MACOM Technology Solutions Holdings, Inc. (MTSI) 2018 Q1 法說會逐字稿

Good afternoon, and welcome to MACOM's Fiscal First Quarter 2018 Financial Results Conference Call. (Operator Instructions) As a reminder, this conference call is being recorded today, Tuesday, February 6, 2018.

各位下午好，歡迎參加 MACOM 2018 會計年度第一季財務業績電話會議。（接線員指示）提醒各位，本次電話會議將於今天（2018 年 2 月 6 日，星期二）錄音。

I will now turn the call over to Steve Ferranti, Vice President of Investor Relations at MACOM. Steve, please go ahead.

現在我將把電話交給 MACOM 投資人關係副總裁 Steve Ferranti。Steve，請開始。

Thanks, Brian. Good afternoon, everyone, and welcome to MACOM's fiscal first quarter 2018 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.

謝謝你，Brian。各位下午好，歡迎參加 MACOM 2018 會計年度第一季財報電話會議。今天與我一同出席的有 MACOM 總裁兼執行長 John Croteau，以及資深副總裁兼財務長 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.

如果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 would 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 SEC, including its current report on Form 8-K filed today and its annual report on Form 10-K filed on November 15, 2017. Any forward-looking statements represent management's views only as of today, February 6, 2018, and MACOM assumes no obligation to update these statements in the future.

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，且可能受到特定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說明，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，以及於 2017 年 11 月 15 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（2018 年 2 月 6 日）的觀點，MACOM 不承擔未來更新此等陳述之義務。

The company's press release and management 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, 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 its related Form 8-K, which was filed with the SEC today and can be found at the Investor Relations section of MACOM's website.

公司新聞稿以及本次電話會議期間管理層的陳述，將包含對若干經調整之非 GAAP 指標與財務資訊的討論，包括除營收外之所有損益表金額與百分比（除非另有說明）。這些財務衡量指標以及 GAAP 與經調整非 GAAP 結果之調節表，已載於公司新聞稿及其相關 Form 8-K（已於今日向 SEC 提交），並可於 MACOM 網站「投資人關係」專區查閱。

And for those of you unable to listen to the entire call at this time, a recording will be made available via webcast for at least 30 days in the Investor Relations section of MACOM's website.

此外，若各位目前無法收聽完整電話會議，錄音將以網路直播回放方式提供，並將在 MACOM 網站「投資人關係」專區至少保留 30 天。

And with that, I'll turn over the call to John for his comments on the quarter.

那麼，接下來我把電話交給 John，請他就本季表現發表評論。

Thank you, Steve. Welcome, everyone, and thanks for joining us today. I'll begin today's call with an overview of our first quarter results for fiscal 2018, followed by a review of our current end-market conditions and near-term business trends. I'll then turn the call over to Bob McMullan, our CFO, who will review our financial performance in further detail. I'll conclude our prepared comments by providing an update on key business developments related to our long-term secular growth drivers before wrapping up with guidance for the fiscal second quarter of 2018.

謝謝你，Steve。各位好，感謝今天加入我們。我將先概述 2018 會計年度第一季的業績，接著回顧目前各終端市場狀況與短期業務趨勢。之後我會把電話交給我們的財務長 Bob McMullan，由他更詳細說明財務表現。我將在事先準備發言的最後，更新與我們長期結構性成長驅動因素相關的關鍵業務進展，並在結尾提供 2018 會計年度第二季的財測指引。

Jumping right into the numbers. Revenue for the fiscal first quarter was $131 million, coming in at the lower end of our guidance. Overall, Q1 demand was mostly in line with the expectations that we had factored into our guidance. Looking back, Q1 was obviously a challenging quarter across the board as we dealt with the full impact of the geopolitical downturn in China. Perhaps more importantly, we believe that December was indeed the bottom of the cycle, at least for our particular mix of businesses in China.

直接看數字。會計年度第一季營收為 1.31 億美元，落在我們指引區間的低端。整體而言，第一季需求大致符合我們納入指引時的預期。回頭看，第一季顯然是全面具挑戰的一季，因為我們承受了中國地緣政治下行的全面影響。更重要的是，我們認為至少就我們在中國的特定業務組合而言，12 月確實已是本輪週期的底部。

Our Q2 revenue guidance reflects an expected recovery of demand within certain end markets in China. While it's still too early to call the exact slope of this recovery, we do expect that demand will progressively strengthen through the remainder of FY '18.

我們對第二季的營收指引反映出，預期中國部分終端市場的需求將出現復甦。雖然現在要判斷復甦的確切斜率仍為時過早，但我們確實預期需求將在 2018 會計年度剩餘期間逐步走強。

Looking at some of the moving parts. First, in telecom. Telecom revenue was down quarter-on-quarter and declined 39% year-on-year, driven by softness in China network infrastructure spending across our served markets. We believe that recovery is underway in our telecom business in Q2. Most prominently, thus far, in Q2, we have already seen recovery in orders and backlog in PON and fiber backhaul, which were among the hardest-hit during the depths of the recent downturn. This, combined with lean channel inventories, has led to a point where we are now supply-constrained for the March quarter across all of our laser product lines.

再看一些變動因素。首先是電信。電信營收較前一季下滑，且年減 39%，主因是中國網路基礎建設支出在我們所服務的市場普遍疲弱。我們認為第二季我們的電信業務復甦正在進行中。尤其值得注意的是，截至目前在第二季，我們已看到 PON 與光纖回傳（fiber backhaul）的訂單與在手訂單（backlog）回升；這兩項在近期下行最深的階段受衝擊最為嚴重。再加上通路庫存偏精實，使得我們目前在 3 月季度於所有雷射產品線上都面臨供給受限。

In the near term, our priority will be on maximizing short-term returns. Looking forward, we expect output to increase throughout 2018, with capacity expansion and supply chain improvements across all of our laser product lines.

短期內，我們的優先事項將是最大化短期報酬。展望未來，我們預期 2018 年全年產出將持續提升，並透過產能擴充與供應鏈改善，涵蓋我們所有雷射產品線。

In Metro/Long-haul, we have also seen some recovery off the bottom, albeit modestly, at transceiver customers in China who serve as domestic and global demand. We believe customers are burning through remaining pockets of inventory, placing orders for first half delivery and are forecasting 15% growth in port count in 2018.

在都會／長途（Metro/Long-haul）方面，我們也看到自底部回升的跡象，雖然幅度不大，主要出現在中國的收發器客戶端，這些客戶同時服務國內與全球需求。我們認為客戶正在消化剩餘的零星庫存、下單以滿足上半年交付，並預測 2018 年埠口數（port count）將成長 15%。

While we clearly see improvement in China, we are also seeing a shift in carrier spending that we believe will moderate the slope of Metro/Long-haul recovery through 2018. First, in our coherent driver and TIA portfolio, there's a shift in demand from Long Haul form factors to lower-cost Metro CFP products as carriers push 100G out toward the edges of their networks. Customer forecasts for these Metro products show higher unit volumes but significantly lower ASPs, thereby softening projected recovery of our Metro/Long-haul business this year.

雖然我們清楚看到中國市場改善，但同時也觀察到電信業者資本支出結構的轉移，我們認為這將使 2018 年都會／長途復甦的斜率趨於溫和。首先，在我們的相干（coherent）驅動器與 TIA 產品組合中，需求正從長途規格（Long Haul form factors）轉向成本較低的都會 CFP 產品，因為電信業者正將 100G 推向網路邊緣。客戶對這些都會產品的預測顯示出更高的出貨量，但 ASP（平均售價）顯著較低，因此將弱化我們今年都會／長途業務的預期復甦幅度。

Second, in our telecom OSA products, we're seeing a transition from LR4 to lower-cost CWDM4 as carriers shift focus to 5G. While we expect this will be favorable for MACOM in the medium to long term, in the short term, it too will moderate recovery of our Metro/Long-haul business this year.

第二，在我們的電信 OSA 產品方面，隨著電信業者將重心轉向 5G，我們看到市場正從 LR4 轉向成本較低的 CWDM4。雖然我們預期這在中長期將對 MACOM 有利，但短期內同樣會使我們今年都會／長途業務的復甦趨於溫和。

The net effect is that we expect our core business in Metro/Long-haul networks to recover, but with a different mix and at a more gradual pace through 2018 than we had previously anticipated.

綜合影響之下，我們預期都會／長途網路的核心業務將會復甦，但產品組合將有所不同，且 2018 年的復甦步調將比我們先前預期更為漸進。

Moving to data centers. Data center revenue was down sequentially but up 107% year-over-year. As most of you know, there are 2 major elements to our data center business. The first comprised of legacy OTN framers and mappers, the second being our 100G portfolio of high-performance analog components, lasers, photonic chips and PHYs for cloud data centers.

接著談資料中心。資料中心營收較前一季下滑，但年增 107%。如各位所知，我們的資料中心業務主要由兩大部分構成：第一是既有的 OTN 成框器（framers）與映射器（mappers）；第二是我們面向雲端資料中心的 100G 高效能類比元件、雷射器、光子晶片與 PHY 產品組合。

Looking at each of these separately. Our legacy portfolio declined sequentially in Q1, driven by a combination of the pause in China as well as sluggishness in other regions where telecom-upgrade OTN routers are being displaced by enterprise-grade switches. Looking ahead, we anticipate recovery in this business, driven by new OTN deployments in Asia Pacific. Overall, we expect this legacy data center business will remain lumpy and see gradual recovery from the Q1 baseline.

