MACOM Technology Solutions Holdings, Inc. (MTSI) 2017 Q1 法說會逐字稿

Good afternoon and welcome to MACOM's fiscal first-quarter financial results conference call. At this time are participants are in a listen only mode.

下午好，歡迎參加 MACOM 會計年度第一季財務業績電話會議。目前所有與會者皆處於僅收聽模式。

(Operator Instructions)

（接線員指示）

As a reminder, this conference call is being recorded today, Tuesday, January 31, 2017. I will now turn the call over to Steve Ferranti, Vice President of Investor Relations at MACOM. Steve, please go ahead.

提醒各位，本次電話會議將於今天（2017 年 1 月 31 日，星期二）錄音。現在我將把電話交給 MACOM 投資人關係副總裁 Steve Ferranti。Steve，請開始。

Thank you, Karen. Good afternoon everyone and welcome to MACOM's first fiscal quarter 2017 earnings conference call. Joining me today are MACOM's President and Chief Executive Officer, John Croteau; and Senior Vice President and Chief Financial Officer Bob McMullan. If you have not yet received a copy of the earnings press release, you can obtain a copy on MACOM's website at www.macom.com, under the investor relations section.

謝謝你，Karen。各位下午好，歡迎參加 MACOM 2017 會計年度第一季財報電話會議。今天與我一同出席的有 MACOM 總裁暨執行長 John Croteau，以及資深副總裁暨財務長 Bob McMullan。若您尚未收到本次財報新聞稿，可至 MACOM 官網 www.macom.com 的投資人關係專區取得。

Before I turn the call over to John, I'd like to remind everyone that management's prepared remarks and answers to your questions contain forward looking statements, which are subject to certain risks and uncertainties. Because actual results may differ materially from those discussed today, MACOM claims the protection of the Safe Harbor for forward looking statements contained in the Private Securities Litigation Reform Act of 1995. For a more detailed discussion of the risks and uncertainties that could result in those differences, we refer you to MACOM's filings with the Securities and Exchange Commission, including its current report on form 8K filed today, annual report on form 10K filed on November 17, 2016, registration statement on form S4 as filed on December 21, 2016, and amendment number 1 there too filed on January 18, 2017.

在我把電話交給 John 之前，我想提醒各位，管理層的事先準備發言以及對各位提問的回答，包含前瞻性陳述，並受若干風險與不確定性影響。由於實際結果可能與今日討論內容存在重大差異，MACOM 主張適用《1995 年私人證券訴訟改革法案》中關於前瞻性陳述的「安全港」保護。關於可能導致上述差異之風險與不確定性的更詳細討論，請參閱 MACOM 向美國證券交易委員會（SEC）提交的文件，包括今日提交的 8-K 表格當前報告、2016 年 11 月 17 日提交的 10-K 表格年度報告、2016 年 12 月 21 日提交的 S-4 表格註冊聲明，以及 2017 年 1 月 18 日提交的其第 1 號修正案。

Any forward looking statements represent management's views only as of today, January 31, 2017 and MACOM assumes no obligation to update these statements in the future. The company's press release and management's statements during this call will include discussions of certain adjusted non-GAAP measures and financial information, including all income statement amounts and percentages other than revenue referred to on today's call unless otherwise noted. These financial measures and a reconciliation of GAAP to adjusted non-GAAP results are provided in the company's press release and related form 8K, which was filed with the SEC today and can be found at the investor relations section of MACOM's website. For those of you unable to listen to the entire call at this time, a recording will also be available via webcast for at least 30 days in the investor relations section of MACOM's website. With that, I'll turn the call over to John for his comments on the quarter.

任何前瞻性陳述僅代表管理層截至今日（2017 年 1 月 31 日）的觀點，MACOM 不承擔未來更新此等陳述之義務。本公司新聞稿及管理層於本次電話會議中的發言，將包含對若干經調整之非 GAAP 指標與財務資訊的討論；除非另有說明，今日電話會議中提及之除營收以外的所有損益表金額與百分比，均為非 GAAP 經調整數。上述財務衡量指標以及 GAAP 與經調整非 GAAP 結果之調節表，已載於本公司新聞稿及相關 8-K 表格（今日已向 SEC 提交），並可於 MACOM 官網投資人關係專區查閱。若各位此刻無法全程收聽，本次會議錄音亦將以網路直播回放形式提供至少 30 天，位置同樣在 MACOM 官網投資人關係專區。接下來我將把電話交給 John，請他就本季發表評論。

Thank you Steve. Welcome everyone, and thanks for joining us today. I will begin today's call with an overview of our first quarter results for 2017, and then turn the call over to Bob McMullan, our CFO, who will review our financial performance in further detail. I will then conclude today's prepared comments by providing a summary of our execution and key highlights during the quarter, followed by an update on the AppliedMicro closing and guidance for the fiscal second-quarter of 2017.

謝謝你，Steve。歡迎各位，也感謝今天加入我們。我將先概述 2017 會計年度第一季的業績，接著把電話交給我們的財務長 Bob McMullan，由他更詳細地回顧財務表現。之後我將以本季執行成果與重點摘要作為事先準備發言的結尾，並接續更新 AppliedMicro 交易結案進度，以及提供 2017 會計年度第二季的展望指引。

Straight to the results. I am pleased to report that for our fiscal first-quarter of 2017, revenue came in at $151.8 million. Adjusted gross margin was 57.2%, with adjusted earnings coming in at $0.57 per diluted share. Looking at our end markets, as we guided, top line revenue for the quarter was essentially flat due to expected seasonality across our businesses. Networks and multi-market were flat to slightly down sequentially, but up year on year 31% and 48% respectively. Aerospace and defense grew sequentially due to strengthen high performance MIMICs, and was up 20% year on year. Now let me turn it over to Bob to review our fiscal first quarter financials in more detail.

直接看結果。我很高興報告，我們 2017 會計年度第一季營收為 1.518 億美元。經調整毛利率為 57.2%，經調整後每股稀釋盈餘為 0.57 美元。從終端市場來看，如同我們先前指引，本季營收基本持平，主要因各業務的預期季節性因素。網路與多元市場業務較前一季持平至小幅下滑，但年增率分別為 31% 與 48%。航太與國防業務因高效能 MIMICs 需求走強而較前一季成長，且年增 20%。接下來我把電話交給 Bob，請他更詳細說明我們第一季的財務表現。

Thank you, John and good afternoon everyone. I will review MACOM's fiscal first quarter results and financial position, and then a high level summary of AppliedMicro's results for its quarter ended December 31, 2016 before turning the call back to John. Our revenue was $151.8 million during the fiscal first quarter, growing 31% over the 2016 fiscal first quarter and seasonally down modestly compared to the $152.7 million in the prior quarter.

謝謝你，John，各位下午好。我將回顧 MACOM 會計年度第一季的業績與財務狀況，並在把電話交回給 John 之前，先就 AppliedMicro 截至 2016 年 12 月 31 日止季度的業績做一個高層次摘要。我們第一季營收為 1.518 億美元，較 2016 會計年度第一季成長 31%，且因季節性因素較前一季的 1.527 億美元小幅下滑。

Revenue by end markets in the fiscal first quarter. Networks, $108.4 million and 71.5% of total revenue, up 31% year over year. Multi market, $21.4 million and 14.1% of total revenue, up 48% year over year. And aerospace and defense, $22 million and 14.5% of total revenue, up 20% year over year. Of our total network revenue in the fiscal first quarter, optical revenue was $82.3 million or 54.2% of total revenue, and up 38.1% year over year, led by Long Haul, Metro and DCI revenue, which was up 85.5% year over year. Non-GAAP gross profit and gross margin in the fiscal first quarter was $86.9 million and 57.2% of revenue, respectively; compared to $68 million and 58.7% of revenue respectively year over year and $89.3 million and 58.5% respectively on a sequential basis. Adjusted gross margin declined sequentially due to slightly lower revenue from higher gross margin products.

第一季按終端市場劃分之營收如下：網路業務 1.084 億美元，占總營收 71.5%，年增 31%；多元市場業務 2,140 萬美元，占總營收 14.1%，年增 48%；航太與國防業務 2,200 萬美元，占總營收 14.5%，年增 20%。在第一季的網路業務總營收中，光學營收為 8,230 萬美元，占總營收 54.2%，年增 38.1%；其中長途（Long Haul）、都會（Metro）與資料中心互連（DCI）營收年增 85.5%，為主要帶動因素。第一季非 GAAP 毛利與毛利率分別為 8,690 萬美元與營收的 57.2%；相較之下，去年同期分別為 6,800 萬美元與 58.7%，而前一季則分別為 8,930 萬美元與 58.5%。經調整毛利率較前一季下降，係因高毛利產品的營收略為降低所致。

In terms of operating expenses in the fiscal first quarter, total non-GAAP operating expenses were $45.9 million, compared to $40.3 million year over year and $51 million sequentially. Adjusted operating expenses were up 13.9% year over year and down 10% sequentially, primarily due to lower variable compensation expenses.

就第一季營業費用而言，非 GAAP 營業費用總額為 4,590 萬美元，相較去年同期為 4,030 萬美元，前一季為 5,100 萬美元。經調整營業費用年增 13.9%，季減 10%，主要因變動薪酬費用較低。

Adjusted R&D and SG&A expenses were $27 million and $18.9 million respectively in the fiscal first quarter. Non-GAAP income from operations and operating margins were $41 million and 27% of revenue, up 47.8 % and 12% respectively year over year, and up 6.9% and 7.6% respectively on a sequential basis. Adjusted operating margin expanded 310 basis points year over year and 190 basis points sequentially. Net interest expense increased to $6.7 million due to the full quarter's inclusion of our additional Term B debt of $250 million issued in August.

第一季經調整研發（R&D）與銷售、一般及行政（SG&A）費用分別為 2,700 萬美元與 1,890 萬美元。第一季非 GAAP 營業利益與營業利益率分別為 4,100 萬美元與營收的 27%，較去年同期分別成長 47.8% 與 12%，並較前一季分別成長 6.9% 與 7.6%。經調整營業利益率較去年同期擴大 310 個基點，較前一季擴大 190 個基點。由於我們於 8 月發行的 2.5 億美元 Term B 額外債務在本季完整納入，淨利息費用增加至 670 萬美元。

Other income of $1.9 million represents revenue from the consulting contract from our auto business divestment that will continue through FY17. Our normalized non-GAAP income tax rate in the fiscal first quarter was 12%, down from the previous 15%, due to the expanding mix of international revenue managed by our offshore entities with lower tax jurisdictions. As for cash taxes, we did not pay cash taxes in the fiscal first quarter and received a $700,000 refund during the quarter.

