Lumentum Holdings Inc. (LITE) 2018 Q2 法說會逐字稿

Good morning. My name is Kelly, and I will be your conference operator today. At this time, I would like to welcome everyone to Lumentum Holdings Fiscal Second Quarter 2018 Financial Results Conference Call. (Operator Instructions)

早安。我叫 Kelly，今天將擔任各位的電話會議接線員。此刻，我謹代表公司歡迎各位參加 Lumentum Holdings 2018 會計年度第二季財務業績電話會議。(接線員指示)

Chris Coldren, Vice President, Strategy and Corporate Development, you may begin your conference.

策略與企業發展副總裁 Chris Coldren，您可以開始主持會議。

Thank you, Kelly. Welcome to Lumentum's Second Quarter Fiscal 2018 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，Kelly。歡迎各位參加 Lumentum 2018 會計年度第二季財報電話會議。我是策略與企業發展副總裁 Chris Coldren。今天與我一同出席的有總裁暨執行長 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, potential market sizes, trends and expectations for products and technology, purchasing trends and demand for our products, momentums expected, financial performance, expenses and position in the market. 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 the most recent filings with the SEC, the risk factors described in our 10-Q filing for our second quarter ended December 30, 2017, that we expect will be on file with the SEC later today. 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.

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、潛在市場規模、產品與技術的趨勢與預期、採購趨勢與對我們產品的需求、預期動能、財務表現、費用以及市場地位等陳述。這些陳述存在風險與不確定性，可能導致實際結果與我們目前的預期有重大差異。我們鼓勵各位查閱我們向美國證券交易委員會（SEC）提交的最新文件，以及我們截至 2017 年 12 月 30 日止第二季 10-Q 申報文件中所描述的風險因素；我們預期該文件將於今日稍晚向 SEC 存檔。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的義務。

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 second quarter fiscal 2018 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.

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優於 GAAP 財務資訊。我們已在公司網站 www.lumentum.com 的「投資人」專區提供 2018 會計年度第二季業績新聞稿，其中包含我們非 GAAP 財務衡量指標的更多細節，以及 GAAP 與非 GAAP 結果之間的調節表。我們的網站亦提供最新的 SEC 申報文件（我們鼓勵各位查閱），以及與今日財報發布相關的補充簡報。最後，今日電話會議的錄音將於今天上午太平洋時間 11:30 前在我們的網站上提供。

Now I would like to turn the call over to Alan for his comments and second 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二季業務重點。

Thank you, Chris. Good morning, everyone. 3 years ago, Lumentum announced -- Lumentum's name was announced to the public. The name Lumentum not only refers to the emission of light, it conveys momentum and forward progress. I think it is fitting to reflect upon this now as we discuss our second quarter results where we achieved record -- new record revenues and earnings. These results exemplify the strong forward momentum we have in achieving our strategic priorities.

謝謝你，Chris。各位早安。3 年前，Lumentum 宣布——Lumentum 的名稱正式對外公布。Lumentum 這個名稱不僅指涉光的發射，也傳達動能與向前邁進。我認為在我們討論第二季業績、並達成創紀錄——新的營收與獲利紀錄之際，回顧這點非常貼切。這些成果體現了我們在實現策略優先事項方面所具備的強勁前進動能。

Headlining our results was the very strong performance of our 3D sensing business. We supply laser diodes into leading consumer electronic manufacturers, who are in the early stages of introducing 3D sensing capabilities into their products. There is clear momentum in this market and in our business serving it.

我們業績中最受矚目的，是 3D 感測業務的非常強勁表現。我們向領先的消費性電子製造商供應雷射二極體，而這些客戶正處於將 3D 感測功能導入其產品的早期階段。此市場以及我們服務該市場的業務，都展現出明確的動能。

Before providing more details on 3D sensing, I'd like to highlight that we had new record revenues from nearly all of our laser product lines. Our commercial lasers segment achieved new record revenues, driven by strong demand from customers' supply and equipment used in the production of next-generation consumer electronic devices. Devices such as new smartphones and wearables are increasingly using components that require laser-based processes. These include flex circuitry, LCD and OLED displays and advanced semiconductor chips. Our industrial laser -- our industrial diode laser production -- product line also achieved record revenues, driven by strong demand from customers building material processing tools, including those building kilowatt-class fiber lasers with our pumps.

在提供更多 3D 感測細節之前，我想先強調，我們幾乎所有雷射產品線都創下新的營收紀錄。我們的商用雷射部門創下新的營收紀錄，主要受惠於客戶在供應鏈與設備方面的強勁需求，這些設備用於生產下一代消費性電子裝置。例如新款智慧型手機與穿戴式裝置，正日益採用需要以雷射為基礎製程的元件。這些元件包括軟性電路、LCD 與 OLED 顯示器，以及先進半導體晶片。我們的工業雷射——工業二極體雷射產品線——也創下營收新高，主要由客戶建置材料加工工具的強勁需求所帶動，其中包括使用我們的泵浦來打造千瓦級光纖雷射的客戶。

In addition, our Telecom pump laser product line achieved new record revenues in the second quarter as network operators around the world continue to light up new fiber and expand their networks. These second quarter results highlight our strategy of leveraging our photonics technologies across multiple growing markets critically dependent on photonics, investing in and quickly ramping the best products and focusing on close relationships with market-leading customers is succeeding. This is a very exciting time with Lumentum.

此外，隨著全球網路營運商持續點亮新的光纖並擴充其網路，我們的電信泵浦雷射產品線在第二季也創下新的營收紀錄。第二季的成果凸顯我們的策略正在奏效：將我們的光子技術運用於多個高度依賴光子技術且持續成長的市場，投資並快速擴產最佳產品，並專注於與市場領先客戶建立緊密關係。對 Lumentum 而言，這是一個非常令人振奮的時刻。

Now for more details. In the second quarter, we rapidly expanded 3D sensing pixel capacity and production volumes. Due to strong execution, we shipped more than $200 million of 3D sensing VCSEL arrays. This revenue substantially exceeded the amount considered in our second quarter guidance. The steep production ramp and our consistently high yields were enabled by our proprietary laser design and production capabilities that have taken us years to develop. We have irreplaceable learnings and volumes of field data from multiple high-volume 3D sensing ramps. This, along with our decades of experience supplying laser diodes into the industrial and subsea communication markets, allows us to produce high performance, highly reliable volumes of lasers.

接下來提供更多細節。在第二季，我們迅速擴充 3D 感測像素產能與生產量。由於執行力強，我們出貨超過 2 億美元的 3D 感測 VCSEL 陣列。此營收大幅超出我們第二季財測所納入的金額。陡峭的產能爬坡以及我們一貫的高良率，得益於我們專有的雷射設計與生產能力，而這些能力是我們多年來逐步建立的。我們從多次高產量的 3D 感測爬坡中，累積了不可取代的經驗與大量的現場數據。再加上我們數十年來向工業與海底通訊市場供應雷射二極體的經驗，使我們能夠生產高效能、且在高產量下仍具高度可靠性的雷射產品。

Our laser chip and manufacturing processes are specifically designed to enable the short-design cycles and high-volume production ramps needed by the fast pace of consumer electronics customers. These requirements are quite different from those of other customers in the industrial and communications markets. We spent nearly a decade developing unique capabilities to address the 3D sensing market. During the second quarter, we continued to book new 3D sensing orders and exited the quarter with a solid order backlog for deliveries through June.

我們的雷射晶片與製造流程是專門設計的，以支援消費性電子客戶快速節奏所需的短設計週期與高產量爬坡。這些要求與工業及通訊市場的其他客戶需求截然不同。我們投入近十年時間，開發因應 3D 感測市場的獨特能力。在第二季期間，我們持續取得新的 3D 感測訂單，並在季末擁有穩健的訂單積壓，可支應至 6 月的交付。

Looking to the third quarter. In our guidance, we are projecting 3D sensing revenues to be down significantly. Third quarter projected 3D sensing revenues consist primarily of revenue from shipments already made to date with the conservative view on revenues from additional shipments this quarter. Demand from consumer electronics customers can be seasonal as we saw in prior 3D sensing cycles. Given our 3D sensing customer mix, we are in a seasonally weaker period now. We expect third quarter revenues to include contributions from new 3D sensing customers in the Android space, including some who have designed in our newest high-performance edge-emitting lasers. These new opportunities are in the early stages and are only expected to contribute a few million dollars to third quarter revenues. These new customers are expected to drive far more business as we look to our fiscal 2019 and beyond. We believe 3D sensing market is accelerating. Underscoring this is recent public commentary from industry leaders and my experience at the Consumer Electronic Show in Las Vegas a few weeks ago. We met with leaders from major smartphone manufacturers as well as other consumer electronics and automobile system leaders. We heard detailed plans to incorporate 3D sensing into numerous brands, models and applications throughout calendar 2018 and 2019. Consumer electronic manufacturers throughout China, Korea and North America are looking to 3D sensing to enhance security, to enable augmented and virtual reality and to add other new functionality. Given the volume that these manufacturers produce, it is not difficult to imagine the annual market for 3D sensing lasers to exceed $1 billion in the next year or 2. To capitalize on these market opportunities, we are rapidly ramping our R&D investment in 3D sensing and in additional manufacturing capacity for VCSELs and edge-emitting lasers. In fact, given lengthy qualification times, we are already in the process of qualifying new equipment to permit even higher production starts in our fourth quarter for first half fiscal 2019 deliveries. With our proven manufacturing scalability, proven field reliability and new product pipeline, we are positioned well to be the partner of choice for 3D sensing customers around the world.