分別來看。第一季我們的既有產品組合較前一季下滑，原因是中國市場暫停的影響，以及其他地區的疲弱——在那些地區，電信升級用的 OTN 路由器正被企業級交換器所取代。展望未來，我們預期該業務將在亞太地區新的 OTN 部署帶動下復甦。整體而言，我們預期這項既有資料中心業務仍將呈現波動（lumpy），並將自第一季基準水準逐步復甦。

In our cloud data center portfolio, demand for 100-gig connectivity remains robust, and we expect 2018 to be another strong year for 100G port growth. CWDM is becoming the technology of choice in DCI and campus networks for reaches ranging from 500 meters to 10 kilometers. Below 10 kilometers, CWDM4 is displacing higher-priced LR4 modules, similar to what is happening in the telecom market. On top of this, the market is rapidly undergoing a sea change as cloud service providers begin to consolidate their supply chains around certain high-volume manufacturers enabled by silicon photonic solutions. While we expect both of these factors to be unequivocally positive for us in the medium to long term, in the near term, the resulting ASP declines are expected to moderate overall SAM growth for our components business, which has been at the heart of our 100-gig data center revenue to date. We expect this scenario to improve as we ramp our own CWDM silicon photonics platform through the course of this year.

在我們的雲端資料中心產品組合方面，對 100G 連線的需求仍然強勁，我們預期 2018 年將是 100G 埠口成長的另一個強勁年度。CWDM 正成為 DCI 與園區網路在 500 公尺至 10 公里傳輸距離範圍內的首選技術。在 10 公里以下，CWDM4 正取代價格較高的 LR4 模組，這與電信市場正在發生的情況相似。此外，市場正快速出現重大變化：雲端服務供應商開始在矽光子（silicon photonics）解決方案的推動下，將其供應鏈整合至特定的高出貨量製造商。雖然我們預期這兩項因素在中長期都將明確利多於我們，但短期內，由此帶來的 ASP 下滑預期將抑制我們元件業務的整體 SAM（可服務市場）成長；而該元件業務迄今一直是我們 100G 資料中心營收的核心。我們預期，隨著我們在今年逐步量產自有的 CWDM 矽光子平台，這一情境將有所改善。

I'll talk more about that later in the call when I address longer-term growth prospects.

我稍後在電話會議中談到較長期的成長前景時，會再更深入說明。

Finally, industrial and defense was $40.7 million for the quarter. This part of the business played out largely as expected, with Q1 revenue being down sequentially off an exceptionally strong Q4.

最後，本季工業與國防業務為 4,070 萬美元。這部分業務的表現大致符合預期，第一季營收因前一季第四季異常強勁而呈現季減。

With that, let me turn it over to Bob to review our fiscal first quarter financials in further detail.

接下來，我把時間交給 Bob，請他更詳細地回顧我們的會計年度第一季財務表現。

Thank you, John, and good afternoon, everyone. I will review MACOM's fiscal first quarter results and financial position. Revenue in the first fiscal quarter was $131 million, declining 14% year-over-year and down 21% sequentially. Revenue by end markets in fiscal Q1: telecom, $55 million and 42% of revenues, down 39% year-over-year; data center, $35 million, 27% of revenues, up 107% year-over-year; industrial and defense, $41 million and 31% of revenue, down 6% year-over-year.

謝謝你，John，各位下午好。我將回顧 MACOM 會計年度第一季的營運結果與財務狀況。會計年度第一季營收為 1.31 億美元，年減 14%，季減 21%。按終端市場劃分的會計年度第一季營收：電信 5,500 萬美元，占營收 42%，年減 39%；資料中心 3,500 萬美元，占營收 27%，年增 107%；工業與國防 4,100 萬美元，占營收 31%，年減 6%。

Non-GAAP gross margin and gross profit in the fiscal first quarter was $70 million and 54% of revenue respectively compared to $87 million and 57% of revenue respectively year-over-year and $97 million and 58% respectively on a sequential basis.

會計年度第一季非 GAAP 毛利與毛利率分別為 7,000 萬美元與營收的 54%，相較去年同期分別為 8,700 萬美元與營收的 57%，以及上一季分別為 9,700 萬美元與 58%。

Gross margin is highly influenced by product mix and the associated gross profits. As our telecom and data center product revenues decline, our gross margins were negatively affected.

毛利率高度受到產品組合及其對應毛利的影響。隨著我們的電信與資料中心產品營收下滑，我們的毛利率也受到負面影響。

In terms of operating expenses. Total non-GAAP operating expenses were $57 million compared to $46 million year-over-year and $59 million sequentially. Adjusted operating expenses were up 24% year-over-year and down 3% sequentially as we aggressively managed through expense controls. Adjusted R&D and SG&A expenses were $36 million and $21 million respectively in the fiscal first quarter. Non-GAAP income from operations and operating margins were $13 million and 10% of revenues, down 67% in dollars and 62% on a percentage basis respectively year-over-year and down 65% in dollars and down 55% or 1,310 basis points respectively on a sequential basis.

就營業費用而言，非 GAAP 營業費用總額為 5,700 萬美元，較去年同期的 4,600 萬美元增加，較上一季的 5,900 萬美元下降。由於我們積極推動費用控管，調整後營業費用年增 24%，季減 3%。會計年度第一季調整後研發費用與銷售、一般及行政（SG&A）費用分別為 3,600 萬美元與 2,100 萬美元。非 GAAP 營業利益與營業利益率分別為 1,300 萬美元與營收的 10%，較去年同期金額下降 67%、比率下降 62%；較上一季金額下降 65%，比率下降 55%（或 1,310 個基點）。

Net interest expense was $6 million flat with fiscal Q4. Our normalized non-GAAP income tax rate in the fiscal first quarter was 8%, in line with guidance. As to cash taxes in our fiscal first quarter, we had cash payments of $4 million associated with our Japan operations, where we're working to minimize future tax exposures.

淨利息費用為 600 萬美元，與會計年度第四季持平。我們會計年度第一季常態化的非 GAAP 所得稅率為 8%，符合指引。至於會計年度第一季的現金稅款，我們就日本營運相關支付了 400 萬美元現金，目前正努力將未來的稅務曝險降至最低。

Briefly, on the new U.S. tax law. Our significant net loss carryforwards will reduce our accumulated foreign earnings and profits to 0, negating any tax liability in payments. Going forward, the new law allows for full deductibility of capital expenditures in the year paid, which we expect to decrease MACOM's U.S. taxable income.

簡要說明新的美國稅法。我們可結轉的重大淨虧損將使我們累積的海外盈餘與利潤（E&P）降至 0，從而抵銷任何匯回支付所產生的稅負。展望未來，新法允許資本支出在支付當年度全額抵扣，我們預期這將降低 MACOM 在美國的應稅所得。

Our fiscal first quarter non-GAAP net income and EPS were $7 million and $0.10 per fully diluted share respectively, decreasing from $32 million and $0.57 year-over-year and $30 million and $0.46 sequentially. Non-GAAP net income decreased 79% year-over-year and 78% sequentially. Non-GAAP EPS decreased 82% year-over-year and 78% sequentially.

會計年度第一季非 GAAP 淨利與每股盈餘（EPS）分別為 700 萬美元與每股完全稀釋後 0.10 美元，低於去年同期的 3,200 萬美元與 0.57 美元，以及上一季的 3,000 萬美元與 0.46 美元。非 GAAP 淨利年減 79%，季減 78%。非 GAAP EPS 年減 82%，季減 78%。

Adjusted EBITDA or earnings before interest, taxes, depreciation and amortization was $21 million, down 57% from $48 million in our fiscal 2017 first quarter and down 56% from $47 million sequentially. GAAP cash flow from operations was $0.5 million, including acquisition-related cash payments of approximately $4 million.

調整後 EBITDA（息稅折舊攤銷前盈餘）為 2,100 萬美元，較 2017 會計年度第一季的 4,800 萬美元下降 57%，較上一季的 4,700 萬美元下降 56%。GAAP 營運活動現金流為 50 萬美元，其中包含約 400 萬美元與併購相關的現金支付。

After deducting capital expenditures and excluding acquisition-related payments, adjusted non-GAAP free cash flow was negative $9 million and negative 140% of non-GAAP net income in the fiscal first quarter compared to $15 million and 49% of non-GAAP net income in the fiscal first quarter of 2017 and $7 million and 25% of non-GAAP net income sequentially, also after excluding acquisition-related payments.

