Q1 2022 Maxlinear Inc Earnings Call
Hello, and welcome to the next one year, Inc. First quarter 2022 earnings conference call and webcast. At this time all participants are in a listen only mode.
And answer session will follow the formal presentation.
They didn't want to take a prior operator assistance. Please press star zero on your telephone keypad. As a reminder, this conference is being recorded if some of my pleasure to turn the call over to Nick I really please go ahead.
Thank you operator, good afternoon, everyone and thank you for joining us on today's conference call to discuss Max linear as first quarter 2022 financial results.
Today's call is being hosted by Dr. Kishore, <unk>, CEO , and Steve Litchfield, Chief Financial Officer, and Chief Corporate strategy Officer. After our prepared 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 our 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 in <unk>.
Yes.
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.
Yes.
These forward looking statements involve substantial risks and uncertainties, including risks arising from competition.
Fly constraints facing the semiconductor industry global trade and export restrictions the impact of COVID-19 pandemic.
Our dependence on a limited number of customers.
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 as outlined in our risk factors section of our recent SEC filings, including our Form 10-Q for the quarter ended.
At March 31, 2022, which we filed today.
Any forward looking statements are made as of today and Max linear has no obligation to update or revise any forward looking statements and first quarter 2022 earnings release is available in the Investor Relations section of our website at Max linear Dot 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 Max linear.
GAAP financial results.
We're 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 two weeks now let me turn the call over to Kishore <unk> CEO of Max linear.
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 <unk> wireless infrastructure end markets.
These end markets continue to be the most significant growth drivers for the company lead our new products have solid traction and are gaining multiyear business opportunities.
We are seeing tailwind to our growth driven by the increasing infrastructure capital expenditure spend.
Specifically telco carriers are upgrading to support multi gigabit fiber pawn broadband warm axis and expanding <unk> network build outs.
Our gathering business strength is born of product development Succes 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 six and fiber gateways are the two 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 six <unk> increased market share higher attach rates and higher asp's.
Furthermore, Wi Fi market itself continues to demonstrate strong growth as consumers demand speed and reliability.
In the connected home to support voice video gaming and Internet in parallel.
Looking into Q2, we expect to diversify and expand our Viper revenues beyond the operator, driven broadband gateway markets as we begin ramping in the third party Standalone routers.
Standalone 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 byproduct revenues in 2022.
And are firmly on a trajectory to deliver at least $200 million in Wi Fi revenue in 2023.
Lastly, our soon to launch innovative next generation Wifi seven 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 you Rx family of Gateway Soc and network processes for 10 gigabit wireless.
For 10 gigabit <unk> networks access that is driving customers to build their own fiber gateway platform offering.
Additionally, new fiber gateway wins will pull through over $20, a barrel bill of material content, including Wi Fi Ethernet and power management solutions.
As a reminder, fiber as a category within the broadband and market is seeing strong unit growth driven by the move to 10 gigabit 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 pawn growth.
Moving to infrastructure RFID wireless access and backhaul products grew in aggregate by over 50% year on year in Q1, driven by early stage build outs of infrastructure in North America.
Even as we benefit from the long term secular trends new products are driving higher content opportunities for our platform and incremental growth for.
For example, our bill of material per platform has doubled as we ramp our <unk> millimeter wave products into multi band radios for wireless backhaul applications.
Ladies and gentlemen, please standby.
Ladies and gentlemen, please standby we are experiencing some technical difficulties, we'll get the speakers back up online shortly thank you.
Ladies and gentlemen.
Stay connected we are reconnecting the speakers as we speak.
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So you're going to be now rejoining the Max one of your speakers until the conference. Please proceed.
Alright.
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 supply chain tightness.
To continue throughout FY 2022 we're 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.
<unk> is expected to be up versus Q1, driven by continued strength in Wi Fi and.
In infrastructure, we are expecting revenue to be flattish compared with Q1.
Demand for our infrastructure solutions continue to be strong, but growth, but growth is being constrained in the near term by tightness in substrate availability.
Lastly, we expect our industrial 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.
We expect our GAAP tax rate to be approximately 25% and non-GAAP tax rate to be roughly 6% we.
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.
To build increasingly strategic relationships that we believe will enable us to grow our presence in markets, where we are today underpenetrated.
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.
Thank you another conducting a question and answer session. We ask you. Please limit yourselves to one question. One follow up then return to the queue, if you'd like to be placed in the question queue. Please press star one on your telephone keypad one moment, please while we poll for questions.