展望第三季。在我們的指引中，我們預期 3D 感測營收將大幅下滑。第三季預估的 3D 感測營收主要由截至目前已出貨所認列的營收構成，並以保守角度看待本季額外出貨所帶來的營收。消費性電子客戶的需求可能具有季節性，正如我們在先前的 3D 感測週期中所見。考量我們的 3D 感測客戶組合，我們目前正處於季節性較弱的期間。我們預期第三季營收將包含來自 Android 陣營新 3D 感測客戶的貢獻，其中包括一些已將我們最新的高效能邊射型雷射（edge-emitting lasers）導入設計的客戶。這些新機會仍在早期階段，預期僅會為第三季營收貢獻數百萬美元。隨著我們展望 2019 財年及其後，這些新客戶預期將帶動更多業務。我們相信 3D 感測市場正在加速發展。近期產業領袖的公開評論，以及我幾週前在拉斯維加斯消費性電子展（Consumer Electronic Show）的親身經驗，都印證了這一點。我們與主要智慧型手機製造商的領導者，以及其他消費性電子與汽車系統領導者會面。我們聽到他們在 2018 與 2019 年曆年期間，將 3D 感測導入多個品牌、機型與應用的詳細規劃。中國、韓國與北美的消費性電子製造商正尋求以 3D 感測來強化安全性、實現擴增與虛擬實境，並加入其他新功能。鑑於這些製造商的產量，不難想像 3D 感測雷射的年度市場在未來 1 到 2 年內將超過 10 億美元。為把握這些市場機會，我們正快速提高在 3D 感測的研發投資，以及 VCSEL 與邊射型雷射的額外製造產能。事實上，鑑於冗長的認證時間，我們已在進行新設備的認證流程，以便在第四季啟動更高的產能，供應 2019 財年上半年交付。憑藉我們已驗證的製造可擴充性、已驗證的現場可靠度，以及新產品管線，我們具備良好條件，成為全球 3D 感測客戶的首選合作夥伴。

Turning to our optical communication business. Second quarter demand for optical communication products was highly varied between our different product lines. As highlighted earlier, Telecom pump laser sales achieved new record revenues. Gross revenues rebounded quarter-on-quarter. North American customers had strong demand, having worked down their ROADM inventories in prior quarters. We expect strong North American ROADM demand to continue in the quarters ahead. Chinese demand for ROADMs was strong in the second quarter, and we expect will grow throughout calendar year 2018 and 2019 as China continues its march towards large-scale domestic deployments. In contrast to pumps and ROADMs, coherent components and Datacom transceivers declined sequentially. We believe the long-term trends are favorable in our Optical Communications business. The growth in bandwidth across the world's data centers and communications networks is unrelenting. Network and cloud operators' only solution to deal with the enormous growth in data they are experiencing and on which their business models depend is to deploy more advanced, higher-performance optical networks.

接著談我們的光通訊業務。第二季對光通訊產品的需求在不同產品線之間差異很大。如先前所強調，電信泵浦雷射（Telecom pump laser）銷售創下新的營收紀錄。總營收較上一季回升。北美客戶需求強勁，因其在前幾季已消化 ROADM 庫存。我們預期北美 ROADM 的強勁需求將在未來幾季持續。中國第二季對 ROADM 的需求強勁，我們預期隨著中國持續邁向大規模國內部署，該需求將在 2018 與 2019 年曆年期間持續成長。與泵浦與 ROADM 相比，相干元件（coherent components）與資料通訊收發器（Datacom transceivers）則呈現季對季下滑。我們相信光通訊業務的長期趨勢仍然有利。全球資料中心與通訊網路的頻寬成長勢不可擋。網路與雲端營運商面對其所經歷、且其商業模式所依賴的龐大資料成長，唯一的解決方案就是部署更先進、效能更高的光網路。

And finally, turning to our commercial lasers business. Revenue increased significantly quarter-on-quarter to new record levels given -- driven by growth in both micromachining and kilowatt fiber lasers. Demand continues to be strong for both of these product lines, and we expect commercial lasers to be on a growth trajectory over the coming quarters.

最後，談到我們的商用雷射業務。在微加工（micromachining）與千瓦級光纖雷射（kilowatt fiber lasers）成長的帶動下，營收較上一季大幅增加並創下新高。這兩條產品線的需求仍然強勁，我們預期商用雷射在未來幾季將維持成長軌跡。

I've highlighted significant long-term trends that make the markets in which we participate increasingly dependent upon our photonics solutions. These trends, along with our investment in new products and technology and intimate relationships with industry-leading customers, create strong long-term growth opportunities for us. It is indeed an exciting time at Lumentum.

我已強調多項重要的長期趨勢，使我們所參與的市場愈來愈依賴我們的光子解決方案。這些趨勢，加上我們對新產品與技術的投資，以及與產業領先客戶的緊密關係，為我們創造了強勁的長期成長機會。對 Lumentum 而言，這確實是一個令人振奮的時刻。

I will now hand the call over to Aaron for more details on our financial results and our guidance for the third quarter of fiscal 2018.

接下來我將把電話會議交給 Aaron，請他更詳細說明我們的財務結果，以及我們對 2018 財年第三季的指引。

Thank you, Alan. Net revenue for the second fiscal quarter was $404.6 million, which increased 66.4% sequentially and 52.7% compared with the same period last year. The sequential growth was driven by the ramp of our 3D sensing products, Telecom pumps and ROADMs and strong demand for micromachining and kilowatt laser products. GAAP gross margin for the second quarter was 42.3%. GAAP operating margin was 22.4% and GAAP diluted net income per share was $3.17. The net income per share includes a onetime $124 million income tax benefit from the valuation allowance release, which was previously set up against our deferred tax assets several years ago. The release of reserves occurred at this time due to cumulative profits generated over the last 2.5 years as a standalone company.

謝謝你，Alan。第二個財政季度的淨營收為 4.046 億美元，較上一季增加 66.4%，較去年同期增加 52.7%。季對季成長主要由我們 3D 感測產品的放量（ramp）、電信泵浦與 ROADM，以及微加工與千瓦級雷射產品的強勁需求所帶動。第二季 GAAP 毛利率為 42.3%。GAAP 營業利益率為 22.4%，GAAP 稀釋後每股淨利為 3.17 美元。每股淨利包含一次性 1.24 億美元的所得稅利益，來自估值備抵（valuation allowance）回轉；該備抵數年前係針對我們的遞延所得稅資產所提列。本次回轉之所以發生，是因為我們作為獨立公司在過去 2.5 年累積產生的獲利。

Our second quarter non-GAAP gross margin was 44.9%, which increased 10.9 percentage points sequentially and 8 percentage points compared with the same period last year. Non-GAAP operating margin was $114.6 million, and operating margin for the second quarter was 28.3% and increased 16.5 percentage points sequentially. The increase in operating margin was primarily due to the 10.9 percentage point increase in gross margin from favorable mix and improved operating leverage from higher volume. Our second quarter operating margin performance demonstrates the strength of our operating model as volume increases. We delivered $86 million or 300% more operating income dollars sequentially on incremental revenue of $161 million. Non-GAAP net income was a record high of $107.8 million for the second quarter. Non-GAAP earnings per share was $1.67 based on a fully diluted share count of 64.6 million and included $900,000 of interest income and a $7.7 million tax expense.