在扣除資本支出並排除併購相關支付後，會計年度第一季調整後非 GAAP 自由現金流為負 900 萬美元，為非 GAAP 淨利的負 140%；相較之下，2017 會計年度第一季為 1,500 萬美元、為非 GAAP 淨利的 49%，上一季為 700 萬美元、為非 GAAP 淨利的 25%（同樣在排除併購相關支付後）。

Now to MACOM's balance sheet. At fiscal first quarter end, our cash, cash equivalents and short-term investments were $197 million, down from $214 million last quarter. Accounts receivable were $97 million, down from $136 million sequentially. Days sales outstanding improved to 68 days compared to 74 days. Inventories were $143 million, up 5% from $136 million sequentially. Inventory turns declined to 1.7x compared to 2.1x. Long-term debt was $680 million, inclusive of capital leases. We also have $160 million of availability in an undrawn credit line.

接著看 MACOM 的資產負債表。截至會計年度第一季末，我們的現金、約當現金與短期投資為 1.97 億美元，低於上一季的 2.14 億美元。應收帳款為 9,700 萬美元，較上一季的 1.36 億美元下降。應收帳款週轉天數（DSO）改善至 68 天，上一季為 74 天。存貨為 1.43 億美元，較上一季的 1.36 億美元增加 5%。存貨週轉率降至 1.7 倍，上一季為 2.1 倍。長期負債為 6.80 億美元（含資本租賃）。我們亦有 1.60 億美元的未動用循環信用額度可供使用。

Capital expenditures in the fiscal first quarter were $14 million or 11% of revenue compared to $8 million or 5% of revenues sequentially. Our capital expenditures are directed to increasing capacity to fulfill expected custom -- demand for our GaN on silicon and silicon photonic products.

會計年度第一季資本支出為 1,400 萬美元，約占營收 11%，相較上一季為 800 萬美元、占營收 5%。我們的資本支出主要用於提升產能，以滿足我們氮化鎵（GaN）矽基與矽光子產品預期的客製化需求。

Depreciation expense was approximately $7 million as compared to $7 million sequentially. Our investments in capital expenditures exceeded our current level of depreciation, reducing our free cash flow by $7 million.

折舊費用約為 700 萬美元，與上一季的 700 萬美元相當。我們在資本支出上的投資高於目前折舊水準，使自由現金流減少 700 萬美元。

Back to you, John.

交還給你，John。

Thanks, Bob. Turning to the longer-term secular drivers for our business. As mentioned in my earlier remarks, coming out of the downturn in China, we do see a shifting market landscape and product mix for our telecom and data center businesses in 2018 and beyond. I'd like to spend a few minutes discussing these trends in more depth. I'd like to start by sharing a conversation I recently had with the founder of one of our large network customers. He shared with me his vision of data center connectivity and his view of the current lay of the land. In his words, he thought the industry is just now entering a golden age of optical connectivity. I found that comment fascinating, especially now at the bottom of this cycle, amidst the geopolitical pause and associated inventory correction. But I get it. His vision mirrors what we outlined in our Cloud Data Center Forms back in May. He then shared with me his industry forecast model, which shows port count increasing in a 30% compound annual growth rate. Bandwidth through those ports is increasing at 100% compound rate or doubling each year. In other words, moving right into our wheelhouses.

謝謝，Bob。接著談我們業務的長期結構性驅動因素。如我先前所提，隨著中國景氣走出低谷，我們確實看到 2018 年及之後電信與資料中心業務的市場格局與產品組合正在轉變。我想花幾分鐘更深入討論這些趨勢。我先分享我最近與我們某家大型網路客戶創辦人的一段對話。他向我分享他對資料中心互連的願景，以及他對當前產業態勢的看法。用他的話說，他認為產業正要進入光學互連的黃金時代。我覺得這個評論很有意思，尤其是在本輪循環的底部、地緣政治暫歇及其伴隨的庫存修正之中。但我理解他的意思。他的願景與我們在 5 月提出的《雲端資料中心形式（Cloud Data Center Forms）》中所概述的內容相呼應。接著他也與我分享他的產業預測模型，顯示連接埠數量以 30% 的年複合成長率增加；而這些連接埠的頻寬以 100% 的年複合成長率增加，也就是每年倍增。換言之，正好切入我們的核心優勢領域。

MACOM is poised to be a major beneficiary of the corresponding upgrade from 10- and 40-gig to 100-gig CWDM and single-lambda PAM4. That's why we still firmly believe that the opportunity for our company in cloud data centers will be transformative over the next several years.

MACOM 有望成為從 10G 與 40G 升級至 100G CWDM 與單波長 PAM4 的主要受益者。這也是為什麼我們仍堅信，未來幾年我們在雲端資料中心的機會將對公司帶來變革性的影響。

We're facing unprecedented growth in port count in both concentrated cloud data centers and soon, distributed-edge computing architectures for 5G telecom. I'll talk about that next.

無論是在高度集中的雲端資料中心，或是不久後用於 5G 電信的分散式邊緣運算架構，我們都正面臨前所未有的連接埠數量成長。我接下來會談這一點。

There's tangible economic demand behind those buildouts in new services like IoT, virtual reality, augmented reality and artificial intelligence. These services and buildouts will fuel industry growth for the next decade to come. Optical is a key enabling technology in this future, and there are firm technical requirements underpinning that demand that are rooted in reduced latency, increased bandwidth and improved quality of service. That brings me to the reason why I'm so passionate about MACOM's long-term prospects in cloud data centers and 5G telecom against the backdrop of the current optical environment.

這些建置背後有來自物聯網（IoT）、虛擬實境、擴增實境與人工智慧等新服務的實質經濟需求。這些服務與建置將推動未來十年的產業成長。光學是這個未來的關鍵使能技術，而支撐該需求的明確技術要求，根源於更低延遲、更高頻寬與更佳服務品質（QoS）。這也帶出我為何在當前光學環境的背景下，對 MACOM 在雲端資料中心與 5G 電信的長期前景如此充滿熱情。

We're building a semiconductor-caliber supply chain with wafer-scale laser manufacturing, silicon photonics with automated assembly and the supporting high-performance analog and mixed-signal portfolio that can support the cost structure and scale to enable these new optical mass markets. In fact, every cloud service provider in every major network OEM we work with resonates with that vision. And it's those customers that inform and fuel my passion behind MACOM's long-term prospects in this area.

我們正在打造具半導體等級的供應鏈，包含晶圓級雷射製造、具自動化組裝的矽光子技術，以及可支撐成本結構與規模化、以促成這些新光學大眾市場的高效能類比與混合訊號產品組合。事實上，我們合作的每一家雲端服務供應商與每一家主要網通 OEM 都對這個願景深有共鳴。也正是這些客戶的回饋，形塑並點燃我對 MACOM 在此領域長期前景的熱情。

Ultimately, the pace at which we scale data center revenues in 2018 will be determined by how quickly we and our transceiver customers ramp production. Today, that ramp is limited by conventional discrete transceiver designs. Our proprietary silicon photonics L-PIC technology is poised to accelerate that ramp, with the potential to dramatically reduce transceiver production times and increase manufacturing output.

最終，我們在 2018 年擴大資料中心營收的速度，將取決於我們以及我們的收發器客戶拉升產能的速度。就目前而言，這個拉升受限於傳統的分立式收發器設計。我們專有的矽光子 L-PIC 技術有望加速這個拉升，並具備大幅縮短收發器生產時間、提升製造產出的潛力。

To that end, this quarter, we successfully expanded our partner engagements for CWDM and PAM4 solutions, adding both new networks OEM customers as well as additional low-cost manufacturing partners.

為此，本季我們成功擴大了在 CWDM 與 PAM4 解決方案上的合作夥伴合作，新增了新的網路 OEM 客戶，以及更多低成本製造合作夥伴。

Now over to the telecom side of the business. Telecom carriers are clearly shifting capital investment this year to building out 5G networks, both optical and wireless, creating what we expect will be a long-term breakout in our telecom business, much akin to cloud data centers. To handle the massive increase in network data traffic ahead, some say by as much as 100x, emerging 5G network architectures are relying more heavily on high-speed optical interconnects from the network backbone, through the baseband processing, all the way to the antenna. Some call this fiber-to-the-antenna. In these fronthaul applications, copper cabling running from the base stations to the antennas will be upgraded to optical, and existing 100-gig transceivers will be upgraded to higher speeds. And for backhaul, new fiber deployments will be pushed deeper into the network, with the majority that ranges below 10 kilometers, well within the capability of our L-PIC technology.

接著談電信業務。電信營運商今年明顯將資本投資轉向建置 5G 網路（包含光纖與無線），這將為我們的電信業務帶來我們預期的長期突破，類似雲端資料中心的發展。為了因應未來網路資料流量的大幅增加，有人甚至認為可達 100 倍，新興的 5G 網路架構將更倚重高速光學互連，從網路骨幹、經由基頻處理，一直到天線端。有些人稱之為「光纖到天線」（fiber-to-the-antenna）。在這些前傳（fronthaul）應用中，從基地台到天線的銅纜將升級為光纖，既有的 100G 收發器也將升級到更高速度。而在回傳（backhaul）方面，新的光纖部署將更深入網路，其中多數距離在 10 公里以下，完全在我們 L-PIC 技術的能力範圍內。

We anticipate that our same CWDM and PAM4 L-PIC solutions that we've developed for cloud data centers have an equally large opportunity in 5G networks, with distributed-edge computing. In this way, 5G telecom networks are evolving to look more like cloud data centers, which are built extensively on a high-speed, low-latency optical framework.

