RiskyRascal
1 day ago
Been reading these forums for a while now. Here is some info from our competition.
https://ca.investing.com/news/stock-market-news/earnings-call-semtech-exceeded-expectations-with-net-sales-of-2061-million-93CH-3447396Semtech exceeded expectations with net sales of $206.1 million
Semtech anticipates the shipment of 1.6T active copper cables to begin by the end of FY '25.
The ACC opportunity is estimated to be a $100 million market, with a 50-50 production share with another component supplier.
We remain very excited by ACC opportunities and are also constructively engaged on a host of key projects as system vendors, ranging from retimed 50-gig solutions for AI and general compute applications, which we expect to substantially contribute to current year net sales, to retimed 100-gig solutions, which we expect to ramp this year, and retimed 200-gig solutions, which we expect to ramp starting in FY '26. We believe these opportunities equate to a very rewarding market over the next few years.
Harsh Kumar: Yeah. Hey, guys. First of all, congratulations on what appears to be a pretty good turnaround that you've instituted already. Paul, probably, the question that I get most often from investors is on the active copper cable opportunity. There seems to be a little bit of confusion whether you're playing in the vertical aspect or the horizontal aspect or both. Maybe you could clarify that and maybe help us understand if it's the same chipset that you will use for vertical and horizontal applications? Just a little bit more color on this opportunity?
Paul Pickle: Yeah. So, we're playing in both -- and so every rack will have two sets of active copper cables within them. That would be a total of 36 cables, but it's not the 5,000 direct attached cables you'd have to subtract from that. But horizontal cabling in between the racks is a larger opportunity, but of course, really does depend on the build configuration or the shipping configuration up to 162 cables rather for those horizontal NVLinks. In terms of chipset, it's almost the same chipsets, but there's a few ICs.
Tore Svanberg: Yes. Thank you, and congratulations on the continuous progress here. Back to the question on ACC, I think for 1.6T, Paul, you mentioned that the cable manufacturers are seeing POs and that you are qualified there. Could you just elaborate a little bit on that? And how should we think about timing there as far as when you would see that potential ramp?
Paul Pickle: Yeah, all right. So, as is kind of typical in hyperscale data center, we'll end up working with a lot of those hyperscalers as well as technology partners to spec product and build chips, collaborating on those chip definitions. As is often the case, they'll specify to us who they want us to utilize for fulfillment. A lot of times that does go to an active optical cable manufacturer, in this case, an active copper cable manufacturer. I'm not at liberty to say who those partners are, but there's two partners that have been designated. We're working with those partners for final qualification. And then, in terms of timing, it's still right now the timing is holding consistent with what we've said in the past, so the latter half of this fiscal year. And I would really kind of say that the ramp is next fiscal year, but we'd expect to see some early revenue this year.
Quinn Bolton: Hey, guys. I'll offer my congratulations as well. Just wanted to follow-up on the ACC opportunity. I know you're going to get a lot of questions here, but there's been a pretty wide range of expectations for this opportunity for you guys. And wondering if you might want to try to level set some of those expectations. I mean, how big -- what do you think a reasonable expectation might be for this business, say, in fiscal '26? I know you'll get a little bit of revenue maybe preproduction in fiscal '25, but as we look out to next year, how big could this be?
Paul Pickle: So, rather than answer how big could it be, because to imagine the high end, it's a pretty big number, I would prefer to kind of focus on what I think is currently a bit more of a reasonable expectation, at least what we're kind of planning around. So, the number of cables that could be used is heavily dependent on both the rack configuration and NVL72 versus NVL36, and the number of horizontal connections, and obviously, the number of NVLs that we'll ship next year. So, it's heavy dependence on shipment configuration, but to just cut to the chase, we kind of size it at $100 million opportunity, not as base case, I definitely don't want to put a high side case number out there. I think on that base case, it's reasonable to expect that we're going to share production between us and one other component supplier. And if you want to just put a slug in there for the share that we would see, you could call it 50-50. We were first to provide the chips, first to get designed in. Maybe that gives us a slight first-mover advantage, but I think it's reasonable to expect this kind of settles out down to a 50% share split.
Cody Acree: Yeah. Thanks for the help. Paul, can you maybe -- you gave us the details on active copper cables. Can you maybe provide some of the similar framework around your expectations for LPOs?
Paul Pickle: Yes. So, right now, we're kind of -- we've got a design project with a particular, what I would call, technology partner. It's the same partner around ACC, specifically for LPO. Most other vendors, we've got a tech partner in Broadcom (NASDAQ:AVGO) also that we're testing out solutions. We're going through lifetime testing with another OEM. So, it's making its progress. And then, I think as we kind of look at some of those LPO products, they're actually being teamed up with in-house DSP solutions from other technology partners that are not meant as a standard product portfolio per se. So, good activity there across the board. So for us, we don't need it to be LPO necessarily. These 200-gig per lane single lambda parts are going to find their way to a lot of different applications, whether they're just really good strong linear TIAs and drivers, and that kind of lends itself to being in a direct drive or in a half retimed or in a full retimed, really doesn't matter to us. I think we're going to do rather well with the product line.