第二季非 GAAP 毛利率為 44.9%，較上一季增加 10.9 個百分點，較去年同期增加 8 個百分點。非 GAAP 營業利益為 1.146 億美元，第二季營業利益率為 28.3%，較上一季增加 16.5 個百分點。營業利益率的提升主要來自兩項因素：產品組合有利帶動毛利率增加 10.9 個百分點，以及在更高出貨量下營運槓桿改善。我們第二季的營業利益率表現顯示，隨著規模提升，我們的營運模式具備強勁的效益。在營收增量 1.61 億美元的情況下，我們交付了 8,600 萬美元的營業利益，較上一季增加 300%。第二季非 GAAP 淨利創下新高，達 1.078 億美元。以完全稀釋後股數 6,460 萬股計算，非 GAAP 每股盈餘為 1.67 美元，其中包含 90 萬美元利息收入與 770 萬美元所得稅費用。

Now for some additional detail. Optical Communications revenue was $360.1 million, an increase of 73% sequentially and 52% compared with the same period last year. During the quarter, we significantly ramped consumer and industrial revenue, which includes 3D sensing, while Telecom was flat and Datacom declined as previously expected. Telecom revenue at $110.2 million was flat sequentially and declined 31% compared with the same period last year. Although Telecom did not grow, our industry-leading ROADMs increased 22% quarter-on-quarter. Datacom was $34.4 million and declined 24% sequentially and 49% compared with the same period last year. Consumer and industrial revenue at $215.5 million increased 312% sequentially and over 2,000% compared with the same period last year. The significant growth for consumer and industrial revenue came from our 3D sensing products.

現在補充一些額外細節。光學通訊營收為3.601億美元，較前一季成長73%，較去年同期成長52%。本季我們大幅拉升消費與工業營收（包含3D感測），而電信持平，資料通訊則如先前預期下滑。電信營收為1.102億美元，較前一季持平，較去年同期下滑31%。雖然電信未成長，我們業界領先的ROADM較上一季成長22%。資料通訊為3,440萬美元，較前一季下滑24%，較去年同期下滑49%。消費與工業營收為2.155億美元，較前一季成長312%，較去年同期成長超過2,000%。消費與工業營收的顯著成長來自我們的3D感測產品。

Optical Communications gross margin at 45% increased 10.3 percentage points sequentially from the favorable mix of products and higher volumes. Commercial lasers revenue was $44.5 million, an increase of 26% sequentially and an increase of 57% compared with the same period last year. The increase in volume was from both micromachining and kilowatt laser products. Second quarter commercial lasers gross margin was 44.7% and increased 14.7 percentage points sequentially. The commercial lasers gross margin returned to the mid-40% level, which reflects the longer-term profile we expect.

光學通訊毛利率為45%，受惠於產品組合較佳與出貨量提升，較前一季增加10.3個百分點。商用雷射營收為4,450萬美元，較前一季成長26%，較去年同期成長57%。出貨量增加來自微加工與千瓦級雷射產品。第二季商用雷射毛利率為44.7%，較前一季增加14.7個百分點。商用雷射毛利率回到40%中段水準，反映我們預期的長期輪廓。

Operating expenses totaled $67.2 million or 16.6% of revenue compared with $54.1 million or 22.2% of revenue for last quarter. R&D expense was $38.9 million and SG&A expense was $28.3 million. The increase in operating expenses was primarily due to our investments in new product programs, infrastructure investments to support growth and variable incentive compensations. We exited the second quarter with cash and short-term investments of $624.5 million, which increased $92 million sequentially. Capital equipment additions were approximately $26 million in Q2.

營業費用合計6,720萬美元，約占營收16.6%，相較上一季為5,410萬美元、約占營收22.2%。研發費用為3,890萬美元，銷售、一般及行政（SG&A）費用為2,830萬美元。營業費用增加主要來自我們對新產品專案的投資、支援成長的基礎設施投資，以及變動性獎酬。第二季結束時，我們的現金與短期投資為6.245億美元，較前一季增加9,200萬美元。第二季資本設備新增約2,600萬美元。

Now on to our guidance for the third quarter of fiscal 2018, noting again that all projections are on a non-GAAP basis. We project net revenue for the third quarter to be in the range of $280 million to $305 million with operating margin in the range of 15.5% to 18% and earnings per share to be in the range of $0.65 to $0.80. For Q3, we expect our non-3D sensing revenue to increase by $25 million to $35 million sequentially.

接著說明2018會計年度第三季的財測，再次提醒所有預測皆以非GAAP基礎呈現。我們預估第三季淨營收介於2.80億至3.05億美元之間，營業利益率介於15.5%至18%之間，每股盈餘介於0.65至0.80美元之間。就第三季而言，我們預期非3D感測營收將較前一季增加2,500萬至3,500萬美元。

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

現在我把電話交回給Chris，開始問答環節。

Thank you, Aaron.

謝謝你，Aaron。

I would like to ask everyone to limit discussion to 1 question and 1 follow-up. Kelly, let's begin the question-and-answer session.

我想請大家將討論限制在1個問題與1個追問。Kelly，我們開始問答環節。

(Operator Instructions) Our first question comes from Alex Henderson from Needham & Company.

(接線員指示) 我們的第一個問題來自Needham & Company的Alex Henderson。

I guess the problem, from our perspective, at this point, is how do we think through the ramp of that business and the seasonality of that business? Obviously, down a lot into the March quarter, but it looks like -- should we be thinking the June quarter is the seasonal trough? And then, could we actually have growth off of the fourth quarter as you expand the multiple lines, multiple vendors as we get into the calendar fourth quarter of the year? How do we think about the curve over the course of the year? Obviously, if it's a billion-dollar market in a year or 2. You guys have the lion's share of that, but what's the shape of that curve to deliver it?

我想從我們的角度來看，目前的問題是：我們該如何思考該業務的爬坡以及其季節性？顯然在3月季度大幅下滑，但看起來——我們是否應該把6月季度視為季節性谷底？然後，當你們擴展到多條產線、更多供應商，進入日曆年度第四季時，我們是否可能在第四季之後出現成長？我們該如何看待全年曲線的走勢？顯然，如果在1到2年內這是一個10億美元的市場，你們占了其中的大部分，但要實現它，這條曲線的形狀會是什麼？

Yes. Alex, good question. Thanks. I think -- we don't guide more than 1 quarter at a time, but I'd tell you, as I said in my introductory comments, we're investing today both in edge-emitters as well as additional capacity for VCSELs in anticipation of the second half of the year -- calendar year that has been extremely strong. Whether some of that gets pulled into the June quarter or not, it's hard to say. I think it really depends upon both our Android customers' ramps and when they actually take place. And as I said, we have a few million dollars in the March quarter that should increase in the June quarter, but I wouldn't say substantially. And then it all comes down to really how the seasonality affect it and do we need to start producing earlier in the June quarter to be able to meet the really massive expected ramp in the second half of the year.

是的。Alex，問得好。謝謝。我想——我們一次不會提供超過1季的指引，但我可以告訴你，如同我在開場評論中所說，我們今天正在投資邊射型（edge-emitters）以及增加VCSEL產能，以因應下半年——也就是日曆年度下半年——預期將非常強勁。其中有些是否會提前到6月季度，還很難說。我認為這很大程度取決於我們Android客戶的爬坡，以及它們實際發生的時間點。如我所說，我們在3月季度有數百萬美元的營收，6月季度應會增加，但我不會說是大幅增加。接下來就要看季節性如何影響，以及我們是否需要在6月季度更早開始生產，以便滿足下半年預期非常龐大的爬坡需求。

So just -- if I could follow up on that. So there sounds like there's 2 variables into the back half. One, when do you fill inventory in anticipation of the back-half ramp, and two, is the back-half ramp suppliable? I.e., can you deliver enough volume industry wide to make the forecasts in the back? Should -- it sounds like it should be tight even as you're adding capacity. Is that the right way to think about it? And then, the only other piece is, can you give us some sense of where do you stand on pricing? That's the other variable that people don't have a handle on.

那我再——如果可以追問一下。聽起來下半年有兩個變數。第一，你們何時為了下半年爬坡而提前備貨；第二，下半年的爬坡是否供應得上？也就是說，從全產業角度，是否能交付足夠的量來達成下半年的預測？即使你們在增加產能，聽起來供應仍會吃緊。這樣理解對嗎？另外唯一還有一點是，你們能否讓我們了解一下目前的定價狀況？這是另一個大家掌握不清的變數。

Yes. I think, as we demonstrated in the end of 2017, we can add capacity very rapidly and ramp to volumes that are pretty steep. And that's really enabled by both our manufacturing process as well as our design to hit high yields. So I'd say, whether we build inventory in the June quarter for the second half of the year, it's still being worked out. I do expect that we will start higher levels of production in the second calendar quarter to be able to meet the needs and demand in the third calendar quarter and fourth calendar quarter. As far as your question on pricing, we stay away from that. I will say, though, that I think that through continued improvements in yields and cost reduction of our supply chain, we expect that the gross margins will still be very healthy as we go forward into fiscal 2019.