我們預期，我們為雲端資料中心所開發的同一套 CWDM 與 PAM4 L-PIC 解決方案，在具備分散式邊緣運算的 5G 網路中也有同樣巨大的機會。如此一來，5G 電信網路正演進得更像雲端資料中心，而雲端資料中心廣泛建立在高速、低延遲的光學架構之上。

Telecom operators see tremendous benefit as it allows more efficient sharing and pooling of network processing resources, much like server racks inside a hyperscale data center. That's why we expect 5G to be a strong secular growth driver for our telecom business moving forward.

電信營運商看見巨大的效益，因為這使得網路處理資源能更有效率地共享與集中管理，就像超大規模資料中心內的伺服器機櫃一樣。因此，我們預期 5G 將成為推動我們電信業務未來成長的強勁長期結構性動能。

At the same time, we can't overlook the wireless side of 5G, which is also moving into our wheelhouse. New antenna designs and the corresponding migration from 4 to 4.5, 4.9 and ultimately, 5G, plays to all of our strengths as a company and is expected to expand our SAM geometrically over the next 5- to 10-year cycle of network buildouts. Everything from active beamforming techniques and massive MIMO arrays, to GaN on Silicon power amplifiers and Mimix, to our ability to embed optical connectivity directly in the antenna.

同時，我們也不能忽視 5G 的無線端，這也正進入我們的核心領域。新的天線設計，以及從 4G 走向 4.5G、4.9G，最終到 5G 的遷移，充分發揮我們公司各項優勢，並預期在未來 5 到 10 年的網路建置週期中，以幾何級數擴大我們的 SAM（可服務市場）。從主動式波束成形技術與大規模 MIMO 陣列，到矽基氮化鎵（GaN on Silicon）功率放大器與 Mimix，再到我們能將光學連接能力直接嵌入天線的能力。

Let me close on 5G by clarifying our expectations as to the time line. Carriers and our OEM customers are working on deterministic schedules, making technology, product and vendor selections today. Field trials are expected this year, and field deployments will begin next year. Our planned rollout and ramp of highly differentiated proprietary products and technologies, like L-PICs and GaN on Silicon, will ride this wave for many years to come.

在結束 5G 話題前，我想釐清我們對時程的預期。電信營運商與我們的 OEM 客戶正依照確定性的時程推進，並在今天就進行技術、產品與供應商的選擇。今年預期會進行外場測試，明年將開始外場部署。我們規劃推出並放量的高度差異化自有產品與技術（如 L-PIC 與矽基氮化鎵 GaN on Silicon），將在未來多年乘著這股浪潮前進。

Before wrapping up, as many of you saw today, we announced an agreement with ST for the manufacture and supply of GaN on Silicon wafers. This addresses the third and final leg of our GaN growth strategy, installing the requisite supply chain to bring GaN mainstream across all parts of the wireless base station market, 4G LTE as well as 5G.

在總結之前，如同各位今天所見，我們宣布與 ST 達成協議，製造並供應矽基氮化鎵（GaN on Silicon）晶圓。這完成了我們 GaN 成長策略的第三個也是最後一個支柱：建立必要的供應鏈，讓 GaN 在無線基地台市場的各個領域（包含 4G LTE 與 5G）走向主流。

To date, we've worked diligently to validate and improve GaN on Silicon technology in base stations, first, in amplifier performance and most recently, in reliability, to support the requisite decades of operating life in the fields. That yeoman's work is effectively complete in the eyes of our customers. Our collaboration with ST is expected to add the scale, cost structure and front-end wafer supply chain, which we believe will uniquely position MACOM to become a top-tier supplier, servicing the roughly billion-dollar market for 4G LTE power amplifiers.

迄今為止，我們一直努力在基地台應用中驗證並提升矽基氮化鎵（GaN on Silicon）技術：先是在放大器效能方面，最近則是在可靠度方面，以支援外場所需的數十年運作壽命。這些紮實的工作在客戶眼中已基本完成。我們與 ST 的合作預期將帶來規模、成本結構與前段晶圓供應鏈，我們相信這將使 MACOM 具備獨特定位，成為一線供應商，服務約 10 億美元規模的 4G LTE 功率放大器市場。

Better yet, we expect the ST collaboration to unlock the biggest commercial opportunity yet, massive MIMO antennas for 5G. As antennas transition from 2 or 4 MIMO channels to 64 element massive MIMO arrays, the cost per channel of power amplification must undergo radical improvements over conventional GaN on Silicon Carbide technology. Otherwise, 5G antennas will not be commercially viable in volume.

更重要的是，我們預期與 ST 的合作將解鎖迄今最大的商業機會：5G 的大規模 MIMO 天線。當天線從 2 或 4 個 MIMO 通道轉向 64 元件的大規模 MIMO 陣列時，功率放大每通道成本必須相較於傳統的碳化矽基氮化鎵（GaN on Silicon Carbide）技術大幅改善，否則 5G 天線將無法在量產上具備商業可行性。

Based on conversations I've had recently with some of the biggest customers, I believe they view the MACOM-ST collaboration as solving a major supply challenge that they're facing for GaN and for 5G. Like our L-PIC technology, we believe GaN on Silicon's source from ST will play a key industry-enabling role in realizing the potential of 5G networks and that MACOM will be the exclusive supplier, with a fundamental intellectual property position.

根據我近期與一些最大客戶的對話，我相信他們認為 MACOM 與 ST 的合作正在解決他們在 GaN 與 5G 方面面臨的一項重大供應挑戰。就像我們的 L-PIC 技術一樣，我們相信由 ST 提供的矽基氮化鎵（GaN on Silicon）將在實現 5G 網路潛力上扮演關鍵的產業賦能角色，而 MACOM 將是具備根本性智慧財產權地位的獨家供應商。

In summary, we're encouraged to see the early signs of market recovery, albeit modest, following last year's industry-wide downturn. We expect that recovery to progress through the better part of fiscal 2018. For that reason, we view FY '18 as being a transitional year in our served markets. As demand comes back, the technology landscape is shifting in anticipation of the next major wave of infrastructure investments in both cloud data centers and 5G telecom. While near term, these shifts will likely moderate the pace of recovery, they're leading to much, much bigger breakout opportunities that play directly to our strengths.

總結來說，在去年全產業下行之後，我們很受鼓舞地看到市場復甦的早期跡象，儘管幅度不大。我們預期復甦將在 2018 財年的大部分時間持續推進。因此，我們將 2018 財年視為我們所服務市場的過渡年。隨著需求回升，技術版圖也正在轉變，以迎接雲端資料中心與 5G 電信兩大領域下一波基礎建設投資。短期而言，這些轉變可能會放緩復甦速度，但它們正引領更大、更具突破性的機會，且與我們的優勢高度契合。

Looking ahead, we will continue to invest aggressively this year in bringing L-PIC and GaN programs to fruition, programs that are today backed by industry-leading customers. We expect these investments over the course of FY '18 to usher in the next phase of MACOM, in which we monetize what previously were strategic investments anticipating future technology disruptions. We believe these technologies are now poised to enable major industry transitions that are now clearly underway. Simply put, MACOM will be an active participant, not a casualty, in these targeted areas of secular industry growth.

展望未來，我們今年將持續積極投資，推動 L-PIC 與 GaN 計畫落地，而這些計畫目前已有產業領先客戶的支持。我們預期在 2018 財年期間的這些投資，將帶領 MACOM 進入下一階段：把過去為因應未來技術顛覆而進行的策略性投資加以變現。我們相信這些技術如今已蓄勢待發，可促成正在明確發生的重大產業轉型。簡而言之，在這些具長期結構性成長的目標領域中，MACOM 將是積極參與者，而非受害者。

Now let's talk about next quarter guidance. For the fiscal second quarter ending March 30, 2018, we expect revenue to be in the range of $142 million to $150 million. Adjusted gross margin is expected to be between 50% and 54% and adjusted earnings per share between $0.10 and $0.16 on an anticipated 66 million fully diluted shares outstanding.

接下來談下一季財測。對於截至 2018 年 3 月 30 日的 2018 財年第二季，我們預期營收將介於 1.42 億至 1.50 億美元。調整後毛利率預期介於 50% 至 54%，在預估 6,600 萬股完全稀釋流通股數的基礎上，調整後每股盈餘預期介於 0.10 至 0.16 美元。

It's worth spending a moment to provide additional color on the March guide. In the December quarter, we believe we saw the bottom in terms of market demand and revenue. Entering the March quarter, we expect Q2 will be the bottom for gross margin mix as we anticipate, in coming quarters, progressive recovery and growth in the higher-margin parts of our portfolio. Longer-term, we are still committed to our target of delivering 60% adjusted gross margins.

值得花點時間補充 3 月指引的更多背景。在 12 月季度，我們認為就市場需求與營收而言已見到谷底。進入 3 月季度，我們預期第二季將是毛利率組合的谷底，因為我們預期在接下來幾季，投資組合中毛利率較高的部分將逐步復甦並成長。長期而言，我們仍致力於達成 60% 調整後毛利率的目標。

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 will come from the line of Blayne Curtis with Barclays.