其他收益 190 萬美元，代表我們出售汽車業務後所簽訂顧問合約的收入，該合約將持續至 2017 會計年度。第一季常態化非 GAAP 所得稅率為 12%，低於先前的 15%，主要因由我們位於較低稅負司法管轄區的海外實體所管理之國際營收占比提高。就現金稅而言，我們第一季未支付現金稅，且於本季收到 70 萬美元退稅。

Our fiscal first-quarter non-GAAP net income and EPS were $31.8 million and $0.57 per fully diluted share. Respectively growing from $21.8 million and $0.40 year over year, and $31.1 million and $0.54 sequentially. Non-GAAP net income grew 45.6% year over year and 5.6% sequentially. Non-GAAP EPS grew 42.5% year over year at and 5.6% sequentially. The share count used to compute non-GAAP EPS was 55.6 million shares fully diluted for the fiscal first quarter.

第一季非 GAAP 淨利與每股盈餘（EPS）分別為 3,180 萬美元與每股完全稀釋 0.57 美元；相較去年同期分別為 2,180 萬美元與 0.40 美元，前一季分別為 3,110 萬美元與 0.54 美元。非 GAAP 淨利年增 45.6%，季增 5.6%。非 GAAP EPS 年增 42.5%，季增 5.6%。用以計算第一季非 GAAP EPS 的完全稀釋加權平均股數為 5,560 萬股。

Adjusted EBITDA or earnings before interest, taxes, depreciation, and amortization was $48.4 million, up 44.5% from $33.5 million in our FY16 first quarter, and up 7.8% from $44.9 million sequentially. GAAP cash flow from operations was $20.4 million in the fiscal first quarter, as compared to $15.5 million in the FY16 first quarter, increasing 31.6% and down from $24.9 million sequentially. Fiscal first quarter cash flow from operations represents 64.2% of non-GAAP net income, down from 71.1% in the fiscal first quarter of 2016 and 82.7% sequentially. The timing effect of an increase in our 2017 fiscal first quarter working capital is the reason for the decline.

經調整 EBITDA（即息稅折舊攤銷前盈餘）為 4,840 萬美元，較 2016 會計年度第一季的 3,350 萬美元成長 44.5%，並較前一季的 4,490 萬美元成長 7.8%。第一季 GAAP 營運活動現金流量為 2,040 萬美元，相較 2016 會計年度第一季為 1,550 萬美元，增加 31.6%，但較前一季的 2,490 萬美元下降。第一季營運活動現金流量相當於非 GAAP 淨利的 64.2%，低於 2016 會計年度第一季的 71.1% 與前一季的 82.7%。下降原因在於 2017 會計年度第一季營運資金增加所造成的時點影響。

After deducting capital expenditures, free cash flow was $15.5 million or 48.7% of non-GAAP net income in the fiscal first quarter, compared to $8.8 million and 40.7% of non-GAAP net income in the fiscal first quarter of 2016, and $17.7 million and 58.8% sequentially. Fiscal first quarter free cash flow was lower due to higher working capital.

扣除資本支出後，會計年度第一季的自由現金流為1,550萬美元，或非GAAP淨利的48.7%，相較於2016年會計年度第一季的880萬美元與非GAAP淨利的40.7%，以及前一季的1,770萬美元與58.8%。會計年度第一季自由現金流較低，係因營運資金較高所致。

Turning to the balance sheet, at fiscal first quarter end, our cash, cash equivalents, and short-term investments were approximately $377.7 million, up $20.9 million sequentially. Accounts receivable were $112.2 million, up from $108.3 million sequentially. Day sales outstanding were 67 days, compared to 65 days. Inventories were up to $115.2 million, compared to $114.9 million sequentially. Inventory turns were 2.3 times, compared to 2.2 times.

接著看資產負債表，截至會計年度第一季季末，我們的現金、約當現金及短期投資約為3億7,770萬美元，較前一季增加2,090萬美元。應收帳款為1億1,220萬美元，較前一季的1億830萬美元增加。應收帳款週轉天數（DSO）為67天，較65天增加。存貨上升至1億1,520萬美元，較前一季的1億1,490萬美元增加。存貨週轉率為2.3次，較2.2次提升。

Long-term debt was $587.1 million inclusive of capital leases. We also had $130 million of availability in an undrawn credit line. Capital expenditures in the fiscal first quarter were $4.9 million or 3.3% of revenue, compared to $7.2 million or 4.7% of revenue sequentially. Depreciation expense for the fiscal first quarter was approximately $5.5 million and compared to $4.7 million sequentially. Our capital expenditures were lower, essentially funded by depreciation expense for the first time from a cash flow perspective.

長期負債為5億8,710萬美元（含資本租賃）。我們亦有1億3,000萬美元的未動用授信額度可用。會計年度第一季資本支出為490萬美元，或營收的3.3%，相較前一季為720萬美元，或營收的4.7%。會計年度第一季折舊費用約為550萬美元，較前一季的470萬美元增加。就現金流角度而言，我們的資本支出較低，且基本上首次由折舊費用所支應。

Now I will provide a high level overview of AppliedMicro's non-GAAP results for its quarter ended December 31, 2016. In AppliedMicro's fiscal third, or December quarter, its last full quarter as a public company, revenue, gross margin and Non-GAAP EPS were in line with consensus estimates. It is important to note the consensus revenue includes AppliedMicro's compute business. Revenues associated with the communication processors has been end-of-life by AppliedMicro.

現在我將就AppliedMicro截至2016年12月31日止季度的非GAAP結果提供高層次概述。在AppliedMicro的會計年度第三季（即12月季度），亦為其作為上市公司最後一個完整季度，營收、毛利率及非GAAP每股盈餘（EPS）符合市場共識預估。需要注意的是，共識營收包含AppliedMicro的運算（compute）業務。與通訊處理器相關的營收已被AppliedMicro終止（產品生命週期結束）。

MACOM will report revenue and associated expenses from the ARM-based products as discontinued operations. For these reasons, post close, investors should not view AppliedMicro's prior consensus revenue as translating to MACOM revenue. AppliedMicro ended its December quarter with approximately $73 million in cash and equivalents.

MACOM將把ARM架構產品的營收及相關費用列為停業單位。基於上述原因，交易完成後，投資人不應將AppliedMicro先前的共識營收視為可直接轉換為MACOM營收。AppliedMicro在其12月季度結束時，持有約7,300萬美元的現金及約當現金。

Looking to MACOM's fiscal second quarter, the partial quarter inclusion of AppliedMicro's revenue will increase enterprise and data center source revenue and will be a measurable market. Considering the expected hyper growth potential, we plan to add our data center revenues to AppliedMicro's revenues, and report data center and enterprise separately, excluded and independent from our optical revenue. We believe enterprise and data center opportunity is another secular growth driver, further diversifying our markets and revenue sources.

展望MACOM的會計年度第二季，AppliedMicro營收的部分季度併入將提高企業與資料中心來源營收，並將成為可衡量的市場。考量預期的超高速成長潛力，我們計畫將資料中心營收納入AppliedMicro的營收，並將資料中心與企業業務分開揭露，且與我們的光學營收區隔、獨立呈現。我們相信企業與資料中心機會是另一個長期結構性成長動能，將進一步分散我們的市場與營收來源。

As we have previously communicated, one of the assets of AppliedMicro is approximately $500 million in reliable net loss operating carryforwards. We plan to integrate AppliedMicro into our international operating structure, allowing us to lower our effective US tax rate. MACOM now believes, based on the mix of worldwide taxable earnings and current income tax rates, our long term permanent tax rate will be 10% in future quarters. Back to you, John.

如我們先前所溝通，AppliedMicro的資產之一是約5億美元、可靠的淨營運虧損結轉（NOL）。我們計畫將AppliedMicro整合至我們的國際營運架構，使我們得以降低美國的有效稅率。MACOM目前相信，基於全球應稅所得組合與現行所得稅率，我們未來季度的長期永久稅率將為10%。交回給你，John。

Thanks, Bob. Let's dive right into it. In aggregate, revenue from our optical businesses was slightly down sequentially and grew 38% year on year. They now constitute 54% of total revenue. Red-hot demand in Metro Long Haul and data centers was offset by seasonal weakness and our correction in PON in China. Demand in Metro Long Haul remains insatiable, as 100 G deployments in global Metro networks continue to ramp and China shifts from backbone to provincial deployments. Revenue was up sequentially and grew 69% year on year across the entire Metro Long Haul portfolio. Visibility remains very strong, with growth continuing to be capacity limited in the March quarter.

謝謝，Bob。我們直接切入重點。整體而言，我們光學業務的營收較前一季小幅下滑，但年增38%。目前光學業務占總營收的54%。都會長途（Metro Long Haul）與資料中心的火熱需求，被季節性疲弱以及我們在中國PON業務的修正所抵銷。都會長途需求仍然旺盛，因為全球都會網路的100G部署持續加速，且中國正從骨幹網轉向省級部署。整個都會長途產品組合的營收較前一季成長，並年增69%。能見度仍非常強勁，3月季度的成長仍將受限於產能。

Elsewhere in optical, PON was seasonally weak and further aggravated by three second-tier competitors, who are liquidating inventories as they exit the business. Our value proposition and market position with Etched Facet Technology remains strong, so we are allowing this correction to run its course with the goal of sustaining share and minimizing ASP erosion after the inventory flushes this quarter. We believe that end market demand in PON remains solid, such that as the supply chain normalizes, these headwinds will turn into tailwinds and contribute to growth in our June and September quarters.

在其他光學領域，PON因季節性因素走弱，且又受到三家二線競爭對手影響；他們在退出該業務時正清理庫存。我們在蝕刻端面（Etched Facet）技術上的價值主張與市場地位依然穩固，因此我們讓這次修正自然發展，目標是在本季庫存出清後維持市占並將ASP侵蝕降至最低。我們認為PON終端市場需求仍然穩健，因此當供應鏈恢復正常後，這些逆風將轉為順風，並在我們6月與9月季度帶動成長。

Now moving on to data centers, last quarter we highlighted success in what we expect will be our next major growth driver for MACOM. Data center revenue was up strong sequentially and grew 114% year on year. We now have enabled more than 30 customers, servicing enterprise and cloud data center applications with laser and VCSEL drivers, CDR's and TIAs. These devices are enabling 100 G optical modules across all standards and formats --- from SR, PSM4, CWDM4 and LR4 servicing all major cloud service providers.