是的。我認為，正如我們在2017年底所展現的，我們可以非常快速地增加產能，並把出貨量拉升到相當陡峭的水準。這主要得益於我們的製造流程，以及我們為達到高良率所做的設計。所以我會說，我們是否會在6月季度為下半年建立庫存，仍在研議中。我確實預期我們會在第二個日曆季度開始更高水準的生產，以滿足第三與第四個日曆季度的需求。至於你問到的定價，我們會避免談這個。不過我會說，透過持續提升良率與供應鏈降本，我們預期在邁入2019會計年度時，毛利率仍將維持非常健康的水準。

Our next question comes from Joseph Wolf from Barclays.

我們的下一個問題來自巴克萊（Barclays）的 Joseph Wolf。

I guess as a follow-on to that prior question. If you think about the trajectories and what you're thinking about as you add capacity for the edge, what kind of mix do you think you're going to have customer-wise if we look out 18 months?

我想作為對前一個問題的延伸。如果你從發展軌跡來看，以及在你為邊緣（edge）增加產能時的思考，若我們把時間拉到 18 個月後，你認為在客戶組合方面會是什麼樣的配置？

That's a good question. I would say it's very dependent upon the number of models that the Android customers put 3D sensing on. And they're very, very secretive with regards to that. So it's hard to say. I will say, though, that I would expect 18 months from now that we'll have substantial edge-emitting revenues. Even 12 months from now, substantial edge-emitting revenues. So it'll certainly be much more balanced as we bring on multiple customers. Some of which will use VCSELs and the others will be using edge-emitters.

這是個好問題。我會說這非常取決於 Android 客戶有多少機型會導入 3D 感測。而且他們在這方面非常、非常保密。所以很難說。不過我會說，我預期在 18 個月後，我們將會有相當可觀的邊緣發射（edge-emitting）營收。甚至在 12 個月後，也會有相當可觀的邊緣發射營收。因此，隨著我們導入多家客戶，整體會變得更為均衡。其中一些會使用 VCSEL，其他則會使用邊緣發射器（edge-emitters）。

Will the margin profile for the company be the same based on the strategy of manufacturing in-house versus outsourcing as the edge comes online?

隨著邊緣發射產品上線，基於公司採取自製（in-house）相對於外包（outsourcing）的製造策略，公司的毛利率結構會維持相同嗎？

I think it won't be dramatically different. I think that the manufacturing structure and partnerships we have on VCSELs today is extremely efficient, and I would put our supply chain up against any vertically integrated supplier today. The edge-emitters, I think is unique in that the process and technology that we have for edge-emitters allows us to hit high volumes at, I think, pretty aggressive cost. So I think that the margin profile will be similar.

我認為不會有戲劇性的差異。我認為我們目前在 VCSEL 的製造架構與合作夥伴關係非常高效；就供應鏈而言，我們可以和任何一家當今垂直整合的供應商相比。至於邊緣發射器，我認為其獨特之處在於：我們在邊緣發射器的製程與技術，讓我們能以我認為相當具競爭力的成本達到高產量。所以我認為毛利率結構會相近。

Our next question comes from Patrick Newton from Stifel.

我們的下一個問題來自 Stifel 的 Patrick Newton。

Alan, Aaron and Chris, congratulations on the solid quarter. I guess on 3D sensing. If we look at the 3D sensing supplier landscape, you have a competitor that's vertically integrating sensor at market in 2019, another has an aggressive ramp that looks unlikely to be able to achieve production they need to carve out the largest customers' design cycle the back half of this year, and you have a final one that's only supplying the flood arrays. So you're in a very enviable position. I'm curious if you've been able to turn this position into a longer-term supply agreement with your key customer. And given the ramp you see in the second half of the year, you did talk to expanding capacity with long lead times. Would you expand capacity without some form of guaranteed share or units?

Alan、Aaron 和 Chris，恭喜本季表現穩健。我想問 3D 感測。如果我們看 3D 感測供應商的競爭版圖，你們有一個競爭對手在 2019 年把感測器垂直整合並推向市場；另一家有很積極的爬坡計畫，但看起來不太可能達到其所需的產量，以在今年下半年最大客戶的設計導入週期中取得一席之地；還有最後一家只供應泛光陣列（flood arrays）。所以你們處在非常有利的位置。我很好奇，你們是否已能把這個優勢轉化為與關鍵客戶的長期供貨協議。另外，考量你們看到今年下半年的拉升（ramp），你們也談到擴產且交期很長。如果沒有某種形式的保證市占或保證出貨量，你們還會擴產嗎？

Yes. Thanks, Patrick. I hesitate to comment on our negotiations or contracts with any customer, but I would say that our confidence is high enough that we are spending time, resources and capital on expanding our production capability, both on our edge-emitters as well as on our VCSELs and with our partners that we use in our supply chain. So I think our confidence is high that the demand will be substantially higher than it was in 2017. And that we should maintain a very high level share of that business.

會的。謝謝你，Patrick。我不太願意評論我們與任何客戶的談判或合約細節，但我會說，我們的信心高到足以讓我們投入時間、資源與資本來擴充生產能力，包含邊緣發射器以及 VCSEL，也包括我們供應鏈中合作夥伴端的產能。因此我認為我們很有信心，需求將會顯著高於 2017 年。而且我們應該能維持該業務非常高的市占水準。

Great. And then as my follow-up, I believe you said that non-3D sensing revenue is actually going to increase by $25 million to $35 million sequentially. So I'm calculating that your implicit March 3D sensing guide is about $60 million. Is that accurate? And if so, if we balance Android and EMLs and the potential for a build in June ahead of the back half, could June trends actually be flat or maybe even up? And then on the flip side of that, that sequential uptick in the non-3D sensing business is pretty impressive given seasonality. So you spoke to lasers being higher, but can you walk through some of the optical drivers?

很好。接著作為追問，我記得你提到非 3D 感測營收將會季增 2,500 萬到 3,500 萬美元。所以我推算你們 3 月季度的 3D 感測隱含指引大約是 6,000 萬美元。這樣正確嗎？如果是的話，若我們平衡 Android 與 EML（邊緣發射雷射）以及在下半年之前 6 月可能的備貨（build），6 月的趨勢是否可能持平，甚至略為上升？另一方面，考量季節性，非 3D 感測業務的季增幅度相當亮眼。你提到雷射會更高，但能否說明一些光學端的成長驅動因素？

Yes. So Patrick, thank you. In terms of the drivers for the non-3D sensing being up, Telecom pumps, ROADMs are very, very strong. Our industrial lasers, commercial lasers for both micromachining and kilowatt lasers, we have more demand that we can supply at this point in time. Both kind of picked up. Our commercial lasers will exceed $50 million. And that's been a target we've been pursuing for a long, long time. Healthy margins as well. In terms of your calculation at a high level for 3D sensing, what we can say is our 3D sensing will be materially down or significantly down here in the quarter, probably 60 -- 60 to 5 -- 5% or so down. So in terms of the exact number, we're not going to comment on the exact number, but from the seasonality standpoint, yes. The March quarter and June quarter are seasonally lower periods. However, as Alan had mentioned in his prepared remarks and in some of the Q&A already, we look at the June quarter with ramps heading into the back half of calendar '18. We're adding capacity and so we're not going to -- we only guide one quarter at a time, but we feel pretty confident on where this business is going balance of calendar '18.

好的。Patrick，謝謝你。就非 3D 感測成長的驅動因素而言，電信泵浦（Telecom pumps）與 ROADM 非常、非常強勁。我們的工業雷射、商用雷射（涵蓋微加工與千瓦級雷射），目前需求大於我們能供應的量。兩者都算是回升。我們的商用雷射營收將超過 5,000 萬美元。這是我們追求了很久很久的目標。毛利率也很健康。至於你在 3D 感測的高層次推算，我們能說的是：本季 3D 感測將會明顯下滑或大幅下滑，可能下滑約 60%——大概 60% 到 5——5% 左右。因此就確切數字，我們不會評論確切數字，但從季節性角度來看，是的。3 月季度與 6 月季度在季節性上是較低的期間。不過，如同 Alan 在事先準備的講稿以及先前部分問答中提到的，我們看待 6 月季度時，是以 2018 年下半年（曆年 '18 下半年）的拉升為前提。我們正在增加產能，因此我們不會——我們一次只提供一季的指引，但我們對 2018 年剩餘期間這項業務的走向相當有信心。

Our next question comes from James Kisner from Loop Capital Markets.

