Maxlinear Inc (MXL) 2022 Q1 法說會逐字稿

Hello, and welcome to the MaxLinear, Inc. First Quarter 2022 Earnings Conference Call Webcast.

(Operator Instructions)

As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Nick Aberle. Please go ahead.

Thank you, operator. Good afternoon, everyone, and thank you for joining us on today's conference call to discuss MaxLinear's first quarter 2022 financial results. Today's call is being hosted by Dr. Kishore Seendripu, CEO; and Steve Litchfield, Chief Financial Officer and Chief Corporate Strategy Officer.

After our prepared room comments, we will take questions. Our comments today include forward-looking statements within the meaning of applicable securities laws, including statements relating to our guidance for second quarter 2022 revenue, revenue growth expectations in our principal target markets, and GAAP and non-GAAP gross margin, operating expenses, effective tax rate and interest and other expense.

In addition, we will make forward-looking statements relating to trends, opportunities and uncertainties in various products and geographic markets, including, without limitation, statements concerning opportunities arising from our broadband wireless infrastructure and connectivity markets and opportunities for improved revenues across our target markets. These forward-looking statements involve substantial risks and uncertainties, including risks arising from competition, supply constraints facing the semiconductor industry, global trade and export restrictions, the impact of COVID-19 pandemic, our dependence on a limited number of customers, average selling price trends and risks that our markets and growth opportunities may not develop as we currently expect, and that our assumptions concerning these opportunities may prove incorrect.

More information on these and other risks is outlined in our Risk Factors section of our recent SEC filings, including our Form 10-Q for the quarter ended March 31, 2022, which we filed today. Any forward-looking statements are made as of today, and MaxLinear has no obligation to update or revise any forward-looking statements.

The first quarter 2022 earnings release is available in the Investor Relations section of our website at maxlinear.com. In addition, we report certain historical financial metrics, including net revenues, gross margins, operating expenses, income from operations, interest and other expense, income taxes, net income and net income per share on both a GAAP and non-GAAP basis. We encourage investors to review these detailed reconciliation of our GAAP and non-GAAP presentations in the press release available on our website. We do not provide a reconciliation of non-GAAP guidance for future periods because of the inherent uncertainty associated with our ability to project certain future charges, including stock-based compensation and its associated tax effects.

Non-GAAP financial measures discussed today do not replace the presentation of MaxLinear's GAAP financial results. We are providing this information to enable investors to perform more meaningful comparisons of our operating results in a manner similar to management's analysis of our business. Lastly, this call is also being webcast, and a replay will be available on our website for 2 weeks.

Now let me turn the call over to Kishore Seendripu, CEO of MaxLinear.

Thank you, Nick, and good afternoon, everyone. Our Q1 revenue was $263.9 million, up 6% sequentially and 26% year-on-year, while gross margin was 62.8% and non-GAAP operating margins expanded to 33.5%. During Q1, we saw accelerating growth in our Wi-Fi connectivity, fiber broadband access and 5G wireless infrastructure end markets. These end markets continue to be the most significant growth drivers for the company where our new products have solid traction and are gaining multiyear business opportunities.

We are seeing tailwinds to our growth driven by the increasing infrastructure capital expenditure spend. Specifically, telco carriers are upgrading to support multi-gigabit fiber PON broadband room access and expanding 5G network build-outs. Our gathering business strength is borne of product development success, content increases in customer platforms as well as the strategic expansion of our portfolio into adjacent technologies and markets.

Turning to the business highlights. In broadband and connectivity, Wi-Fi 6 and fiber gateways are the 2 most significant drivers of growth for the company, and we expect continued revenue expansion over the next several years. Most notably, in Q1, Wi-Fi had another breakout performance, growing 37% quarter-on-quarter and nearly tripling year-on-year. We are benefiting from the transition to Wi-Fi 6 as Wi-Fi 6E increased market share, higher attach rates and higher ASPs. Furthermore, the Wi-Fi market itself continues to demonstrate strong growth as consumers demand speed and reliability within the Connected Home to support voice, video, gaming and Internet in parallel.