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

Maybe we can start in with gross margin. I just want to understand the mixes of the moving pieces here. Obviously, mix has a little impact, but it didn't shift that much. And then, John, you talked about some issues in terms of mix within products that kind of lower margin. And I'm just trying to understand, is that just getting started, or kind of how do you think about -- I know you expect gross margins will recover, I'm just trying to understand that slope. Are those transitions just starting? Or does that all kind of happen and that you can grow from the space? I'm just trying to understand all those moving pieces.

也許我們可以先從毛利率開始。我只是想了解這裡面各項變動因素的組合。顯然，組合對毛利率有一些影響，但變化並沒有那麼大。然後 John，你提到在產品內部的組合上有一些問題，會讓毛利率偏低。我想了解的是，這只是剛開始發生，還是你怎麼看待——我知道你預期毛利率會回升，我只是想理解那個回升斜率。那些轉換才剛開始嗎？還是其實都已經發生完了，接下來你們就能在那個基礎上成長？我想弄清楚所有這些變動因素。

Yes, good question. So there was part of the gross margin mix which was fully expected and then at development within the quarter which was unexpected. So the part that was expected is, hey, at the bottom of its cycle, it's never uglier than that point. So the part that was expected was the hardest-hit in the downturn was among our highest-margin part of our portfolio. The thing that happened that we didn't anticipate was the transition from LR4 to CWDM, which impacted 2 things. One is SAM compression. So there's simply business that was lost from our customers to CWDM solutions. So there's SAM compression. The second is ASP erosion. So CWDM is much lower-priced than LR4. So -- and we had a very nice business in LR4, which has suffered within the quarter, and we expect that to bottom out in the second quarter. That was my last comment about being the bottom. We absolutely see everything being up from that point. This is really the bottom point for that LR4 impact. But the growth that we're anticipating is all in the high-margin stuff.

是的，好問題。所以毛利率組合有一部分是完全在預期之內的，另外一部分是在季度內的發展，屬於我們未預期到的。預期之內的部分是：在景氣循環的谷底，情況不會比那個時點更糟。所以我們預期到的是，在這次下行中受衝擊最嚴重的，正是我們產品組合中毛利率最高的部分。我們未預期到的是從 LR4 轉向 CWDM 的轉換，這影響了兩件事。第一是 SAM 壓縮，也就是我們客戶有一些業務流失到 CWDM 解決方案上，因此出現 SAM 壓縮。第二是 ASP 侵蝕，因為 CWDM 的價格遠低於 LR4。因此——我們原本在 LR4 有一個很不錯的業務，但在本季度受到影響，我們預期這會在第二季觸底。這就是我最後提到「谷底」的原因。我們確實看到從那個點之後一切都會往上走。就 LR4 的影響而言，這真的是谷底點。但我們所預期的成長，全部都在高毛利的部分。

And then, John, just on that CWDM4, just you've been looking to win some big projects. Maybe just give us an update. But then more importantly, as pricing gets -- that market gets more competitive, even if you do win it, would that be accretive or dilutive to gross margin going forward?

然後，John，關於那個 CWDM4，你一直在爭取拿下一些大型專案。也許請你更新一下進度。但更重要的是，隨著定價——那個市場變得更具競爭性，即使你們贏得了專案，往後對毛利率會是增厚（accretive）還是稀釋（dilutive）？

Yes, believe it or not, it's all rooted in our laser position and specifically the silicon photonics. So the current generation at CWDM4 is largely discrete TOSA designs, optical subassemblies. So you have discrete lasers and then separate Mux/Demux-type functions on the TOSA/ROSA. What's happening right now is specifically silicon photonics base solutions are both driving price compression on CWDM4. Secondly, they're getting up to 10 kilometers reach. At 10 kilometers, that's where LR4 thrived. And what we see is, in the telecom side of things, not just from the data center side, CWDM coming in and it's really kind of a precursor to what's developing, where CWDM4 looks to be central figure for 5G. So that's why my commentary about our L-PIC ramp is so critical because a couple of reasons. One is cost in margin. We've got a fantastic cost structure for that product, but I think, more importantly, the ability to scale volume because the manufacturing throughput and manufacturing output goes way up when you talk about that automated assembly. That's always been our L-game, and that's exactly -- we're in the process of ramping right now in this year.

是的，信不信由你，這一切都根源於我們在雷射上的佈局，特別是矽光子（silicon photonics）。所以目前這一代的 CWDM4 主要是離散式的 TOSA 設計，也就是光學子組件。因此你會有離散雷射，然後在 TOSA/ROSA 上再有獨立的 Mux/Demux 類功能。現在正在發生的是，特別是以矽光子為基礎的解決方案，一方面正在推動 CWDM4 的價格下壓。第二，它們的傳輸距離正在提升到 10 公里。到 10 公里時，正是 LR4 過去表現最強的區間。而我們看到的是，在電信端，不只是資料中心端，CWDM 正在進來，而且這其實有點像是一個前兆，預示著正在發展的趨勢：CWDM4 看起來將成為 5G 的核心角色。所以我才會說我們的 L-PIC 量產爬坡（ramp）非常關鍵，原因有幾個。第一是成本與毛利。我們這個產品有非常出色的成本結構，但我認為更重要的是能夠擴大量產規模，因為一旦談到自動化組裝，製造吞吐量與產出都會大幅提升。那一直是我們的強項，而這正是——我們今年正在進行爬坡量產的事情。

Got you. And then just a quick one for Bob. The inventory levels are of large amounts on date but even on absolute dollar amount is, I think, the highest you've had. So if you could just talk about why the inventories are so high and how you're going to manage them back down.

了解。然後再快速問 Bob 一個問題。庫存水位不僅以天數來看很高，即使以絕對金額來看，我想也是你們歷來最高。能否談談為什麼庫存這麼高，以及你們打算如何把它管理降下來？

Well, again, even to the extent of lower revenues, we still shift a large quantity of products, over 2,000 units, in the different product numbers. And most of our inventory that increases in -- is in raw materials like wafers and sub assemblies that are ready to go as things turn around. Some of those commitments have long lead times, therefore, we cannot cut them back as quickly as one would expect on -- they're not necessarily tied to the same vision of a revenue forecast. And I think we've hit the top here at this level of inventory that we'll see probably kick -- stay even next quarter and down for the rest of the year. But it is really difficult to match the cycle times required to be in a position to shift the products that are ordered by the customers.

嗯，再次強調，即使營收較低，我們仍然出貨大量產品，超過 2,000 個單位，涵蓋不同的料號。而我們增加的大部分庫存——主要是在原材料，例如晶圓（wafers）以及已準備就緒、可在景氣回升時立即投入的次組件（sub assemblies）。其中有些承諾的交期很長，因此我們無法像一般人預期那樣快速削減——它們不一定與同一套營收預測的視角完全綁定。我認為我們的庫存大概已經在這個水位見頂，可能下個季度會大致持平，之後在今年剩餘時間會下降。但要配合客戶下單所需的週期時間，並確保我們能處於可出貨的狀態，確實非常困難。

And our next question will come from the line of Quinn Bolton with Needham & Company.

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

I wanted just to follow up on Blayne's question on gross margin. Are you guys seeing any impact from under-absorption? When your revenues have been cut by 40%, 50% over a couple of quarters, I would think that under-absorption may be a factor here.

我想跟進 Blayne 關於毛利率的問題。你們是否看到產能吸收不足（under-absorption）的影響？當你們的營收在幾個季度內被砍了 40%、50%，我會認為產能吸收不足可能是其中一個因素。

Quinn, certainly, some of the absorption is higher now with lower revenues, but it's not a function of revenue per se, it's a function of build. And some of that is reflected in the inventory levels as well. So it's not necessarily falling through to the gross margin today, and it's absorbed in some of the inventory levels. But it's really -- absorption is not critical or really material to our overall gross profit, it's really product mix that drives gross margins.

Quinn，當然，在營收較低的情況下，部分吸收率現在確實更高，但它並不是單純由營收本身決定，而是由生產建置（build）所決定。而其中一部分也反映在庫存水位上。所以它不一定會在今天直接反映到毛利率上，而是被吸收到部分庫存水位裡。但整體來說——吸收並不是關鍵，或對我們整體毛利（gross profit）並不具重大影響；真正驅動毛利率的是產品組合（product mix）。

Got it. Okay. And then for John, you had mentioned capacity constraints on the laser side. I know, probably the background datacom sessions, you say you are taking a lot of the PON laser capacity, switching it over to 25-gig data center laser capacity. So can you just give us an update, when you talk about laser constraints, is it just that you shifted a lot of the laser capacity over to data center and therefore you're short on PON? Can you bring that laser production back to the PON space? Just what's going on, on the laser production side of the business?