我們的下一個問題來自 Loop Capital Markets 的 James Kisner。

So I appreciate your comments on ROADMs. I was wondering if you're able -- give us a little more detail. Maybe talk about where the revenue kind of is now. I mean, you kind of peaked around $60 million a quarter. Are we there yet? And -- or in this last quarter, we hit that kind of high-water mark and you're close to it? And just wondering the longer-term outlook, I mean, could ROADMs hit a kind of annual high here in calendar 2018?

我很感謝你們對 ROADM 的評論。我想知道你們是否能——提供更多細節。也許談談目前營收大概在哪個水位。我的意思是，你們曾在單季大約 6,000 萬美元左右見頂。我們現在到那個水位了嗎？或者在上一季，我們已經達到那個高水位、並且接近它？也想請教較長期的展望，也就是 ROADM 是否可能在 2018 年曆年出現某種年度高點？

Yes. Thanks, James. So in terms of ROADMs, we're not going to give out the specific number, primarily because we're not doing that for any of these different products. But yes, ROADMs bounced back. It was strong. We were up 22% or so. We saw strength in both North America as well as in China. China was about 20% of the total ROADM volume. So a healthy rebound there as well. And as we have been mentioning in previous calls, the ROADM deployment in China, we believe is going to occur here in the back half of calendar '18 and through calendar '19 as they go and build out a lot of the networks and -- in a lot of the large cities going forward. And in terms of North America, we're beyond a lot of the inventory rebalancing that has occurred the last couple of quarters, and we're seeing strong demand from our customers who deploy into the folks in North America.

是的。謝謝你，James。關於 ROADM，我們不會提供具體數字，主要是因為我們對這些不同產品都不提供具體數字。但沒錯，ROADM 已經反彈。表現很強。我們成長了約 22% 左右。我們在北美以及中國都看到強勁動能。中國約占 ROADM 總出貨量的 20%。因此那邊也有健康的回升。而且如同我們在先前電話會議中提到的，我們認為中國的 ROADM 佈建將會在 2018 年曆年下半年發生，並延續到 2019 年曆年，因為他們將在未來於許多大型城市建置大量網路。至於北美，我們已經度過了過去幾季所發生的多數庫存再平衡（inventory rebalancing），並且看到我們客戶的強勁需求；這些客戶會部署到北美的終端客戶。

Yes. I think maybe just to add to that, we are adding capacity for ROADMs today, so I would expect, to your point, our ability to get a new peak level of ROADM revenue this year is very highly likely.

是的。我想也許補充一點，我們目前正在為 ROADM 增加產能，所以如你所說，我預期我們今年達到 ROADM 營收新高峰水準的能力非常有可能。

Great. And then just one follow-up. On Datacom, the issue there is becoming pretty well known on CWDM4. I'm just wondering if you could comment on your participation just to monitor trajectory of that business in calendar ‘18.

很好。接著再追問一個。關於 Datacom，那邊的問題在 CWDM4 上已經相當廣為人知。我只是想請你評論一下你們的參與情況，以便觀察該業務在 2018 年曆年的走勢。

Yes. I think the CWDM4 business is a highly priced competitive. As I said in earlier earnings calls, we have a very focused effort in our development team to introduce an extremely low-cost version of that product to be able to compete at the hyperscale level. And today, we don't have that to make it make sense to have a big volume at the hyperscale guide. But later this summer, we'll have a product that we think we can have decent margins or good margins selling at the hyperscale level at the prices they expect. So I'd say that it's challenging today, but we have a plan to invest it in the coming quarters.

是的。我認為 CWDM4 業務是一個高定價的競爭市場。如我在先前的財報電話會議中所說，我們的研發團隊正非常聚焦地投入，推出該產品的極低成本版本，以便能在超大規模（hyperscale）層級競爭。而目前我們還沒有這樣的產品，因此在超大規模指引所對應的層級上，做大出貨量並不合理。但在今年夏末，我們會有一款產品，我們認為在超大規模層級、以他們預期的價格銷售時，仍能取得不錯的毛利或良好的毛利。所以我會說目前確實具挑戰性，但我們有計畫在接下來幾個季度投入。

Our next question comes from Tim Savageaux from Northland Capital Markets.

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

Congrats on the strong quarter and the cash generation. I guess I'm looking to dig a little bit deeper into the semantics of really massive, I guess. And I did a little work on that, actually, earlier this week and making some assumptions around unit volumes, concluded that the total dollar value of the opportunity with -- just with your largest customer, could more than double, substantially more than double year-over-year, say, from the second half of '18 versus '17. So we're hearing suppliers -- I think you referenced maybe up and down the food chain, industry leaders talking about these types of ramps in the second half. You mentioned a couple of times an increase in production starts heading into Q4, although I'd be curious as to increase relative to what? Perhaps, an increase relative to what you just reported here in the December quarter. So I've thrown out a few metrics there. You can take your pick, but I'm trying to get a better sense of the type of year-over-year growth dynamic that you might be looking for kind of second half '18 versus what you've just reported second half '17 and whether that kind of your doubling tight metric is reasonable.

恭喜本季表現強勁以及現金創造能力。我想更深入探討一下「非常龐大」這個說法的語意。我本週稍早其實做了一些分析，基於對單位出貨量的若干假設，我得出的結論是：僅就你們最大客戶而言，這個機會的總美元價值可能會年增超過一倍，甚至遠超過一倍，例如以 2018 年下半年相較 2017 年下半年來看。我們也聽到供應商——我想你提到可能是整個供應鏈上下游——產業領導者在談論下半年這類的放量爬坡。你也提到幾次，進入第四季時會增加生產啟動量（production starts），不過我想知道是相對於什麼的增加？也許是相對於你們剛在 12 月季度所報告的水準。我提出了幾個衡量指標。你可以選擇回答其中之一，但我想更清楚了解：你們在 2018 年下半年相較於剛報告的 2017 年下半年，可能期待的年增成長動能類型，以及我提出的「翻倍」這個緊密指標是否合理。

Yes. I think if you just look at units, models that should have 3D sensing capabilities in it, you're spot on and that unit volume should more than double. And then you layer on top that the market for Android and the timing of when they'll be introducing 3D sensing into their product lines, I think you could have more than double the -- of that potential market in the second half compared to what the second half of fiscal -- or rather, calendar '17. So I think your numbers are aligned with our expectations about market growth.

是的。我認為如果你只看具備 3D 感測能力的機型單位數，你的判斷非常準確，該單位出貨量應該會超過翻倍。然後再把 Android 市場以及他們何時會在產品線中導入 3D 感測的時點疊加進來，我認為你在下半年看到的潛在市場規模，可能會是——相較於會計年度下半年——更正，是相較於 2017 年曆年下半年——超過翻倍。所以我認為你的數字與我們對市場成長的預期一致。

Our next question comes from Troy Jensen from Piper Jaffray.

下一個問題來自 Piper Jaffray 的 Troy Jensen。

So on the ROADMs being up sequentially in March, just to be clear, you expect both the U.S. and China growth?

關於 ROADM 在 3 月季度較前一季成長，為了確認清楚，你預期美國與中國都會成長嗎？

Yes.

是的。

In the U.S., can you say whether or not Verizon seems to be accelerating orders?

在美國方面，你能否說明 Verizon 的訂單看起來是否正在加速？

With staying away from specific customers, I'd say that North America metro is seeing a pickup in deployments and demand expectations for us in both the March quarter as well as the June quarter.

在不針對特定客戶的前提下，我會說北美都會區（metro）在部署上正看到回升，且我們在 3 月季度以及 6 月季度的需求預期都在上升。

Okay. Perfect. And then maybe one for Aaron here. I'm not an accounting expert, by any means, but guess I thought when you take the deferred tax asset out of the balance sheet, you need to start reporting a full tax rate. And I understand you won't be -- on the cash flow statement, you'll still be absorbing the NOLs. But should we be modeling a higher tax rate here in future quarters?

