下坡，還是隨著復甦仍可能有一些成長？

So -- Aaron, you want to take the 10 and 40?

那——Aaron，你要回答 10G 和 40G 的部分嗎？

Sure. Yes. In terms of the percentage, James, so faster speed, meaning 40 gig and above is 77% in the March quarter. Last quarter it was 83% just to calibrate, but we had more CFP2 volume last quarter. So legacy, 10 gig and below was 23% in the March quarter. In terms of the [dock orders] so our 100-gig Datacom volume was about $25 million-or-so in the March quarter. So $12.5 million was QSFP28.

當然。是的。就占比而言，James，更高速的部分，也就是 40G 及以上，在 3 月季度占 77%。上季是 83%，供你校準一下，但上季我們的 CFP2 出貨量較多。所以舊世代，也就是 10G 及以下，在 3 月季度占 23%。就 [dock orders] 而言，我們 100G Datacom 的出貨量在 3 月季度大約是 2,500 萬美元左右。其中 1,250 萬美元是 QSFP28。

And as far as the long-term outlook for QSFP28, CFP2, I think, CFP2, first of all, has a long tail. I'd say that it's a matter of inventory buildup in China that created the issue. And there is still a lot of CFPs being deployed in the world, and that transition from CFP to CFP2 is well underway. And I'd say that the demand for QSFP28 is very strong both from that 300- and 500-meter short-reach products in the hyperscale datacenters as well as the 2-kilometer CWDM4. And the transition from CFP2 to QSFP28 LR4 is underway as well, but that transition is going to take a little bit longer. But we're positioned very well. Qualifications are happening and have happened, so I think our broad portfolio of QSFP28 that we showed at OFC has really positioned us well across the portfolio from short reach all the way to 10-kilometer kind of products.

至於 QSFP28、CFP2 的長期展望，我想先說 CFP2，首先，它有很長的尾端需求。我會說，問題在於中國的庫存堆積造成了這個狀況。而且全球仍有大量 CFP 正在部署，從 CFP 轉向 CFP2 的轉換也正在順利進行。我也會說，QSFP28 的需求非常強勁，來源包括超大規模資料中心中 300 公尺與 500 公尺的短距產品，以及 2 公里 CWDM4。從 CFP2 轉向 QSFP28 LR4 的轉換也正在進行，但這個轉換會花更長一點時間。不過我們的布局非常到位。認證（qualification）正在進行且也已完成，所以我認為我們在 OFC 展示的廣泛 QSFP28 產品組合，確實讓我們在從短距到 10 公里等產品的整體組合上都具備很好的競爭位置。

Great. And just a follow-up. Just commercial lasers, it's nice to see that recover, but your gross margin is not what I would have expected, just given the revenue level. Is there start-up costs in there? Is this kind of what you'd expect going forward in terms of gross margins for commercial lasers or might we see that kind of get to the high levels again?

很好。再追問一下。商用雷射看到復甦很不錯，但以目前的營收水準來看，你們的毛利率不是我原本預期的。裡面有啟動成本（start-up costs）嗎？就商用雷射的毛利率而言，未來大致會是你們預期的水準嗎？還是我們可能會看到毛利率回到之前較高的水準？

So James, in terms of commercial lasers gross margins, we're at 41%. In terms of where we had been in the past, we were close to 50% in the past. And there's no reason we can't get back there. It's highly mix-dependent. So we have had added capacity capability as we've brought new generations of fiber lasers to market. Unfortunately, it requires investment in terms of some fixed costs that have been put in place. So there is a little bit of a drag on gross margins from that perspective. As Alan had mentioned in the prepared remarks, micromachining lasers have come back in this quarter and represented close to 40% of our mix or $16 million. Those products have very high gross margins, which are higher than our average commercial lasers. So if that can continue -- and most of those lasers go into semiconductor for slicing and dicing. And if that continues and it continues to grow back to where it once was in terms of over $20 million per quarter, there is no reason our gross margin can't get back into the high 40s and close to 50%. So the way we look at it, it could be 3 to 5 quarters out that we get back there.