Our first question today is coming from tore Svanberg from Stifel. Nicholas Your line is now live.
Yes, good afternoon and.
Congratulations on the strong adult.
First of all this is Jeremy.
Our master.
It was part of the Fortunately I cut off but on the infrastructure side.
Just an update on the Pam four.
DST.
So in the prepared remarks, we did talk through Pam four DSP I mean, we continue to be on track and very pleased if you recall last quarter, we kind of push 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 five five nanometer.
Our solution, where we're seeing significant traction.
And I guess I would also add that the market opportunity. There I think continues to be very robust and.
And your penetration with the third party Standalone solution.
Can you talk about any differences in terms of.
Okay.
Wifi routers and it's based on their total performance of our solution on the.
On the.
What I call artificial <unk>, obviously, the highest throughput.
Data performance of any of our competition, that's hugely differentiating for us and secondly, the the overall competitiveness of our cost and versus performance.
Relative to others in order to be competitive in the third party Standalone 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 bidding on that front and so we really are going to see the latter half.
Half of this year very very strong pickup on Wifi. All these set of third party Standalone Wifi routers okay.
Great. Thank you very much.
Thanks, Jeremy.
Our next question today is coming from Alex Vecchi from William Blair. Your line is now live.
Okay.
Hey, guys congratulations on excellent execution.
Just a follow up on the Wi Fi question.
Steve maybe can you help us understand the potential impact going forward as Wi Fi becomes a larger portion of the business and you guys get to that $200 million in revenue next year in terms of gross margin I think historically, that's been a lower gross margin products, but I know D. G. Overtook Impella you would make some improvement so maybe a little clarification there.
Yes, sure absolutely so very excited about Wi Fi I mean, when you say what the impact is it's a great impact.
Very excited about seeing this growth I mean <unk> this business.
Get north of $200 million I think it still feels very much like early days here.
We're seeing nice.
Upsides 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.
We do see third party routers coming in I mean this is Rick.
I suggested earlier, there's an incremental 100 million units out there that we can now go out and address gross.
Gross margin of 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 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.
So yes, I mean, there are some lower margin business that.
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 in and being able to go after our mid sixties.
Gross gross margin percentage.
One qualifier there Steve.
The Wi Fi six even talk to you all as the product developed.
After the acquisition and closed out based on that so it's not a legacy products. So you've got them. Some what if you will Max Lee of flavors to it in terms of competitiveness on the cost structure.
Okay. That's helpful. Thanks for that clarification, and then just a question on the constraints. When you 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 <unk> trajectory as we move throughout the year.
So I think that we don't breakout where we have shortages, but the acute shortages we are having in high performance substrates are affecting.
Affecting our infrastructure revenues, that's absolutely correct in fact.
While we now disclose disclose or discuss the backlog on our product lines, but the infrastructure is a extremely healthy backlog well beyond what.
What we even expected in terms of our growth and it's really driven by <unk> rollouts.
The fight is it all is helping us in a big way transitions to higher Bom content on the backhaul side from microwave to millimeter wave.
Almost doubling the volume at the same time the axis 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 is not perishable demand.
<unk> and <unk>.
We had taken place taken measures as a company to bringing more capacity online we are invested in.
<unk> high performance of straight companies to have dedicated capacity for us going forward. So we'll get through this so we are being more constrained on infrastructure that any other.
<unk> because of the high performance substrates. There are some other FX some of them some other areas, but they're not meaningful enough.
Good luck.
With that I'll jump back into queue. Thank you.
Thanks, Doug thank.
Thank you. Your next question is coming from David Williams from the Benchmark Company. Your line is now live.
David David perhaps your phone is on mute David Please pickup your handset.
My apologies there click that al. Thanks for thanks for letting me jump on and congrats on the solid quarter.
Thanks, David.
I guess on the first side, just kind of thinking about China and the.
<unk> got a pretty good portion of your business kind of shift into Asia. Overall, just kind of curious if youre seeing anything in terms of either demand or supply side from from the Chinese lockdowns that we've seen intense over the last several weeks.
Yes, I guess I wouldn't say that we have huge exposure I mean, we've definitely gotten a lot of business, there and it's growing nicely, but I mean as far as the COVID-19 dynamics and shut down.
I don't think the demand side, we've seen too much 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.
Yes.
Okay Fantastic and then maybe just on a high 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 their behavior, just kind of thinking about the demand outlook or do you still feel pretty comfortable that that it is.
It's business as usual here.
So yes.