好的。完美。接著可能問 Aaron 一題。我完全不是會計專家，但我原本以為當你把遞延所得稅資產從資產負債表中移除後，就需要開始申報完整的稅率。我理解在現金流量表上，你們仍會吸收 NOL（淨營運虧損結轉扣抵）。但我們在未來幾季是否應該用較高的稅率來建模？

At this point in time, Troy, I think our tax rate is going to be similar to what we've seen in the past, so somewhere between 6% and 10% depending upon the geography of where the income is generated. But when we separated from JDSU, we had a tax-optimized structure. And so I think we're still in good shape. We're going to be evaluating the new tax legislation over the next few months. And there could be some pluses and minuses here or there, but I don't think there's going to be anything material at this point in time.

就目前而言，Troy，我認為我們的稅率會與過去相近，大約在 6% 到 10% 之間，取決於收入產生的地理區域。但當我們從 JDSU 分拆時，我們採用了稅務最佳化的架構。因此我認為我們目前仍處於良好狀態。我們會在接下來幾個月評估新的稅改法案。可能會有一些正面或負面的影響，但就目前來看，我不認為會有任何重大影響。

Our next question comes from Simon Leopold from Raymond James.

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

I want to make sure I'm really understanding your commentary of non-3D sensing business being up $25 million to $35 million. You were kind enough to indicate lasers would be over $50 million, so that gives us some boundary around where the rest of it comes from. It sounds like strength from ROADMs and pumps would need to be in the neighborhood of $20 million sequential growth to get to that March suggestion. I just want to make sure I'm interpreting all of this correctly, given that March is typically a tough seasonal quarter on price resets. Did I get the math right here?

我想確認我是否真正理解你對非 3D 感測業務增加 2,500 萬到 3,500 萬美元的評論。你很貼心地指出雷射會超過 5,000 萬美元，這讓我們對其餘部分的來源有了一些界線。聽起來 ROADM 與泵浦的強勁表現，需要大約 2,000 萬美元的季增，才能達到你對 3 月季度的建議。我想確認我對這些的解讀是否正確，因為 3 月通常是價格重置下、季節性偏弱的一季。我這裡的計算對嗎？

Yes. That's correct, Simon. In terms of the commercial lasers product lines, both micromachining and kilowatt lasers, we have more demand than we can satisfy. And so we're going to be growing in the $50 million range. In terms of the Telecom product line, very strong demand for Telecom pumps. We can't produce enough in some cases. And then in terms of ROADMs as well for both North America and China, we have demand picking up. And so as Alan had mentioned, we're going to be adding capacity as we look forward here through calendar '18.

是的。Simon，你說得沒錯。就商用雷射產品線而言，無論是微加工（micromachining）或千瓦級雷射（kilowatt lasers），需求都超過我們能滿足的供給。因此我們將在約 5,000 萬美元的範圍內成長。就電信產品線而言，電信泵浦需求非常強勁。在某些情況下我們的產能不足。另外就 ROADM 而言，北美與中國的需求也在回升。因此如 Alan 所提到的，展望 2018 年曆年接下來的時間，我們將會增加產能。

Okay. And in terms of where the 3D sensing business is going. I appreciate you don't want to give us full June guidance, but just to give us order magnitude of what kind of patterns to expect given sort of product cycles, new customer wins. Is it reasonable to think of June as sort of the bottom for 3D sensing, given sort of normal patterns of orders that it could be roughly half of the March sales and then ramp after that? Is that the right way to think about June in 3D?

好的。那就 3D 感測業務的走向而言。我理解你們不想提供完整的 6 月指引，但能否就產品週期、新客戶拿下等因素，給我們一個大致量級，讓我們知道可能會出現什麼樣的型態？把 6 月視為 3D 感測的谷底是否合理？依照一般訂單的正常模式，它可能大約是 3 月銷售額的一半，之後再爬升？用這種方式來看 3D 的 6 月季度，是否正確？

I would say that we don't guide more than a quarter at a time, but I'd say that the first half of the calendar year is the trough. And how that spreads between the March quarter and June quarter is still to be determined. So I think we're expecting and preparing for a very rapid growth in the second half. And that means ramping up production again with wafer starts in the April, May time frame. So I think second half is what we're focused on, and whatever happens in the March and June quarter is what's going to happen.

我會說我們一次不會指引超過一個季度，但我會說曆年的上半年是谷底。而這個谷底在 3 月季度與 6 月季度之間如何分布，仍有待觀察。所以我認為我們預期並且正在為下半年非常快速的成長做準備。這意味著在 4 月、5 月期間以晶圓投片重新拉升產能。因此我們關注的是下半年，而 3 月與 6 月季度會發生什麼就讓它發生。

And then a longer-term question. There's been a lot of press around the Chinese government trying to reduce the nation's dependence on imported optical components. And they've named a number of categories, which includes 3D as well as ROADMs as areas where they'd like to develop domestic supply. We've generally thought about this -- all of these technologies as pretty hard to do. And so it's not an easy barrier. But wanted to get your perspective of how this may differ from your past expectations, how you gauge the threat and what sort of trend you expect in terms of China reducing its dependence on imported products such as yours?

接著是一個較長期的問題。近期有很多報導提到中國政府試圖降低國家對進口光學元件的依賴。他們點名了多個類別，其中包括 3D 以及 ROADM，作為希望發展國內供應的領域。我們一般認為——這些技術都相當難做。因此門檻並不容易跨越。但想請教你們的觀點：這與你們過去的預期有何不同？你們如何評估威脅？以及你們預期中國在降低對像你們這類進口產品依賴方面，會呈現什麼樣的趨勢？

Hey, Simon. This is Chris. I think in the products that you've highlighted, 3D sensing and ROADMs, while there may be some objectives of having domestic supply in China, these are products that are quite challenging to make a lot of intellectual property where, in the case of ROADMs, over the years, have seen fewer competitors, not more competitors emerging. We think that's a space where there's probably going to be limited developments in China domestically. We think the -- where we'll continue to see China supply develop around is probably around transmission products, whether that be Datacom or Telecom at the module level. And so that's why we're heavily focused on ensuring that we have world-class and world-leading component capability to be able to either compete at the module level or in areas where we're challenged due to government support in China, to be able to provide at the component level and still get our fair share of the big spend in China.

嗨，Simon。我是 Chris。我認為就你提到的產品——3D 感測與 ROADM——雖然中國可能有一些建立國內供應的目標，但這些產品製造難度很高，且涉及大量智慧財產；以 ROADM 為例，多年來我們看到的是競爭者變少，而不是有更多競爭者出現。我們認為這個領域在中國國內可能只會有有限的發展。我們認為——中國供應鏈持續發展的方向，可能會是在傳輸產品上，不論是資料通訊或電信，在模組層級。因此我們非常專注於確保我們具備世界級、領先的元件能力，能夠在模組層級競爭；或是在因中國政府支持而使我們在某些領域面臨挑戰時，仍能在元件層級提供產品，並在中國龐大的支出中取得我們應得的份額。

Our next question comes from Doug Clark from Goldman Sachs.

我們的下一個問題來自高盛（Goldman Sachs）的 Doug Clark。

Just one quick question on 3D sensing. Can you give us an update on what your expected timing for the auto adoption is?

關於 3D 感測我只有一個簡短問題。你能否更新一下你們預期汽車端採用的時間點？

Oh, it's longer term. I'd say that it's not meaningful revenue probably until 2020 calendar year because there's none.

喔，那是比較長期的。我會說大概要到 2020 曆年才可能有具意義的營收，因為目前沒有。

Okay. Okay. And then a question or a clarification on some comments that you made on China kind of ramping ROADM deployments throughout the year. Is this also an indication of your broader expectations just for China procurement across kind of modules and transceivers for the Telecom business? Or is this a more ROADM-specific comment and expectation?

好的。好的。另外想就你剛才提到中國在全年逐步加速 ROADM 部署的說法，問一個問題或做個釐清。這是否也代表你們對中國在電信業務中、跨模組與收發器等採購的更廣泛預期？還是這只是更偏向 ROADM 的特定評論與預期？

Yes. Our comment on ROADMs was really more the look at deployments of ROADMs as incremental opportunity for us. And we believe we're capturing a very large share of the high-end ROADM deployments in China. I'd say that China, overall, has reduced inventory levels. So we're encouraged by that in the non-ROADMs space. But they're -- we're struggling to satisfy the ROADM demand that we have today for China. So I think longer term, as major deployments happen -- I mean, we're adding capacity to be able to address that. And that's why I said earlier that we believe this year, we could achieve a new record level of ROADM revenue.