接著談資料中心。上一季我們強調了我們的成功，我們預期這將成為MACOM下一個主要成長動能。資料中心營收較前一季大幅成長，並年增114%。我們目前已支援超過30家客戶，透過雷射與VCSEL驅動器、CDR與TIA，服務企業與雲端資料中心應用。這些元件支援各種標準與規格的100G光模組——從SR、PSM4、CWDM4到LR4——服務所有主要雲端服務供應商。

We anticipate growth to further accelerate in the second half as we ramp lasers for 100 G data center applications. We're deeply engage with laser design-ins and vendor selections at more than 25 customers, again, across the LR4, CWDM4 and PSM4 applications. We expect lasers to be a significant contributor to growth moving into our fiscal third and fourth quarters.

我們預期隨著下半年針對100G資料中心應用的雷射放量，成長將進一步加速。我們正深度參與超過25家客戶的雷射設計導入與供應商選定，同樣涵蓋LR4、CWDM4與PSM4應用。我們預期雷射將在我們會計年度第三與第四季成為成長的重要貢獻來源。

To close out my comments on our optical businesses, this quarter is a great example of the merits of diversifying our business portfolio and not falling into the trap of servicing the captive names of one standard, one part of the network, or one transceiver supplier. We are able to withstand a very substantial correction in PON this quarter, counterbalanced by strength in Metro Long Haul and data centers. Allowing our optical businesses in aggregate to grow 38% year on year.

作為我對光學業務評論的結語，本季是分散業務組合優勢的絕佳例證，也顯示我們不落入只服務單一標準、網路單一環節或單一收發器供應商的陷阱。我們能承受本季PON非常顯著的修正，並由都會長途與資料中心的強勁表現加以抵銷，使我們光學業務整體仍能年增38%。

Each of these optical sub segments is notoriously cyclical. Yet, regardless of the mix on a quarter-to-quarter basis, we remain confident that our optical portfolio will deliver strong growth due to the insatiable demand for bandwidth in today's Cloud Connected Apps Economy. We are uniquely diversified across Access, Metro, Long Haul and Data Centers and not just in China, but in North America, Japan and Europe. And we are not overly exposed to any one customer, one standard, or one platform.

這些光學子區隔各自都以高度景氣循環性著稱。然而，不論季度間組合如何變化，我們仍有信心光學產品組合將因當今「雲端連結應用經濟」對頻寬的強勁需求而帶來強勁成長。我們在接取網（Access）、都會網（Metro）、長途（Long Haul）與資料中心均具備獨特的多元布局，不僅在中國，也涵蓋北美、日本與歐洲。而且我們不會對任何單一客戶、單一標準或單一平台過度曝險。

With that, let's move over to GaN. This quarter we delivered on orders for initial production builds that I previously highlighted at two major customers. It still early yet, but we are making solid progress, tuning the boards for customer qualifications and field trials. I'd like to highlight two new developments, two leading indicators that we're on the right track. First, one of those customers has asked us to negotiate a global purchase agreement for base station business, which they only require of strategic vendors that they plan to ramp to significant share of wallet. Second, one of them has now asked us to bid on a 900 MHz platform, in addition to the earlier 1.8 and 3.5 GHz programs.

接下來談GaN。本季我們交付了我先前提到、兩家主要客戶的初始量產建置訂單。雖然仍在早期階段，但我們正穩健推進，針對客戶認證與外場測試調校電路板。我想強調兩項新進展、兩個顯示我們走在正確道路上的領先指標。第一，其中一家客戶要求我們就基地台業務洽談全球採購協議；他們通常只對計畫提升至顯著採購占比的策略供應商提出此要求。第二，其中一家客戶也要求我們針對900 MHz平台投標，除先前的1.8與3.5 GHz專案之外再新增一項。

Subtle, but very important is the fact that when customers consider new sources for legacy narrowband programs, where LDMOS has thrived, they do so with a major shift in suppliers in mind, and with the intention of qualifying that GaN supplier for all frequency bands. This significantly improves our SAM model. We now believe that GaN adoption will end up widespread at all frequency bands simultaneously. Which would provide us access to the full $1 billion TAM and base stations.

一個細微但非常重要的點是：當客戶為既有的窄頻專案（LDMOS長期占優）尋找新的供應來源時，他們往往是以供應商大幅更替為前提，並意圖讓該GaN供應商在所有頻段都取得認證。這將顯著改善我們的SAM模型。我們現在相信，GaN的採用最終將在所有頻段同時普及。這將使我們得以觸及完整的10億美元TAM與基地台市場。

This is exactly what I saw with the adoption of LDMOS many years ago. When the first movers adopted LDMOS technology, it triggered a domino effect. Base station OEMs know they can't be left behind with outdated power amplifier technology. I believe this domino effect can only be enabled by someone like MACOM, who can deliver the benefits of GaN at the required cost structure, and more importantly, with the supply chain flexibility to support search capacity for global wireless infrastructure deployments. At this juncture, our ability to execute operationally will determine the magnitude and slope of the GaN revenue ramp over the coming quarters and years.

這正是我多年前在LDMOS採用過程中所看到的情況。當第一批先行者採用LDMOS技術時，便引發了骨牌效應。基地台OEM知道他們不能因過時的功率放大器技術而落後。我相信，這種骨牌效應只能由像MACOM這樣的公司促成：我們能以所需的成本結構交付GaN的效益，更重要的是，具備供應鏈彈性以支援全球無線基礎建設部署所需的快速擴產能力。在此階段，我們的營運執行能力將決定未來幾季與幾年GaN營收爬升的規模與斜率。

Now, moving over to MMICs. As reported we previously, the really big news for MACOM is that the growth rate of our RF and microwave businesses is now poised to match, if not exceed, our optical businesses. The driver of this today is MMICs. Last quarter MMICs across all of our end markets were up sequentially and grew 38% year on year. We continue to exploit a void in the marketplace that's left as competitors undergo consolidation. We've launched 33 new MMICs over the last year with Tier 1 customers sponsoring these new products across our catalog of networks and AMD portfolios.

現在，轉到 MMIC。正如我們先前所報告的，對 MACOM 而言真正的重大消息是，我們的 RF 與微波業務成長率如今已蓄勢待發，可望追上、甚至超越我們的光學業務。當前的驅動力就是 MMIC。上一季，我們在所有終端市場的 MMIC 皆呈現季增，且年增 38%。我們持續把握競爭對手整併所留下的市場空缺。過去一年我們已推出 33 款新的 MMIC，並由一級（Tier 1）客戶贊助這些新產品，涵蓋我們的網路與 AMD 產品組合目錄。

It's also worth mentioning, we've completed the Metelics integration on schedule and on budget. The Londonderry and Sunnyvale sites are now closed, with manufacturing fully transitioned over to Lowell. With that behind us, we are now squarely focused on integrating AppliedMicro.

另外也值得一提的是，我們已按期且在預算內完成 Metelics 的整合。Londonderry 與 Sunnyvale 廠區現已關閉，製造已全面轉移至 Lowell。完成這些之後，我們現在將重心完全放在整合 AppliedMicro。

Speaking of AppliedMicro, last Thursday we closed the transaction. We're now heads down executing our 100 day plan to integrate productivity and divest the compute business. We received unsolicited interest from numerous parties since we announced the definitive agreement, and we believe we will be able to find a good home for the compute team within that 100 day window.

談到 AppliedMicro，上週四我們完成了交易交割。我們目前正全力執行 100 天計畫，以整合生產力並剝離運算業務。自我們宣布最終協議以來，已收到多方主動提出的興趣，我們相信能在這 100 天窗口內，為運算團隊找到合適的歸屬。

Now that the transaction is closed, I can speak more freely about our view of the upside potential of the portfolio coming over with AppliedMicro. With the geopolitical storm that's brewing around cybersecurity, the move to hardware-based encryption, specifically MACsec, as well as PAM4, have given the AppliedMicro team a seat at the table for architectural discussions with the world's leading enterprise and cloud data center providers. AppliedMicro is way out in front as a strategic supplier of MACsec to all of these major OEMs, helping secure their network links with hardware encryption, which is critical in this age of cybersecurity at 100 gig and beyond.

既然交易已完成，我就能更自由地談談我們對 AppliedMicro 併入之產品組合上行潛力的看法。隨著圍繞資安的地緣政治風暴正在醞釀，轉向以硬體為基礎的加密（特別是 MACsec）以及 PAM4，使 AppliedMicro 團隊得以參與與全球領先企業與雲端資料中心供應商的架構討論。AppliedMicro 作為這些主要 OEM 的 MACsec 策略供應商，已大幅領先，透過硬體加密協助保護其網路連結；在 100G 及更高速率的資安時代，這一點至關重要。

With the closing of the transaction, we can expand those architectural alignments to include analog and photonic roadmaps which we expect will far outpace the sales of MACsec itself. When you see the list of all the major OEMs who are adopting MACsec, as well as PAM4, for 100 gig to 400 gig applications, you'll understand why we believe cloud data centers have the potential to be yet another explosive growth driver for MACOM. Not only is MACsec expected to be material contributor to growth, but it's an accelerant in our ability to ramp the rest of our portfolio and data centers.

隨著交易完成，我們可以將這些架構層面的對齊擴展到類比與光子（photonic）路線圖，我們預期其銷售將遠超過 MACsec 本身。當你看到所有主要 OEM 採用 MACsec 以及 PAM4、用於 100G 到 400G 應用的名單時，你就會理解為何我們相信雲端資料中心有潛力成為 MACOM 另一個爆發式成長動能。不僅 MACsec 預期將對成長做出實質貢獻，它也會加速我們在資料中心推升其餘產品組合的能力。

So, that brings us to PAM4. In the March quarter the AppliedMicro team is on track to deliver initial production units to our lead customer, a world leader in network infrastructure equipment, who tells us that they expect to be in production with single-lambda PAM4 transceivers in the second half of this year, 2017. Furthermore, at least four of the six major cloud data center players have already made the architectural decision and are poised to move forward, focusing their efforts on single-lambda PAM4 as their standard of choice for 100 gig and beyond.

接著談 PAM4。在 3 月季度，AppliedMicro 團隊按計畫將向我們的領先客戶交付初始量產單位；該客戶是全球網路基礎設施設備的領導者，並告訴我們他們預期將在今年（2017 年）下半年，以單波長（single-lambda）PAM4 收發器進入量產。此外，六大雲端資料中心業者中至少有四家已做出架構決策並準備推進，將其重點放在單波長 PAM4，作為 100G 及更高速率的標準選擇。

Beyond the initial customer ramps, we believe that broad industry adoption of PAM4 will be unlocked by the ecosystem of companion analog, laser and photonic components. This is something that MACOM can uniquely enable. As of this March quarter, we're also sampling units of companion lasers and analog components for single-lambda PAM4 to be followed by integrated L-PICs later this year. Because of the explosive growth opportunity in enterprise and cloud data centers, we will break this out and speak to it as a separate secular growth driver for the company, independent from optical going forward.

