MACOM Technology Solutions Holdings, Inc. (MTSI) 2017 Q3 法說會逐字稿

Good afternoon, and welcome to MACOM's Fiscal Third Quarter Financial Results Conference Call. (Operator Instructions) As a reminder, this conference call is being recorded today, Tuesday, August 1, 2017. I will now turn the call over to Steve Ferranti, Vice President of Investor Relations at MACOM. Steve, please go ahead.

下午好，歡迎參加 MACOM 會計年度第三季財務業績電話會議。(接線員指示) 提醒各位，本電話會議於今天（2017 年 8 月 1 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, operator. Good afternoon, everyone, and welcome to MACOM's Fiscal Third 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.

謝謝，接線員。各位下午好，歡迎參加 MACOM 2017 會計年度第三季財報電話會議。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。

If you have not yet received a copy of the earnings press release, you can obtain a copy at MACOM's website at www.macom.com, in the Investor Relations section.

若您尚未收到本次財報新聞稿，可至 MACOM 網站 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.

在我把電話交給 John 之前，我想提醒各位，管理層的準備發言以及對各位提問的回答中包含前瞻性陳述，且受某些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》所載之前瞻性陳述安全港條款之保護。

For more detailed discussions of 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 filed on Form 8-K filed today, quarterly reports on Form 10-Q filed on April 26, 2017, and February 1, 2017, and Annual Report on Form 10-K filed on November 17, 2016. Any forward-looking statements represent management's views only as of today, August 1, 2017, and MACOM assumes no obligation to update these statements in the future.

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 Form 8-K 當前報告、於 2017 年 4 月 26 日及 2017 年 2 月 1 日提交的 Form 10-Q 季度報告，以及於 2016 年 11 月 17 日提交的 Form 10-K 年度報告。任何前瞻性陳述僅代表管理層截至今日（2017 年 8 月 1 日）的觀點，MACOM 不承擔未來更新此等陳述之任何義務。

The company's press release and management's statements during this conference 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.

公司新聞稿以及管理層在本次電話會議中的陳述，將包含對若干經調整之非 GAAP 衡量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，皆為此類經調整之非 GAAP 數據。

These financial measures and a reconciliation of GAAP to adjusted non-GAAP results are provided in the company's press release and related Form 8-K, which was filed with the SEC today and can be found at the Investor Relations section of MACOM's website.

上述財務衡量指標以及 GAAP 與經調整非 GAAP 結果之調節表，已載於公司新聞稿及相關 Form 8-K（今日已向 SEC 提交），並可於 MACOM 網站「投資人關係」專區查閱。

For those of you unable to listen to the entire call at this time, a recording will be available via webcast for at least 30 days in the Investor Relations section of MACOM's website. With that, I'll turn over the call to John for his comments on the quarter.

若各位目前無法收聽完整電話會議，網路直播的錄音將於 MACOM 網站「投資人關係」專區提供，至少保留 30 天。接下來，我將把電話交給 John，請他就本季發表評論。

Thanks, Steve. Welcome, everyone, and thanks for joining us today. I'll begin today's call with an overview of our fiscal third 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'll then conclude today's prepared comments by providing a summary of our execution and key highlights during the quarter and guidance for the fiscal fourth quarter of 2017.

謝謝，Steve。歡迎各位，感謝今天加入我們。我將先概述我們 2017 會計年度第三季的業績，接著把電話交給我們的財務長 Bob McMullan，由他更詳細地說明財務表現。之後我將以總結我們本季的執行成果與重點亮點，以及提供 2017 會計年度第四季的展望作為結束。

Our third quarter financial results came in at the lower end of our guidance range. While we had anticipated soft demand in segments like PON and China-based Metro/Long-haul, both were significantly weaker than prior expectations. Partially offsetting that weakness, we had solid performance in our A&D and Multi-market businesses, along with breakout growth again in data centers.

我們第三季的財務結果落在先前財測區間的下緣。雖然我們原先預期 PON 與中國的都會／長途（Metro/Long-haul）等區隔需求偏弱，但實際情況顯著低於先前預期。部分抵銷上述疲弱的是，我們在航太與國防（A&D）及多元市場（Multi-market）業務表現穩健，且資料中心業務再度出現突破性成長。

Last quarter, we began highlighting a weakening environment for network infrastructure in China, which impacted not only our business but the entire Optical supply chain. Despite those major headwinds, we were able to deliver 5% sequential growth. Looking to Q4, demand in China remains very weak as Chinese provincial deployments continue to push out and carriers wind down spending in 2.5G PON in anticipation of 10G. These are major factors shaping Q4 guidance.

上季我們開始強調中國網路基礎建設環境轉弱，這不僅影響我們的業務，也影響整個光學供應鏈。儘管面臨這些重大逆風，我們仍實現 5% 的季增長。展望第四季，中國需求仍然非常疲弱，因為中國各省部署持續延後，且營運商在預期 10G 來臨之際，逐步降低 2.5G PON 的支出。這些是形塑第四季財測的主要因素。

As a diversified high-performance analog provider with broad exposure to numerous end markets and geographies, there are always puts and takes in our business. For the third quarter, these roughly balanced out. However, in the fourth quarter, the degree of weakness we're seeing in China simply cannot be offset by the ramp of other growth drivers in the near term. Despite these short-term challenges, we remain highly confident that our growth strategy remains on track. We expect these cyclical headwinds to turn into tailwinds in fiscal 2018, and our additional growth drivers will layer in on top.

作為一家多元化的高效能類比供應商，我們廣泛布局眾多終端市場與地理區域，因此業務中總會有此消彼長的因素。在第三季，這些因素大致相互抵銷。然而在第四季，我們在中國所見的疲弱程度，短期內無法由其他成長動能的爬坡所抵銷。儘管面臨這些短期挑戰，我們仍高度有信心，成長策略依然按計畫推進。我們預期這些景氣循環逆風將在 2018 會計年度轉為順風，而我們的其他成長動能也將在其上疊加。

So over to the numbers. Revenue for our fiscal third quarter came in at $194.6 million, within our prior guidance range, up 5% sequentially and 37% year-on-year. Excluding the contribution from AppliedMicro and despite Optical being down 16%, we grew 7% organically on a year-over-year basis. Adjusted gross margin was 58.5% with adjusted earnings coming in at $0.67 per diluted share. By end market, Networks was up sequentially, growing 43.5% year-on-year. Multi-market grew sequentially and was up 17.5% year-on-year. Aerospace and Defense was slightly down sequentially but still grew 18.3% year-on-year.

接著看數字。我們 2017 會計年度第三季營收為 1.946 億美元，落在先前財測區間內，季增 5%，年增 37%。若排除 AppliedMicro 的貢獻，且儘管光學業務年減 16%，我們的有機成長仍達年增 7%。經調整毛利率為 58.5%，經調整每股盈餘為稀釋後每股 0.67 美元。按終端市場來看，網路（Networks）業務季增，年增 43.5%。多元市場（Multi-market）業務季增，年增 17.5%。航太與國防（Aerospace and Defense）業務季減幅度不大，但仍年增 18.3%。

Now let me turn it over to Bob to review our fiscal third quarter financials in more detail.

現在我把電話交給 Bob，請他更詳細地說明我們 2017 會計年度第三季的財務狀況。

Thank you, John, and good afternoon, everyone. I will review MACOM's fiscal third quarter results and financial position, provide an update on our planned sale of the AppliedMicro compute business and end with commentary around our target financial operating model.

謝謝你，John，各位下午好。我將回顧 MACOM 會計年度第三季的業績與財務狀況，更新我們計畫出售 AppliedMicro 運算（compute）業務的進度，並以我們目標財務營運模型的相關評論作結。

Revenue in the third quarter was $194.6 million, growing 36.7% year-over-year and up from $186.1 million or 4.6% sequentially.

第三季營收為 1.946 億美元，年增 36.7%，並較上一季的 1.861 億美元季增 4.6%。

Revenue by end markets, Networks was $150.1 million and 77.2% of total revenue, up 43.5% year-over-year; multi-market was $23 million and 11.8% of total revenue, up 17.5% year-over-year and Aerospace and Defense, $21.4 million and 11% of total revenues, up 18.3% year-over-year.

按終端市場劃分之營收：網路（Networks）為 1.501 億美元，占總營收 77.2%，年增 43.5%；多元市場（multi-market）為 2,300 萬美元，占總營收 11.8%，年增 17.5%；航太與國防（Aerospace and Defense）為 2,140 萬美元，占總營收 11%，年增 18.3%。

Of the total Network revenue, Optical was $55.7 million or 28.6% of total revenue, down 16.1% year-over-year. Data center was $57.8 million or 29.7% and up more than 300% year-over-year. And other network revenue was $36.7 million or 18.8% and up 52% year-over-year.

在網路營收總額中，光學（Optical）為 5,570 萬美元，占總營收 28.6%，年減 16.1%。資料中心（Data center）為 5,780 萬美元，占 29.7%，年增超過 300%。其他網路營收為 3,670 萬美元，占 18.8%，年增 52%。

To provide additional color as to the decline year-over-year in Optical, PON was $8.3 million and 4.3% of total revenues, down 70.8% year-over-year compared to $28.2 million or 20% of total revenue.

為了進一步說明光學業務年減的原因，PON 營收為 830 萬美元，占總營收 4.3%，相較於去年同期的 2,820 萬美元（占總營收 20%）年減 70.8%。

Non-GAAP gross profit and gross margin in the fiscal third quarter was $113.7 million and 58.5% of revenues, respectively, compared to $81.5 million and 57.3% of revenues, respectively, year-over-year, and $108.9 million and 58.5%, respectively, on a sequential basis.

本財年第三季的非 GAAP 毛利與毛利率分別為 1.137 億美元與營收的 58.5%，相較於去年同期分別為 8,150 萬美元與營收的 57.3%，以及按季比較分別為 1.089 億美元與 58.5%。

In terms of operating expenses, total non-GAAP operating expenses were $60.8 million compared to $46.6 million year-over-year and $60.3 million sequentially. Adjusted operating expenses were up 30.5% year-over-year and up 0.8% sequentially, including AppliedMicro's expenses for the full fiscal third quarter, partially offset by lower variable compensation expense. Adjusted R&D and SG&A expenses were $35.5 million and $25.3 million, respectively, in the fiscal third quarter.

就營業費用而言，非 GAAP 營業費用總額為 6,080 萬美元，相較於去年同期為 4,660 萬美元，按季為 6,030 萬美元。調整後營業費用年增 30.5%、季增 0.8%，其中包含 AppliedMicro 在整個本財年第三季的費用，部分被較低的變動薪酬費用所抵銷。本財年第三季調整後研發費用與銷售、一般及行政（SG&A）費用分別為 3,550 萬美元與 2,530 萬美元。

Non-GAAP income from operations and operating margins were $52.9 million and 27.2% of revenues, up 51.7% in dollar and 11% on a percentage basis, respectively, year-over-year and up 8.9% in dollars and up 4.2% or 110 basis points, respectively, on a sequential basis. Net interest expense was $6.1 million as compared to $6.7 million in fiscal Q2 as the incremental $100 million we raised in our May refinancing was offset by lower interest rates. During fiscal 2017, we have reduced our interest rate by 75 basis points or 225 versus 300 basis LIBOR spread. We have also extended the maturity of our Term B debt from 2021 to 2024.

非 GAAP 營業利益與營業利益率分別為 5,290 萬美元與營收的 27.2%；相較去年同期，金額年增 51.7%，比例年增 11%；按季則分別金額成長 8.9%，比例成長 4.2%（或 110 個基點）。淨利息費用為 610 萬美元，相較於財年第二季的 670 萬美元，原因是我們在 5 月再融資中新增籌得的 1 億美元，被較低的利率所抵銷。在 2017 財年期間，我們已將利率下調 75 個基點，亦即 LIBOR 利差由 300 個基點降至 225 個基點。我們也將 Term B 債務的到期日由 2021 年延長至 2024 年。

Other income of $1.9 million represents income from the consulted contract that continues through fiscal 2017 associated with the automotive business divestment. Our normalized non-GAAP income tax rate in the fiscal third quarter was 10% due to the expanding mix of international revenues managed by our offshore entities in lower or no-tax jurisdictions. As to cash taxes, we had payments of less than $200,000.