James，就商用雷射毛利率而言，我們目前是 41%。就過去的水準來看，我們以前接近 50%。而且沒有理由我們回不到那個水準。這高度取決於產品組合（mix）。因此，隨著我們把新一代光纖雷射推向市場，我們也增加了產能能力。不幸的是，這需要投資，也就是一些已經到位的固定成本。所以從這個角度看，毛利率會有一點拖累。如同 Alan 在事先準備的講稿中提到的，微加工（micromachining）雷射在本季回來了，約占我們組合的 40%，或 1,600 萬美元。這些產品的毛利率非常高，高於我們商用雷射的平均。所以如果這能持續——而且這些雷射多數用在半導體的切割與分割（slicing and dicing）。如果這能持續並成長回到過去每季超過 2,000 萬美元的水準，那我們的毛利率回到 40% 高段、接近 50% 是沒有理由做不到的。所以我們的看法是，可能再過 3 到 5 個季度就能回到那裡。

Again, I'd say just one other dynamics is that in the March quarter, most of the fiber laser business was Gen 2 and that's been in production for quite some time. So the margins as we end of life a product like that, are lower than the new products. So as we bring on the Gen 3 that we started revenue last quarter, and that becomes a bigger percentage of our fiber laser, that will help the overall gross margin of both the fiber laser as well as the overall commercial lasers gross margin.

另外我想補充的一個動態是，在 3 月季度，大部分光纖雷射業務是第二代（Gen 2），而那已經量產一段時間了。因此，當我們讓這類產品進入生命週期末期（end of life）時，毛利率會比新產品低。所以當我們導入第三代（Gen 3）——我們上季已開始認列營收——而且它在光纖雷射中的占比提高時，將有助於提升光纖雷射的整體毛利率，也會提升整體商用雷射的毛利率。

Great. That's really helpful. I'm going to sneak in just one more. Did you guys comment on OpEx sequentially in your guidance?

很好。這真的很有幫助。我再偷偷問最後一個。你們在財測指引中有評論到 OpEx 的季比變化嗎？

No. We didn't break out gross margin or OpEx in our guidance. But in terms of the operating margin and the midpoint there, where we have guided 10%-or-so, if you go look back 4 to 5 quarters ago, we were below 9% in terms of operating margin. So in terms of some of the near-term headwinds, we are keeping a close eye on discretionary spending, so to speak, and keeping expenses under control so we can maximize our operating margin. In terms of fixed costs over those 5 quarters, we've put a lot of fixed cost in place, both on the operational side as well as within OpEx. And you can see that our operating margins are still expanding by at least 100 basis points, which means our variable margins have increased over that period of time, which translates into -- or translates from a richer mix of products, newer products with higher margins.

沒有。我們在指引中沒有拆分毛利率或 OpEx。但就營業利益率以及其中位數而言，我們指引大約是 10% 左右；如果你回頭看 4 到 5 個季度前，我們的營業利益率低於 9%。因此，就一些短期逆風而言，我們正密切關注可自由支配支出（discretionary spending），並控制費用，以便最大化我們的營業利益率。就這 5 個季度的固定成本而言，我們在營運端以及 OpEx 端都投入了不少固定成本。而你可以看到我們的營業利益率仍至少擴張了 100 個基點，這表示我們的變動毛利率在那段期間有所提升，這反映——或說是源自——更佳的產品組合、更高毛利的新產品。

And our next question comes from Meta Marshall from Morgan Stanley.

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

Just wanted to circle back on China and just see overall pricing environment. Is there any kind of going back and renegotiating pricing as they work through inventory? And then second, I don't think it's been touched upon, around ACO timing. That had been kind of planned for the second half of the year. Is that still on track? Or is some of that going into China and so there is a little bit of slowdown in getting that product out?