Looking into Q2, we expect to diversify and expand our Wi-Fi revenues beyond operator-driven broadband gateway markets, as we begin ramping into third-party stand-alone routers. The stand-alone Wi-Fi router addressable market opportunity exceeds 100 million units per year. Based on these trends and our strong product traction, we confidently expect to more than double our Wi-Fi product revenues in 2022 and are firmly in a trajectory to deliver at least $200 million in Wi-Fi revenue in 2023. Lastly, our soon-to-launch innovative next-generation Wi-Fi 7 standard-based product will be a strong positive catalyst for increased selling prices, future share gains and market expansion opportunities in Wi-Fi connectivity.

In broadband gateway, we are ramping into several new fiber access applications with new products, technology and renewed focus driving meaningful design win traction. One example is our industry-leading URX family of gateway SoC and network processes for 10 gigabit wireless -- for 10-gigabit WAN access networks access that is driving customers to build around our fiber gateway platform offering. Additionally, new fiber gateway wins will pull through over $20 of peripheral bill of material content, including Wi-Fi, Ethernet and power management solutions.

As a reminder, fiber as a category within the broadband end market is seeing strong unit growth driven by the move to 10 gigabits, increased capital deployment with carriers to add subscribers and to benefit from government funds to deliver services to underserved homes. We are very bullish about our fiber PON growth.

Moving to infrastructure. Our 5G wireless access and backhaul products grew in aggregate by over 50% year-on-year in Q1, driven by early-stage build-outs of 5G infrastructure in North America. Even as we benefit from the long-term 5G secular trends, new products are driving higher content opportunities per platform and incremental growth. For example, our bill-of-material per platform has doubled as we ramp our 5G millimeter wave products into multi-band radios for wireless backhaul application.

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Now rejoining the MaxLinear speakers into the conference. Please proceed.

All right. I apologize, everyone. I'm not sure exactly what happened there, but I'm going to start again on our guidance. So we currently expect revenue in the second quarter of 2022 to be approximately $275 million to $285 million, up approximately 6% at the midpoint of the range versus previous quarter, and up approximately 36% versus the prior year. While we continue to expect to supply chain tightness to continue throughout FY 2022, we are expecting to see incremental improvements to better support the success of our customers. Looking at Q2 by end market, we expect broadband revenue to be up quarter-over-quarter driven by growth in gateway SoC for both cable and fiber applications.

Connectivity is expected to be up versus Q1 driven by continued strength in Wi-Fi. In infrastructure, we are expecting revenue to be flattish compared with Q1. Demand for our infrastructure solutions continue to be strong, but growth is being constrained in the near term by tightness and substrate availability. Lastly, we expect our industrial and multi-market revenue to be slightly up quarter-over-quarter. We expect second quarter GAAP gross profit margin to be approximately 57% to 59% and non-GAAP gross profit margin to be between 61% to 63% of revenue.

As a reminder, our gross profit margin percentage forecast can vary within a given quarter depending on product mix and other factors. We expect Q2 2022 GAAP operating expenses to be up quarter-on-quarter to a range of $112 million to $118 million. We expect Q2 non-GAAP operating expenses to be above Q1 levels within a range of $80 million to $86 million. We expect our tax rate to be approximately 25% and non-GAAP tax rate to be roughly 6%. We expect GAAP and non-GAAP interest and other expense to be roughly $3 million. In closing, we are continuing to execute with innovative product offerings that are enabling us to drive growth through market share gains and silicon content increases.

We have significantly increased our total addressable market by delivering innovative new products for adjacent markets. We have prioritized customers and continuing to build increasingly strategic relationships that we believe will enable us to grow our presence in markets where we are today under penetrated. We believe we are well positioned for continued revenue expansion and operating leverage throughout FY 2022, which will create significant value for our shareholders.

With that, I'd like to turn the call over for questions. Operator?