了解。好。接著問 John，你提到雷射端有產能限制。我知道在一些 datacom 的背景說明裡，你們提到把很多 PON 雷射產能切換到 25G 資料中心雷射產能。那你能否更新一下：當你談到雷射限制時，是不是因為你們把大量雷射產能轉到資料中心，所以 PON 這邊就短缺？你們能把雷射產量再拉回 PON 領域嗎？雷射生產端到底發生了什麼？

Yes. I mean, what we started seeing developing in November was totally unanticipated recovery in PON. And as we had originally planned, we're kind of one of the last guys standing. So as the PON market recovers, that's actually very, very nice cash flow business for us. So where we had empty capacity before that we could focus solely on ramping data center product, we're moving back to a more balanced supply at this point, frankly fixated on gross revenue per wafer, so maximizing short-term returns and also focusing to make sure we're sustaining the customers that are important for our strategy moving forward. And there are some, believe it or not, there are some crossover. As you talk about 5G entering CWDM and PAM4 over in China, some of the customers that we have, high-volume PON customers, are actually becoming data center 5G customers. So it's not a simple answer, but the 2 things are optimizing short-term returns and then ramping capacity as quickly as we can to supply both. I mean, we're going to have a breakout in data centers this year that we have to feed as well as supplying the PON market.

是的。我的意思是，我們從 11 月開始看到的是 PON 出現完全出乎意料的復甦。按照我們原本的規劃，我們算是少數還站著的供應商之一。所以當 PON 市場復甦時，對我們來說其實是非常、非常好的現金流業務。先前我們有閒置產能，可以專注於資料中心產品的爬坡量產；但現在我們正回到更平衡的供應配置，坦白說，我們會緊盯每片晶圓的毛營收（gross revenue per wafer），以最大化短期回報，同時也確保我們能持續供應對我們未來策略很重要的客戶。而且信不信由你，確實存在一些交叉。當你談到 5G 在中國進入 CWDM 與 PAM4 時，我們的一些高量 PON 客戶其實也正在成為資料中心 5G 客戶。所以這不是一個簡單的答案，但有兩件事：優化短期回報，並且盡快擴充產能以同時供應兩邊。我的意思是，我們今年在資料中心會有一個必須供應的突破性成長，同時也要供應 PON 市場。

So we shouldn't think that the laser production in PON is going back to that peak level you hit in 2016, it's something like 5 million to 8 million units a month, you're not anticipating that kind of recovery in the PON side? You're going to keep a fair amount of capacity on the 25-gig laser to support the data center business?

所以我們不應該認為 PON 的雷射產量會回到你們 2016 年達到的峰值水準——大概每月 500 萬到 800 萬顆——你們並不預期 PON 端會有那種程度的復甦？你們會把相當一部分產能留在 25G 雷射上，以支援資料中心業務？

Actually, it is. It's snapping back to similar volumes as you thought. The ASPs are slightly down compared to what they were, but the demand has actually snapped back to the previous run rates to our surprise. So between the 2.5-gig lasers, the 10-gig lasers, now the 25-gig lasers, we're pretty much constrained in all parts of the portfolio. And like I said, step 1, when we saw the upturn in November, it was not an instantaneous supply situation because you have materials you got to get in and order. So we didn't see the full impact on the March quarter guide. But as you get into the June quarter and beyond, we'll have -- we'll be clipping in terms of supply, but at the same time, we're doing everything we can to ramp capacity in that time frame and beyond.

其實會。它正快速回彈到你原先以為的相近出貨量。ASP 相較過去略有下降，但需求其實出乎我們意料地回到先前的運行速率（run rates）。所以在 2.5G 雷射、10G 雷射、以及現在的 25G 雷射之間，我們幾乎在整個產品組合的各個部分都受到產能限制。就像我說的，第一步，當我們在 11 月看到回升時，供應不可能立刻跟上，因為你還得把材料備齊並下單。因此我們在 3 月季度的指引中沒有看到全部影響。但當你進入 6 月季度以及之後，我們在供應方面會——會變得吃緊，但同時，我們也會在那段期間及之後盡一切努力提升產能。

And our next question will come from the line of Mark Kelleher with D. A. Davidson.

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

I just wanted to look at the R&D. You made some comments that you're going to be investing more this year, kind of took a step-up sequentially. Is this the new baseline? Should we be looking for a build from here? Was there anything unusual in the quarter? What should we be looking for, for operating leverage in R&D?

我想看看研發（R&D）。你提到今年會加大投資，季度間也有順序性的上升。這是新的基準水準嗎？我們是否應該預期從這裡開始繼續增加？這一季有沒有什麼不尋常的項目？在研發方面，我們應該如何看待營運槓桿（operating leverage）？

Yes, I wouldn't say it is definitely the new baseline. We have an interesting problem here. When I talked about the L-PIC programs and the GaN programs, we have a premier set of customer commitments that we're ramping and for ramps, so we don't have the luxury of cutting back OpEx in those things. Actually, we're doubling down. We've made a lot of portfolio decisions internally to focus our investments very heavily in those 2 areas, well, I should say, including 5G front-end modules, so between 5G, both on the transmit side with the GaN side as well as 4G LTE. As well as the L-PICs for both cloud data centers and 5G telecom, 5G optical, we're burning rich on OpEx, and now is not the time to leave customers high and dry on that. It's kind of unfortunate timing that at the bottom of the cycle, that we've got that demand. But the good news is these were all customer programs. I think the big difference at our R&D this year is we're focused on monetizing what previously could be called more speculative investments in technology transitions. Those are now turning into customer programs where revenue ramps through 2018 and '19.

是的，我不會說這一定就是新的基準。我們這裡有個有趣的問題。當我談到 L-PIC 專案與 GaN 專案時，我們正在爬坡量產、以及為爬坡量產做準備的，是一組頂級的客戶承諾；在這種爬坡階段，我們沒有餘裕去削減這些項目的營業費用（OpEx）。事實上，我們是在加碼投入。我們在內部做了很多產品組合的決策，把投資非常集中在這兩個領域——嗯，我應該說也包括 5G 前端模組，所以在 5G 方面，包含發射端的 GaN 以及 4G LTE。同時還有 L-PIC，面向雲端資料中心與 5G 電信、5G 光學。我們在 OpEx 上投入很重，而現在不是讓客戶在這些事情上無人支援的時候。比較不幸的是，景氣循環在底部時，我們卻有這樣的需求。但好消息是，這些全部都是客戶專案。我認為今年我們研發最大的不同在於：我們專注於把過去可能被稱為較具投機性的技術轉換投資變現。這些現在正在轉變為客戶專案，營收會在 2018 與 2019 年爬坡成長。

Okay. And just a quick second question. Some of your partner programs that you're ramping with CWDM, I think you may have addressed this earlier and I missed it, but what's the gross margin profile? Does that help? Is that higher or lower than your average gross margin?

好的。再快速追問一個問題。你們有一些與 CWDM 一起加速推進的合作夥伴方案，我想你可能先前有提到但我錯過了，那它的毛利率輪廓是什麼？這有幫助嗎？它是高於還是低於你們的平均毛利率？

So the L-PICs will be at/above our corporate target.

所以 L-PICs 的毛利率將會達到或高於我們的公司目標。

And our next question will come from the line of C.J. Muse with Evercore.

接下來的問題來自 Evercore 的 C.J. Muse。

I guess, first question, trying to get a holistic view of what you're seeing in China. I would love to get an update on where we are in terms of excess inventory, demand. And I guess as part of that, in terms of sort of the pressure we're seeing today, how much of that pressure is just working through inventory versus ASP pressure?

我想先問第一個問題，試著從整體角度了解你們在中國看到的情況。我很希望你能更新一下我們在過剩庫存、需求方面目前的狀況。以及我想作為其中一部分，就我們今天看到的壓力而言，這些壓力有多少只是庫存去化的過程， versus ASP（平均售價）壓力？

Well, I'd say in terms of the recovery, from a unit standpoint, it's upon us. I used the example, we had a substantial laser business in PON and backhaul and fronthaul, and that's back. I mean, that's back on strong, as I mentioned. So that's why I emphasized, for our particular mix of businesses, we hit the bottom and we're seeing recovery. It's too early to call the pace of that recovery, but this, unquestionably going to be progressively stronger as we go through the year. On the Metro/Long-haul stuff in terms of the China, the infamous China pause, I want to emphasize, we sell analog components, modulator drivers, TIAs to Chinese transceiver customers. That demand, they have burned through much of the inventory, there's a little pocket of inventory left that they're burning through. We have seen recovery there. We have seen lifts in that business. We anticipate 15%. All of our customers have said use the same number, 15% port count growth. The moderating factors are important though. There's a big shift, stronger than what we had anticipated, from Long Haul form factors to Metro, so these are CFP, and there's a very substantial difference in ASPs. Gross margin percentage is still quite good, in fact, very good. But the ASPs are profoundly different. So that produces an element, a little bit of a SAM compression in that traditional part of our business. And with the reason why I said it's a transitional year is now we see the lift on the 5G side, the transition from LR4 to CWDM, which is placed right to our -- the same products, CWDM4 and PAM4, 100-gig PAM 4, showing promise, to begin ramping in 5G over in China. So again, selling analog components, photonic components, lasers to Chinese manufacturers, servicing that local demand and quite likely global data center demand as well.