我想再回到中國，看看整體的定價環境。在他們消化庫存的過程中，是否有任何回頭重新談判價格的情況？第二個問題，我想之前沒有提到，關於 ACO 的時程。原本似乎規劃在今年下半年。目前仍在軌道上嗎？或者其中有一些是出貨到中國，因此在把該產品推出（out）方面會有一些放緩？

Yes. So, for China pricing, we set pricing annually with our Chinese customers, and there is no renegotiating because demand is softening. I would say that as far as ACO is concerned, we've made tremendous progress over the last 3 months. We've been shipping beta units now, not just evaluation units but beta units to Tier 1s, including in China. But I'd say that we weren't expecting, nor was, I think, the industry expecting China to be consuming a lot of CFP2 ACOs even in this calendar year. That's really more of an end of calendar '17 and really ramp into '18. So I think that's our expectations for China on ACO. Rest of the world, I think, we're still on track over the next couple of quarters to start volume productions as we get qualified outside of China.

是的。因此，針對中國的定價，我們每年與中國客戶設定一次價格，需求轉弱也不會重新議價。我想就 ACO 而言，過去 3 個月我們已取得巨大的進展。我們現在已開始出貨 beta 單元，不只是評估用單元，而是出貨 beta 單元給一線客戶（Tier 1），包括在中國的客戶。但我想我們並不預期——我認為整個產業也不預期——中國即使在本曆年也會大量消耗 CFP2 ACO。那更可能是在 2017 年底，並在 2018 年真正放量爬坡。所以我認為這就是我們對中國 ACO 的預期。至於世界其他地區，我認為在接下來幾個季度，隨著我們在中國以外完成認證，我們仍按計畫開始量產。

And our next question comes from Joseph Wolf from Barclays.

下一個問題來自 Barclays 的 Joseph Wolf。

You made a comment about the relative value on the QSFP28 in terms of the revenues and the capacity in terms of the margins. Given the shift right now and the movement, can we see any -- how much room is there for margin improvement in the Datacom business as you get to really high levels of QSFP28 in the mix, 28?

你提到 QSFP28 在營收相對價值以及產能對毛利的影響。鑑於目前的轉變與動向，我們能否看到——當 QSFP28 在組合中占比提高到很高水準時，數據通訊（Datacom）業務的毛利還有多少改善空間？

Yes, the majority of QSFP28 in the March quarter was more of the 2-kilometer CWDM4 and then comparing that to a 10-kilometer CFP2, the price is -- average selling price is a factor of 50% lower plus-or-minus a little bit. So I do think that as we introduce new generations of QSFP28s, and we have 2 new products coming out that are focused primarily on cost reduction, as we ramp up volume, we should see continued improvement in gross margin in our QSFP28 Datacom business, even with the hyperscale pricing pressures that we see in the industry. So I think from that perspective, we're in very good position. I do think that CFP2 will pick back up, but we're not counting that in the short term.

是的，3 月季度的 QSFP28 主要是 2 公里 CWDM4；若拿它與 10 公里 CFP2 相比，價格——平均銷售單價大約低了 50%（上下略有差異）。因此我確實認為，隨著我們推出新一代 QSFP28，而且我們有兩款新產品即將上市，主要聚焦於降低成本，當我們把出貨量拉升後，即使面臨產業中我們所看到的超大規模客戶（hyperscale）定價壓力，我們的 QSFP28 數據通訊業務毛利率仍應會持續改善。所以從這個角度來看，我們處於非常有利的位置。我也確實認為 CFP2 會回升，但短期內我們不把它納入預期。

And then, just as you look -- if you take this, I guess, relative softness in China and think about what that means in terms of the components that were on allocation where you had supply constraint, how is that shaping up for the rest of the calendar year as you look across those components? What kind of opportunities do have in terms of additional capacity and getting the supply chain set for the pickup in China?

另外，當你看——如果把中國目前相對疲軟的情況，放到那些曾經被配給、也就是供應受限的元件來看，對於今年剩餘的時間，這些元件的供需狀況會如何發展？在增加額外產能、並為中國需求回升而把供應鏈準備就緒方面，你們有哪些機會？

Well, we've added $100 million of CapEx over the last 3 quarters. So that capacity is coming online and becoming productive this quarter and next. And so I think we're very well positioned for when China comes back. We still are constrained on some of our products, but I'd say that we are focused on making sure that when the demand comes back, we have the capacity to supply what our customers need. So the question in my mind is, is it in the September quarter or is it in the December quarter, not is it ever. So I'd say that we're confident in our ability to meet the demand as the demand comes back in China.