其他收入 190 萬美元代表與汽車業務剝離相關、延續至 2017 財年的顧問合約收入。本財年第三季我們的常態化非 GAAP 所得稅率為 10%，主因為由我們位於低稅或免稅司法管轄區的境外實體所管理之國際營收占比擴大。就現金稅而言，我們的支付金額少於 20 萬美元。

Our fiscal third quarter non-GAAP net income and EPS were $43.9 million and $0.67 per fully diluted share, respectively, growing from $27.9 million and $0.51 year-over-year, and $39.4 million and $0.63 sequentially. Non-GAAP net income grew 57.1% year-over-year and 11.4% sequentially. Non-GAAP EPS grew 31.4% year-over-year and 6% sequentially, lower than net income due to higher fully diluted shares. The share count used to calculate non-GAAP EPS was 65.9 million fully diluted shares.

本財年第三季非 GAAP 淨利與每股盈餘（EPS）分別為 4,390 萬美元與每股完全稀釋後 0.67 美元，較去年同期的 2,790 萬美元與 0.51 美元成長，亦較前一季的 3,940 萬美元與 0.63 美元提升。非 GAAP 淨利年增 57.1%，季增 11.4%。非 GAAP EPS 年增 31.4%，季增 6%，由於完全稀釋股數較高，EPS 成長低於淨利成長。用於計算非 GAAP EPS 的股數為 6,590 萬股完全稀釋股數。

Adjusted EBITDA or earnings before interest, taxes, depreciation and amortization was $61.6 million, up 46.2% from $42.1 million in our fiscal 2016 third quarter, and up 8.7% from $56.6 million sequentially. GAAP cash flow from operations was $27.9 million, which included acquisition-related cash payments of approximately $4 million. Cash flow from operations of fiscal 2016 third quarter was $19.2 million and $0.4 million during the second fiscal quarter of 2017, including $28.1 million acquisition-related expenses. After deducting capital expenditures and excluding acquisition-related payments, adjusted non-GAAP free cash flow was $20.1 million and 45.9% of non-GAAP net income in the fiscal third quarter compared to $12.1 million and 43.4% of non-GAAP net income in the fiscal third quarter of 2016, and $17.2 million and 43.7% of non-GAAP net income sequentially, after excluding acquisition-related payments.

調整後 EBITDA（息稅折舊攤銷前盈餘）為 6,160 萬美元，較 2016 財年第三季的 4,210 萬美元成長 46.2%，亦較前一季的 5,660 萬美元成長 8.7%。GAAP 營運活動現金流為 2,790 萬美元，其中包含約 400 萬美元的併購相關現金支付。2016 財年第三季的營運活動現金流為 1,920 萬美元，而 2017 財年第二季為 40 萬美元，其中包含 2,810 萬美元的併購相關費用。在扣除資本支出並排除併購相關支付後，本財年第三季調整後非 GAAP 自由現金流為 2,010 萬美元，為非 GAAP 淨利的 45.9%；相較之下，2016 財年第三季為 1,210 萬美元、占非 GAAP 淨利的 43.4%；按季比較，在排除併購相關支付後為 1,720 萬美元、占非 GAAP 淨利的 43.7%。

Now to MACOM's balance sheet. At fiscal third quarter end, our cash, cash equivalents and short-term investments were $249.2 million, up from $144.2 million or $105 million, of which approximately $88 million were net proceeds from our Term B repricing and $17 million from operations.

接下來談 MACOM 的資產負債表。截至本財年第三季期末，我們的現金、約當現金與短期投資為 2.492 億美元，較前一季的 1.442 億美元增加 1.05 億美元，其中約 8,800 萬美元為 Term B 重新定價的淨收益，1,700 萬美元來自營運。

Accounts receivable were $129.8 million, up from $127.7 million sequentially. Days sales outstanding were 61 days compared to 63 days sequentially.

應收帳款為 1.298 億美元，較前一季的 1.277 億美元增加。應收帳款週轉天數（DSO）為 61 天，相較前一季為 63 天。

Inventories were $120.3 million, down 13.8% from $139.6 million sequentially. Inventory turns were 2.7x compared to 2.2x sequentially.

存貨為 1.203 億美元，較前一季的 1.396 億美元下降 13.8%。存貨週轉率為 2.7 倍，相較前一季為 2.2 倍。

Long-term debt was $677.4 million, inclusive of capital leases. We also had $160 million of availability in an undrawn credit line.

長期負債為 6.774 億美元，包含資本租賃。我們在一條未動用的信用額度中亦有 1.6 億美元的可用額度。

Capital expenditures in the fiscal third quarter were $8.2 million or 4.2% of revenues compared to $11.4 million or 6.1% of revenues sequentially.

本財年第三季資本支出為 820 萬美元，約占營收的 4.2%，相較前一季為 1,140 萬美元、占營收的 6.1%。

Depreciation expense was approximately $6.7 million as compared to $6.2 million sequentially. Our investments in capital expenditures exceed our current levels of depreciation, reducing our free cash flow by $1.5 million.

折舊費用約為 670 萬美元，相較前一季為 620 萬美元。我們在資本支出上的投資高於目前的折舊水準，使我們的自由現金流減少 150 萬美元。

I will now provide an update on the planned sale of AppliedMicro's compute business.

我現在將就 AppliedMicro 運算（compute）業務的計畫出售提供最新進展。

We believe we are nearing the conclusion of negotiations to finalize a definitive agreement with a domestic buyer, which we believe will be concluded within 30 days. Under currently proposed terms of the acquisition, MACOM will contribute the intellectual property, patents, employees and other assets and certain identified liabilities to the new entity. MACOM will not receive upfront cash proceeds but will participate in the long-term value creation through a minority equity ownership position.

我們相信已接近完成與一位國內買方的協商，以敲定具約束力的最終協議，並預期將在 30 天內完成。依目前提出的收購條款，MACOM 將把智慧財產、專利、員工與其他資產，以及特定已辨識的負債，投入新設實體。MACOM 不會取得預先的現金對價，但將透過持有少數股權的方式參與長期價值創造。

We believe the pedigree of the new ownership and management team will provide a solid foundation for growth with the compute business while offering MACOM a future potential return on its investments in the business today. We plan to provide more specific information at the time of the announcement of the final agreement upon conclusion of negotiations.

我們相信新所有權與管理團隊的背景與資歷，將為運算業務的成長提供穩固基礎，同時也讓 MACOM 對其目前在該業務上的投資，未來有潛在回報。在協商完成並宣布最終協議時，我們計畫提供更具體的資訊。

I want to emphasize, MACOM's targeted financial operating model remains intact, notwithstanding the near-term challenge we expect in our fiscal fourth quarter. Our target financial operating model is for annual revenues growth of 20%, adjusted gross margins of 60%, generating adjusted operating margins initially at 30% but with strong opportunity to advance to 40% as revenue from large market new products take hold. Despite the fiscal fourth quarter challenges due to the cyclical disruption in China negatively impacting Long-haul/Metro and PON revenue in fiscal 2017, MACOM expects to deliver revenue growth for the fourth consecutive year of better than our target of 20% as well as delivering adjusted EPS growth of better than 20% as well.

我想強調，儘管我們預期在本財年第四季將面臨短期挑戰，MACOM 既定的目標財務營運模型仍維持不變。我們的目標財務營運模型為：年營收成長 20%、調整後毛利率 60%，並在初期產生 30% 的調整後營業利益率；隨著面向大型市場的新產品營收逐步成形，亦有強勁機會提升至 40%。儘管 2017 財年因中國的景氣循環性擾動，對長途/都會（Long-haul/Metro）與 PON 營收造成負面影響而使本財年第四季面臨挑戰，MACOM 仍預期可連續第四年實現優於 20% 目標的營收成長，並同時交付優於 20% 的調整後 EPS 成長。

MACOM's secular growth drivers, Optical 100G and beyond, data center, GaN base stations and active antenna remain a solid fundamental underpinning for continuing to meet our long-term target operating financial model. Back to you, John.

MACOM 的結構性成長驅動因素——光通訊 100G 及以上、資料中心、GaN 基地台與主動式天線——仍是持續達成我們長期目標財務營運模型的堅實基本面支撐。交回給你，John。

Thanks, Bob. Now let me explain what's going on as we see it, specifically in China. Clearly, we're dealing with rapidly changing demand conditions across a number of our addressable markets. The weakness that we highlighted last quarter in China actually became more pronounced across multiple carrier base segments, notably in PON and provincial Metro/Long-haul deployments. We're now seeing similar effects in the September quarter in other carrier-based segments such as wireless and fiber backhaul.

謝謝，Bob。現在讓我說明我們所看到的情況，特別是在中國。顯然，我們在多個可服務市場正面臨需求條件快速變化。我們在上一季於中國所強調的疲弱，實際上在多個電信營運商基礎建設區隔變得更為明顯，尤其是在 PON 以及省級都會/長途（Metro/Long-haul）部署。我們現在也在 9 月季度於其他以營運商為主的區隔（例如無線與光纖回程）看到類似影響。

In PON, there's been a precipitous drop in order intake and visibility for 2.5G products, consistent with what's been reported about the transition to 10G PON. While we had anticipated the transition to 10G, the decline in 2.5G has been much quicker than our customers anticipated. This is reminiscent of the transition 5 years ago from 3G to 4G LTE mobile infrastructure.

在 PON 方面，2.5G 產品的訂單接單量與可見度出現斷崖式下滑，這與外界對於轉向 10G PON 的報導一致。雖然我們原本預期會轉向 10G，但 2.5G 的下滑速度遠快於我們客戶的預期。這讓人想起 5 年前從 3G 轉向 4G LTE 行動基礎建設的轉換。

Orders for 3G products dried up without warning, followed later by greater spending on 4G buildouts. Carriers had concluded that the 3G networks simply did not meet the demands of exploding data traffic from smartphones, so they stopped spending on 3G. We understand that Chinese carriers have similarly determined that the current 2.5G PON infrastructure cannot support mandated data rates for the client. Consistent with that, 2.5G orders have dried up and we have seen a distinct shift in focus among our first tier customer towards ramping 10G platforms in 2018.

3G 產品的訂單在毫無預警下枯竭，之後才出現對 4G 建設更大的支出。營運商認定 3G 網路已無法滿足智慧型手機帶來的爆炸性數據流量需求，因此停止在 3G 上支出。我們了解中國營運商也同樣判定，目前的 2.5G PON 基礎建設無法支援客戶端所要求的法定（規範）資料速率。與此一致，2.5G 訂單已枯竭，而我們也看到一線客戶的重點明顯轉向在 2018 年加速導入 10G 平台。

Our competitive strength in PON lies in providing the cost structure, capacity and supply chain flexibility for high-volume client-side Optical network units or ONUs. The 10G PON opportunity today lies primarily in the central office with optical line terminals. OLTs are characterized by modest volumes and represent a relatively small short-term opportunity for MACOM.

我們在 PON 的競爭優勢在於：為高出貨量的客戶端光網路單元（Optical Network Units，ONU）提供具競爭力的成本結構、產能與供應鏈彈性。目前 10G PON 的機會主要在局端（central office）的光纖線路終端（optical line terminals）。OLT 的特性是出貨量不大，對 MACOM 而言短期機會相對有限。

We believe our PON business should recover to previous levels once client-side ONUs ramp to volume, at which time, we expect dollar volumes and gross margin structures to exceed that of 2.5G PON. We are therefore taking a very conservative view on PON demand in the September quarter. Client-side adoption of 10G will not be instantaneous, so we expect PON to remain soft during the transition.

我們相信，一旦客戶端 ONU 的 10G 放量，我們的 PON 業務應可回升至先前水準；屆時，我們預期美元出貨規模與毛利結構將優於 2.5G PON。因此，我們對 9 月季度的 PON 需求採取非常保守的看法。客戶端對 10G 的採用不會一蹴可幾，因此我們預期 PON 在轉換期間仍將偏弱。

During this transitional period for PON, our operations, quality and application engineering resources are instead fixated, in fact, consumed with scaling 25G lasers and 100-gig analog products for our breakout and cloud data centers. The pause in PON actually enhances our ability to focus and capture share in data centers. In Long-haul/Metro, where we're down sequentially but still up 29% year-on-year, the sequential decline was entirely attributable to China.