(Operator Instructions)

Our first question today is coming from Tore Svanberg from Stifel, Nicolaus.

Yes. Congratulations on the strong results. First of all, this is Jeremy Kwan for Tore. I'm not sure if this was part of the portion that got cut off, but on the infrastructure side, did you provide us an update on the PAM4 DSP?

So in the prepared remarks, we did talk through PAM4 DSP. I mean we continue to be on track and very pleased. If you recall last quarter, we kind of pushed some of those revenues out to the back half of the year, but we just completed a really successful OFC show, where we talked a lot about the 5-nanometer solution, where we're seeing significant traction. And that -- I guess I would also add that the market opportunity there, I think, continues to be very robust. And so we're excited to see those products kind of proliferate and start to penetrate with additional customers.

Great. And then in terms of the Wi-Fi 6 project and your penetration with third-party standalone solutions, can you talk about any differences in terms of the design cycle, potential ramp? Maybe -- and also maybe the ASP or gross margin, if any impact?

So I think that the Wi-Fi 6 and 6E penetration is where we're getting a lot of traction. We obviously have based on being with the first people to be certified by the Wi-Fi 6 Alliance bed that we are one of the top 3 access point solutions there. So we're getting a lot of traction with stand-alone Wi-Fi routers and it's based on the total performance of the solution. On what I call our differentiations, obviously, the highest throughput in the data performance of any of our competition, that's hugely differentiating for us.

And secondly, the overall competitiveness from a cost and versus performance, relative to others. In order to be competitive in the third-party stand-alone Wi-Fi market, you really have to have the best, most robust and really price-competitive standalone Wi-Fi solution, which also includes obviously our Ethernet offerings. And so we are leading on front. So we really would see in the latter half of this year, very, very strong pickup on Wi-Fi instead of third-party standalone Wi-Fi routers. Okay?

Next question today is from Alex Vecchi from William Blair.

Congratulations on excellent execution. Just a follow-up on the Wi-Fi question. Steve, can you help us understand the potential impact going forward as Wi-Fi becomes a larger portion of the business? And you guys get that $200 million in revenue next year in terms of gross margin. I think historically, that's been a lower gross margin product, but I know since you overtook Intel, you've made some improvement. So maybe a little clarification there?

Yes. Yes, sure. Absolutely. So very excited about Wi-Fi. I mean when you say what the impact is, it's a great impact, we're very excited about seeing this growth. I mean, seeing this business get north of $200 million, I think it still feels very much like early days here. We're seeing nice upside in supply. So we're starting to see more supply that we've been able to kind of move some things around and get more supply out for our customers. We do see third-party routers coming in. I mean this is kind of I suggested earlier, there's an incremental 100 million units out there that we can now go out and address.

Gross margin in this business are good. It does get lumped into the category of kind of a lot of those Intel products came in at lower gross margins. And so we are making improvements there. And some of that's on the supply chain side with cost but it's also our next generation products will come out at higher gross margins as well.

So -- yes, I mean there's some lower margin business that comes into play in the second half of the year. But I think long term, we don't see a problem as far as competing and being able to go after our mid-60s gross margin percentage.

Just one qualifier there, Steve, the Wi-Fi 6E we're talking of is the product developed after the acquisition and closed out based on that. So it's not a legacy product. So it's got some what, if you will, MaxLinear flavors to it in terms of competitiveness on the cost structure.

That's helpful. And then just a question on the constraints, when you talked a little bit about substrates and infrastructure, is that more on the wireless backhaul side? Is it on the optical side? Or is it also impacting the 5G trajectory as we move throughout the year?

So I think that we don't break out there. We have shortages, but the acute shortages we are having in high performance substrates are affecting our infrastructure revenues. That's absolutely correct. In fact, while we never disclosed or discussed the backlog on the product lines where the infrastructure has an extremely healthy backlog, well beyond what we even expect in terms of growth. And it's really driven by 5G rollouts. And the 5G roll is helping us in a big way in transitions to higher BOM content on the backhaul side for microwave to millimeter wave, almost doubling the BOM. At the same time, the access is growing.