嗯，我會說就復甦而言，從出貨量（unit）的角度看，復甦已經來了。我舉個例子，我們在 PON、回傳（backhaul）與前傳（fronthaul）有一個相當可觀的雷射業務，而那已經回來了。我的意思是，正如我提到的，它已經強勢回來了。所以我才強調，對我們特定的業務組合而言，我們已經觸底並且正在看到復甦。現在要判斷復甦的速度還太早，但毫無疑問，隨著今年推進，它會逐步轉強。至於都會/長途（Metro/Long-haul）在中國的部分，也就是眾所周知的「中國暫停」，我想強調的是，我們向中國的收發器客戶銷售類比元件、調變器驅動器（modulator drivers）、TIA。那邊的需求，他們已經消耗掉大部分庫存，還剩下一小部分庫存正在消耗。我們已經看到那邊的復甦，也看到該業務的拉升。我們預期 15%。我們所有客戶都說用同一個數字：15% 的埠數（port count）成長。不過，調節因素也很重要。有一個很大的轉移，強度超過我們原先預期，從長途（Long Haul）外形規格轉向都會（Metro），也就是 CFP，而 ASP 的差異非常大。毛利率百分比仍然相當不錯，事實上非常好。但 ASP 的差異極其顯著。因此在我們傳統業務的那一部分，會帶來一些因素，讓 SAM 有一點壓縮。而我之所以說這是一個過渡年，是因為我們現在看到 5G 端的拉升、從 LR4 轉向 CWDM，這正好對應到我們——同樣的產品，CWDM4 和 PAM4、100G PAM4，顯示出希望，開始在中國的 5G 端放量。所以再說一次，我們向中國製造商銷售類比元件、光子元件、雷射，服務當地需求，也很可能同時服務全球資料中心需求。

That's helpful. As my follow-up, Bob, could you talk a bit about, given the call for fiscal '18 to be more of a transitional year, how you plan to manage your cost structure over the near to medium term?

這很有幫助。作為追問，Bob，你能談談在你們預期 2018 財年會更像是一個過渡年的情況下，你們打算在短期到中期如何管理成本結構嗎？

So if we look to define the term as fiscal '18, we are seeing -- feel good about a recovery in revenue. As the mix improves and new products come in, we will see a recovery in our gross margin, not -- we do not forecast longer than the forward quarter, but I don't think, as we see the visibility today, that we get to 60% in fiscal '18. But we have critical programs that are underway that we're spending, one, to increase capacity, to finalize quals, to get product in the customers' hands, all of which is increasing our expenses over the year in that backdrop. So I anticipate, for the forward fiscal 2Q, a modest increase in R&D and operating expenses here in the fiscal second quarter.

所以如果我們把這個詞定義為 2018 財年，我們正在看到——對營收復甦感覺良好。隨著產品組合改善以及新產品導入，我們會看到毛利率回升；我們不會預測超過下一個季度，但以我們今天看到的能見度來看，我不認為我們在 2018 財年能到 60%。但我們有一些正在進行的關鍵專案，我們在投入：第一是提升產能、完成認證（quals）、把產品交到客戶手上，這些都會在這樣的背景下讓我們全年費用增加。因此我預期，在接下來的 2 財季，我們在研發與營運費用上，於本財年第二季會有小幅增加。

(Operator Instructions) And our next question will come from the line of Tore Svanberg with Stifel, Nicolaus.

（接線員指示）接下來的問題來自 Stifel, Nicolaus 的 Tore Svanberg。

John, I was hoping you could insert in a little bit more on the LR4 and CWDM4. When exactly will we go from these lower ASP partnerships to L-PIC because I know you're really ramping the capacity, but if you could give a little bit of a time line, that will be really helpful.

John，我希望你能再多補充一點關於 LR4 和 CWDM4。從這些較低 ASP 的合作夥伴方案轉到 L-PIC 的時間點究竟會是何時？因為我知道你們正在大幅提升產能，如果你能給一個時間線，會非常有幫助。

Yes. So the LR4, we've had a very nice business globally outside of China and Japan and North America for LR4, actually largely subassemblies, which have suffered some loss. Our customers suffered lost business, and that they lost business to CWDM4 modules specifically. Silicon photonics enabled, the silicon photonics enabled a 10-kilometer reach, which was not anticipated. So that's what the downside impact is. On the ramp of the L-PICs, we are ramping our production, our capacity, as Bob said. I mean, this is transformed out of the unit volumes but just for cloud data centers, and the number is now shapen up for 5G telecom and pulling in low-cost Chinese manufacturers for those solutions. And each quarter through this calendar year, you'll see a progression of that coming to fruition. Obviously, much stronger with the knee of the curve as you get into the second half of the calendar year. And it will continue to ramp, I believe, very aggressively as we ramp silicon photonics wafer supply. I think in terms of our product availability, that's going to gate what our products can do, we can -- we'll have enough laser capacity to populate those with flip-chip lasers. But it's really going to be the PIC wafers that will be gating our production ramp. But we have customers piling on right now. As bizarre as it sounds, in this environment, at the bottom of the cycle, whether it's laser supply or these L-PICs, we have kind of a feeding frenzy right now, people trying to get hands on product to be able to begin sampling their cloud customers in 5G over in China. So from a demand standpoint, not an issue, but we're doing the best we can to ramp production on those products sequentially and progressively each quarter.

好的。就 LR4 而言，我們在中國、日本與北美以外的全球市場有一個非常不錯的 LR4 業務，實際上主要是次組件（subassemblies），但已經遭受一些流失。我們的客戶流失了業務，而他們的業務特別是流失給 CWDM4 模組。矽光子（silicon photonics）使得 10 公里傳輸距離成為可能，這是原先未預期的。所以這就是下行影響的來源。至於 L-PIC 的放量，我們正在提升產量與產能，如 Bob 所說。我的意思是，這已經從單位出貨量的角度被徹底改變，不僅是雲端資料中心，現在這個數字也正在成形，涵蓋 5G 電信，並把低成本的中國製造商納入這些解決方案。接下來在今年的每一個季度，你都會看到這些逐步落地。顯然，當你進入下半年、曲線拐點（knee of the curve）出現時會更強。而且我相信，隨著我們提升矽光子晶圓供應，它會非常積極地持續放量。我認為就我們的產品供應能力而言，那將會決定我們產品能做到什麼；我們——會有足夠的雷射產能用倒裝晶片雷射（flip-chip lasers）去填充。但真正會限制我們產能爬坡的，將是 PIC 晶圓。不過我們現在有客戶蜂擁而上。聽起來很奇怪，在這樣的環境、在景氣循環底部，不管是雷射供應還是這些 L-PIC，我們現在有點像是「搶貨潮」，大家都想拿到產品，好開始在中國那邊針對他們的雲端客戶與 5G 進行送樣。所以從需求角度不是問題，但我們正盡最大努力，按季度、循序且逐步地提升這些產品的產量。

That's really helpful. And as my follow-up, could you also elaborate a little bit more on the ST partnership? When would we start to see some revenue production from that partnership? And I assume there's no issues here with the IP litigation rights of the business. Is this something that's going to materialize regardless of the outcome of that litigation?

這真的很有幫助。作為追問，你也能再多談一點與 ST 的合作夥伴關係嗎？我們何時會開始看到這個合作帶來一些營收產出？另外我假設這裡在業務的 IP 訴訟權利方面沒有問題。無論訴訟結果如何，這件事都會實現嗎？

Yes, actually, it's not unrelated. It's a very insightful question. Thanks for asking. So we've been working with ST for the past few years. That's who I was referring to over time. Very, very, very exciting partnership, I can tell you, given my background. I know the scale of manufacturing that's required to service base stations, with an emphasis on required. We've been using modest compound semi factories, like our Lowell factory, to improve the technology and performance and field reliability. But now ramping at ST delivers the required capacity, surge capacity, cost structure, that frankly is second to none. From a timing standpoint, I had hoped to be able to announce it sooner. The reason why we were holding off was we were in the midst of litigation. And on January 29, the Federal Circuit Court affirmed the ruling in Los Angeles District Court, confirming that our contract is fully valid and fully in place, which grants us not just exclusive rights in our field of use but also grants us some license rights. So the relationship with ST involves a sublicense, enabling them to go off and develop the markets they care to develop. They will be driving very high volumes in automotive, consumer, mobile applications and so on. They will be benefiting from our volumes in wireless infrastructure, where we reserve exclusivity. And I can tell you, right now, the cost structure in that supply chain is a fraction of the cost of the most mature LDMOS technology. So the brilliant thing is we have the performance of GaN validated, field reliability-proven and now the supply chain that where we -- where we can drive the transition. I'll finish by saying we have wafers in line of the first high-volume products that we believe will be delivering revenue. So this isn't speculative, this is tape-outs of proven products, with proven customer demand servicing all the right guys. So it's -- this -- like the L-PIC stuff, this year, GaN is turning on, moving from speculative technology transition, to monetizing those investments. So it's an exciting time.