嗯，我們在過去 3 個季度額外增加了 1 億美元的資本支出（CapEx）。因此，這些產能正在上線，並在本季與下季開始形成有效產出。所以我認為，當中國需求回來時，我們的準備非常充分。我們在部分產品上仍然受限，但我想我們的重點是確保當需求回升時，我們有能力供應客戶所需要的量。所以我心中的問題是：是在 9 月季度回來，還是在 12 月季度回來，而不是會不會回來。因此我會說，隨著中國需求回升，我們有信心能滿足需求。

So this hasn't changed any of the build plans?

所以這並沒有改變任何擴產計畫嗎？

Oh, well yes. So in terms of capacity that Alan was alluding to, it typically takes 6 to 7 months from the time you launch orders and approve it to when it comes -- starts to come online. There's a lot of qualification that takes place. So a lot of the CapEx that landed in the March quarter was launched 6 -- several months ago. Same thing -- as of last quarter, there's some things we're still ramping. For example, pump lasers are still tight. So we're continuously adding capacity there. 100-gig transceivers, we've been capacity-constrained in that regard. So we've added a lot of capacity and more is coming online. In terms of the next couple of quarters, some of the traditional or base products have some near-term demand challenges from China. And it could take a [couple years] to rebound. But we think when it does come back, we're going to be well positioned to take advantage of it because we will have the capacity in place. We've been trying to stay rational as well and not get too far ahead of ourselves in terms of capacity, but unfortunately, it does take 6 to 7 months to get it online.

喔，有的。就 Alan 剛才提到的產能而言，通常從下單啟動並核准到設備開始——開始上線，約需 6 到 7 個月。期間會進行大量的認證作業。因此，許多在 3 月季度到位的資本支出，其實是在 6——幾個月前就已啟動。同樣地——截至上季，我們仍有一些項目在爬坡。例如，泵浦雷射（pump lasers）仍然吃緊。所以我們持續在那裡增加產能。在 100G 收發器方面，我們也一直受到產能限制。因此我們已增加了大量產能，且還有更多產能正在上線。至於接下來幾個季度，一些傳統或基礎產品在短期內會因中國而面臨需求挑戰。而要反彈可能需要[幾年]。但我們認為當它回來時，我們會處於有利位置把握機會，因為我們將具備相應產能。我們也一直努力保持理性，不讓產能超前太多，但不幸的是，產能上線確實需要 6 到 7 個月。

At this time, there are no further questions. I would now like to turn the call back over to Alan Lowe for any closing remarks.

目前沒有其他問題。現在我想把電話交回給 Alan Lowe，請他做結語。

Thank you, Bruce. I want to thank our customers for their business and our employees for all of their hard work in growing our business, putting us in an excellent position in the market. I believe we are in a worldwide bandwidth expansion, and photonics are increasingly becoming critical to manufacturing in next-generation, high-volume and 3D sensing applications, making the future bright at Lumentum.

謝謝你，Bruce。我要感謝我們的客戶對我們業務的支持，也感謝員工在拓展業務上的辛勤付出，讓我們在市場上處於極佳的位置。我相信全球正處於頻寬擴張之中，而光子技術在下一代高產量製造與 3D 感測應用中正變得愈來愈關鍵，讓 Lumentum 的未來一片光明。

We regularly discuss our business at Investor Relations events. These events are listed on our website in the Investor Relations section and are regularly updated.

我們會在投資人關係（Investor Relations）活動中定期討論我們的業務。這些活動列於我們網站的投資人關係專區，並會定期更新。

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 3 months.

今天的電話會議到此結束。感謝各位的參與。我們期待在 3 個月後再次與各位交流。

Ladies and gentlemen, thank you for your participation in today's conference. And this does concludes the program. You may all disconnect. Everyone, have a great day.

各位女士、先生，感謝您參與今天的會議。本次議程到此結束。各位可以掛線。祝各位今天愉快。