It is business as usual in a very positive way right, whereas it's not business as usual because we are seeing a lot of growth accelerated growth in the various market. So for us there is.
A lot of demand with the big infrastructure spend that's going on with <unk> in our wireless infrastructure market optical data to the market.
In the broadband fiber deployments right. So we are benefiting from that.
So we are not seeing.
Cancellations or push outs, but we do know.
That.
Our customers are struggling still to secure products of other other players in the platforms.
Having said that our guidance reflects our expectation of what I call an end to.
And throughput throughput fails in that which is what we track when we give guidance and not what we settle into our customers per se. So we feel very good where we are in terms of our guidance and the demand out there.
Fantastic. Thanks, so much for the color I appreciate it.
Thanks, David.
Thank you. Our next question today is coming from <unk> Silva from Roth Capital. Your line is not a lot.
Thank you Charles congratulations on the progress here.
You talked about in the Wi Fi market.
Expanding to the router opportunity I picture that as being different from the set top box opportunity <unk> done very well and can you talk about what.
What competitive landscape just differences are penetrating that market and what the timing might be to <unk>.
Some wins there.
I think if you already spoke about it they said the latter half of this year is going to be heavily driven by these gains in standalone router business.
The the dynamics of any of these markets are quite similar to the very different room operated markets.
Hello are typically even the standalone router market some data on the way the end the customer to those standalone router designs, our operator class of businesses. So.
However, the difference easier here, if you don't get to compete with our full platform offering.
Our gateway Soc.
The fiber or the cable front end.
The full menu of products, we bring to bear.
One on the gateway platform. So we compete.
It had to had combat and Wi Fi side and you win based on performance.
We are winning I mean, you want to keep in mind that we had a purely access point focused Wi Fi product company.
So we really focus on building the best in class in that in that in that in that landscape.
The other competitors really come from the consumer side.
And it sort of the reverse migration to the access point, so that they become intermediate and advantages driving straight from the access point side.
Okay, Great that's very helpful.
And then maybe for Steve or perhaps I'm sure you've done very well, but the Intel acquisition tracking your history of acquisitions.
How should we be thinking about further inorganic activity now that you've had a couple of quarters.
Moving forward and that's what put the framework, we should be thinking about.
We have a lot of organic opportunities already going so curious.
I just wanted to correct this misperception right.
Our growth.
The intellect was your business and ours were coupled because we had a strong broadband presence so our organic growth in the previous two years without exactly begin the timeframe 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 wanted to correct. The precision we have been investing organically for a while and infrastructure without fleet.
Five years and now the wireless infrastructure is really caught a lot of acceleration in momentum.
And the reason I say it is very very important for our employee validation as well that we had a technology company, we take investments and we measure ourselves of how we execute engineering excellence is what we bring to bear in a product with levels of customer.
Excellent as well so I just wanted to correct that misperception. This growth was coming it was in the works and we got a lot of momentum from our ability to execute on acquisitions right.
So I just wanted to and so this is going to be a story to continue Steve you want to add anything else on 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 were generating a lot of cash here and so I think the message on that front is consistent we will continue to pay down.
That 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 acquisition. So all through all of those are still relevant today.
Okay, great. Thanks, guys.
Great. Thank you.
Okay.
Thank you. Our next question is coming from Gary Mobley from Wells Fargo Securities. Your line is now live.
Hey, guys. Thanks for taking my question.
Start up by asking about Wi Fi seven I know one of your competitors put out press slash a week or two ago.
Just curious from your perspective, what you are anticipating on Wi Fi seven in terms of.
Product generation product revenue content gain opportunity.
Those sorts of things.
Hey, Gary I'll I'll take this question obviously.
It is going to be a highly differentiated solution.
We have not begun press releases too early to the market hollow words around the corner and we will be one of the first certified.
Wifi access point solutions out there.
Offering is going to reflect what Max linear is about high levels of integration cost competitiveness lowest power and.
A very innovative bom savings for the customer in performance. So we believe that with that we.
It will drive a lot of market share gain growth.
And also expand our stickiness existing markets and market share.
In addition, it is going to allow us to differentiate in other ways, where we can expand the end market itself going into more adjacent market. So that's the way we visualize the strategic rollout of our <unk> seven and I'm, absolutely confident we will do a great job on it.
Thanks Kishore.
Perhaps a question for Steve.
If I do my calculation correctly, it looks like your own internal inventory days, which was roughly.
Flat sequentially. The increase is supportive of your 6% sequential revenue growth guidance.