Cody Acree: So, what are your expectations around LPOs for next year?
Paul Pickle: Not currently. I think we've got -- we're a little bit further along the design curve, the design in and win curve with ACCs. I think I'll be able to put better color to our 200-gig single lambda product and 1.6T optical solutions in the next couple of quarters.
Tristan Gerra: Hi, good afternoon. So, you've talked about ACC potentially moving to general purpose data center in '26. In AI, how sustainable is that in future AI platform beyond this year? When do we see horizontal and vertical connection moving ultimately to optical? And if not, why not?
Paul Pickle: It could very well be, but -- all right, so I'll tackle that last bit, Tristan, if you don't mind. If we look at configuration [indiscernible] are going to be close together and the reach is rather short. It doesn't -- you don't necessarily need optical for that. Where would it make sense to do optical? Well, if we can't do-400 gig, single-lane 400-gig active copper cables, well then I think the natural migration path would be to optical for up to some reach. But that's where you have to kind of think in terms of internal to the rack, those direct attached cables, are they going to have to go active versus passive solutions? At some speed, a lot of people would say, yes. I think we have to kind of wait and see how that goes. It really kind of depends on the switch ASICs and how strong their drivers are. But I don't see active copper. If the question is, is active copper going to be something that's short term? I think the answer to that is absolutely not. It's going to be another tool in the arsenal and it all kind of comes down to reach. But if you look at those horizontal cables, if we can't do 400-gig active copper at, let's say 1.5 meters or so, then direct drive, no latency, optical connections is the next logical choice rather than retime because you can't introduce latency into those NVLinks. Does that answer your question?
Anthony Stoss: Got it. And then just a quick follow-up on the ACC side. You talked about qualifications are ongoing. Any sense of how much longer it's going to take?
Paul Pickle: So, I think on my last call, I said we'd know in the next two quarters. We're reporting incremental progress with purchase orders at the cable manufacturers. I think we should hopefully find out in a quarter and have something to report.
Robert31
6 days ago
Unidentified Participant
Hi. Thank you for taking our question. This is Taksan [ph] on behalf of Vivek. I just want to go back to the AEC product line. Obviously you're ramping your second customer, third customer also in qualification in the second half. How are you seeing the competitive dynamic? Just because Marvell and Astera are also launching their products here.
Bill Brennan
At a high level, we have not seen a significant change in the competitive environment. So our objective has always been to be first to deliver and first to qualify. And I think we've done a really good job on this objective with all of our customers. I would say that, one big advantage that we have competitively is the way we're organized. We have more than 100 people on our team that are dedicated to the AEC business. And that includes hardware and software development. That includes qualification, production, fulfillment and support.
And this really drives success with this objective, to be able to deliver first and qualify first. So I would say that as we go deeper with each customer relationship, we really see an increasing number of requests for customized hardware and software. And I think from the standpoint of the number of SKUs that we're working on today, the number is more than 20 that are in active development from a different SKU perspective.
So competitively, I would say we're unique in a sense that we're the single point of contact and we take full responsibility for all aspects of the relationships with our customers. And this really drives their satisfaction. When I talk more specifically about competition, we're really competing with groups of companies that need to do the same work that we're doing, but there's really no shortcut to it. And when you've got the complexity of having multiple suppliers involved and responsible for different aspects of one solution, it's really far greater complexity than having one party like Credo being ultimately responsible.
And so I guess with that said, the market's growing quickly and we do expect to see second sourcing in the future. This is natural, and ultimately, our goal is to always be raising the competitive bar and ultimately serving our customers very well and driving their satisfaction. But I don't have specific feedback regarding the two potential competitors that you mentioned.
Unidentified Participant
Of course. And then as a follow-up, just given, NVIDIA is also entering this Ethernet switch market, and that could potentially have some implications on AEC as a standard for connectivity. So I was wondering if you have any color there, or if you've done any interoperability testing with the NVIDIA solutions as well? Thank you.
Bill Brennan
Sure. We've been really clear when we talk about the US hyperscalers, there is a desire to move to Ethernet long term. And so I think it comes as no surprise that we've seen a lot of discussion around NVIDIA and Ethernet. We view this as a positive for us and our business. We've done testing with everybody that's out there from the standpoint of NICs and switches. And so we feel really quite confident that there will be an opportunity for our AECs for inter-rack connectivity. And again, we don't view this as really a surprise that the U.S. hyperscalers are driving in this direction.
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