在 PON 的這段轉換期，我們的營運、品質與應用工程資源則轉而高度聚焦，甚至可說被全面投入於：為分拆（breakout）與雲端資料中心擴產 25G 雷射與 100G 類比產品。PON 的暫緩反而提升了我們專注並在資料中心取得市占的能力。在長途/都會（Long-haul/Metro）方面，我們雖然季對季下滑，但年對年仍成長 29%；而季對季下滑完全歸因於中國。

90 days ago, we relayed comments from Chinese carriers at OFC as well as customer sentiment that provincial deployments would resume this fall. Having just returned from China last month, I can tell you that we have no such visibility into any pickup in demands in the September quarter. Order intake in China has all but dried up as OEMs work through lingering inventory. Like PON, we're taking a very conservative view on metro and long-haul demands in the September quarter.

90 天前，我們轉述了中國營運商在 OFC 的評論以及客戶情緒，認為省級部署將在今年秋季恢復。我上個月剛從中國回來，可以告訴各位，我們對 9 月季度需求回升並沒有任何可見度。隨著 OEM 消化仍然偏高的庫存，中國的接單量幾乎已枯竭。如同 PON，我們對 9 月季度的都會與長途需求也採取非常保守的看法。

Despite these near-term weaknesses on the carrier side, we had another breakout quarter in cloud data centers with strong sequential growth and 310% growth year-on-year. Our strategy is playing out as envisioned and as articulated during our investor forums in Boston and in New York last quarter, as we remain engaged with all major cloud service providers and their transceiver suppliers.

儘管營運商端短期走弱，我們在雲端資料中心仍再度迎來突破性的一季，季對季強勁成長，年對年成長 310%。我們的策略正如預期般展開，也如同我們上一季在波士頓與紐約投資人論壇所闡述的：我們持續與所有主要雲端服務供應商及其收發器供應商保持合作。

Again, our approach is to follow the direction of the cloud service providers, aligning our products, cost structure, capacity and supply chain with their needs and those of their preferred transceiver suppliers.

再次強調，我們的方法是跟隨雲端服務供應商的方向，讓我們的產品、成本結構、產能與供應鏈與其需求，以及其偏好的收發器供應商需求保持一致。

We made 2 major strides last quarter in this space. First, our high-performance analog business had another strong quarter servicing cloud data centers, up strong sequentially with 115% year-on-year growth. Second, we tripled 25G laser output last quarter. More importantly, we're on track to complete qualification this month, August, to produce 25G lasers in our 4-inch line in Lowell, thereby alleviating the current industry bottleneck in laser supply for data centers as early as the December quarter.

我們在上一季於此領域取得兩項重大進展。第一，我們的高效能類比業務在服務雲端資料中心方面再度繳出強勁一季，季對季大幅成長，年對年成長 115%。第二，我們上一季將 25G 雷射產出提升至三倍。更重要的是，我們正按計畫於本月（8 月）完成認證（qualification），以便在位於 Lowell 的 4 吋產線生產 25G 雷射，從而最早在 12 月季度緩解目前資料中心雷射供應的產業瓶頸。

Our production ramp of CWDM L-PICs for major cloud programs is on track, along with our single-lambda PAM-4 PHYs. At this juncture, we're heads down executing on each of these fronts operationally.

我們針對主要雲端專案的 CWDM L-PICs 量產爬坡進度如期推進，單波長 PAM-4 PHY 亦同。在此階段，我們正全力以赴，從營運面執行上述各項工作。

We continue to prioritize company resources on cloud data centers, a long-term market opportunity that we believe is large enough to one day offset future cyclicality on the carrier side of the business.

我們持續將公司資源優先投入雲端資料中心；我們相信這是一個長期市場機會，其規模大到足以在未來某一天抵消營運商端業務的週期性波動。

Okay. Moving on to connectivity, a.k.a. AppliedMicro. First, we secured a major design ends for MACsec with the leading global supplier of network infrastructure equipment servicing international demand for our hardware encryption. This is a watershed event in terms of proliferating MACsec beyond the borders of the U.S., and thus furthering our position, leading the establishment of a global standard for network security.

好的。接著談連接性（connectivity），也就是AppliedMicro。第一，我們在 MACsec 方面取得一項重大設計導入（design win），客戶為全球領先的網路基礎建設設備供應商，為其國際市場需求提供我們的硬體加密。這是將 MACsec 推廣至美國以外市場的里程碑事件，並進一步鞏固我們在推動建立全球網路安全標準方面的領導地位。

Second, our lead customer for single lambda PAM-4 is right on schedule for initial production builds and are on track to ramp the volume production. Further, in terms of broader IEEE adoption, we're now engaged with 21 customers, half of which have committed programs, and 5 are actively developing 100-gig transceivers using our single lambda PAM-4 solution.

第二，我們在單波長 PAM-4 的領先客戶，初期量產建置（production builds）完全按進度進行，並正按計畫提升至量產規模。此外，就更廣泛的 IEEE 採用而言，我們目前已與 21 家客戶合作，其中一半已有承諾的專案，且有 5 家正積極使用我們的單波長 PAM-4 解決方案開發 100G 收發器。

Given that the cloud service providers now recognize MACOM leadership across the full scope of product categories for optical connectivity, we're poised to establish a preeminent position servicing this long-term sustainable market with high-value analog, mixed signal and photonic semiconductors. Operational execution in ramping MACOM production will remain paramount over the coming months and quarters as we continue to scale share in this hyper growth market called cloud data centers.

鑑於雲端服務供應商如今已認可 MACOM 在光連接性全產品類別範疇的領導地位，我們已蓄勢待發，將以高價值的類比、混合訊號與光子半導體，建立服務此長期且可持續市場的卓越地位。隨著我們持續在這個名為雲端資料中心的高速成長市場擴大市占，未來數月與數季，量產爬坡的營運執行仍將是重中之重。

Moving over to the RF side of the house and GaN, at our May data center forum, we announced 2 design ends with lead programs in base stations. These initial production builds are a major gate in the step process of rolling out our GaN technology for deployment in macrocell base stations. We are confident that we're well-positioned to be one of the mainstream suppliers of RF power technology in the latest generation of 4G LTE base stations.

再看 RF 與 GaN 方面，在我們 5 月的資料中心論壇上，我們宣布在基地台領域取得兩項設計導入（design win），並對應領先專案。這些初期量產建置是我們將 GaN 技術推向宏蜂巢（macrocell）基地台部署之分階段推進流程中的重要關卡。我們有信心，我們已具備條件成為最新一代 4G LTE 基地台 RF 功率技術的主流供應商之一。

Looking beyond 4G, China Mobile recently announced the scope, time line and technical specifications for 5G deployments. China is predicted to invest 50% more in their 5G buildout over the next 7 years than they invested in 4G LTE over the previous 7 years. The next 12 months will be intense from a design end standpoint for volume deployments beginning in 2019. China's time line and technical requirements, which we expect will be followed by Japan, Korea and Europe, are now clear and aligned perfectly with multiple aspects of our growth strategies, not just GaN.

放眼 4G 之後，中國移動近期公布了 5G 部署的範圍、時程與技術規格。預計未來 7 年中國在 5G 建設上的投資，將比其前 7 年在 4G LTE 的投資高出 50%。從設計導入的角度來看，未來 12 個月將非常密集，為 2019 年開始的量產部署做準備。中國的時程與技術要求（我們預期日本、韓國與歐洲將跟進）如今已清晰明確，並與我們多項成長策略完美契合，不僅僅是 GaN。

China Mobile's requirements call upon many aspects of our active antenna technologies and competencies as well as our optical capabilities for innovations in front haul and backhaul. For that reason, we're proud to announce that MACOM has been selected by China Mobile as a 5G innovation center partner. With 5G landing right in our wheelhouse, you can now understand why major base station customers have been sponsoring MACOM as a mainstream GaN supplier for 4G programs. We're squarely focused on near-term program execution for 2018 revenue with deterministic investment for 5G success in 2019 and beyond.

中國移動的需求涵蓋了我們主動天線技術與能力的多個面向，以及我們在前傳與回傳創新方面的光學能力。因此，我們很自豪地宣布，MACOM 已被中國移動選為 5G 創新中心合作夥伴。隨著 5G 正好落在我們的核心專長範圍內，您現在可以理解為何主要基地台客戶一直贊助 MACOM，作為 4G 專案的主流 GaN 供應商。我們將重點放在 2018 年營收的近期專案執行，同時以可確定的投資來確保 2019 年及之後的 5G 成功。

So to close, let's talk about next quarter guidance. For the fiscal fourth quarter ending September 29, 2017, we expect revenue to be in the range of $165 million to $174 million. Adjusted gross margin is expected to be between 58% and 61%, and adjusted earnings per share between $0.45 and $0.50, on an anticipated 66.7 million fully diluted shares outstanding. No doubt, we have some very tough sledding in the short-term with multiple carrier-based network segments cycling down simultaneously.

最後，讓我們談談下一季的財測指引。對於截至 2017 年 9 月 29 日的第四財季，我們預期營收將落在 1.65 億至 1.74 億美元之間。在預期完全稀釋流通股數為 6,670 萬股的情況下，調整後毛利率預計介於 58% 至 61%，調整後每股盈餘介於 0.45 至 0.50 美元。毫無疑問，短期內我們將面臨相當艱難的局面，因為多個以電信營運商為主的網路細分市場同時進入下行循環。

We're taking a conservative approach to Q4 revenue guidance with the intention of getting the worst behind us. We're also taking appropriate measures on operating expense to minimize short-term impact to our shareholder returns. At the same time, I'd like to emphasize that we remain highly confident that our growth drivers and financial model remain intact for 2018.

我們對第四季營收指引採取保守作法，目的是讓最糟的情況盡快過去。我們也在營運費用上採取適當措施，以將對股東報酬的短期影響降到最低。同時，我想強調，我們仍高度有信心，我們的成長動能與財務模型在 2018 年依然完好無虞。

We continue to see the opportunity for 20%-plus growth with expanding margins and profitability. We believe today's headwinds will inevitably turn into tailwinds as these markets cycle back in coming quarters.

我們仍持續看到超過 20% 的成長機會，並伴隨毛利率與獲利能力的擴張。我們相信，今日的逆風在未來幾季市場循環回升時，終將不可避免地轉為順風。

When you factor in the many breakthroughs and disruptive initiatives that are coming to fruition for MACOM, whether they be in cloud data centers, Metro networks, GaN power, active antennas, and optical connectivity in 4G and 5G base stations, you'll understand why we have never been more confident in the company's potential to outperform our industry for many years to come.

當您把 MACOM 正在開花結果的多項突破與顛覆性計畫納入考量——無論是在雲端資料中心、都會網路、GaN 功率、主動天線，以及 4G 與 5G 基地台中的光學連接——您就會理解為何我們從未像現在這樣對公司在未來多年持續優於產業表現的潛力充滿信心。

Operator, you can now open the call to questions.

接線員，現在可以開放提問。

(Operator Instructions) And our first question comes from Blayne Curtis of Barclays.

(接線員指示) 我們的第一個問題來自 Barclays 的 Blayne Curtis。

John, maybe just walk me through the June quarter. The Networks didn't miss, but within that, Optical is down. Maybe you could just walk me through data center and the big step-up in other, what went on there and then how you're looking at those 2 subsegments into September?

John，能否帶我回顧一下 6 月那一季？Networks 整體沒有失誤，但其中 Optical 是下滑的。也許你可以說明一下資料中心，以及「其他」項目大幅跳升的原因，當時發生了什麼事？另外，你如何看待這兩個子區塊到 9 月的走勢？

Yes, so you're talking about Q3 results, right?

是的，所以你指的是第三季的結果，對嗎？

Can you walk me through June, where you didn't miss Networks overall because, I think, data center and, really, other was up a lot. Can you walk me through why that was and then how you're thinking about them into September?