除了初期客戶的放量之外，我們相信 PAM4 的廣泛產業採用，將由配套的類比、雷射與光子元件生態系所解鎖，而這正是 MACOM 能夠獨特促成的。就本 3 月季度而言，我們也正在送樣單波長 PAM4 的配套雷射與類比元件，並將於今年稍晚推出整合式 L-PIC。由於企業與雲端資料中心存在爆發性的成長機會，我們將把這部分拆分出來，作為公司獨立於光學之外的另一項長期結構性成長動能，並在未來持續對外說明。

So wrapping it all up, we are now targeting multiple major growth waves in our industry. We're riding the optical super cycle, we are leading the technology transition to GaN and RF, we are filling the vacuum for MMICs that has been created by industry consolidation, we are securing the internet with hardware encryption for cybersecurity, and we are servicing the exploding demand for productivity within cloud data centers. We're not just diversified in optical, we are diversified across multiple end markets and multiple secular growth drivers. Again, this is the reason why we're confident we can continue to outperform, as we have for the past three years, despite the inevitable ebbs and flows and market gyrations in the semiconductor industry.

總結來說，我們現在鎖定的是產業中的多個主要成長浪潮。我們正乘著光學超級循環，我們領導向 GaN 與 RF 的技術轉換，我們填補產業整併所造成的 MMIC 真空，我們以硬體加密為資安守護網際網路，並服務雲端資料中心對生產力爆發式成長的需求。我們不僅在光學領域多元化，更是在多個終端市場與多個長期結構性成長動能上實現多元化。再次強調，這就是為什麼我們有信心，即使半導體產業不可避免會有起伏與市場劇烈波動，我們仍能如同過去三年一樣持續跑贏。

With that, let's talk about next quarter guidance. For the fiscal second quarter ending March 31, 2017, we expect revenue to be in the range of $180 million to $186 million. Adjusted gross margin is expected to be between 58% and 61%. And adjusted earnings per share between $0.59 and $0.63 on an anticipated $64 million fully diluted shares outstanding. Operator, you can now open the call to questions.

接下來談下一季財測。對於截至 2017 年 3 月 31 日的會計年度第二季，我們預期營收將落在 1.80 億至 1.86 億美元之間。調整後毛利率預期介於 58% 至 61%。在預估完全稀釋後流通股數為 6,400 萬股的前提下，調整後每股盈餘預期介於 0.59 美元至 0.63 美元。接線員，現在可以開放提問。

(Operator Instructions)

（接線員指示）

Harlan Sur, JPMorgan.

Harlan Sur，摩根大通（JPMorgan）。

Good afternoon, thanks for taking my question. Maybe if you could just help us clarify given this is the first quarter of inclusion with AppliedMicro. So on the two-thirds of the AMCC business you're recognizing here in the March quarter, are you including both the connectivity and embedded businesses or just the connectivity businesses?

下午好，謝謝讓我提問。也許請你們協助釐清一下，因為這是納入 AppliedMicro 的第一個季度。所以在 3 月季度你們在此認列的 AMCC 業務約三分之二部分，是否同時包含連接（connectivity）與嵌入式（embedded）業務，還是只有連接業務？

It includes both Harlan, but the compute business will be treated as discontinued operations and the embedded business has really been end of life, and so they push their numbers up, which is not the real run rate going forward.

兩者都包含，Harlan。不過運算（compute）業務將被視為終止營運（discontinued operations），而嵌入式業務其實已接近產品生命週期終點，因此他們把數字往上推，那並不是未來真正的常態營運水準（run rate）。

So on that note, on the embedded business, if we look at the proxy, I think that AMCC's forecast was for that business to decline like 60% over the next 12 months, so is that how we should be modeling this segment over the next 12 months or do you guys have a different view of the revenue decline for embedded?

就此延伸，在嵌入式業務方面，如果我們看委託書（proxy），我記得 AMCC 的預測是該業務在未來 12 個月會下滑約 60%，那我們在未來 12 個月對這個區塊建模時是否應該如此處理？還是你們對嵌入式營收下滑有不同看法？

It could be even a bit faster.

甚至可能會更快一些。

Yes, it can be faster. The other thing I'm not sure that's mentioned is, that tends to operate a very low gross margin. So the quicker we do it, the more gross margin dilution we experience. So and there's scenarios where the buyer for the ARM business takes the embedded business. So you really got to be careful including pretty much any of that revenue in the model.

是的，可能更快。還有一點我不確定是否有提到：那塊業務的毛利率通常非常低。因此我們越快處理，毛利率稀釋（dilution）就會越明顯。另外也存在一些情境：ARM 業務的買方會把嵌入式業務一併接手。所以你在模型中納入幾乎任何這部分營收時，都必須非常謹慎。

Okay, got it. And then, on a brighter note, like on the growth prospects on A&D, that business grew 20% year over year in the December quarter. I think you guys have had a view that, and it's been going quite strongly given the strength on the MIMIC design wins that you've had, I think the team has had a view that A&D business would grow about 40% type of growth rate over the next few quarters. So I guess the question here is, do you guys still anticipate 40% growth rates on a go forward basis for A&D?

好的，了解。接著換個比較正面的話題，像 A&D 的成長前景：該業務在 12 月季度年增 20%。我想你們一直認為在你們取得的 MIMIC 設計導入（design wins）帶動下，表現相當強勁；我記得團隊的看法是 A&D 業務在接下來幾個季度會有約 40% 的成長率。因此我想問的是，你們是否仍預期 A&D 在未來仍可維持 40% 的成長率？

Yes for the year on year, for the entire year, 2017 versus 2016, we are still anticipating more than 40% growth year on year. And we're, as you know, we are well into our second fiscal quarter. So the visibility is pretty good on that at this juncture.

是的，以年對年來看、以全年而言，2017 年相較 2016 年，我們仍預期年增超過 40%。而且如你所知，我們已進入會計年度第二季一段時間了，所以在這個時間點的能見度相當不錯。

Great, just one last question. So can you just give us an update on the L-PIC to silicon photonics products? This is a product that has pretty high level of integration. Are you guys still on track to kind of start ramping this over the next few months and is this going to be more for -- I believe it's going to be more for data center applications, but if you could just confirm. Thank you.

很好，最後一個問題。能否請你們更新一下 L-PIC 到矽光子（silicon photonics）產品的進度？這是一個整合度很高的產品。你們是否仍按計畫在未來幾個月開始放量？另外這是否會主要用於——我相信會主要用於資料中心應用，但請你們確認一下。謝謝。

Sure, yes. The initial L-PICs is absolutely targeted at data centers NRZ 100 gig. It is right on track in terms of qualification. Anybody interested, you might want to go to OFC, you will see it in action as production units. And the good news is, the assembly process, we call the self aligning EFT technology, is operating spectacularly. So that is going to be a fantastic compliment to the AppliedMicro portfolio -- and actually in advance of the AppliedMicro portfolio for NRZ applications. So it's one of the reasons why we are so bullish for the cloud data center opportunity.

當然，可以。是的，初期的 L-PIC 絕對是鎖定資料中心的 NRZ 100G。就認證（qualification）進度而言完全按計畫進行。有興趣的人可以去 OFC，你會看到它以量產單位實際運作。好消息是，我們的組裝流程——我們稱之為自我對準（self aligning）的 EFT 技術——表現非常出色。因此這將會是 AppliedMicro 產品組合的絕佳互補——而且其實在 NRZ 應用上，甚至會早於 AppliedMicro 產品組合。這也是我們對雲端資料中心機會如此看多的原因之一。

Great, thank you.

太好了，謝謝。

You're welcome.

不客氣。

C.J. Muse, Evercore.

C.J. Muse，Evercore。

Good afternoon and thank you for taking my questions. I guess first question around AMCC, can you quantify what you are including in terms of the March guide, partially for AMC both from connectivity and embedded? And I guess as a follow on to that, can you talk about the PAM4 large customer? I'm curious as that business ramps in the back half of the year given the resources that they will presumably require, how we should layer in the margin impact for that business for you guys?

下午好，謝謝讓我提問。我想第一個問題是關於 AMCC，能否量化一下你們在 3 月指引中納入了哪些內容，部分是針對 AMC（無論是連接性還是嵌入式）？另外延伸問一下，能否談談 PAM4 的大型客戶？我很好奇，隨著這項業務在今年下半年爬坡，考量到他們推進時推測會需要的資源，我們應該如何把這項業務對你們毛利率的影響納入模型？

One of the things we're very cautious about, I will start with some of the latter parts of the series of questions, is we don't like to preannounce our customers' product plans. If you understand the market for PAM4 and single-lambda, you can probably infer from that who the lead customers are. But Bob, you want to speak to the --

我們非常謹慎的一點——我先從你這一連串問題後半段開始——是我們不喜歡提前對外宣布客戶的產品規劃。如果你了解 PAM4 與 single-lambda 的市場，你大概可以由此推測領先客戶是誰。不過 Bob，你要不要談談——

So we really don't want to be bifurcating two businesses because we run as one business. But in a range, we're in line with our consensus and the balance is plus or minus around what makes up the difference with the AMCC revenue in the forward quarter.

所以我們其實不想把兩個業務拆開來看，因為我們是以單一業務在運作。不過在一個區間內，我們與市場共識一致，而差額的組成在於前瞻季度中 AMCC 營收所造成的差異，上下會有一些正負波動。

Yes, if you break it down it's a pretty logical mathematical equation this quarter. On a go forward basis, the caution we have is as AppliedMicro telegraphs, they began an end of life exercise with the embedded business that started well before we got involved. So that's going to be tailing off fairly rapidly, so you got to be careful on the forward quarters.

是的，如果你把它拆開來看，這一季其實是一個相當合乎邏輯的數學等式。往後看的話，我們的謹慎點在於：如 AppliedMicro 所揭示，他們在我們介入之前很久就已經對嵌入式業務啟動了產品生命週期終止（end of life）的作業。因此那部分會相當快速地走下坡，所以看未來幾季時必須小心。

Helpful. And I guess as a quick follow up, I think I read in one of the registration statements that you had NOLs of $1.23 billion, I think you've been talking about $600 million plus, so can I infer from that that a portion of the NOLs will stick with compute upon that asset sale?

很有幫助。那我再快速追問一下，我想我在其中一份註冊聲明裡看到你們有 12.3 億美元的 NOL（淨營運虧損結轉），我記得你們一直在談的是 6 億美元以上，所以我是否可以推論，在那筆資產出售之後，有一部分 NOL 會留在 compute 那邊？

No. It's not the way it works. So on the 382 change of control, there is a limitation based upon fair market value of the acquired business. With that calculation of fair market value, which is about $772 million times the rate, you're limited by that calculation as to what you can use in total NOLs. So, the difference dissipates into the world of not being used, unfortunately. Or fortunately, depending on the value you look towards AMCC.