So a lot of good things happening. So I would say that this would be a spectacular year in terms of the growth we have, but it's not perishable demand. So we'll catch up to it. And we have taken place -- taken measures as a company to bring in more capacity online. We've invested in setting high-performance substrate companies to have dedicated capacity for us going forward. So we'll get through this. So we are being more constrained on infrastructure than any other market because of the high-performance substrate. There are some of that effects, some other areas, but they're not meaningful enough.

Next question is coming from David Williams from The Benchmark Company.

Congrats on the solid quarter. I guess on the first, just kind of thinking about China and the -- you've got a pretty good portion of your business kind of shipped into Asia overall. Just kind of curious if you're seeing anything in terms of either demand or supply side from the Chinese lockdowns that we've seen intensifying over the last several weeks?

Yes. I guess I wouldn't say that we have huge exposure. I mean, we've definitely got a lot of business there, and it's growing nicely. But I mean, as far as the dynamics and shutdown. I don't think the demand that I'll be seeing too much on. On the supply side, we definitely saw some of that late last quarter, and we're seeing it right now. But overall, I think we feel very comfortable and that was reflected in our guidance.

Okay. Fantastic. And then maybe just on a higher level, but from a backlog or maybe the order book, have you seen anything in terms of cancellations or changes there? Or your customers, have they changed the behavior? Just kind of thinking about the demand outlook? Or do you still feel pretty comfortable that it's business as usual here?

So it's business as usual in a very positive way, right. For us, it's not business as usual because we're seeing a lot of growth, accelerating growth in the various markets. So for us, there's a lot of demand with the big infrastructure spend that's going on, whether it's in our wireless infrastructure markets, optical data center markets or in broadband fiber deployment, right?

So we are benefiting from that. So we are not seeing cancellations or pushouts, but we do know that our customers are struggling still to secure products of other players in the platforms. Having said that, our guidance reflects our expectation of what they call an end throughput sales, which is what we track when we give guidance, not what we sell into our customers per se. So we feel very good where we are in terms of the guidance and the demand out there.

Our next question is coming from Suji Desilva from ROTH Capital.

Congratulations on the progress here. You talked about the Wi-Fi market expanding to the router opportunity pictured as being different from the set-top box opportunity where you done very well in. Can you talk about what competitive landscape or just differences there are penetrating that market and what the timing might be to announcing some wins there?

I think we already spoke about it. I said the latter half, obviously, is going to be heavily driven by the gains in stand-alone router business. And -- the dynamics of any of these markets are quite similar, they're very different operator markets. However, typically, even in the standalone router market, somewhere along the way, the end customer to those standalone router designs are operator class of businesses. So -- however the difference is that here we don't get to compete with a full platform offering with our gateway SoC, the fiber or the cable front end and the full menu of products we bring to bear on the gateway platform.

So we compete -- it's a hand-to-hand combat on the Wi-Fi side and you win based on performance and I think that we are winning. So you want to keep in mind that we are a purely access point-focused Wi-Fi product company. And so we really focus on building the best-in-class in that landscape whereas the other competitors really come from the consumer side. It's a sort of a reverse migration to the access point. So I think we come into many (inaudible) advantages driving straight from the access point side.

That's great, Kishore. And then maybe Steve, or perhaps Kishore, you've done very well with the Intel acquisition tracking your history of acquisitions. How should we be thinking about further inorganic activity now we've had a couple of quarters of kind of moving forward from this? What sorts of framework we should be thinking about? You have a lot of organic opportunities already going in some, so I am curious.

So I just want to correct this misperception, right? Our growth -- our -- the Intel acquisition business and ours were coupled because we had a strong broadband presence. So our organic growth in the previous 2 years without exactly picking the time frame, was in excess of 40%. So we don't break that out because we sell it as a full category right now. So I just want to correct the perception. We've been investing organically for a while in infrastructure for the last 3 to 5 years. And now the wireless infrastructure has really caught a lot of acceleration and momentum.