你能帶我回顧一下 6 月那季嗎？你們 Networks 整體沒有失誤，因為我想資料中心、以及其實「其他」都大幅成長。你能說明一下為什麼會這樣，然後你們如何看待它們到 9 月的表現？

I would say the strength in data center continues unabated. Everything is clicking on all cylinders. And that, I think, we reported independently, as you can see that. On the other, I'm trying to think what was the major driver, Bob?

我會說資料中心的強勁動能持續不減。各方面都運轉得非常順暢。而且我想我們也有獨立揭露過，你可以看到那部分。至於「其他」，我在想主要驅動因素是什麼，Bob？

Yes, when you get into the detail, a lot of the crosspoint switches and some of the wireless stuff had a good quarter. It's hard to track crosspoints but -- because that portfolio was so diverse in its end markets, it was pretty robust in the quarter. And again, we had some weakness in backhaul products as well. So it goes to the diversification of the product mix that did lend itself to making the quarter this.

是的，若看細項，許多 crosspoint 交換器以及部分無線相關產品在該季表現不錯。crosspoint 不太容易追蹤，因為那個產品組合在終端市場上非常多元，所以該季相當強勁。另外，我們在回傳（backhaul）產品上也有一些疲弱。這也反映出產品組合多元化，確實有助於讓該季呈現這樣的結果。

Actually, the big strong growth...

其實，最大的強勁成長……

What was...

是什麼……

Sorry, Blayne, let me just make one more point and then we'll take your next question. Yes, I mean, the big strong growth sequentially was we had double-digit growth quarter-on-quarter in Metro/Long-haul outside of China. That remains continuing. And the projection in Q4 is similar. Sorry. So you had another question?

抱歉，Blayne，讓我再補充一點，然後我們再回答你的下一個問題。是的，我的意思是，按季（sequential）來看，最大的強勁成長是中國以外的都會/長途（Metro/Long-haul）出現了雙位數的季增。這個趨勢仍在延續。而第四季的展望也類似。抱歉。所以你還有另一個問題嗎？

I was just going to clarify. I noticed some last time buys, so I was just kind of curious, maybe you guided what that was and does that have any impact in September?

我只是想確認一下。我注意到有一些 last time buys，所以我有點好奇，你們是否有指引那是什麼，以及這對 9 月是否有任何影響？

No, no, no. If you're referring to the PowerPC stuff, that was about flat quarter-on-quarter, as anticipated.

沒有，沒有，沒有。如果你指的是 PowerPC 的部分，那按季大致持平，符合預期。

There's no last time buys in the network business today.

目前在網路業務中沒有任何 last time buys。

Great and can you just help...

很好，那你能否再幫我……

Sorry, Blayne, you're breaking up there on the question.

抱歉，Blayne，你那邊的問題聲音有點斷斷續續。

I'm sorry, I'm just traveling, but if you can hear me now, I was just curious, PON is down to pretty de minimis levels. You said you're taking a cautious view on Long-haul/Metro. Does that mean flat or you're actually modeling it down again in September? And then, if you can just also just talk about you had a growth trajectory in lasers, what's the -- is that still on plan to what you had previously stated about doubling?

抱歉，我正在旅途中，但如果你現在聽得到，我只是好奇，PON 已經降到幾乎可忽略的水準。你說你們對長途/都會（Long-haul/Metro）採取謹慎看法。這代表持平，還是你們其實在 9 月又把它建模為再度下滑？另外，也請談談你們在雷射（lasers）方面原本有一個成長軌跡，這部分——是否仍按你們先前所說的倍增計畫進行？

Yes. So Metro/Long-haul is flattish from a Q3 to Q4 standpoint. That said, I won't say slightly down, double digit, low double-digit down quarter-on-quarter in China, continued growth double-digit sequential in Metro/Long-haul outside of China. You're right, we get down to de minimis levels on PON as we go into that transition. And did I miss -- there was another aspect to the question.

是的。所以從第三季到第四季的角度來看，都會/長途（Metro/Long-haul）大致持平。不過，我不會說只是小幅下滑；在中國按季是雙位數下滑、偏低雙位數的下滑，而中國以外的都會/長途則持續呈現雙位數的按季成長。你說得對，隨著我們進入那個轉換期，PON 會降到幾乎可忽略的水準。我是不是漏掉了——問題還有另一個部分。

Data center is still strong. Our other network stuff.

資料中心仍然很強。我們其他的網路相關業務。

Oh yes, lasers.

喔對，雷射。

Our other network products, that's going to be down slightly. That's some of the stuff that's hard to predict in the portfolio, but still, at this point...

我們其他的網路產品，將會小幅下滑。那裡面有些產品在組合中比較難預測，但即便如此，在目前這個時間點……

Let me give you a great example of the other stuff. The OTN framers coming in from the connectivity stuff that sell into telecom also shows slight weakness, and the backhaul stuff. We said wireless infra -- the mobile infrastructure stuff, fiber and wireless backhaul looks to be softening for the next quarter. You made a comment about the lasers. So our plan has been, as articulated in May, to double output quarter-on-quarter. We actually tripled last quarter. And we're really teed up for a breakout. From a supply standpoint, we're completing the Lowell qualification in August. So from a supply standpoint, we'll be unlimited beginning in the December quarter. Now that said, we need to complete the vendor qualification, the customer qualifications, get the orders and actually produce the materials. So that -- the laser opportunity looks to be poised for a breakout.

我給你一個很好的「其他」例子。來自連接（connectivity）產品、銷往電信市場的 OTN 成框器（framers）也呈現些微疲弱，回傳（backhaul）相關產品亦然。我們提到無線基礎建設——行動基礎建設相關產品、光纖與無線回傳在下一季看起來會轉弱。你提到雷射的部分。因此，我們的計畫如同 5 月所闡述，是要按季將產出倍增。我們其實在上一季把產出提高到三倍。而我們已經準備好迎接突破性成長。從供應角度來看，我們將在 8 月完成 Lowell 的認證（qualification）。因此就供應而言，從 12 月那一季開始我們將不再受限。不過話說回來，我們仍需要完成供應商認證、客戶端認證，取得訂單並實際生產材料。因此——雷射的機會看起來已蓄勢待發，準備迎來突破。

So I guess, I'm still confused, what is driving the sequential decline in September? Maybe I'll just ask at a high level.

所以我想，我還是有點困惑，是什麼在驅動 9 月的連續下滑？也許我先從較高層次來問。

China. So both PON drops down to de minimis levels and further decline in the Metro/Long-haul. If you look at the decline, it's about half that and half PON. And then, relative to consensus, the other $10 million would be a combination of backhaul and OTN framers. And all of that, everything I just mentioned, is 100% China.

中國。所以 PON 兩者都降到可忽略不計的水準，且都在都會/長途（Metro/Long-haul）進一步下滑。如果你看這個下滑，大約一半是那部分，一半是 PON。然後相對於市場共識，另外那 1,000 萬美元會是回程（backhaul）與 OTN 成幀器（framers）的組合。而我剛提到的所有這些，100% 都在中國。

And our next question comes from Harlan Sur of JPMorgan.

下一個問題來自摩根大通（JPMorgan）的 Harlan Sur。

Can you just help us understand directionally, obviously, networking will drive almost or all of the decline in the September quarter. How do you see A&D and Multi-market trending quarter-on-quarter? And I think that you guys have put some of the A&D programs on hold, given the hold for data center products. Are you guys starting to reaccelerate some of the product position on some of these A&D programs?

能否請你幫我們從方向性來理解一下，顯然網路業務將驅動 9 月季度幾乎全部或全部的下滑。你怎麼看 A&D 與多元市場（Multi-market）在季度對季度的趨勢？而且我想你們因為資料中心產品的暫停，已把部分 A&D 專案先擱置。你們是否開始在其中一些 A&D 專案上，重新加速某些產品布局？

Yes. So for the fourth quarter, you'll see, between our Multi-market and A&D businesses, good sequential growth. And part of that contribution is exactly what you mentioned. We deferred some of the fulfillment on demand orders that we had, and we'll be shipping at least part of that, if not all of it.

是的。所以在第四季，你會看到我們的多元市場與 A&D 業務都有不錯的連續成長。而其中一部分貢獻正如你提到的。我們延後了一些既有的按需訂單（demand orders）的履約出貨，我們將至少出貨其中一部分，甚至可能全部出貨。

And then, maybe if you could just help us quantify, just looking back at the June quarter at your Optical business, of the $56 million in revenues for that segment, looks like $8 million was PON. So of that remaining $48 million, how much of that was focused on China metro and long-haul? Just kind of rough numbers would be great.

另外，也許你可以幫我們量化一下，回頭看 6 月季度你們的光學（Optical）業務，在該部門 5,600 萬美元營收中，看起來有 800 萬美元是 PON。那剩下的 4,800 萬美元中，有多少是聚焦在中國的都會與長途？大概的數字就很好。

So I would say, in -- so last quarter, you're talking about Q3?

所以我會說，在——所以你說的上一季，是指第三季（Q3）嗎？

Yes.

是的。

Yes, so we try not to report on a product line basis, but it was down substantially. It was down 50% sequentially in China on the Metro/Long-haul business. So that's where you see -- I mean, we did not anticipate in our last guidance. That decelerated or further deteriorated after our guidance. We made up the difference, frankly, with outperforming on data centers, for the most part. And as well as outside of China, I mean, we're up close to 10% sequentially outside of China in Metro/Long-haul. So you can see the reason why I say this is a very acute China phenomenon that we're dealing with right now.

是的，所以我們盡量不以產品線為基礎來揭露，但它確實大幅下滑。在中國的都會/長途業務，連續下滑了 50%。所以你看到——我的意思是，我們在上次指引中並未預期到這點。在我們給出指引之後，它又放緩或進一步惡化。坦白說，我們主要是靠資料中心表現超出預期來彌補差額。另外在中國以外，我是說，我們在中國以外的都會/長途業務連續成長接近 10%。所以你可以理解為什麼我說，這是我們目前正在面對的一個非常急性的中國現象。

In fact, we've added more customers to the overall Long-haul/Metro roster. I think, we talked over 30 the last time. When you add the client side of the business that's emerging now on the Metro side, including guys that are taking samples and at least starts the design process, it's well over 50 customers today. So the potential and the way it's aligning to the rest of the world, and that includes great strength out of Japan, Europe and North America with multiple equipment suppliers and transceiver manufacturers, it's offset, though, by the world -- what's going on in China.

事實上，我們在整體長途/都會客戶名單中新增了更多客戶。我想我們上次提到超過 30 家。當你把目前在都會端新浮現的客戶側業務也算進來，包括那些正在拿樣品、至少開始設計流程的客戶，今天已遠超過 50 家客戶。所以其潛力以及與世界其他地區的對齊方式——其中也包括日本、歐洲與北美的強勁動能，且有多家設備供應商與收發器（transceiver）製造商——但仍被中國正在發生的事情所抵消。

Okay. Bob, just one last question for you. Sorry, I haven't worked through the numbers yet, but can you just give us a rough sense on where you're going to take the OpEx levels this quarter?

好的。Bob，最後再問你一個問題。抱歉，我還沒把數字算完，但你能否大概說一下你們這一季的營運費用（OpEx）水準會抓在什麼位置？

OpEx at midrange, the EPS numbers around, it's up slightly to about $63 million.

營運費用在中位數區間，依 EPS 的數字來看，會小幅上升到大約 6,300 萬美元。

And our next question comes from C.J. Muse of Evercore.

下一個問題來自 Evercore 的 C.J. Muse。

I guess, first question, high-level question here, if we look back to your last earnings cycle, you talked about PON turning weak, I think, in the last 4 weeks before reporting. And I assume that it's only gotten weaker through the quarter. And I guess, volatility there is not something that would be terribly unusual, but what I'm trying to understand is why you were so bullish on your investor days during that period. Can you help me understand kind of your thought process there and the timing of when PON really took a turn for the worse?