不會。運作方式不是那樣。依照 382 條款的控制權變更（change of control），會有一個限制，該限制是以被收購業務的公允市價為基礎。用那個公允市價的計算——大約是 7.72 億美元乘上稅率——你能使用的 NOL 總額就受該計算所限制。所以差額很遺憾地就會消散，變成無法使用。或者也可能說是幸運，取決於你怎麼看 AMCC 的價值。

Got you. Very helpful, thank you.

了解了。非常有幫助，謝謝。

You're welcome.

不客氣。

Steve Smigie, Raymond James.

Steve Smigie，Raymond James。

Great, excellent. Just wanted to follow up, as we think about June, I know you don't like to guide that far out, but if you only have a partial quarter of AMCC in March, so are you going to give any color on what maybe AMCC could look like in June at this point and we could maybe call ourselves on June, or how we should think about seasonality now for June?

很好，太棒了。我想追問一下，當我們思考 6 月季度時，我知道你們不喜歡把指引給到那麼遠，但如果 3 月只有 AMCC 的部分季度，那你們現在是否會提供一些線索，讓我們了解 6 月 AMCC 可能會是什麼樣子，或者我們可以自己推估 6 月，或是我們現在應該如何看待 6 月的季節性？

So we traditionally do not have seasonality in our June quarter. I don't expect it with the acquired business. We are going to -- again, don't like to identify these businesses and that's why we pointed to the enterprise and data center revenue category, because there is complementary and product overlaps that push and pull each other. But overall, I think if you were to look at the trend by quarters, in line with the shaping of MACOM, I think from this point here you'd see similar shaping for the balance of the year.

我們傳統上在 6 月季度沒有季節性。我也不預期收購進來的業務會有。我們會——再說一次，我們不喜歡點名這些業務，所以我們才指向企業與資料中心營收類別，因為其中有互補性與產品重疊，彼此會有拉抬與抵銷。但整體而言，我認為如果你按季度去看趨勢，會與 MACOM 的走勢塑形一致；從現在起，你會看到今年剩餘期間有類似的走勢。

Okay, great. And then, it sounds like you guys continue to make progress on GaN, it feels like this is a year where you get some production revenue or maybe calendar 2018 is the year where maybe you see more substantial revenue. Should we think about the 2018 revenue as probably an order of magnitude -- or maybe not an order of magnitude but multiple or larger returns of revenue in 2018 versus 2017?

好的，很好。接著聽起來你們在 GaN 上持續取得進展，感覺今年會有一些量產營收，或者可能到 2018 年曆年才會看到更顯著的營收。那我們是否應該把 2018 年的營收想成大概會是——或許不是一個數量級，但會是 2018 相較 2017 的數倍或更大的營收回報？

No question, I think that's not an unfair assessment. There is material contribution in the back half of the year that's again beginning to ramp. It just layers on top of the other things that are turning on. Bob maybe commented that there isn't seasonality, I would actually describe our third and fourth quarter as the absence of negative seasonality, so maybe that's seasonality. So I mean traditionally our third and fourth quarter are pretty strong, you start layering in the GaN of stuff and it starts looking better and better. But no question, talking about our top line numbers are big enough now that GaN has to get sizable to have a material contribution to our growth and there's no question 2018 would be the year where that happens.

毫無疑問，我覺得這樣的判斷不算不公平。今年下半年會有實質貢獻，而且正開始爬坡；它只是疊加在其他正在啟動的項目之上。Bob 也許提到沒有季節性，但我其實會把我們第三、第四季描述為「沒有負向季節性」，所以也許那就是季節性。也就是說，傳統上我們第三、第四季都相當強，當你再把 GaN 的東西疊上去，看起來就越來越好。不過毫無疑問，我們現在營收規模已經夠大，GaN 必須做到相當可觀，才會對我們成長有實質貢獻；而 2018 年毫無疑問會是那個發生的一年。

Again, riding on top of cloud data centers, Metro Long Haul seems to have a lot of juice to continue at least for another year. So it all layers in nicely. But that's not an inaccurate description. And it's coming off a small enough number that an order of magnitude is pretty easy, to be honest. The question is how many multiples of an order of magnitude.

同樣地，疊加在雲端資料中心之上，城域與長途（Metro Long Haul）看起來還有很大的動能，至少還能延續一年。所以整體疊加得很漂亮。這樣的描述並不不準確。而且它是從一個夠小的基數起跳，老實說，要做到一個數量級的成長其實很容易。問題在於會是「一個數量級的幾倍」。

And again, once we get through the field trials and the customer qualifications, we'll have a much better sense. As I mentioned, customers now asking us about global procurement agreements --- that is a clear indicator they're looking to move forward and turn on significant share of wallet. Same thing when they're exercising us a 900 MHz programs. That a clear indicator they are looking at a wholesale transition from a supply chain standpoint. So all the indicators are good, but there's still a lot of execution before us.

而且，一旦我們完成現場測試與客戶認證，我們就會更清楚。如我提到的，客戶現在開始詢問我們全球採購協議——這是很明確的指標，代表他們希望往前推進並啟動顯著的錢包份額（share of wallet）。同樣地，當他們讓我們參與 900 MHz 專案時，也是一個明確指標，表示他們正從供應鏈角度考慮全面轉換。所以所有指標都很正面，但我們前面仍有很多執行工作要完成。

If I could just sneak one quick one in on -- John, you have a lot of experience in this space. Can you talk about if there's any second sourcing? So let's say you have a major OEM, you win certain platforms and even within a specific platform you might win, could you share that platform fifty-fifty with somebody? So how many suppliers would an OEM adopt within a specific platform, how many suppliers did they adopt?

如果我可以再塞一個很快的問題——John，你在這個領域有很多經驗。你能談談是否存在第二供應來源（second sourcing）嗎？也就是說，假設你有一家主要 OEM，你在某些平台上勝出，甚至在某個特定平台內你可能勝出，那你是否可能跟別人五五分？所以在特定平台內，OEM 會採用多少家供應商？他們會採用幾家供應商？

So when a program goes into production, there's no such thing as a second source. During the development process they will have two or three runoff, typically two, more is a risk, a contingency in terms of technical execution. But once the business is awarded, it is impossible to have two sources. The behavior of the devices and the designs are different, so there's no way to have two sources.

所以當一個專案進入量產後，就沒有什麼第二來源這回事。在開發過程中，他們會有兩到三個備選，通常是兩個；更多會是一種風險，是在技術執行上的備援。但一旦業務授予之後，不可能有兩個來源。元件的行為與設計不同，所以沒有辦法有兩個來源。

The way they achieve the spirit of what you're describing is, these base station OEMs are very mature and controlled in terms of awarding programs to stick handle share of wallet within their overall purchase. They're buying $200 million plus each of power transistors and for a given year, depending on how different vendors are performing, they will have targets increasing or decreasing for each of those vendors. But on a program by program basis, they're sole sourced.

他們達成你所描述那種精神的方式是：這些基地台 OEM 在專案授予上非常成熟且控管嚴謹，會在整體採購中調配錢包份額。他們每年採購功率電晶體超過 2 億美元；在某一年，取決於不同供應商的表現，他們會對各供應商設定提高或降低的目標。但就單一專案而言，他們是單一來源（sole sourced）。

Okay that's really helpful, thank you.

好的，這真的很有幫助，謝謝。

You're welcome.

不客氣。

Blayne Curtis, Barclays.

Blayne Curtis，Barclays。

Just looking at the March guidance, maybe you can talk about the core MACOM segments just directionally. Are they all growing or are you seeing any seasonality?

看一下 3 月的指引，也許你可以就核心 MACOM 各個部門的方向性談談。它們都是在成長嗎？還是你們看到任何季節性？

So A&D, consistent with the question the line of questioning earlier, that's going to have a strong quarter. Networks is going to have a strong quarter. And multi market is kind of a neutral quarter. The way I describe that when I look into it, that kind of surprised me when I looked at it, but basically our catalog MMICs are selling into applications that are ramping more aggressively. And customers that we described as A&D and networks, multi market is basically other, so there's no reason why that's not growing, it's just our MMICs are very hot on the A&D and the networks side right now. But as you would expect, as you start getting into our second and especially our third and fourth quarter, things lift pretty materially.

所以 A&D（航太與國防），呼應先前那一串提問，這一季會很強。Networks（網路）這一季也會很強。Multi market（多元市場）則大致是持平的一季。我深入看時的描述是：這點在我看到時有點意外，但基本上我們的型錄 MMIC 正在賣到一些爬坡更積極的應用上。而我們所描述為 A&D 與 networks 的客戶，multi market 基本上就是其他，所以沒有理由它不成長；只是我們的 MMIC 目前在 A&D 與 networks 端非常火熱。不過如你所預期，當你進入我們第二季，尤其第三、第四季時，整體會相當明顯地上升。

Got you. And then maybe just talk about that, in the second half you talked about 100 gig lasers, can you talk about what you need to accomplish to get these to revenue?

了解。那接著也許談一下，你在後半段提到 100G 雷射，能否談談你們要達成哪些事情，才能讓這些產品開始帶來營收？

Design wins and orders. We launched three lasers, I think it was about 90 days ago at our last earnings call, just before that. And now we're hot and heavy, I think we've got 25 or 30 customers that were actively in design wins. And there is some qualifications required of end customers, so that's what -- it's all leading to 100 gig demand so this is 4 times 25G, so it's big numbers, healthy ASPs, great gross margin, so it's all good stuff.

設計導入（design wins）與訂單。我們推出了三款雷射，我記得大概是在 90 天前、我們上次法說會時，就在那之前不久。現在我們正全力推進，我想目前大概有 25 到 30 家客戶正在積極進行設計導入。而終端客戶也需要完成一些認證/資格審核，所以這些 -- 都是在導向 100G 的需求，因為這是 4 倍的 25G，所以量很大、ASP 健康、毛利率很棒，所以整體都是好消息。

That's one of the contributors, but it's pretty much across the board. The Metro Long Haul stuff, that is insatiable. It's all capacity expansion there, that's a growth driver. We get some contribution from GaN, A&D from the previous comments, that's strong. It's pretty much everything. When you get into the third and fourth quarter everything is kind of clicking on all cylinders or that's the way it looks.

那是其中一個貢獻來源，但其實幾乎是全面性的。都會/長途（Metro Long Haul）那塊的需求是無止境的，全部都是擴充容量，這是成長動能。我們也從 GaN、航太與國防（A&D）得到一些貢獻，呼應前面提到的內容，那部分很強。基本上是各方面都在發力。到了第三、第四季，所有事情看起來都在全面到位、火力全開，至少目前看起來是這樣。

Okay, thanks, nice job.