是的，其實這兩者並非無關。這是個非常有洞見的問題，謝謝你提問。所以我們過去幾年一直在與 ST 合作。這就是我先前提到的那家。以我的背景來說，我可以告訴你，這是一個非常、非常、非常令人興奮的合作夥伴關係。我了解要服務基地台所需的製造規模，而且是「必須」的規模。我們一直使用較小規模的化合物半導體工廠，例如我們的 Lowell 工廠，來改善技術、效能與現場可靠度。但現在在 ST 放量，能提供所需的產能、突發產能（surge capacity）與成本結構，坦白說幾乎無人能及。就時程而言，我原本希望能更早宣布。我們之所以延後，是因為當時正處於訴訟之中。而在 1 月 29 日，聯邦巡迴上訴法院（Federal Circuit Court）維持洛杉磯地方法院的裁決，確認我們的合約完全有效且完全生效，這不僅授予我們在使用領域（field of use）的獨家權利，也授予我們一些授權（license）權利。因此，與 ST 的關係包含一個再授權（sublicense），使他們能去開發他們想要開發的市場。他們將在車用、消費性、行動裝置應用等領域推動非常高的出貨量；而他們也將受益於我們在無線基礎設施領域的出貨量，在該領域我們保留獨家權利。我可以告訴你，就目前而言，那條供應鏈的成本結構只是最成熟的 LDMOS 技術成本的一小部分。所以最精彩的是，我們已經驗證了 GaN 的效能、現場可靠度也已被證明，現在又具備了供應鏈，使我們——使我們能推動這個轉換。我最後補充，我們已經有晶圓在產線上，用於我們認為將帶來營收的第一批高出貨量產品。所以這不是推測，而是已完成 tape-out 的成熟產品，具備已證實的客戶需求，服務所有對的客戶。所以——這——就像 L-PIC 一樣，今年 GaN 正在啟動，從推測性的技術轉換，走向把那些投資變現。所以這是一個令人振奮的時刻。

And our next question will come from the line of Richard Shannon with Craig-Hallum.

我們的下一個問題將來自 Craig-Hallum 的 Richard Shannon 專線。

Maybe I'll ask a question on GaN. John, you had some interesting comments in your prepared remarks around using that technology not only for power amplifiers but also in the antenna arrays. Is the antenna array part of the opportunity here? Is it anywhere near the size of the power amps?

我想先問一個關於 GaN 的問題。John，你在事先準備的發言中提到一些很有意思的看法，談到這項技術不僅用於功率放大器，也用於天線陣列。天線陣列是否也是這裡的機會之一？它的規模是否接近功率放大器？

It's integer-multiples bigger. So I was over in China 2, 3 weeks ago. I met with the top sourcing guys at our customers. They quantify the number of antennas that they will be shipping, and I should emphasize, these are sub-6 gigahertz, these are not the millimeter-wave, small cell-type devices. And if you do the number of antennas that they, the base stations, they anticipate deploying in China alone, times the number of elements, it's integer-multiples times bigger. So we view the GaN space, 4G LTE going to 5G, as a growth market, SAM expansion, not a decline.

它大了整數倍。所以我在 2、3 週前去了中國。我和我們客戶端負責採購的高層人士見了面。他們量化了他們將出貨的天線數量；我必須強調，這些是 sub-6 GHz 的，不是毫米波、那種小型基地台類型的裝置。若你把他們預期僅在中國部署的基地台天線數量乘上每個基地台的元素數，規模就是整數倍地更大。因此我們把 GaN 領域（4G LTE 走向 5G）視為成長市場、SAM 擴張，而不是衰退。

Okay. That's helpful. Second thing, just a follow-up on the previous questions about data center. You're talking about a breakout happening this year, and it sounds like it's constrained by -- if I gathered your response to that question, John, some internal things like wafer supply or something like -- I wonder if you could detail a little bit more and give maybe a little bit more precise time frame by which those constraints will be relieved?

好的，這很有幫助。第二點，延續前面關於資料中心的問題。你提到今年會出現突破，聽起來似乎受到——如果我理解你對那個問題的回覆，John——一些內部因素的限制，例如晶圓供應之類。我想請你再多說明一點，並給出更精確的時間表，說明這些限制大概何時能解除？

Well, I would say it's a hockey stick ramp quarter to quarter to quarter to quarter to quarter. When you say constrained by the -- I mean, everything has hit finite ability. I mean, this is hardware, not software. And so I would say, silicon photonics wafers, if you look at where silicon photonics is applied, has been applied so far, and you look at the unit volume and wafer consumption, frankly, it pales by comparison to where we're now applying it, which is inside of data centers, inside these 5G networks and so on. I mean, it's a much larger market for wafers than what has materialized to date. So we've been working with the top executives at our PIC wafer supplier, one of the known global foundries in the world, and quarter-by-quarter, through this year, this calendar year and especially into '19, there is a very material ramp. Again, the exact shape of it, we're being very cautious not to, frankly, guide more than a quarter at a time. But there's not a demand issue whatsoever. We've got customers and cloud customers who are chomping at the bit, and it's just a matter of getting that capacity in place and the wafers flowing and so on.

嗯，我會說這是一季接一季、再接一季的「曲棍球棒式」爬升。你說受限於——我的意思是，所有事情都碰到了有限的能力上限。畢竟這是硬體，不是軟體。所以我會說，矽光子晶圓——如果你看矽光子到目前為止的應用領域，再看其出貨量與晶圓消耗量，坦白說，和我們現在要把它用到的地方相比就相形見絀；我們現在是用在資料中心內部、用在這些 5G 網路裡等等。也就是說，晶圓的市場規模遠大於迄今為止實際呈現出來的規模。因此我們一直在與我們 PIC 晶圓供應商的高階主管合作——那是一家全球知名的晶圓代工廠——按季推進，在今年這個曆年內，尤其進入 2019 年，會有非常顯著的爬升。再次強調，至於確切的曲線形狀，我們非常謹慎，坦白說不會超過一次只指引一季。但完全不是需求問題。我們有客戶與雲端客戶都迫不及待；接下來只是把產能建置到位、讓晶圓供應順暢流動等等。

Okay. Helpful. That's helpful as well. John, last quick question for me on PAM4. Where do you sit in terms of qualifying your single-lambda as a product here? What's your view on the ramp of that product line?

好的，有幫助。這也很有幫助。John，我最後一個快問是關於 PAM4。就你們的單波長（single-lambda）產品而言，目前在產品認證/資格認定上進展到哪一步？你對這條產品線的爬升有何看法？

Yes. So it's all gated by our lead customers. And I'm at a disadvantage because we're dealing with customers that we -- that don't appreciate us talking to the public about the status of their programs. But we have qualifications in process, and we see fabulous opportunities at 100-gig. I would describe this as another area where we can monetize what were previously were strategic investments. That's the way we view that area this year as well. I was very pleased. I had great -- I referred to the meeting I had with a customer, I was talking about his vision of the data center market. And the comment he had was he expected a 10-year life in 100-gig single-lambda. He is passionate about that and so on. So that's encouraging, and it's a matter of monetizing into the different configurations and products and market segments for that product portfolio. That's what this year is going to be about in that space.

是的。所以一切都取決於我們的領先客戶。我處於不利位置，因為我們面對的客戶——他們不希望我們對外公開談論其專案的進度。但我們的資格認定正在進行中，而且我們在 100G 上看到極佳的機會。我會把這描述為另一個領域：我們可以把先前屬於策略性投資的成果變現。我們今年也這樣看待這個領域。我非常高興。我提到我與某位客戶的會議——我當時在談他對資料中心市場的願景。他的評論是，他預期 100G 單波長會有 10 年的生命週期。他對此非常投入等等。這令人鼓舞，接下來就是在不同的配置、產品與市場區隔中把這個產品組合變現。今年在這個領域的重點就是如此。

And I'm showing no further questions at this time. So it's my pleasure to hand the conference back over to Mr. John Croteau, President and Chief Executive Officer, for some closing comments and remarks. Sir?

目前我這邊顯示沒有其他問題。因此我很高興把會議交回給總裁兼執行長 John Croteau 先生，請他做一些結語與補充說明。先生？

Sure. So before closing out today's call, I want to mention the investor events and trade shows that we'll be attending in the coming months, which includes the Goldman Sachs Technology and Internet Conference on February 14 in San Francisco, Mobile World Congress in Barcelona on February 26 and 27 and OFC in San Diego on March 13 and 14. If you'd like to arrange a meeting at one of these events, please email us at ir@macom.com. That concludes today's remarks. Operator, you may now disconnect the call.

好的。在結束今天的電話會議之前，我想提一下我們未來幾個月將參加的投資人活動與展會，包括：2 月 14 日在舊金山舉行的高盛科技與網際網路研討會、2 月 26 日與 27 日在巴塞隆納舉行的世界行動通訊大會（Mobile World Congress），以及 3 月 13 日與 14 日在聖地牙哥舉行的 OFC。如果您希望在上述活動之一安排會面，請寄電子郵件至 ir@macom.com。以上為今天的發言。接線員，您現在可以中斷通話。

Thank you, sir. Ladies and gentlemen, thank you for your participation on today's conference. This does conclude our program, and we may all disconnect. Everybody, have a wonderful day.

謝謝您，先生。各位女士、先生，感謝各位參與今天的電話會議。本次議程到此結束，大家可以掛線。祝各位有美好的一天。