我想先問一個高層次問題，如果回顧你們上一次財報週期，你們提到 PON 轉弱，我記得是在公布前最後 4 週。而我假設在本季期間只會更弱。我想那裡的波動也不算特別不尋常，但我試圖理解的是，為什麼你們在那段期間的投資人日（investor days）上會那麼樂觀。你能否幫我理解你們當時的思考脈絡，以及 PON 真正開始急轉直下的時間點？

Well, I don't think we were bullish on PON in our investor -- the investor forums, I would say. But to answer your question, what happened...

嗯，我不認為我們在投資人——我會說在投資人場合——對 PON 是樂觀的。但要回答你的問題，發生的是……

No, it was more on your outlook and perhaps maybe it was more of your focus, but I think, we all interpreted a more robust data center ramp amidst that.

不，我的意思比較是你們的展望，或許更像是你們的重點，但我想我們都把它解讀為：在那樣的背景下，資料中心的拉升（ramp）會更強勁。

Well, we're exceeding our internal plans and expectations on the data center stuff, so there is nothing in our results at all that has to do with data center performance to expectation. This is 100% concentrated geographically in China and its multiple carrier segments. And to get to your specific question about PON is it's spot on the point. Going into the quarter last quarter and through our guidance, what I had -- my bellwether -- I just came back from China, normal customer connections and so on, making sure that our share is intact, the markets are happening. Frankly, the order intake dried up and trying to understand what the heck was happening. Going into the quarter, we were guided by our major customers saying, "Look, expect 15%, 20% unit decline year-on-year for the 2.5-gig PON." Well, what happened this quarter after we guided was, no, no, it dried up completely. One of our major customers literally stopped production, exited 2.5G PON production. And then, we started getting reports independently of the carriers concluding that they need to switch to 10-gig PON deployments rather than 2.5-gig. So that was a surprise. That was totally new information that was -- that we did not have insight into going into the last quarter guidance.

嗯，我們在資料中心相關的部分，表現超出我們內部計畫與預期，所以我們的結果完全沒有任何一點是因為資料中心表現不如預期。這 100% 是地理上集中在中國，且涵蓋多個電信營運商（carrier）細分領域。而回到你關於 PON 的具體問題，你說得非常到位。在上一季進入本季、以及我們給出指引的期間，我的——我的風向球（bellwether）——我剛從中國回來，做了正常的客戶交流等等，確認我們的市占仍在、確認市場仍在發生。坦白說，接單量（order intake）乾涸了，我們試著理解到底發生了什麼。在進入該季度時，我們是依據主要客戶所說的：「你看，預期 2.5G PON 的出貨量年對年會下滑 15%、20%。」但這一季在我們給出指引之後發生的是：不，不是那樣，它是完全乾涸。我們的一個主要客戶甚至直接停止生產，退出 2.5G PON 的生產。接著，我們開始從營運商以外的獨立來源收到報告，指出他們認為需要改為部署 10G PON，而不是 2.5G。所以那是個意外。那是全新的資訊——在我們做上一季指引時，我們並沒有洞察到這點。

That's helpful. And I guess, as a follow-up question on the AMCC side, 2 questions there. I guess, first part, what should we be modeling there for the PowerPC end-of-life revenues for September? And then, as you think about getting a minority stake on the equity side, how does that change your thinking around the ROI of that acquisition?

這很有幫助。我想再追問 AMCC 這邊的問題，有兩點。第一部分，對於 9 月 PowerPC 產品生命週期終止（end-of-life）的營收，你們認為我們模型應該怎麼估？第二，當你們在股權端取得少數持股時，這會如何改變你們對該收購案投資報酬率（ROI）的看法？

Okay. Two questions. So first one is fairly simple. The PowerPC business is not a growth business. We said that from post last quarter in terms of getting it behind us in terms of its dilution to the margin. And I would not expect the large part of revenue to be part of that in the fourth quarter. And it's included in our guidance that way. ROI is a tricky thing. I think, we have -- that's one element. And again, we -- post acquisition, when we mentioned that we would be divesting the compute business, that we assume some minimum valuation in the fairness of opinion presented to the Board of Directors. We are conservative in the valuation of the carrying amount of those assets. Again, I reiterate, this is not going to be a business run by the former management team. It is a new, professional, extremely experienced processor team with an all-star cast. And I think, it's quite frankly an all or nothing, either they're going to be hugely successful or will have low returns.

好的。兩個問題。第一個相對簡單。PowerPC 業務不是成長型業務。我們從上個季度之後就提到，要把它對毛利率的稀釋影響處理完、把它拋在身後。而且我不預期第四季會有很大一部分營收來自那一塊。我們在財測指引中也是以這種方式納入。ROI（投資報酬率）是個棘手的議題。我想，我們——那是一個面向。再者，我們——在併購後，當我們提到將剝離運算業務時，我們在提交董事會的公平意見（fairness opinion）中，假設了某個最低估值。我們對這些資產帳面金額的估值相當保守。我再重申一次，這不會是一個由前任管理團隊經營的業務。這將是一支全新、專業、極具經驗的處理器團隊，陣容堪稱全明星。而且坦白說，我認為這是「成則大成、敗則歸零」的機會：要嘛他們會非常成功，要嘛回報會很低。

I can provide a little more color. During the due diligence, which you can imagine, was very intense for this buyer, the customer feedback and major industry players, including cloud service guys, was spectacular. Very, very supportive for the transaction. And I think, the real bellwether that I had was what Bob was hitting on, which is the pedigree of the new ownership and management team is profoundly superior on a go-forward basis. So the opportunity -- it is all or nothing, either you succeed, and they're very well-poised for success. And when you see the pedigree, you'll understand what we're referring to. Or it flames out and it is what it is. But what we used in our fairness of opinion was relatively de minimis and, frankly, is dwarfed by the opportunities that we now see on the PAM-4 and the MACsec stuff. So we've always been fairly conservative in terms of the valuation on the compute business.

我可以再補充一些背景。在盡職調查期間——你可以想像，對這位買方而言非常密集——客戶回饋以及主要產業參與者（包括雲端服務業者）的反應都非常出色。對這筆交易非常、非常支持。而我觀察到真正的風向球，正如 Bob 所提到的，是新股東與管理團隊的資歷與血統，在未來展望上顯著更強。所以這個機會——確實是成敗兩極：要嘛成功，而他們也具備非常好的成功條件。當你看到他們的資歷，你就會理解我們指的是什麼。要嘛就熄火，事情就是那樣。但我們在公平意見中採用的假設相對是微不足道（de minimis）的，而且坦白說，與我們現在在 PAM-4 與 MACsec 相關領域看到的機會相比，根本不在同一個量級。因此，我們對運算業務的估值一向相當保守。

And our next question comes from Quinn Bolton of Needham & Company.

下一個問題來自 Needham & Company 的 Quinn Bolton。

Just wanted to come back to the Other segment within Networks. Can you just describe what products are in that? I thought some of the wireless -- or sorry, optical backhaul for cellular networks is included in your Optical business. It sounds like that's perhaps in the Other bucket. So what's in Other?

我想回到網路（Networks）部門裡的「其他（Other）」分項。你能否描述一下那裡包含哪些產品？我原本以為部分無線——抱歉，行動網路的光纖回傳（optical backhaul）是算在你們的光學（Optical）業務裡。聽起來那可能其實是在「其他」這個桶子裡。所以「其他」裡面到底有哪些？

Well, there's a portfolio of about 12 different product categories. And in any given quarter, these things move back and forth. We talked about the portfolio of crosspoint switches that has been around for a long time that has -- seems to continue to have new applications. It's a functionality in a chip that reduces latency issues, enhances latency. And it finds new markets. And the team's done a good job to continue to expand that opportunity. To focus on any single component is really hard and really is not giving the right context of the business.

嗯，那是一個大約 12 個不同產品類別的產品組合。而在任何一個季度，這些項目都可能來回移動。我們談過那個已經存在很久的 crosspoint switch（交叉點交換器）產品組合——它似乎持續出現新的應用。它是一種晶片上的功能，可降低延遲問題、改善延遲表現。而且它會找到新的市場。團隊也做得很好，持續擴大那個機會。要聚焦在任何單一元件其實很難，也無法提供這項業務的正確脈絡。

We'll give you more flavor on some of the other diversity stuff. We've got the wireless backhaul point-to-point portfolio that we've had at MACOM for 5 years-plus. Fiber backhaul is reported in that. There's lasers going into mobile infrastructure. OTN framers and mappers, that is the business coming in from AppliedMicro. We have an old legacy Voice-over-IP piece that came in from Mindspeed 3 years ago. It's all kinds of bits and pieces. And like Bob said, on a quarter-by-quarter basis, things pop around up and down and sideways.

我們再多給你一些關於其他多元化項目的細節。我們有無線回傳點對點（point-to-point）的產品組合，在 MACOM 已經有 5 年以上。光纖回傳（fiber backhaul）也歸在那裡。還有用於行動基礎建設的雷射器。OTN 成幀器（framers）與映射器（mappers），那是從 AppliedMicro 併入的業務。我們還有一個較舊的傳統 VoIP（網路語音）業務，是 3 年前從 Mindspeed 併入的。總之就是各式各樣零零碎碎的東西。就像 Bob 說的，以季度為單位，這些項目會上下左右地波動。

Got it. So within that Other bucket, the OTN framers, mappers, the lasers for cellular backhaul declined sequentially into September, given the China part of that business declines?

了解。所以在那個「其他」桶子裡，OTN 成幀器、映射器，以及用於行動回傳的雷射器，在 9 月季度相較前一季是下滑的，因為其中中國相關的那部分業務下滑？

Correct.

正確。

Yes. So we're seeing exactly what other people are reporting, which is mobile infrastructure is looking weak for at least the September quarter. That's the only visibility we have. But it was previously strong. But that cycled back and forth over the past few years. But I can only tell you, September is looking soft for that business.

是的。所以我們看到的情況跟其他人回報的一樣：至少在 9 月季度，行動基礎建設看起來偏弱。這是我們唯一能見度所及的範圍。但先前它是強勁的。而且在過去幾年裡，它一直在強弱之間來回循環。但我只能告訴你，9 月對那塊業務看起來偏軟。

So then, just shifting over to the Optical business, which was in the mid-50 million, that's just the PON business and the Long-haul/Metro revenue? Or is there anything else in that Optical bucket?

那接著轉到光學（Optical）業務，營收在 5,000 多萬美元左右，那只是 PON 業務以及長途/都會（Long-haul/Metro）的營收嗎？還是光學這個桶子裡還有其他東西？

No. It's Long-haul/Metro. It is the PON business, and the rest goes into the data center bucket today.

沒有。就是長途/都會（Long-haul/Metro）。還有 PON 業務，其餘的目前都歸到資料中心（data center）那個桶子裡。

Yes, we pull -- you might as well pull data center-related stuff out, they used to have data center.

是的，我們把——你也可以把跟資料中心相關的東西抽出來，他們以前是把它算在資料中心。

There is a small piece of the framer business and OTNs that go also into optical applications as well as other enterprise applications.

另外還有一小部分的成幀器（framer）業務與 OTN，也會用在光學應用以及其他企業級應用。

Okay. And I assume, given your comments on the data center business, that you would expect sequential growth in data center within the Optical bucket into the September quarter?

好的。那我假設，根據你們對資料中心業務的評論，你們預期 9 月季度在光學桶子裡的資料中心會呈現季增？

Yes.

是的。

Great. And just last question for me. You guys have talked conceptually about selling directly to some of the hyperscale customers where you provide your reference designs and they can build those. Can you say whether or not you've entered production in any of those types of engagements with that model?

很好。我最後一個問題。你們曾在概念上談到，直接銷售給部分超大規模（hyperscale）客戶：你們提供參考設計，然後他們可以自行建置。你能否說明，在這種模式的合作中，你們是否已經有任何案子進入量產？

Yes. So let me just clarify because there's a subtlety that is a sensitive point with our customers that I think people have misinterpreted our comments. So our model is we engage with the cloud service guys not just because of our desire to, but the cloud service and major data center guys are very professional in their supply chain management. It's like the personal computer industry. They engage directly with the semiconductor suppliers and electronic component suppliers to make sure the supply chain is set up with the right capacity, supply chain flexibility, the right products, the right technology, and so that's their model. It's not us trying to do something different. And we're recognized by all the major cloud guys. I mean, we had one of the mega guys at OFC come into our booth and say, we opened up all these transceivers and they're chock-full of MACOM components. 7 out of 10, by our estimate, includes our content. So they're engaging with us. And the answer is with all of these guys, we have a lot of customers, transceiver customers servicing each one of them. And there's multiple per one, right? And there's been some coverage lately of some successes and so on. Let me tell you my emotional reaction to that. That's one of many. It's not the only one. It's not a singular event. It's one of many with different product configurations, different standards and different transceiver suppliers.