And the reason I say it is very, very important for our employee validation as well that we are a technology company, we take investments and we measure ourselves on how we execute. Engineering excellence is what we bring to bear in our product and with levels of customer support excellence as well. So I just want to correct that misperception. This growth was coming, it was in the works, and we got a lot of momentum our ability to execute on acquisitions, right? So I just want to -- and so this is going to be a story to continues.

Steve, do you want to add anything else to that?

Well, the only other thing -- I'll just address the second part of your question. I mean, look, we're generating -- I think you saw in the quarter, we're generating a lot of cash here. And so I think the message on that front is consistent. We'll continue to pay down the debt, continue to buy back stock. We had a big stock buyback this quarter, about $26 million of stock. And we'll continue to look at acquisitions. So all of those are still relevant today.

Next question is coming from Gary Mobley from Wells Fargo Securities.

I want to start by asking about Wi-Fi 7, I know one of your competitors put out press splash a week or 2 ago. And I'm just curious from your perspective, what you're anticipating on Wi-Fi 7 in terms of product generation, product revenue, content gain opportunity, those sorts of things.

Gary, I'll take this question. Obviously, it is going to be a highly differentiated solution. We have now not begun press releases too early to the market. However, it's around the corner. And we will be one of the first certified Wi-Fi 7 access points solutions out there. The offering is going to reflect what MaxLinear is about high levels of integration, cost competitiveness, lowest powered and a very innovative BOM savings for the customer in performance.

So we believe that with that we'll drive a lot of market share gain growth and also expand our stickiness in existing markets and market share. In addition, it's going to allow us to differentiate in other ways where we can expand the end market itself going to more adjacent markets. So that's the way we visualize the strategic role of our Wi-Fi 7, and I'm absolutely confident we will do a great job on it.

And perhaps a question for Steve. If I do my calculation correctly, it looks like your own internal inventory days was roughly flat sequentially and increase is supportive of your 6% sequential revenue growth guidance. But maybe if you could just speak about inventory in the channel, where you see that currently? And given the current profile of your backlog and the improving supply situation, how many consecutive quarters of sequential revenue growth do you think you can string together?

Gary, absolutely. So the inventory, we did see a modest increase in dollars when days were about the same. You're correct on that. And we're not keeping up with demand, I guess, at this point. Visibility continues to be very strong. I mean Kishore kind of shared a few times on the call, but we have a lot of new opportunities in Wi-Fi, in fiber, in some of our infrastructure opportunities. So we continue to see a tremendous amount of growth over a multiyear period, right? And so I'm not going to guide more than the quarter that we just gave you. But I think you can see with the product portfolio and the traction that we're getting, I think we feel very good.

With regard to more of the tactical aspect of the question, like everyone else, we're always looking -- watching channel inventory levels, and they're still very, very low. And we've seen that across all of our end markets. I mean it is a cyclical industry. So we're absolutely watching closely to see if that changes and when that changes and how do we respond. But at this point, at least as far as our products go and the traction that we're getting with some of our new market share gains and the like, we feel very good about, very strong visibility.

Your next question today is coming from Trevor Janoskie from Needham.

This is Trevor Janoskie on for Quinn Bolton. Congrats on the solid quarter and guidance. So following up on the China lockdown question, even though we know is the product ends up in North America and Europe, how much of the company's products are shipped to manufacturing locations in China?

So Trevor, we are a chip supplier, right? We supply chips. So most of them are manufactured pretty much in the location where the wafers are. So to that extent, we are a very, very heavily Taiwan-dependent wafer consumer. So I think that answers to your question where our products get manufactured. And because so much of our revenues are outside of China, most of the business goes through ODMs who are placed in Taiwan. And so to the extent that the ODMs are present in Taiwan, they have diversified their supply chains in the last few years to be both dual located or even outside of China.