是的。我們對 ROADM 的評論，主要是把 ROADM 的部署視為我們的增量機會。我們相信我們在中國高階 ROADM 部署中拿下了非常大的市占。我會說中國整體已降低庫存水位。因此在非 ROADM 領域我們對此感到鼓舞。但就 ROADM 而言——我們目前在滿足中國的 ROADM 需求上仍然吃緊。所以我認為長期來看，隨著重大部署發生——我的意思是，我們正在增加產能以因應。這也是我先前說我們相信今年 ROADM 營收可能創下新高的原因。

Okay. That makes sense and that helps. Final question. Just with an influx of cash and just a more cash-generative business, can you give us an updated view on M&A? Or potential kind of product adjacencies? Or supply -- capacity adjacencies that might be interesting?

好的。這很合理，也很有幫助。最後一個問題。在現金大量流入、且業務更能產生現金的情況下，你能否更新一下你們對併購（M&A）的看法？或是可能的相鄰產品領域？或是供應——產能相鄰領域中，哪些可能有趣？

Yes. So in terms of M&A and cash generation, Doug. So we continuously evaluate our capital allocation strategies and our uses of cash. And in terms of strategic alternatives, the industry, probably, will consolidate at some point in time. The industry structure needs some change. But in terms of being able to discuss anything at this time, we're not prepared to talk about anything specifically. But in terms of the cash generation, we are pleased with what we've achieved here in the quarter. And it highlights the operating model and the strength of what we're able to produce here as volume increases.

是的。Doug，就併購與現金創造而言。我們會持續評估資本配置策略以及現金用途。就策略選項而言，這個產業可能在某個時間點會整併。產業結構需要一些改變。但就目前能否討論任何事情而言，我們還沒有準備好具體談任何項目。不過就現金創造而言，我們對本季度所達成的成果感到滿意。這也凸顯了營運模式，以及隨著出貨量增加我們所能展現的產出能力與強度。

Our next question comes from George Notter from Jefferies.

我們的下一個問題來自 Jefferies 的 George Notter。

I guess I wanted to ask about 3D sensing orders and aggregate. I think last quarter, you guys talked about having received $300 million in orders and aggregates since the 3D sensing opportunity really emerged. Can you update that number now, just out of curiosity? And then separately, I guess I had a question about the upside in the quarter on 3D sensing. Any more you can provide in terms of -- was that driven by yield improvements? Was it driven by just raw increases in capacity? And then any gating factors as we look forward as you think about capacity on 3D sensing?

我想問的是 3D 感測訂單與累計的情況。我記得上個季度你們提到，自從 3D 感測機會真正浮現以來，你們累計已收到 3 億美元的訂單。能否出於好奇更新一下目前這個數字？另外，我也想問本季度 3D 感測超預期的部分。你們能否提供更多資訊——這是由良率改善所帶動嗎？還是單純由產能的原始增加所帶動？以及往前看，當你們思考 3D 感測產能時，有哪些關鍵限制因素？

Yes. We gave specifics on the backlog previously just to let you know that our guidance was founded on orders we had in house. We're not going to do that anymore. We don't give booking updates on any product lines, so we're not going to do that. I will say that during the quarter, we did receive significant orders. So that's why we believe that we're in good shape for the first half of the calendar year. And as far as upside in the December quarter, I think it was really a matter of strong demand and our ability to ramp at high yields on the 2 products that we have in volume. So we're very pleased with the progress that the team has performed and expect us to continue to perform at even higher yields and lower costs to be able to maintain those nice margins.

是的。我們先前提供了在手訂單（backlog）的具體細節，只是想讓各位知道，我們的指引是建立在我們已經拿到手的訂單之上。我們之後不會再這麼做了。我們不會針對任何產品線提供接單（booking）更新，所以我們也不會再提供這類資訊。我可以說的是，在本季期間，我們確實收到相當可觀的訂單。因此我們相信，我們在曆年上半年會處於良好狀態。至於 12 月季度的上行空間，我認為主要是強勁需求，以及我們對目前已量產的兩項產品，能以高良率加速擴產的能力。因此我們對團隊所展現的進展感到非常滿意，並預期我們將持續以更高良率與更低成本來維持這些不錯的毛利率。

Our next question comes from Thejes Venkatesh from UBS.

下一個問題來自 UBS 的 Thejes Venkatesh。

3D sensing question from me as well. We know you're at 40 -- above $40 million of 3D sensing revenue in the October month. And then generated $216 million for the whole quarter. So based on that, it looks like you have $1 billion of annual 3D sensing VCSEL capacity already, implying you can handle doubling demand next year potentially. And you're still talking about adding additional capacity. So can you sort of help reconcile that?

我也有一個關於 3D 感測的問題。我們知道你們在 10 月單月的 3D 感測營收已達 4,000 萬美元以上。而整個季度則創造了 2.16 億美元。因此依此看來，你們目前的 3D 感測 VCSEL 年產能似乎已達 10 億美元，意味著你們可能可以應付明年需求倍增。但你們仍在談要再增加額外產能。你們能否協助我們釐清這之間如何一致？

Yes. So just one clarity. The $216 million was our consumer -- with our industrial diode laser business included with our 3D sensing. So total 3D sensing was just over $200 million. So you're right. We did $160 million in the November-December time period. I'd say that we're adding capacity because we think it's going to be even bigger. But it's also seasonal, so you can't just expect to build $80 million a quarter to get to -- $80 million a month to get to $1 billion market. I'd the other thing is that we are introducing edge-emitting lasers, which uses a different supply chain and different technology. So we have to add capacity for both VCSEL to be able to hit the peak demand as well as for edge-emitters that we're starting to ramp in the 2019 time frame that we'll see first real revenue this quarter.

是的。先澄清一點。2.16 億美元是我們的消費性業務——其中包含我們的工業二極體雷射業務，並與 3D 感測合併計入。因此純 3D 感測合計略高於 2 億美元。所以你說得沒錯。我們在 11–12 月期間做了 1.6 億美元。我會說我們之所以增加產能，是因為我們認為規模會更大。但它也具有季節性，所以你不能只是假設每季做 8,000 萬美元——或每月做 8,000 萬美元——就能達到 10 億美元市場。另外一點是，我們正在導入邊射型雷射（edge-emitting lasers），這需要不同的供應鏈與不同的技術。因此我們必須同時為 VCSEL 增加產能以滿足尖峰需求，也要為邊射型產品增加產能；我們預計在 2019 年時間框架開始爬坡，而本季將看到第一筆真正的營收。

Got it. And just a follow-up. Looks like the profitability of this business is better than previously thought. Can you talk a bit about how you're thinking about competition in fiscal '19? And if there's potential to continue improving yields?

了解。再追問一下。看起來這項業務的獲利能力比先前預期更好。你能談談你們如何看待 2019 會計年度的競爭態勢嗎？以及良率是否有機會持續改善？

Yes. I mean -- I think we're always fearful of competition. That's the nature of the business we're in. And the only way we can compete effectively is to continue to drive costs down. We believe that our supply chain is super-efficient, and we'll -- I'll put it head-to-head with any vertically integrated supply chain. And so I think from that perspective, even with price reductions, we expect that the margin profile of 3D sensing across our product line -- across our customer base is going to be lighter as we go into 2019.

是的。我的意思是——我想我們一直都會擔心競爭。這就是我們所處產業的本質。而我們能有效競爭的唯一方式，就是持續把成本降下來。我們相信我們的供應鏈非常高效率，而且我們——我願意把它拿來與任何垂直整合的供應鏈正面比較。因此從這個角度來看，即便有降價，我們預期 3D 感測在我們整體產品線——以及整體客戶基礎上的毛利結構，在進入 2019 年時會較為偏低。

Our next question comes from Mark Kelleher from D. A. Davidson.

下一個問題來自 D. A. Davidson 的 Mark Kelleher。

I just want to look at the gross margins a little bit. Very strong sequential uptick. And you mentioned that that's in mix. And I'm kind of curious as to how we should look at the range of gross margin going forward given the seasonality of your VCSEL sales? Is there a cycle that goes through? Are there -- or is the ROADM sales and the pump lasers? Is that pulling it up as well? Can you just tell us some puts and takes on what we should look for in gross margin?

我想稍微談一下毛利率。季對季大幅上升，非常強勁。你提到這是產品組合（mix）的影響。我有點好奇，考量你們 VCSEL 銷售的季節性，我們應該如何看待未來毛利率的區間？是否存在某種循環？或者 ROADM 的銷售與泵浦雷射（pump lasers）也在拉升毛利率？你能否談談毛利率的主要正負因素，讓我們知道該觀察什麼？

So in terms of the margin in commercial lasers, product lines. So we were 44.7% in Q2 or so. And we believe we're going to be in that range, and our longer-term model has us going towards 50% over time. More of the volume was weighted towards Optical Communications, primarily because of the big quarter we had with 3D sensing. We had indicated in the past that our 3D sensing gross margins would be over our corporate average, and they were significantly over our corporate average -- our historical corporate average. In terms of going forward, so it's going to be a function of the mix of 3D sensing against our total volume as well as the mixture of commercial lasers as well. Our Telecom pumps and ROADM product lines have good gross margins as well, which should help us as we go forward.