是的。我先澄清一下，因為這裡有個細微差異，對我們的客戶而言是敏感點，我認為外界有人誤解了我們的說法。我們的模式是與雲端服務業者合作，不只是因為我們想這麼做，而是因為雲端服務與大型資料中心業者在供應鏈管理上非常專業。這就像個人電腦產業一樣。他們會直接與半導體供應商與電子元件供應商接洽，以確保供應鏈具備正確的產能、供應鏈彈性、正確的產品與正確的技術，因此那是他們的模式。不是我們想要做一些不同的事情。而且所有主要雲端業者都認可我們。我的意思是，我們在 OFC 上曾有一家巨頭到我們攤位說，他們拆開了很多收發器（transceivers），裡面塞滿了 MACOM 的元件。依我們估計，10 個裡有 7 個包含我們的內容。所以他們確實在與我們互動。答案是：對於所有這些業者，我們都有很多客戶——也就是收發器客戶——分別為他們每一家提供服務。而且每一家不只一個供應商，對吧？最近也有一些報導提到某些成功案例等等。我告訴你我對那件事的情緒反應。那只是眾多案例之一。不是唯一的一個。也不是單一事件。它只是眾多案例之一，涉及不同的產品配置、不同的標準，以及不同的收發器供應商。

And our next question comes from Mark Delaney of Goldman Sachs.

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

First question is a follow-up on the China 100G pushouts relative to what the company had been looking for as of the last call of potential increase in the September quarter. And John, I know you said you were just over there, and I think, you made some comments specifically about what's happening in PON relative to your prior expectations. Could you just elaborate a bit more on the 100G opportunity, and is any of the weakness either share loss or incremental pricing pressure, or is it all just lower end demand?

第一個問題是延續上次電話會議的追問，關於中國 100G 訂單延後（pushouts），相較於公司在上次電話會議時所預期 9 月季度可能會增加的情況。John，我知道你剛去那邊，我想你也特別針對 PON 的現況相對於你先前的預期發表了一些看法。你能否再多談一點 100G 的機會？另外，這些疲弱是否有任何部分是市占流失或額外的價格壓力所致，還是完全只是終端需求較弱？

No, I mean, one of the reasons why I go over to those customers is I'm very sensitive to share issues, gaining share and losing share. And yes, when orders dry up, you start worrying about the worst, right? I can tell you, 0 indication of share loss. We're mid-cycle with a lot of these programs, they just don't switch suppliers. I mean, it's not like these are multi-source things and so on. It's 100% end market-related issues. Let me give you the kind of flow, and if you look at major players in the industry, and I'll give you -- Acacia is a great bellwether selling into China as well, there are a lot of people who have been successful, not just us. In the December quarter and March quarters, very, very strong. And what happened was in the -- as we're exiting the March quarter with our April guidance, we started to see softening, and we tried to emphasize that. Some would argue, overemphasized that in our last earnings call. And then, after the earnings call, it continued, the visibility did not come back. At OFC, which was in March, we had major customers and carriers talking about provincial deployments that would begin in the fall, which would indicate -- people asked about the September quarter. I said, "Look, September is going to depend upon is that sooner in the fall or later in the fall." And now, people are saying, well, end of the calendar year. So we literally have customers who, mid-quarter, said stop shipping products, and they have not and will not place orders for delivery in September until they burn down the inventories and those provincial deployments continue.

不，我的意思是，我之所以會去拜訪那些客戶，是因為我對市占問題非常敏感——包括拿到市占或失去市占。而且是的，當訂單突然乾掉時，你就會開始往最糟的方向擔心，對吧？我可以告訴你，完全沒有任何市占流失的跡象。我們在許多這類專案都處於週期中段，他們不會隨便更換供應商。我的意思是，這不像是可以多來源供應之類的情況。這 100% 是終端市場相關的問題。我來說明一下整個脈絡：如果你看產業裡的主要玩家——我舉例，Acacia 也是一個很好的風向球，他們也在中國銷售——有很多公司都很成功，不只是我們。在 12 月季度和 3 月季度，需求非常、非常強。接著發生的是，當我們在 3 月季度末、提出 4 月的財測指引時，我們開始看到需求轉弱，我們也試著強調這點。有人會認為，我們在上次財報電話會議上把這點強調得過頭了。但在那次電話會議之後，轉弱仍持續，能見度並沒有回來。在 3 月的 OFC 上，我們有主要客戶與電信業者談到省級部署將在秋季開始，這也意味著——大家問到 9 月季度。我當時說：「你看，9 月會取決於秋季是偏早開始還是偏晚開始。」而現在，人們說的是年底。所以我們確實有客戶在季度進行到一半時就說停止出貨，而且在他們把庫存消化下來、以及那些省級部署持續推進之前，他們不會、也尚未下單要求 9 月交付。

This is telecom, too, this is a major qualification process, so you're not swapping out boards as...

這也是電信領域，這是一個重大的認證流程，所以你不會像……那樣把板子換掉……

Boards, components or otherwise. They're mid-programs. They're not new programs with changes in suppliers and so on. Very sensitive to the point. But I can tell you, this is 100% about specifically China and specifically end market health. Cyclical issues.

板子、元件或其他任何東西。他們是在專案中段。這不是新專案，不涉及更換供應商之類的變動。我對這點非常敏感。但我可以告訴你，這 100% 是關於中國、而且是關於終端市場健康狀況。屬於景氣循環性的問題。

Got it. That's helpful detail. Second question, switching gears a little bit on the 25G lasers. I think, you said you tripled output, so is my math right? You're 600,000 units as of last quarter? And then, as you bring on Lowell, hopefully, later this summer, does that get you all the way to that 5 million to 8 million units of capacity that you had in PON? Or is there still additional factories that would need to convert? And maybe you could also just talk a little bit about how the yields are on the 25G lasers versus 2.5G?

了解。這些細節很有幫助。第二個問題，稍微換個話題談 25G 雷射。我想你說你把產出提高到三倍，所以我算得對嗎？你們上季是 60 萬顆？然後，當你們在今年夏末希望讓 Lowell 上線時，是否就能把產能一路拉到你們在 PON 所提到的 500 萬到 800 萬顆？還是仍需要再把其他工廠轉換？另外也請你談談 25G 雷射相較於 2.5G 的良率表現如何？

Well, yes, I mean, you're talking about a fully mature -- I mean, I think, we sold 200 million lasers in 2.5G, and you're talking about numbers that were orders of magnitude. So totally different stage of yield curves. But it is several integer, multiples, higher yields quarter-on-quarter, which is consistent with tripling capacity out of our Ithaca factory. I can just -- I'll put Lowell this way. Once we have Lowell qualified and we're midpoint through the high temperature operating life qualifications and everything's looking great and all indications are things will complete, I mean, it's a transfer of something from one factory to copy exactly to the next factory. We'll have the equipment capacity and the ability to start enough material that supply 100% of the data center market for these foreseeable several years. Now I should say, that doesn't mean we're qualified at all to customers necessary to place the orders and fulfill that demand, but there will no longer be any kind of capacity bottleneck in the industry servicing 100-gig transceivers, 100 gig or even 400-gig transceivers.

嗯，是的，我的意思是，你談的是一個完全成熟的——我是說，我想我們在 2.5G 賣了 2 億顆雷射，而你現在談的數量是小了好幾個數量級。所以良率曲線所處的階段完全不同。但我們的良率確實在每一季相較前一季都有數個整數倍的提升，這也符合我們在 Ithaca 工廠把產能提高三倍的情況。我可以——我用 Lowell 這樣說。一旦 Lowell 完成認證，而且我們在高溫操作壽命（HTOL）等各項認證已經走到中段、目前看起來都很棒、所有跡象都顯示會完成——我的意思是，這就是把某個工廠的製程轉移到下一個工廠，完全照樣複製。我們將具備設備產能，以及啟動足夠材料的能力，在未來可預見的幾年內供應資料中心市場對這些產品的 100% 需求。當然我也要說，這不代表我們已經對所有客戶都完成認證、足以讓他們下單並滿足那個需求，但在服務 100G 收發器、100G 甚至 400G 收發器方面，產業將不再有任何產能瓶頸。

And Lowell is a 4-inch fab versus a 3-inch fab.

而且 Lowell 是 4 吋晶圓廠（fab），相較於 3 吋晶圓廠。

4-inch versus 3-inch. Frankly, from a yield standpoint, a lot more reliable and robust. It's a world-class compound semi fab that's perfect. And as you can see, I mean, we're shipping 8 million a month at peak in the PON. And there's no reason, at maturity, we can't do the same thing with 25-gig lasers.

4 吋對 3 吋。坦白說，就良率而言，可靠性與穩健性高很多。那是一座世界級的化合物半導體晶圓廠，非常適合。而且如你所見，我們在 PON 高峰期每月出貨 800 萬顆。而且沒有理由在成熟後，我們不能在 25G 雷射上做到同樣的水準。

Or more.

或更多。

Or more. I mean, 8 million was not the limit by any means. But if we can sell 8 million per month of 25-gig lasers, I'll be pretty happy, put it that way.

或更多。我的意思是，800 萬絕不是上限。但如果我們能每月賣出 800 萬顆 25G 雷射，我會相當滿意，就這麼說吧。

Right. And if I could just sneak one more in on the GaN for base stations. I think, last quarter, we talked about having a couple of different qualifications, one at 900 megahertz and one at 1.8 gigahertz, and those were supposed to be done at June time frame. How did those fair? And are those programs still on track for production ramps in the, I think it was December to February time frame was what had been communicated previously?

好。如果我可以再塞最後一個問題，關於基地台用的 GaN。我記得上季我們談到有幾個不同的認證案，一個在 900 兆赫（MHz），一個在 1.8 吉赫（GHz），原本預計在 6 月左右完成。那些進展如何？而且那些專案是否仍按計畫在量產爬坡（production ramps）方面維持進度？我想先前溝通的是 12 月到 2 月的時間框架？

Yes, the initial design ends we have, we actually have more frequency bands now than we had before. We -- I think, I talked about 901.8. We now have wins with 3.5 and 2.3. And all those initial quals completed, we have additional quals completing in September. We have a major customer audit, which is the conclusion of all this qualification stuff, August 10. Full expectation that, that's going to go well, in which case, we're going be off to the races with geometric proliferation of program wins and on a go-forward basis. But let me say what I've always said, which is we're not through the gate until we're through the gate. August 10 is not -- this is August 1, not August 10. And so everything is looking very, very exciting. My confidence genuinely over the past year quarter-to-quarter-to-quarter has continued to grow. The inflection point could be within the next 30 days.

是的，我們最初的設計導入（design-ins），其實現在的頻段比以前更多了。我們——我想我之前談的是 900 和 1.8。我們現在在 3.5 和 2.3 也拿到案子（wins）。而且那些初始認證都已完成，我們還有額外的認證會在 9 月完成。我們有一個主要客戶稽核（audit），這是所有這些認證工作的收尾，時間是 8 月 10 日。我們完全預期那會進展順利；若是如此，我們就會全速前進，未來將出現幾何級數的專案得標擴散（program wins），並在往後持續推進。但我還是要重申我一直說的：在真正過關之前，我們都還沒過關。8 月 10 日還沒到——今天是 8 月 1 日，不是 8 月 10 日。所以目前看起來一切都非常、非常令人振奮。我在過去一年裡，每一季、每一季、每一季的信心都持續增加。轉折點可能就在接下來 30 天內。

And our next question comes from Tore Svanberg of Stifel.

我們的下一個問題來自 Stifel 的 Tore Svanberg。

I know you don't want to report on the product lines, but the Long-haul/Metro, which looks like it's around $47 million, how big of that is China? Is it half? Is it 1/4? Again, I'm not looking for a specific percentage but just rather, a rough magnitude.