好的，謝謝，做得很好。

Thanks.

謝謝。

Quinn Bolton, Needham & Company.

Needham & Company 的 Quinn Bolton。

Hey guys. Just wanted to first ask on the AppliedMicro, should we be thinking about that quarter since you have a partial contribution this quarter, is that business fairly linear across the three months, meaning that we should take effectively two-thirds of whatever we forecast AMCC to do in a full March quarter, and then you'll pick up that third month in June? Or does it tend to be a little bit more back end loaded in February and March? That your guidance would actually include more than a two-thirds contribution for AMCC?

嗨，各位。我先想問 AppliedMicro 的部分，因為這一季只有部分貢獻，我們是否應該把它視為三個月相對線性、也就是說我們可以用 AMCC 在完整 3 月季度的預估值乘以三分之二，然後剩下那三分之一會在 6 月季度認列？還是它通常在 2 月和 3 月比較偏後段出貨，因此你們的指引其實會包含高於三分之二的 AMCC 貢獻？

So as Bob said, we don't bifurcate the business between the two. But if you take two-thirds of the number, it's probably good math, not inconsistent with the previous expectations.

如 Bob 所說，我們不會把兩邊的業務拆開來看。但如果你用那個數字的三分之二來估，這大概是合理的算法，且不會與先前的預期不一致。

But it's not what they did two-thirds of what they did last quarter though. That's the caution here. Because of the end of life and the dynamics going around the embedded processor.

但要注意的是，這不是「他們上季表現的三分之二」。這裡要提醒一下。因為嵌入式處理器那邊有產品生命週期結束（end of life）以及相關動態因素。

Yes -- well are you talking about for second quarter or third quarter?

是的 -- 你是在問第二季還是第三季？

For the forward quarter.

問的是往前看的那一季。

Yes, so when you go forward to the third quarter and so on, you have a very substantial tail off on that embedded business.

是的，所以當你往第三季以及之後看，嵌入式那塊業務會有非常明顯的下滑。

Right. Got it. And then sort a similar question on the expenses, I know when you announced the deal you said that the connectivity business carried about 49% of the OpEx. Will that other 51% from day one of the acquisition be included in those discontinued ops or could some of the AMCC expenses be a little bit higher here in the stub period for March that could weigh on OpEx?

了解。那再問一個類似的問題，關於費用。我知道你們宣布交易時提到，連接（connectivity）業務大約承擔 49% 的營業費用（OpEx）。那剩下 51% 在併購第一天起就會被列入停業部門（discontinued ops）嗎？還是 AMCC 在 3 月這個短期（stub period）的費用可能會稍高，進而對 OpEx 造成壓力？

Quinn, as we talk about it as we announced the deal, there are some imbalance in the first partial quarter of timing of expenses, so it's possible the expenses could be a little higher on this partial quarter that's mismatched against the more traditional linear revenue.

Quinn，如同我們在宣布交易時所談到的，第一個不完整季度在費用認列時點上會有一些不均衡，所以這個不完整季度的費用有可能會稍高，且與較傳統、較線性的營收節奏不完全匹配。

To put in perspective here, we're three days into this post closing, so we are always very cautious because every deal we have done there's always things that we learn, so let's just say we guide with caution.

補充一下背景，我們在交割完成後才第 3 天，所以我們一向非常謹慎，因為每一筆交易我們都會學到一些新情況，所以就先說我們的指引會以審慎為主。

Understood. And then just wanted to come back to the core business, Non-GAAP gross margin towards the lower end of your guidance and I think you said in the script that you have now fully integrated Metelics, and once you're done that I thought you were going to be tracking towards 60% gross margin on the Metelics business. Just wondering where we are on the gross margin ramp for both Metelics and FiBest. Are they still a distance away from that 60% gross margin target that you are aiming for or are they getting closer to that target? Especially on the Metelics side now that you've integrated the two manufacturing facilities into Lowell.

了解。然後我想回到核心業務。Non-GAAP 毛利率落在你們指引區間的較低端，而且我記得你們在講稿中提到現在已經完全整合 Metelics；我原本以為整合完成後，Metelics 的業務毛利率會朝 60% 走。想請問目前 Metelics 與 FiBest 的毛利率爬坡進度如何？距離你們目標的 60% 毛利率還有一段距離嗎，還是已經更接近？特別是 Metelics 這邊，現在你們已把兩個製造據點整合到 Lowell。

I would say both on the Metelics integration, we've closed Sunnyvale and Londonderry and moved that production into Lowell. That's now a tailwind in terms of gross margin expansion. Likewise on FiBest, we've restructured our supply chain as new product transitions where we have the majority, if not 100% semiconductor content. So that's a tailwind in gross margin expansion.

我會說，Metelics 的整合方面，我們已關閉 Sunnyvale 與 Londonderry，並把生產移到 Lowell。這在毛利率擴張上已經成為順風。同樣地，FiBest 方面，我們在新產品轉換時重整了供應鏈，讓半導體內容占比達到大多數、甚至可能是 100%。這也會成為毛利率擴張的順風。

The issue with the last quarter, as bizarre as this sounds, is the weakness in PON. PON is actually one of our highest gross margin -- higher, not highest -- but higher gross margin areas for commodity. Those lasers, the Etched Facet Technology has just a fabulous economic position in that market. So with the weakness in PON being compensated by Metro Long Haul, part of that is actually compensation with the TOSA/ROSA portfolio that came over with FiBest. Which is, even on a good day, not nearly what we get from the Etched Facet lasers.

上一季的問題是，聽起來很奇怪，但其實是 PON 的疲弱。PON 其實是我們毛利率較高的領域之一 -- 是較高、不是最高 -- 但在商品型產品中屬於較高毛利。那些雷射的蝕刻端面技術（Etched Facet Technology）在那個市場有非常出色的經濟性。因此當 PON 的疲弱由都會/長途（Metro Long Haul）來補上時，其中一部分其實是由 FiBest 帶來的 TOSA/ROSA 產品組合來補。即使在最好的情況下，那也遠不如我們從蝕刻端面雷射所取得的水準。

So it's really a mix issue that was this weakness in PON and strength in the Metro Long Haul. Which again is counterintuitive, you would think PON would be low margin, Metro Long Haul would be high margin, the modulator drivers are a great margin, the TOSAs/ROSAs are modest margin. So it's just a bunch of moving parts in the past quarter.

所以這其實是組合（mix）問題：PON 疲弱、都會/長途強勁。這點再次說明是反直覺的，你會以為 PON 低毛利、都會/長途高毛利；調變器驅動器（modulator drivers）毛利很棒，而 TOSA/ROSA 的毛利則較為一般。所以過去一季就是很多因素同時在變動。

Got it, great, thank you.

了解，很好，謝謝你。

You're welcome.

不客氣。

Mark Delaney, Goldman Sachs.

Goldman Sachs 的 Mark Delaney。

Yes, good afternoon, and thanks very much for taking the questions. First question is on some of the -radar opportunities around tiles with MPAR and the SPAR tiles. Can you give us an update on when you could maybe convert some of those opportunities for aerospace and defense and weather applications into revenue?

是的，下午好，也非常感謝讓我提問。第一個問題是關於一些與雷達相關的機會，圍繞 MPAR 與 SPAR 磚塊（tiles）。你能否更新一下，何時可能把航太與國防、以及氣象應用的這些機會轉換成營收？

We try to avoid talking a lot about that because until we have landed the programs, we can't say that we've landed the programs. I can tell you our lead customer, Northop, has some very active focus within Northrop on specific programs that would be thoroughly inappropriate to talk about. But on the civil side, where we work with Northrop and everyone else, MPAR continues to move down. The bidding is this year in 2017 with RFPs that are going out. Our customers are all kind of scrambling to come up with their own competitive strategies on how they plan to bid. But that's still a ways off in terms of production.

我們會盡量避免談太多，因為在我們拿下專案之前，我們不能說我們已拿下專案。我可以告訴你，我們的主要客戶 Northrop，在 Northrop 內部對一些特定專案有非常積極的投入，但談那些會非常不適當。不過在民用端，我們與 Northrop 以及其他夥伴合作的部分，MPAR 持續往下推進。今年 2017 年會進入投標階段，RFP 也會陸續發出。我們的客戶都在加緊制定各自的競爭策略，規劃如何投標。但就量產而言，距離真正生產仍還有一段時間。

The one thing I would say though is, if you actually look at even modest levels of initial production builds for some of these guys, for their own bidding process, it adds up to not immaterial revenue to us in terms of growth. So in the medium term, if MPAR gets traction in terms of through that RFP process, we can see material contribution next year.

不過我會說一點：即使你只看其中一些廠商在初期、為了自身投標流程而做的相對溫和的試產建置量，對我們而言加總起來也會形成不可忽視的營收成長。所以中期來看，如果 MPAR 在 RFP 流程中獲得進展，我們明年就可能看到實質貢獻。

That's helpful, and then follow up question, if you could just talk a bit more on the multi market business, just any sort of trends you're seeing in terms of distribution changes and changes in inventory patterns at the channel.

這很有幫助。接著一個追問，如果可以的話，請再多談談多市場（multi market）業務：你們看到的趨勢，例如通路/經銷（distribution）變化，以及通路端庫存模式的變化。

No. There wasn't anything really material in terms of inventory trends for our catalog portfolio. Again, catalog transcends multi market A&D and networks. So that was not a primary factor. Things were relatively flat, to be honest.

沒有。就我們的型錄（catalog）產品組合而言，庫存趨勢沒有什麼實質性的變化。再說一次，型錄產品橫跨多市場的航太與國防以及網路領域，所以那不是主要因素。老實說，整體相對持平。

With the growth of the networks business, the reliance upon the contribution of distribution revenues continue to decline. As the networks business primarily direct OEMs or their contract manufacturers.

隨著網路業務成長，對經銷通路營收貢獻的依賴持續下降。因為網路業務主要是直接面向 OEM 或其代工廠（contract manufacturers）。

Big guys.

大客戶。

Got it. One clarification as you guys go to the new segment reporting for next quarter with AMCC. I think a piece of AMCC in the acquisition presentation with allocated out to be optical, so is the part of AMCC that you consider optical going to be in the optical line or is all of AMCC going to go into your data center segment?

了解。最後一個釐清：你們下季因 AMCC 將採用新的分部揭露。我記得在併購簡報中，AMCC 有一部分被分配到光學（optical），那你們認為屬於光學的 AMCC 部分會放在光學那條線裡，還是 AMCC 全部都會放進你們的資料中心（data center）分部？

There is a small piece, most of it though is going to go to the enterprise data center.