就商用雷射各產品線的毛利率而言。我們在第二季大約是 44.7%。我們相信未來會維持在這個區間，而我們的長期模型則是隨時間推進到 50%。本季的出貨量更偏向光通訊（Optical Communications），主要是因為 3D 感測帶來了一個很大的季度。我們過去曾指出 3D 感測的毛利率會高於公司平均，而實際上也顯著高於公司平均——也高於我們歷史上的公司平均。展望未來，毛利率將取決於 3D 感測在我們總出貨量中的占比，以及商用雷射產品組合的配置。我們的電信泵浦與 ROADM 產品線也有不錯的毛利率，這將在未來持續提供支撐。

So the 10 points increase sequentially, can you break that out as to what contribution came from 3D lasers?

那麼毛利率季對季提升 10 個百分點，你能拆解一下其中有多少貢獻來自 3D 雷射嗎？

Yes. So we're not going to split that out specifically. But it was a function of the mix from 3D sensing as well as the large volume uptick. 66% increase in top line contributed a lot to that as well.

是的。我們不會特別把它拆分出來。但這是 3D 感測的產品組合效應，以及出貨量大幅上升共同造成的結果。營收年增 66% 也對此貢獻很大。

And 14% improvement in commercial lasers.

以及商用雷射改善 14%。

Our next question comes from Meta Marshall from Morgan Stanley.

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

A couple of quick questions. On the Datacom market, are there any kind of 400G product introduction that we should think of kind of towards the latter half of 2018 or into 2019? And then second, on ROADMs in China. Is that still primarily China Telecom demand? Or have you seen any movement on China Mobile to incorporate ROADMs in 2018 versus 2019?

兩個簡短問題。在資料通訊（Datacom）市場方面，是否有任何 400G 產品導入，我們應該在 2018 年下半年或進入 2019 年時留意？第二個問題是關於中國的 ROADM。目前需求仍主要來自中國電信嗎？或者你們是否看到中國移動在 2018 年（相較於 2019 年）導入 ROADM 的任何動向？

Sure. Datacom 400G, you won't see revenue really this year. It's really more of a back half of calendar '19. As far as ROADMs, China Telecom, as you say, is clearly leading the way. And we expect that the other carriers in China should start deploying late this year -- late this calendar year or early calendar '19. But the majority of the deployments to date have been China Telecom as well as the ROADMs that we ship into China that end up in EMEA or other regions as well.

好的。Datacom 400G 今年你不會真的看到營收。它其實比較會落在 2019 年曆年的下半年。至於 ROADM，如你所說，中國電信顯然走在最前面。我們預期中國其他電信業者應該會在今年稍晚——今年曆年稍晚或 2019 年曆年初——開始部署。但截至目前的大多數部署都來自中國電信，另外還包括我們出貨到中國、但最終用在 EMEA 或其他地區的 ROADM。

And our last question comes from Richard Shannon from Craig-Hallum.

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

Maybe I'll ask a couple of questions primarily related to 3D sensing. I wonder if you can give us your sense as you see it right now of kind of the go-forward opportunity 2, 4, 8 quarters out, both for the Android ecosystem versus your -- kind of your current customer base? And also get a sense of scale of what you think the edge-emitters can do versus your initial early stage or your initial with -- ramp ups with VCSELs?

我可能會問幾個主要與 3D 感測相關的問題。我想請你談談，以你目前所見，未來 2、4、8 個季度的機會大概如何，包含 Android 生態系相較於你們——也就是你們目前客戶基礎——的情況？另外也想了解一下，你認為邊緣發射器相較於你們初期階段、或你們在 VCSEL 的初期——爬坡量產——方面，規模潛力會如何？

Yes. Well, so I think the edge-emitters certainly have their set of strengths. And customers come to us because they can try both different technologies and choose whichever one they want. And we're -- we don't care which one they choose. We have the technology to supply both. So I'd say that customers have chosen their path. And many of them have chosen edge-emitters, which puts us really in a very, very solid position. I'd say, for your first question about the go-forward 2, 4, 8 quarters out, my expectations are that we add significant numbers of customers that are Tier 1 smartphone device manufacturers in the 4- to 8- quarter range for sure. And a question in my mind is really that, do we see meaningful Android customers in the second half of calendar '18? And I think the answer is probably yes. But it's really up to us to execute and them to execute as well. So I think from our perspective, we're adding the capacity in anticipation of that happening. But I think that calendar 2019 is going to be a solid year with less seasonality like what we're seeing here today given the introduction timing of the different smartphone manufacturers. Did I answer your...

是的。我認為邊緣發射器確實有其一套優勢。客戶來找我們，是因為他們可以同時嘗試不同技術，並選擇他們想要的那一種。而我們——我們不在乎他們選哪一種。我們具備供應兩者的技術能力。所以我會說，客戶已經選定他們的路徑。而其中許多客戶選擇了邊緣發射器，這讓我們處於非常、非常穩固的位置。至於你第一個問題，關於未來 2、4、8 個季度的展望，我的預期是，在 4 到 8 個季度的時間範圍內，我們肯定會新增相當數量的客戶，這些客戶是第一線（Tier 1）的智慧型手機裝置製造商。我心中的問題其實是：我們是否會在 2018 年曆年下半年看到具實質意義的 Android 客戶？我認為答案大概是會。但這真的取決於我們的執行，以及他們的執行。因此從我們的角度來看，我們正在增加產能，以因應這件事的發生。但我認為 2019 年曆年會是穩健的一年，季節性會比我們今天看到的更低，因為不同智慧型手機製造商的導入時點不同。我有回答你的……

Okay. That's helpful. Yes, yes, it did. I know you can't size these quantitatively. I think that's a good starting point. I'm sure we'll continue to ask questions on that topic. My follow-up question related to gross margins. Obviously, you mentioned 3D sensing gross margins are above corporate average. And while you haven't quantified what they are, how do you view the gross margins in 3D sensing as you kind of ramp up in 2 to 4 quarters from now? Can they be at the same level they've been at the last couple of quarters? Or will it be higher or lower?

好的。這很有幫助。是的，是的，有回答到。我知道你無法用量化方式來估算這些。我覺得這是個很好的起點。我相信我們會持續就這個主題提問。我接著的追問與毛利率有關。顯然你提到 3D 感測的毛利率高於公司平均。雖然你沒有量化其水準，但當你們在未來 2 到 4 個季度逐步放量時，你如何看待 3D 感測的毛利率？它們能維持在過去幾個季度的同一水準嗎？還是會更高或更低？

Yes. Thanks, Richard. In terms of gross margins, as we go forward, it's our belief and expectation that gross margins will be similar to where we're at today primarily because, as Alan had highlighted, we have continuous cost reduction initiatives, yield improvement aspects, throughput. And we'll continue to optimize our supply chain, which will give us lower costs over time irregardless of what happens with selling prices.

是的。謝謝你，Richard。就毛利率而言，往後看，我們的看法與預期是毛利率會與目前相近，主要原因是，如 Alan 所強調的，我們有持續的降本計畫、良率改善、產出提升等面向。而且我們會持續優化供應鏈，讓我們的成本隨時間下降，不論售價如何變動。

And there are no further questions at this time. I'll now turn the call back over to Alan Lowe, President and Chief Executive Officer, for closing remarks.

目前沒有其他問題。我現在把電話交回給總裁兼執行長 Alan Lowe 作結語。

Thank you, Kelly. I want to thank our customers for their business and partnership. I also want to thank our employees for all their hard work in helping us achieve new record revenue and earnings results and putting us into an excellent position for long-term growth. We regularly discuss our business at Investor Relations events. These events are listed on our website in the Investor Relations section and regularly updated.

謝謝你，Kelly。我要感謝我們的客戶給予的業務與合作夥伴關係。我也要感謝我們的員工辛勤付出，協助我們達成新的營收與獲利紀錄，並讓我們處於極佳的位置以實現長期成長。我們會在投資人關係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。

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。感謝各位與會，我們期待在 3 個月後再次與各位交流。

This concludes today's conference call. You may now disconnect.

今天的電話會議到此結束。您現在可以掛線。