我知道你們不想按產品線來揭露，但長途/都會（Long-haul/Metro）看起來大約是 4,700 萬美元，其中有多少來自中國？是一半嗎？是四分之一嗎？同樣地，我不是要一個精確百分比，只是想了解大概的量級。

So China business overall, at its peak, was almost 40% and our fiscal Q1, is down to 30%, but that's not just Long-haul/Metro. I...

整體中國業務在高峰時接近 40%，而我們的會計年度第一季降到 30%，但那不只是長途/都會。我……

Actually those numbers tie in with the stuff I have in front of me here, Bob.

其實這些數字跟我手上這份資料相符，Bob。

Yes. It's just that we do sell some other products to China. And China includes Hong Kong because it's a port of entry and gets around some VAT taxes for some of the customers, for us at least. And so it's softening as this trend has happened.

是的。只是我們也有賣一些其他產品到中國。而且中國也包含香港，因為它是入境港口，對某些客戶而言（至少對我們而言）可以繞過一些增值稅（VAT）。因此隨著這個趨勢發生，需求正在轉弱。

Yes. Back in the second quarter for Metro/Long-haul, it was pretty close to 50-50, inside and outside China. Q3, you had fairly precipitous decline in China, continued sequential growth close to double-digit in outside China. So the China decline was precipitous. From that low number, we still see -- I mean, literally, orders have dried up. Customers do not want to take products in the September quarter, so there's another small sequential decline, much smaller than the previous one, but off that low number in China. And we continue to grow double digit sequential outside of China. So let me emphasize something, just to give you the image, from a design win footprint, market position overall, our position only grows. In terms of end market cyclical weakness, we have a short-term issue in China. Once the provincial deployments resume, we're back off to the races, right? So this is genuinely a cyclical issue dealing with end market demand. The overall market position we have is only strengthening on a global basis.

是的。回到第二季，就都會/長途而言，中國內外大致接近 50/50。第三季你看到中國出現相當急遽的下滑，而中國以外則持續呈現接近兩位數的季增長。所以中國的下滑非常陡峭。在那個低基期之後，我們仍然看到——我是說，訂單真的乾掉了。客戶不想在 9 月季度提貨，所以還會再有一個小幅的季減，幅度比前一次小很多，但仍是從中國的低基期再往下。而中國以外我們仍持續維持兩位數的季增長。所以我想強調一點，給你一個畫面：從設計導入（design win）的版圖、整體市場地位來看，我們的地位只會持續提升。就終端市場的週期性疲弱而言，我們在中國有一個短期問題。一旦各省的部署恢復，我們就又會全速前進，對吧？所以這確實是一個與終端市場需求相關的週期性問題。我們整體的市場地位在全球範圍內只會更強。

And as more of the contract manufacturers come into play in the data center market, that will also increase the China penetration of end market deliveries.

而且隨著更多合約製造商在資料中心市場中發揮作用，這也會提高終端市場交付中中國的滲透率。

Yes.

是的。

Understood. And then -- so PON was about $8 million last quarter, how should we think about that revenue going forward? So will it pretty much go away in the September quarter? And maybe perhaps another way of asking the question is when will be the crossover between 2.5 and 10G? Will you start to see that crossover pretty soon?

了解。接著——PON 上季大約是 800 萬美元，未來這部分營收我們應該怎麼看？所以它在 9 月季度會幾乎消失嗎？也許換個方式問：2.5G 和 10G 的交叉點會在什麼時候出現？你們會很快開始看到那個交叉嗎？

So we're being very cautious on that exact point. This is a technology transition. It's not just a cyclical thing. The 2.5 is -- there was a clear inflection point. The answer that our business will come back, that inflection point produces an overhang with an inventory burn off. It's the bullwhip effect, semiconductor guys. So yes, 2.5G will come back at some lower level eventually, once they burn off the inventories. That's not about happening in September. I wouldn't anticipate that happening in December. On the 10-gig PON, there's really 2 waves to look to. One is the OLTs, the optical line terminals, which is the central office side of things. The issue there is it's moderate volumes. And our position of strength really comes in where you have the scale volume on the client side, the optical network units. And that is not an instant transition. So that -- PON is going to remain soft on the intermediate term. And again, I try to use the analogy of 3G to 4G transition in mobile infrastructure back in 2012. Things fell off like a rock in March 2012. And later quarters, year later, came back roaring like a lion where people couldn't supply enough product. That's what I anticipate with 10G. But I'll tell you, we are not close enough to the carriers to give you a date when that's going to happen. And frankly, I wouldn't believe it until I saw it in orders anyway.

所以在這一點上我們會非常保守。這是一個技術轉換。不只是週期性因素。2.5G——那裡有一個很明確的拐點。即便答案是我們的業務會回來，那個拐點也會帶來庫存去化所造成的壓力。這就是牛鞭效應（bullwhip effect），半導體圈的各位。所以是的，2.5G 最終會在較低的水準回來，一旦他們把庫存消化完。但這不會在 9 月發生。我也不預期 12 月會發生。至於 10G PON，基本上有兩波可以觀察。第一波是 OLT，也就是光纖線路終端（optical line terminals），屬於局端（central office）那一側。那邊的問題是量屬於中等規模。而我們真正的優勢是在客戶端具備規模量的地方，也就是 ONU（optical network units，光網路單元）。而那不是一個瞬間就能完成的轉換。因此——PON 在中期仍會維持疲弱。我再用一個類比：2012 年行動基礎建設從 3G 轉 4G。2012 年 3 月需求像石頭一樣掉下去。之後的季度、約一年後，又像獅子般咆哮回來，大家甚至供不應求。我對 10G 的預期也是如此。但我必須說，我們跟電信業者的距離還不夠近，無法給你一個日期說那會在何時發生。坦白說，就算有人給我日期，我也要看到訂單才會相信。

To think about it, we already said we shipped 200 million 2.5-gig lasers. If there's 100% replacement market, we still have plenty of capacity for 10-gig lasers.

再想一下，我們已經說過我們出貨了 2 億顆 2.5G 雷射。即使有 100% 的汰換市場，我們在 10G 雷射方面仍然有充足的產能。

Sounds good. Just last question on single lambda PAM-4s, you said everything is on track there. So is it too early to talk about sort of what the revenue contribution could be there next year? Do you have any numbers you want to share with us?

聽起來不錯。最後一個問題關於單波長（single lambda）PAM-4，你說那邊一切都按計畫進行。那現在談明年那部分可能的營收貢獻是否還太早？你們有沒有任何數字可以跟我們分享？

No. And I'll tell you, one thing has become clear, especially after our data center investor forums. We got to be really careful about what we talked about, our lead customers' level of business. There's a high degree of sensitivity with our customers talking about their business to investors. When you get more diversified businesses with multiple customers, it helps. When you have one big lead customer driving your business, we have to be really cautious. So a long-winded way of saying no. I can tell you, their internal program delivering the full transceiver using that single lambda PHY is very smoothly flowing through. They'll be in a position this fall to be sampling for their customers. It's -- the risks that were there before this quarter, was, well, they would have to complete their product, so there's always technical risk in their own development, and that is going very well. And so everything looks to be right on track for their own internal schedules. And it is a strategic program of real significant interest to that customer. So they're very much motivated to drive that out of the marketplace. They think it's quite disruptive, in fact.

沒有。我告訴你，有一件事已經很清楚了，尤其是在我們的資料中心投資人論壇之後。我們必須非常小心我們談到的內容，尤其是關於我們領先客戶的業務水準。客戶對於向投資人談論他們的業務有高度敏感性。當你的業務更分散、擁有多個客戶時，會比較有幫助。當你有一個大型領先客戶在驅動你的業務時，我們就必須非常謹慎。所以用一個比較冗長的方式來說：不會。我可以告訴你，他們內部使用該單波長 PHY 來交付完整收發器（transceiver）的專案，進展非常順利。他們今年秋天將具備向其客戶送樣（sampling）的條件。在本季之前存在的風險是：他們必須完成自己的產品，因此他們自身研發總是存在技術風險，而目前進展非常好。所以一切看起來都完全符合他們內部的時程。而且這對那位客戶而言是一個具有重大戰略意義、非常受重視的專案。因此他們非常有動力把它推向市場。事實上，他們認為這會相當具有顛覆性。

And our next question comes from Harsh Kumar of Stephens.

我們的下一個問題來自 Stephens 的 Harsh Kumar。

I just wanted to follow up on the previous question. I think, Tore mentioned $47 million for Long-haul/Metro. First of all, do you agree with that number? And then, just relatively speaking, for -- you gave like a 50% down number. Was that number for PON -- or I'm sorry, for Long-haul/Metro, was that for June or for September guide for us to think about? Maybe just provide some color on that.

我只是想延續上一個問題。我想 Tore 提到長途/都會是 4,700 萬美元。首先，你同意這個數字嗎？然後，相對而言，關於——你提到大約下滑 50% 的數字。那個數字是針對 PON——抱歉，是針對長途/都會？那是 6 月的實際情況，還是你們給我們用來思考的 9 月指引？也許可以多提供一些說明。

Yes, the $47 million number is our second fiscal quarter, so the March quarter. A little more than half of that was China. And China dropped by half. So you can see a 25% sequential drop in our total. At the same time, the non-China business grew sequentially close to 10%, so that offset that somewhat. But in total, there was a sequential decline in the June quarter in Metro/Long-haul, 100% -- more than 100% attributable to China.

是的，4,700 萬美元這個數字是我們第二個會計季度，也就是 3 月季度。其中略多於一半來自中國。而中國下滑了一半。所以你可以看到我們總體出現 25% 的環比下滑。同時，非中國業務環比成長接近 10%，因此在一定程度上抵消了影響。但總體而言，6 月季度在都會/長途（Metro/Long-haul）出現了環比下滑，其中 100%——甚至超過 100% 都可歸因於中國。

Got it. And then, you mentioned -- John, you mentioned that fiscal 2018, you expect Long-haul/Metro to pick up. Is there something that you're seeing? Or is this just based on previous experience that you've seen with other cycles? Just some color on that as well.

了解。然後，你提到——John，你提到在 2018 會計年度，你預期長途/都會（Long-haul/Metro）會回升。你是看到了什麼跡象嗎？還是只是基於你過去在其他景氣循環中的經驗？也請就這點再補充一些說明。

I'm sorry, which period did I say? It was...

抱歉，我說的是哪個期間？是……

I think, you said next year, you expect Long-haul/Metro to pick up and come back.

我想，你是說明年你預期長途/都會（Long-haul/Metro）會回升並恢復。

Oh, geez, yes, I mean, look, let me caution one thing, having heard what people said at OFC and that not materializing, I'm a little bit snake-bit, and I don't want to be the prognosticator of recovery. But I'll tell you, the reality is, and you'll see our customers reporting over the next week or so, and I'll caution, our customers will see recovery sooner than us. We get the bullwhip effect on inventories. They're going to be talking about provincial deployments later this year. So we don't have to wait for next year for the China stuff to come back. It's going to be coming back naturally as those deployments proceed. No one has said those have disappeared. That's why I say this is a cyclical issue. And we get the bullwhip effect of the inventory effect. And meanwhile, outside of China, look, we're posting multiple quarters of, on average, 10% sequential growth. So we don't have to wait for next year for Metro/Long-haul to recover. It's going to be soon. But how soon it is, we guide one quarter at a time.

噢，天啊，是的，我的意思是，先提醒一點：聽了大家在 OFC 上說的那些話但後來沒有實現，我有點被咬過一次就怕了，我不想當那個預測復甦的人。但我可以告訴你，現實是——你會看到我們的客戶在接下來一週左右陸續公布，我也要提醒，我們的客戶會比我們更早看到復甦。我們會受到庫存的「牛鞭效應」。他們會談到今年稍晚的省級部署。所以我們不必等到明年中國的部分才會回來。隨著那些部署推進，它會自然回來。沒有人說那些部署已經消失。這就是為什麼我說這是週期性問題。而我們會受到庫存效應的牛鞭效應。同時，在中國以外，你看，我們已經連續多個季度平均環比成長 10%。所以我們不必等到明年都會/長途（Metro/Long-haul）才復甦。它會很快發生。但到底多快，我們一次只給一個季度的指引。

And our next question comes from the Vivek Arya of Bank of America Merrill Lynch.