有一小部分，但其中大多數將會進入企業資料中心。

Yes, I don't think we're talking about reporting even our analog data center products as optical. We will pull it out of optical. And in the spirit, we want to provide greater visibility and granularity in terms of -- that data center business is really driven by a different set of economics than the service provider side. So now that we're going to have such a mass of revenue, it makes sense to report on that separately as it really behaves differently. But we've got to get to the point is actually slicing and dicing the AppliedMicro revenue to come up with definitive answers 90 days from now.

是的，我不認為我們在談要把甚至我們的類比資料中心產品也當作光學來揭露。我們會把它從光學中拆出來。而且本著這個精神，我們希望在可視性與細分粒度方面提供更高的透明度——因為資料中心業務的驅動經濟性，確實與服務供應商端是不同的一套。因此，既然我們將會有這麼大一塊營收，把它獨立出來單獨揭露是合理的，因為它的表現方式確實不同。但我們必須先做到能夠把 AppliedMicro 的營收切分拆解，才能在 90 天後給出明確的答案。

Understood, thank you very much.

了解，非常感謝。

You're welcome.

不客氣。

(Operator Instructions)

（接線員指示）

Tore Svanberg, Stifel.

Tore Svanberg，Stifel。

Yes, thank you. Can you just clarify what exactly is going to be reported under data center revenue?

是的，謝謝。你能否釐清一下，究竟哪些項目會被歸類並揭露為資料中心營收？

So we sell many products, clock data recovery, TIAs, the L-PIC would be a data center product; some of the framers, OTM MACsec at the data center primarily and the PAM4, when that kicks off, that would be more of an optical application.

我們銷售很多產品：時鐘資料恢復（CDR）、跨阻放大器（TIA）、L-PIC 會是資料中心產品；部分成幀器（framer）、OTM MACsec 主要在資料中心端，以及 PAM4，當它開始放量時，那會更偏向光學應用。

Okay. I just got a bit confused, because you said some of the analog parts, you're actually not going to include in data center, or did I not hear that correctly?

好的。我有點困惑，因為你說有些類比零件其實不會納入資料中心，還是我聽錯了？

No. So the products that we have that we started reporting as data center last quarter, these are VCSEL and laser drivers, TIA, CDRs and so on. We will report those separately as data center -- separate from optical. And then, a sizable chunk of the AppliedMicro portfolio, notably PAM4, but they sell a lot of product into enterprise data centers. So that's the part of their revenue that we will be reporting as data center. So it's not just cloud data centers, it's enterprise and cloud data centers.

沒有。也就是說，我們上季開始以資料中心來揭露的那些產品，包括 VCSEL 與雷射驅動器、TIA、CDR 等等。我們會把這些作為資料中心單獨揭露——與光學分開。另外，AppliedMicro 產品組合中有相當大的一塊，尤其是 PAM4，但他們也有很多產品是賣進企業資料中心。因此，我們會把他們那一部分的營收揭露為資料中心。所以不只是雲端資料中心，也包含企業與雲端資料中心。

That's very helpful. And you also talked about some competitors flushing out inventories in the March quarter and the PON area, I'm just wondering, are these same competitors going to be around or they are basically just older parts that they need to flush out? Just trying to understand the dynamics a little bit better there, which obviously gives you confidence that maybe PON is going to start growing again in the June quarter.

這很有幫助。你也提到有些競爭對手在 3 月季度、以及 PON 領域在清理庫存。我想問的是，這些競爭對手之後還會繼續存在嗎？還是基本上只是一些舊料需要出清？我只是想更了解那邊的動態，這顯然也讓你有信心 PON 可能在 6 月季度會重新開始成長。

So basically what happened is, coming in Mitsubishi and CyOptics, Avago, Broadcom, or whatever they called now, were really the two incumbent big guys, and when there was a supply shortage, there were four Asian competitors that attempted to try to fill the void in addition to BinOptics. And what happened was when we got so aggressive in taking share a few quarters ago during the summer, we got up to about 70% share, we got a cost structure that is well below what any of these guys have. We could meet the market price targets and basically consolidate down to the three big guys. Three of the four guys basically decided, what we understand, is to exit the business and started liquidating inventories.

基本上發生的是：原本三菱與 CyOptics、Avago、Broadcom（或他們現在叫什麼）其實是兩個既有的大玩家；當時出現供應短缺時，除了 BinOptics 之外，還有四家亞洲競爭對手試圖填補缺口。結果是，當我們在幾個季度前的夏天非常積極地搶市占時，我們的市占一度到大約 70%，而且我們的成本結構遠低於任何一家。我們能達到市場的目標價格，基本上把市場整併到三家主要玩家。據我們了解，那四家中的三家基本上決定退出這個業務，並開始清算庫存。

When that behavior starts, as you can imagine, there is some dumping that goes on they will sell at any price. So we assumed the posture of saying, okay, we've got to let that stuff flush, because our primary concern is preserving ASP such as that when that stuff flushes, we still have a healthy cash flow business, because the end market demand has not changed. Our customer is telling us the end market demand is the same.

當這種行為開始時，如你所想，會出現一些拋售——他們會以任何價格賣出。因此我們採取的立場是：好吧，我們得讓這些貨先出清，因為我們首要關切是維持 ASP（平均售價），讓這些貨出清後，我們仍然能有健康的現金流業務，因為終端市場需求並沒有改變。我們的客戶告訴我們，終端市場需求是一樣的。

There was some other dynamics when one of our customer is changing from an in sourcing to an outsourcing with five sub cons, so lots of kind of moving parts. But at the end of the day there's three definitive guys, second tier guys that are exiting the business. And the fourth one, they are on the ropes.

另外還有一些動態，例如我們其中一位客戶正從內製轉為外包，並有五家代工廠，所以有很多變動因素。但歸根結底，現在有三家明確的玩家；第二梯隊的玩家正在退出這個業務。而第四家也已經岌岌可危。

Okay.

好的。

So that's something that, frankly, we didn't fully anticipate that when guys exit that happens. But it is what it is.

坦白說，這是我們沒有完全預期到的——當有人退出時就會發生這種事。但事情就是如此。

Okay, very good. And then the last question is on GaN. So maybe you could talk a little bit about some of the milestones from your own manufacturing perspective and my understanding is that you're going to be manufacturing all these in-house. Is that the case, would you consider doing outsourcing? And again, what are some of the milestones for us to monitor as far as manufacturing on your side as you gear up for a bigger GaN ramps?

好的，很好。最後一個問題是關於 GaN。也許你可以從你們自身製造的角度談談一些里程碑。我理解你們會把這些都在內部製造，是這樣嗎？你們會考慮外包嗎？另外，就你們端為了更大規模的 GaN 放量而做準備，在製造方面有哪些里程碑是我們可以追蹤的？

Yes, so the answer is really time dimensional. So when the Nitronex business came over it was outsourced, Nitronex was not manufacturing wafers, so we still have that source that supplies some of our GaN. We then brought it into Lowell, so we have Lowell as a source, as a qualified source now for our GeN4. And then we have another partner that I'm just chomping at the bit to announce, which is the game changer in terms of the cost structure. We are within spitting distance now of being able to announce that, and be off to the races. So in terms of wafer supply, it's going to be multisourced.

是的，所以答案其實取決於時間維度。Nitronex 業務併入時是外包的，Nitronex 本身不製造晶圓，所以我們仍有那個來源供應我們部分 GaN。之後我們把它導入 Lowell，所以 Lowell 現在已成為我們 GeN4 的一個合格來源。然後我們還有另一個合作夥伴，我已經迫不及待想宣布了——就成本結構而言那會是改變遊戲規則的關鍵。我們現在距離能夠宣布已經非常接近，之後就能全速前進。因此在晶圓供應方面，會是多來源供應。

That's one of the things that, if you're going to supply proprietary product to base station guys, you cannot be supplying it from one factory. And you need to have surge capacity, so that supply chain is really being tuned with partners both on the front end as well as backend. The backend manufacturing is equally critical in terms of surge capacity. So it's not fully internally sourced. Partially, but not entirely.

如果你要向基地台客戶供應專有產品，其中一件事是你不能只從單一工廠供貨。你需要有突發（surge）產能，因此供應鏈正在與合作夥伴一起調校，涵蓋前段以及後段。後段製造在突發產能方面同樣關鍵。所以不會完全內部自製；部分是，但不是全部。

That's helpful, thank you very much.

很有幫助，非常感謝。

You're welcome.

不客氣。

Harsh Kumar, Stephens.

Harsh Kumar，Stephens。

Hey Bob, a lot of us are trying to triangulate on the March guide and trying to figure what's running that, is there any way you could give us a range or point us in the direction of how much is switch and how much is compute business? Or give us some idea thereof?

嗨，Bob，我們很多人都在嘗試推算 3 月的指引並想弄清楚是什麼在驅動它。你能否給我們一個區間，或指引我們大概有多少是交換器（switch）業務、多少是運算（compute）業務？或給我們一些概念？

So it was in the 20% to 25% range of total revenues last quarter for their December quarter.

他們在上一季（也就是他們的 12 月季度）大約占總營收的 20% 到 25%。

Okay, that's helpful Bob. And that's together, right? Obviously the compute business was not very much. Okay that's very helpful. And then you're saying it falls off really, really fast from there?

好的，這很有幫助，Bob。那是合在一起的對吧？顯然運算業務並不多。好的，這非常有幫助。然後你是說從那之後就會非常、非常快地下滑？

Yes.

是的。

Okay. Also, second question, in terms of -- and this is for John and Bob, in terms of you have it now, it's a little early, couple days now, but obviously I would suspect there is some consolidation at least at some level that will happen. How do you view these, is there even an opportunity here?

好的。另外第二個問題，關於——這題給 John 和 Bob：你們現在才剛拿到，雖然還很早，才幾天，但我想至少在某個層面上會有一些整併發生。你們怎麼看這些，這裡是否甚至存在機會？

I'm sorry, consolidation?

抱歉，你說整併？

Cost structure.

成本結構。

Oh yes, people have already been informed. The people who are not staying on, many have already left. And then one of our goals, and we've achieved it this time, is at the time of closing, everyone knows definitively if they are staying, if they are going, if they are staying temporarily for 90 days, 180 days, transitional, we owe it to them to be very clear. And for those who are not necessarily in the short term, necessary in the short term, they are informed immediately and walk away with very generous packages. So there is a lot of cost savings going on right now.