So we feel that our end markets outside of China are very well serviced by being immune to this lockdown to the extent that they have to supply to their customers. Now I cannot really project on what pieces they bring out of China and Beijing into their boxes, I cannot say that. But we feel for now that they've got sufficient diversification geographically on manufacturing capabilities for their product.

And as my follow-up, are there any particular cost headwinds in the second quarter that caused gross margins to decline 80 basis points at the midpoint in June? Or is it mostly just mix?

So Trevor, so we saw a nice improvement last quarter of 120 basis points. And so this is really consistent with the guidance that we had kind of talked about as far as that 62% at the midpoint here is pretty consistent with what we've talked about. And it is a product mix. We continue to feel very confident in the gross margin kind of getting up to the mid-60s over the next couple of years as supply chain constraints start to ease. There's nothing that stands out that's super concerning to us in Q2 whatsoever.

I also want to add one more element of the supply chain constraints, right? I think there are constraints. People are talking about easing of supply chain, but it's very, very choppy to put at least, right? So there are constraints based on technology nodes, there are constraints based on packages. And so I think the constraints will continue in the kind of quality of high-value end markets we are in. But we are navigating those constraints as best as we can, and we have done a decent job of it. And there are some suppliers who are communicating cost increases moving forward as well. So we have taken that entire expectation also into our guidance for you guys.

Our next question today is coming from Sam Peterman from Craig-Hallum.

I wanted to ask a little bit on the broadband segment. You talked about it growing quarter-over-quarter into the second quarter here, and mentioned cable and fiber, both being growth drivers there. Obviously, on a percentage basis, fiber is probably going to grow faster, but I wonder if you could talk about in dollar terms, is fiber kind of taking the lead now from cable in terms of driving the majority of your dollar growth in that segment? And then on fiber as well, are you still on track to ramp with that large North American Tier 1 you've mentioned before in the second half?

Yes. So absolutely, Sam. So -- yes, broadband continues to do very well. We do expect it to be up again this quarter. You're absolutely right. I mean it has contributed or contributing from the fiber side as well as the cable side. We've been talking a lot about the fiber opportunity. And yes, on the large North American supplier, we do expect that to ramp in the second half of the year. That's on track, going well. And that will continue. We'll see continued growth into 2023 because it will end up being somewhat supply constrained throughout this year.

So -- and it's not just that one. I mean, we've got multiple suppliers that are ramping in 2022, and we'll continue to see that growth in 2023. It's still a small number right? I mean we've talked about that business last year being less than $10 million, growing to kind of tens of millions of dollars this year. I think as we look out into '23, I mean, there's a good shot of seeing that kind of double again next year in 2023 because it's still pretty early days on the fiber side.

Okay. And second question, I just want to go back to Wi-Fi and this third-party access -- or third-party router market that you're talking about, that sounds like a good opportunity for unit growth for you guys. And I wonder if you could talk about kind of unit growth opportunities you see for Wi-Fi and kind of the core markets -- I guess, the core operator markets that you you've been in, in cable and fiber at this point? Is there a lot of unit growth runway there still? Or do you see much of the growth coming from kind of more content as you move up to new generations at this point?

Yes. Yes. Look, I mean, it's still very much early days on the Wi-Fi side for us. I mean we're still barely keeping up. I mean, we've talked about our attach rates still not one-to-one and even our main gateway customers, right? So we've got we still got continued growth coming that attach rate. We've got more significant growth coming from the fiber attached that's all new business for us. So that's going to contribute. And then, of course, the standalone routers is yet another market.

So we're by no means keeping up yet. The market opportunity itself continues to expand. And so I think there's really nice runway as we roll out 6E and Wi-Fi 7 coming beyond that, which will expand the market even further. But we're hitting price points and good profitability levels. We're getting traction with customers, and we have significant more supply coming on late this year and into 2023 to satisfy that demand.

Our next question today is coming from Ananda Baruah from Loop Capital.