下一個問題來自美國銀行美林（Bank of America Merrill Lynch）的 Vivek Arya。

I guess, we're all trying to guess how prolonged this downturn is. I think, of course, there's an understanding it's cyclical, but when the recovery would be is harder to predict. But when I look at the December quarter, seasonally, it has been flat to down for you guys over the last number of years. And I'm wondering what is the right way to think about it this time? Like, should we really be expecting a recovery so late in the year? Or just what are the puts and takes for December, even if it's on a conceptual basis, given potential for recovery versus GaN and base station, et cetera?

我想，我們都在試著猜這次下行會持續多久。我想，當然大家都理解這是週期性的，但何時復甦就更難預測。不過當我看 12 月季度，從季節性來看，過去幾年你們在那個季度通常是持平到下滑。我想知道這次應該怎麼看才對？例如，我們真的應該預期復甦會拖到年底那麼晚嗎？或者就概念層面而言，考量可能的復甦、以及 GaN 和基地台等因素，12 月有哪些利多與利空？

So let me put it this way, yes, so we have definitely seen in recent years, seasonal softening in our first fiscal quarter, the December quarter, no doubt. To be honest, this cyclical effect dwarfs that, right? This is a precipitous decline in some businesses that are in that same region. If we see the deployments begin in December quarter, like people talk about, that effect, in my opinion, could very well dwarf the other seasonality. How much? The puts and takes and relative balances, it remains to be seen. I would say, PON, I would not count on recovery in the December quarter. That's a technology transition. It's not just an inventory effect with a pushout in demand. And frankly, it's not that far off of what we anticipated anyway, to be honest. But at the same time, our data center business is marching along well ahead of our expectations on all fronts, on all form factors. The lasers, the analog stuff continues to post very strong sequential growth quarter-to-quarter-to-quarter. We had the L-PICs now rolling out. We're going to have first major customer with very high volume capability in the fall, sampling transceivers based upon our CWDM4 L-PIC. We're just -- well, I guess, next year, you'd actually see the material PAM-4 PHY stuff, but it's all a matter of balance of puts and takes. It's -- the thing we're dealing with right now is just multiple segments, bad luck, everything cycling down in China simultaneously.

我這樣說吧，是的，近幾年我們確實在第一個會計季度，也就是 12 月季度，看到季節性走弱，毫無疑問。坦白說，這次的週期性影響遠遠大於那個季節性因素。這是在同一地區某些業務出現的斷崖式下滑。如果像大家所說的那樣在 12 月季度開始部署，我認為那個影響很可能會遠遠超過其他季節性因素。會有多大？各種利多利空與相對平衡，仍有待觀察。我會說，PON 的話，我不會指望在 12 月季度復甦。那是技術轉換。不只是庫存效應、需求遞延而已。而且坦白說，這也離我們原先預期的情況不算太遠。但同時，我們的資料中心業務在各方面、各種外形規格上，都以遠超我們預期的速度穩步推進。雷射、類比相關產品持續呈現非常強勁的環比成長，一季接一季。我們現在也開始推出 L-PIC。今年秋天，我們將有第一個主要客戶具備非常高的量產能力，並會針對基於我們 CWDM4 L-PIC 的收發器進行送樣。我們只是——嗯，我想明年你才會真正看到具體的 PAM-4 PHY 相關貢獻，但一切都取決於利多利空的平衡。我們現在面對的是多個區隔同時受影響、運氣不好，中國的各項業務同時進入下行循環。

Yes, MACsec is also well-positioned for...

是的，MACsec 也處於很好的位置，適合……

Yes, so MACsec and PAM-4 are ahead of our expectations, both in terms of revenue recognition as well as design win and customer adoption. So strategically, it's all very good. But all the telecom-related stuff in China, including the OTN framers and mappers, the wireless and fiber backhaul stuff, all shaping up for a soft September quarter. And it's cyclical. It is not share-related. And all the reports you see start talking about recovery in China getting back to more normal conditions as early as the December quarter, I think, it's just way too early for us because there's that whiplash effect with inventory, inventory burnout, that until we get visibility of orders coming in, we can't call it.

是的，所以 MACsec 和 PAM-4 都超出我們的預期，無論是在營收認列，還是在設計導入（design win）與客戶採用方面。因此從策略上看，一切都非常好。但中國所有與電信相關的部分，包括 OTN 成幀器與映射器、無線與光纖回傳（backhaul）相關產品，都顯示 9 月季度會偏弱。而這是週期性的。不是市占率相關的問題。你看到的各種報告開始談到中國最早在 12 月季度就能回到較正常的狀況、出現復甦，我認為對我們來說還太早，因為有庫存的鞭打效應——庫存去化、庫存消耗——在我們看到訂單進來、取得能見度之前，我們無法下定論。

Got it. And as my follow-up on gross margins, when I look at June results, I understand you mentioned some trends started to weaken, but sales were roughly in line with the broad guidance you had provided, but gross margins were 100 basis points weaker, but then, importantly, when I look at your September guidance, you were expecting gross margins to go up 100 basis points even though sales are expected to come down to 13%. And I'm just trying to understand why the miss in June and why would they grow in September?

了解。那我追問毛利率：當我看 6 月季度的結果，我理解你提到一些趨勢開始轉弱，但銷售額大致符合你們先前提供的整體指引；然而毛利率卻低了 100 個基點。更重要的是，當我看你們對 9 月季度的指引，你們預期即使銷售額預計下滑到 13%，毛利率仍會上升 100 個基點。我想了解為什麼 6 月會失準，以及為什麼 9 月毛利率反而會成長？

So our gross margins are an issue of blend of the business. Our Metro/Long-haul business and PON, believe it or not, in PON, are among the highest gross margin businesses we have in the company. That's where the pain is the most acute. The answer to your question about the sequential growth expansion in gross margin in the September quarter has, frankly, a lot to do with data center. Data center is yielding the same or better gross margins than those. So it's just a mix on a quarter-to-quarter basis.

所以我們的毛利率取決於業務組合。我們的都會/長途（Metro/Long-haul）業務以及 PON——信不信由你，PON 也是——都屬於公司內毛利率最高的業務之一。而痛點最嚴重的正是在那裡。你問到 9 月季度毛利率環比擴張的原因，坦白說，很大一部分與資料中心有關。資料中心帶來的毛利率與那些業務相同或更好。所以這只是季度之間的組合變化。

And we already said that the PowerPC business is not a growth business in the fourth quarter. And that's been dragging down margins.

而且我們已經說過，PowerPC 業務在第四季並不是成長型業務。而這一直在拖累毛利率。

Got it. So just lastly, if you were in our seat, you would be modeling December up sequentially?

了解。那最後一個問題，如果你坐在我們的位置，你會把 12 月的表現建模為較前一月（或前一季）連續成長嗎？

We are not making comment on Q4, calendar Q4, our fiscal Q1. We have no evidence to say that seasonality will not be any different this year than we've seen in the past at this point in time. We don't -- we guide one quarter at a time.

我們不對第四季（曆年第四季、也就是我們的會計年度第一季）發表評論。我們不會——我們一次只提供一個季度的指引。

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

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

I think, I'll just ask one question, I think, as the China topic has been largely delved into here. But let me ask one quick one on PAM. John, you mentioned you have 21 engagements including, I think, the wording I got was 5 programs and some level of detail there. I wonder if you could help us understand the breadth of the customer list there? Would you describe them as Tier 1s? And how fast do you think those programs, which, I assume, you're describing as past your lead customer here are expected to ramp into revenues?

我想我就問一個問題，因為關於中國的話題在這裡已經談得差不多了。不過讓我就 PAM 再快速問一個。John，你提到你們有 21 個合作案（engagements），其中我記得你用的措辭是包含 5 個專案（programs），並且有一些細節。我想請你幫我們理解一下那份客戶名單的廣度？你會把他們描述為 Tier 1 客戶嗎？以及你認為那些專案（我假設你指的是超出你們這裡的領先客戶之外的專案）預期會以多快的速度放量並轉化為營收？

Yes, here's the way to think about PAM-4, no one refutes the fact that the IEEE standard, single lambda-based standard, is unequivocally the approach for 400-gig, right? And a lot -- every single one of these customers we're talking about is locked on to 400-gig as we roll it out over the coming months and quarters. A subset of those people are active in 100-gig programs for multiple reasons, one of which is to be a pipe cleaner so that they're ready to deploy the 400-gig as a logical follow-on because 400-gig you can think of is the quad version of 100-gig in those IEEE standards. In terms of the quality of customers, it's a who's-who list. Frankly, we don't waste our time supporting -- this is heavy handholding, high-maintenance design wins, and we don't -- I shouldn't say waste our time, we focus our energy on the guys who can move the needle, put it that way. And literarily, it's almost -- there's no one that isn't serious about 400-gig. And 400-gig is unequivocal and we're unequivocally in the point position. So it's a very, very nice position to be in. And that's the reason why I keep harping on -- the success with that, like a lot of things we're doing, is purely an issue of execution, getting the product out, getting it ramped into volume and getting the customer programs likewise qualified and shipping.

是的，PAM-4 可以這樣理解：沒有人會否認 IEEE 標準、以單波長（single lambda）為基礎的標準，毫無疑問就是 400G 的路徑，對吧？而且——我們談到的每一位客戶，都鎖定在 400G，因為我們會在接下來幾個月與幾個季度逐步推出。其中有一部分客戶基於多種原因，正在進行 100G 專案，其中一個原因是作為「試管」（pipe cleaner），讓他們準備好在後續順理成章地部署 400G；因為在那些 IEEE 標準中，你可以把 400G 視為 100G 的四通道版本（quad version）。就客戶品質而言，這是一份「名人錄」式的名單。坦白說，我們不會把時間花在支援——這些是需要大量手把手協助、維護成本很高的設計導入（design wins），而我們不——我不該說浪費時間；我們把精力聚焦在能帶來實質影響的人身上，就這麼說吧。而且實際上，幾乎——沒有誰不是認真看待 400G 的。400G 是毫無疑問的，而我們也毫無疑問地處於領先位置。所以這是一個非常、非常好的位置。這也是為什麼我一直強調——那方面的成功，和我們正在做的很多事情一樣，純粹取決於執行：把產品推出、把量拉起來，並讓客戶端的專案同樣完成認證並開始出貨。

We're good. So before closing out today's call, I want to mention that Bob and I will be attending a number of investor events over the coming months, including the Pacific Crest KeyBanc Tech Forum on August 7 in Vail; Oppenheimer's Technology Internet & Communications Conference in August 8 in Boston; Jefferies Semi Hardware and Communications Summit on August 29 in Chicago; Drexel Hamilton's TMT Conference on September 6 in New York; and Citi's Global Tech Conference also in New York on the 7th. If you'd like to request a meeting at one of these upcoming events, please email us at ir@macom.com or contact your sales representative directly. We look forward to providing an update and reporting on our continued progress during next quarter's call. That concludes today's remarks. Operator, you may now disconnect the call.

我們沒問題。那麼在結束今天的電話會議之前，我想提一下，接下來幾個月 Bob 和我將參加多場投資人活動，包括：8 月 7 日在 Vail 舉行的 Pacific Crest KeyBanc Tech Forum；8 月 8 日在波士頓舉行的 Oppenheimer Technology Internet & Communications Conference；8 月 29 日在芝加哥舉行的 Jefferies Semi Hardware and Communications Summit；9 月 6 日在紐約舉行的 Drexel Hamilton TMT Conference；以及 7 日同樣在紐約舉行的 Citi Global Tech Conference。如果你想在上述即將到來的活動中安排會面，請寄信至 ir@macom.com，或直接聯繫你的業務代表。我們期待在下季的電話會議中提供最新進展並報告我們持續的進度。以上為今天的發言。接線員，您現在可以中斷通話。

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone, have a great day.

各位女士先生，感謝您參與今天的電話會議。本次會議到此結束，您可以全部掛線。祝各位有美好的一天。