喔，是的，相關人員已經被告知了。不會留下來的人，很多已經離開。然後我們的一個目標——而且這次我們做到了——是在交割完成時，每個人都能明確知道自己是留下、離開，或是暫時留下 90 天、180 天作為過渡；我們有義務把話說清楚。對於短期內不一定需要的人，我們會立即通知，並讓他們帶著非常優渥的補償方案離開。所以目前正在進行大量的成本節省。

Understood. And another one for Bob, Bob in terms of OpEx, would you be able to give us an idea of how the new OpEx for March, how that breaks down into R&D and SG&A considering is going to have a pretty big component in AMCC?

了解。另外一題給 Bob：就營業費用（OpEx）而言，你能否讓我們大概了解 3 月的新 OpEx，考量到 AMCC 會占很大一部分，它在研發（R&D）與銷售、一般及行政（SG&A）之間大概如何拆分？

So I think you will see continued -- the way I will tell you is, you will see continued expansion of operating margin by 100 to 200 basis points, something like that. So I think on the guide you can kind of get to the number there.

我想你會看到營業利益率持續擴張——我會這樣告訴你：你會看到營業利益率持續擴張約 100 到 200 個基點，差不多是這樣。所以你可以從指引大致推算出那個數字。

Fair enough, that's helpful. And then, sorry back up to John, John you mentioned there is on the GaN side, there is a global requisite from a customer, one of your potential customers. And then you separately mentioned there is a 900 MHz bid request on the product side. Are these two from the same guy or customer or are they from the two separate customers?

了解，這很有幫助。然後，不好意思我回到 John 那邊，John 你提到在 GaN 這一塊，有一個來自客戶（你們其中一位潛在客戶）的全球性要求。另外你也分別提到在產品端有一個 900 MHz 的投標請求。這兩個是同一個人或同一個客戶提出的，還是來自兩個不同的客戶？

The one I was referring to are both from the same guy, there were other 900 MHz requests that are not as far along. By the way, there other customers where we already have global purchase agreements. The reason why I called out the new one was, the fact that it's a new specifically for base station business is an indicator that they are looking to move forward and to bring us on as a mainstream supplier. I can't say, if we have a GPA the preexists, I can't make that statement. We are already covered by a GPA. But when I was trying to do is really provide our investors visibility into leading indicators that we're on the right track. And that to me, for that particular customer, which is a very substantial player, is a very big deal.

我剛才提到的那個，兩件事都是同一個人提出的；另外也有其他 900 MHz 的需求，但進度沒有那麼快。順帶一提，還有其他客戶我們已經有全球採購協議（GPA）。我之所以特別點出這個新的，是因為它是針對基地台業務的新協議，這代表他們正打算往前推進，並把我們納入主流供應商。我不能說如果我們有一個既有的 GPA 就能做出那樣的表述；我們已經被 GPA 覆蓋了。但我想做的是，讓投資人看見一些領先指標，顯示我們走在正確的軌道上。對我而言，對那個特定客戶（而且是非常重要的玩家）來說，這是一件非常大的事。

Understood. Thanks guys. This is all I have, thank you.

了解。謝謝各位。我的問題就這些，謝謝。

You're welcome.

不客氣。

Richard Shannon, Craig-Hallum.

Richard Shannon，Craig-Hallum。

Hi John and Bob, thanks for taking my questions. Maybe just a couple for me first on the topic of PON. Taking a couple of your prepared remarks, as well as one of the questions, John, curious what your expectations are for share, that you might have after three of the suppliers liquidate their inventory. Think you mentioned CyOptics and Mitsubishi as ones who have historically been there, do you expect them to maintain or could you have a share easily higher than the 70% number you talked about over the summer?

嗨 John 和 Bob，謝謝讓我提問。我這邊可能先問兩個，先談 PON。綜合你們準備好的發言以及其中一個問題，John，我想了解你對市占的預期：在三家供應商清掉庫存之後，你們可能會拿到多少份額？我想你提到 CyOptics 和 Mitsubishi 是過去一直在的供應商，你預期他們會維持原狀嗎？或者你們是否能很容易把市占拉高到你夏天提到的 70% 以上？

It's quite possible we can end up with a higher share. It's just when you get above 70%, it's kind of diminishing returns in terms of incremental share. I think when you get up to that level, you're going to be guided more by the end market health than anything else, and I can't predict those customers', those competitors' behaviors. We suspect that this is relatively poor margin business for them, so it's not something at all that they care to fight over. But it's not like we're looking to rule the universe with a monopolistic supply condition either. So at 70% we are happy, we accomplish what we want, which is a great cash flow business.

很有可能我們最後會拿到更高的市占。只是當你超過 70% 之後，就增量市占而言會有點邊際效益遞減。我認為當你到那個水準時，更多會受到終端市場健康狀況的影響，而不是其他因素；而且我也無法預測那些客戶、那些競爭對手的行為。我們推測這對他們來說是毛利相對不佳的業務，所以他們也不太會想為此大打出手。但我們也不是要以壟斷式供應來稱霸市場。70% 的話我們就很滿意，也達成我們想要的目標：這是一門現金流很好的生意。

Okay fair enough. Question on your L-PIC products and if I could ask you to repeat the comments about the products you intend to come out with here. I thought I heard you say CWDM4 and PSM4, if you could just repeat which products you specifically anticipate for L-PIC that would be great.

好，了解。關於你們的 L-PIC 產品，我想請你重複一下你剛才提到你們打算推出的產品評論。我好像聽到你說 CWDM4 和 PSM4；如果你能再重複一次你對 L-PIC 具體預期的產品，會很有幫助。

So the product that we'll be showcasing at OFC is the first product, which is a quad L-PIC for CWDM4. So that is a very hot commodity for data center applications. Really showcases the benefits of that self aligning technology.

我們會在 OFC 展示的產品是第一個產品，也就是用於 CWDM4 的四通道（quad）L-PIC。這在資料中心應用上是非常熱門的品項，也能充分展現那項自我對準（self-aligning）技術的優勢。

Okay. And just to verify, you also said PSM4 as well, John?

好。再確認一下，John，你也提到了 PSM4，對嗎？

Yes. I don't think we've announced anything about product plans beyond that, but we have very ambitious plans taking advantage of that L-PIC capability.

是的。我想我們還沒有對外宣布超出這些的產品規劃，但我們會非常積極地利用 L-PIC 的能力來推進。

Okay. And then on CWDM4, do you think you can give us a sense of timeframe you expect to be in the volume production for that?

好。那在 CWDM4 方面，你覺得能否給我們一個大概的時間點，預期何時會進入量產？

Second half of the year unequivocally we will have production units at OFC. In fact, I believe we have production units today, we are just completing the qualifications. It's kind of like analogous to the GaN ramp. There's issues of getting the supply chain aligned to be able to scale to the volume required for these data centers. And we have complete alignment with our manufacturing partner on that stuff, and it's a matter of just locking down supply and securing the designs. We've actually got the same customers who we would anticipate to be the lead customers for the L-PICs with the previous generation where we are not supplying the L-PIC, we're providing all of the analog content at a higher level of solution with the right supply chain lined up. So the L-PIC really kind of slots in as the next generation that disrupts the cost structure that much more. But it's not like our revenue in data centers is waiting for the L-PIC.

毫無疑問在下半年，我們在 OFC 會有量產單位。事實上，我相信我們今天就已經有量產單位了，只是在完成認證（qualification）。這有點類似 GaN 的爬坡：關鍵在於讓供應鏈對齊，才能擴產到這些資料中心所需要的量。我們和製造合作夥伴在這些事情上已經完全對齊，接下來就是把供應鎖定、把設計定案。我們其實也已經和同一批客戶合作：在上一代產品中，即使我們不是供應 L-PIC，我們也以更高層級的解決方案提供所有類比內容，並把正確的供應鏈配置好。所以 L-PIC 基本上就是下一代，能進一步顛覆成本結構。但我們的資料中心營收並不是在等 L-PIC 才會發生。

Right of course. Understood. Last question for me, you mentioned you're still capacity constrained, any way can give us a sense of what product or products you are constrained on and how long those will remain?

對，當然。了解。我最後一個問題：你提到你們仍然受限於產能，有沒有辦法讓我們了解是哪些產品受限，以及這種情況大概會持續多久？

We have insatiable demand for the modulator drivers where we have leadership share, as well as for the TOSAs and ROSAs. Every single product that we can manufacturer, we can sell for the foreseeable future.

我們在調變器驅動器（modulator drivers）方面需求旺盛到供不應求，而我們在這塊有領先的市占；另外 TOSA 和 ROSA 也是如此。就可預見的未來，我們能製造的每一個產品，都能賣得出去。

Okay. Perfect, that's all the questions for me guys, thank you very much.

好。非常好，我的問題就這些，謝謝各位。

You're welcome.

不客氣。

I'd just like to -- Harsh, to your question on operating margin, the right range is about 50 basis points to 100 basis points, not 100 to 200. I want to make that clear.

我想補充一下——Harsh，關於你問的營業利益率（operating margin），正確的區間大約是 50 個基點到 100 個基點，不是 100 到 200。我想把這點說清楚。

Thank you, and that concludes our question and answer session for today. I would like to turn the floor back over to John Croteau for any closing comments.

謝謝，今天的問答環節到此結束。接下來我想把時間交回給 John Croteau，請他做結語。

Very good. Before closing out today's call, please note that we will be attending a number of upcoming investor events, including the Goldman Sachs conference on February 15 in San Francisco and the Raymond James Institutional Investors conference in Orlando on March 6. In addition, we'll be taking meetings that Mobile World Congress in Barcelona and OFC in Los Angeles, if any of you plan to attend. If you'd like to request a meeting at one of these upcoming events, please email us at IR@macom.com We look forward to reporting our fiscal second quarter results and continued progress on next quarter's call. That concludes today's remarks. Operator, you may now disconnect the call.

很好。在結束今天的電話會議之前，請注意我們接下來會參加多場投資人活動，包括 2 月 15 日在舊金山舉行的高盛（Goldman Sachs）會議，以及 3 月 6 日在奧蘭多舉行的 Raymond James 機構投資人會議。此外，如果各位計畫參加，我們也會在巴塞隆納的世界行動通訊大會（Mobile World Congress）以及洛杉磯的 OFC 安排會議。若您希望在上述活動之一安排會面，請寄信至 IR@macom.com。我們期待在下一季的電話會議中，報告我們會計年度第二季的業績，以及持續的進展。以上為今天的結語。接線員，您現在可以中斷通話。

Thank you. Ladies and gentlemen, thank you for participation in today's conference. This does conclude the program and you may now disconnect. Everyone have a great evening.

謝謝。各位女士、先生，感謝您參與今天的會議。至此本次議程結束，您現在可以中斷連線。祝各位晚安。