Congrats on the strong results and the execution. 2 if I could. On -- I guess, PON and massive MIMO, where are you guys -- do you still -- I believe, you've PON talked about kind of through last year as a $200 million to $300 million revenue opportunity for you guys and massive MIMO $300 million to $600 million over 3 to 4 years. Do you guys still feel those are the appropriate ways to think about those opportunities? And how are you tracking relative to how you thought you'd be tracking 12 months ago?

Yes. Okay. So then you're talking about -- so I'm going to start with 5G massive MIMO. 5G massive MIMO, hundreds of millions of dollars. And this goes back a little bit of time once 5G was rolling out. There was a big $500-ish million TAM opportunity out there. Now a lot of things have kind of pushed to the right due to the China dynamics and we continue to see that. But absolutely see a $100 million plus product line coming out of the wireless infrastructure, wireless access side specifically. Kishore kind of spoke a little bit like Sierra. We're seeing ASP increases. So that's a bigger market opportunity as well.

With regard to the PON side, maybe I'll take a step back. So on the PON side, what we've said is that you -- look, PON is probably 3x, kind of depending on how you define it, but call it 3x bigger than the cable market, right? And we're very underpenetrated. But we've said that we've got the potential to see hundreds of millions of dollars of revenue from the PON business over the next few years.

So very exciting opportunity for us and we get lots of dollar content as those gateways roll out. And we see opportunities throughout the world, and -- which is exciting, particularly with the fact that you're seeing a lot of government subsidies kind of help a lot of these operators roll out on the PON side as well. You're seeing tons of fiber rollout. But even some of the fixed wireless access stuff that people are talking about as well, we support and benefit from.

And we are tracking to our own internal metrics on the fiber side for sure. In fact, we led with saying that this will be the top -- one of the top drivers of our growth right now. And on the 5G access side, like Steve said, we pushed out to the right. So sort of smeared out a little bit the opportunity, but we definitely expect it to be $100 million-plus revenue contributor to us. In addition to the wireless backhaul revenue, that will be in excess of $100 million, right? So -- we're well into the -- in the $100 million range right now as a wireless infrastructure, and we are supply constrained.

Our next question is coming from Christopher Rolland from Susquehanna.

I guess my question is around competitive dynamics. Are you seeing anything there in terms of their availability of competing product or lead times or supply issues that they may be having? And is this to your benefit?

Yes, Chris. Good question. I think -- I mean, there's kind of ebbs and flows on this front. I mean, there's -- we've tried to be proactive. I think we've been pretty creative early on. I know I've shared this before that I think we're trying to move, get other vendors up and qualified. Kishore mentioned that we're doing some investing as well to try and get these guys qualified to get out product quicker. And I think we've had a lot of success with that, and that's part of what's kind of contributing to that outside and how we can outpace the competition. So I think that's definitely helpful.

Great. As a follow-up on infra, as you look at the outlook for the rest of the year, what -- I'll let you guys kind of talk about this. What do you think is going to be the biggest driver of growth there? Is it going to be PAM perhaps in the back half or wireless backhaul or transceivers, how are you thinking?

Yes. I mean, look, it's clearly kind of dominated by the wireless infrastructure side, right? So transceivers, but transceivers on the access side as well as on the backhaul side, both have been constrained. But I mean, we're starting to get more product out. Demand has been extremely strong as Kishore indicated earlier. So I think that's going to be the biggest driver. And frankly, I think I see that continuing through 2023. And I think in '23, you'll start to see a lot more optical contribution.

We reached the end of our question-and-answer session. I'd like to turn the floor back over to Kishore for any further or closing comments.

Well, thank you, operator. I just want to let everybody know that we'll be participating at these following upcoming conferences during Q2: The JPMorgan 50th Annual Global Technology, Media and Communications Conference on May 24; Craig-Hallum's 19th Annual Institutional Investor Conference on June 1; Loop Capital Markets' Third Annual Investor Conference on June 2; and Stifel Cross Sector Insight Conference on June 7.

With that being said, I want to thank you all for joining us today, and we look forward to reporting on our progress to you next quarter. Thank you.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.