But maybe if you could just speak about inventory in the channel where is he.
See that.
Currently.
And given the current profile of your backlog in the improving supply situation.
How many consecutive quarters of sequential revenue growth do you think you can string together.
Yes, Gary.
So the inventory.
We did see a modest increase in dollars, but days were about the same youre correct on that.
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.
New opportunities in Wi Fi in fiber in some of our infrastructure opportunities. So we continue to see.
Tremendous amount of growth over a multiyear period right and so I'm not going to guide more than a quarter that we just gave you but.
Thank 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 there is 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 in the lake.
We feel very good about very strong visibility.
I appreciate the color Steve Thank you guys.
Sure.
Thank you. Our next question today is coming from Trevor Konoski from Needham. Your line is now live.
Yes, Hi, guys. This is Trevor janovsky on for Quinn, Bolton and congrats on the solid quarter and guidance. So following up on the China Lockdown question, even though we know most of the end product ends up in North America, and Europe , how much of the company's products are shipped manufacturing locations in China.
Thanks.
So Trevor.
Okay.
Yes.
We are a chip supplier right.
The supply chip. So most of them are manufactured pretty much to the location, where the wafers are so to that extent there are very very heavily dive on dependent vapor consumer. So so I think that answers your question via our products get manufactured.
And <unk>.
Because so much of our revenues are outside of China.
Most of the business goes through Oems, who are pleased in Taiwan.
So.
So to the extent that the Oems are presently dive on they have diversified supply chains in the last few years to be both dual located or even outside of China. So we feel that our end markets.
Side of China are already well very well serviced by not by being immune to these logged on to the extend that.
They have to supply to their customers now I cannot.
Really project on what pieces, they bring out of Shanghai, China in Beijing into their boxes, I cannot say that but.
But we feel for now that they've got sufficient diversification geographically on on manufacturing capability for their product.
Thank you and as my follow up are there any particular cost headwinds in the second quarter and that cause gross margins to decline 80 basis points at the midpoint in June or is it mostly just mix.
It's Trevor.
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.
The 62% at them at the midpoint here, it's pretty consistent 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 sixties over the next couple of years.
Fly chain constraints start to ease there's nothing that stands out that super concerning to us and in Q2 whatsoever.
I also want to add one more element of the supply chain.
Constrains right I think there are constraints.
People are talking of easing of supply chain Budd.
It's very very.
Choppy to put at least right. So there are there are constraints based on technology nodes were constrained based on packages and so I think the constraints will continue in the kind of quality of high end high value end markets. We are in but we are navigating those constraints.
As best as we can and we've done a decent job of it and there are some suppliers are communicating cost increases moving forward as well so.
So we have taken that entire expectation also into our into our guidance, but you guys.
Thank you.
Our next question today is coming from Sam Peter made from Craig Hallum. Your line is now live.
Hi, guys. Thanks for taking my question I wanted to ask a little bit.
On the broadband segment, you talked about a growing quarter over quarter into the second quarter here.
Cable and fiber.
<unk> growth drivers there obviously on a percentage basis fiber is probably kind of grow faster, but I wonder if you could talk about.
In dollar terms is fiber kind of taken the lead now from cable in terms of driving the majority of it.
Your dollar growth in that segment.
On fiber as well are you still on track to ramp with that large north American tier one you've mentioned before in the second half.
Yes so.
Absolutely Sam So yes broadband continues to do very well would you expect it to be up again this quarter.
You're absolutely right I mean, it has contributed or contributing from the.
The fiber side as well as the cable side.
We've been talking a lot about the fiber opportunity in yet 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 will continue to see that growth in 2023 is 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.
As we look out into 'twenty three I mean, there's a good shot is seeing that kind of double again next year in 2023, because it's still pretty early days on the on the fiber side.
Okay. Thanks for that.
Second question I, just wanted to go back to Wi Fi and this third party.
Access for third party router market.
Talking about that sounds like a good opportunity for unit growth for you guys and I Wonder if you could talk about kind.
Kind of unit growth opportunities you see for Wifi and kind of the core markets I guess the core operating in markets that.
You've done then.
And 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.
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 rate is still not one to one and even our main gateway customers right. So we've got we still got continued growth coming with that attach rate we've got.
More significant growth coming from the fiber attached thats, all new business for us. So that's going to contribute and then of course, the standalone routers as yet another market. So so we're we're by no means keeping up yet.
The market opportunity itself continues to expand and so I think there is really nice runway as we rollout E. Wi Fi seven coming beyond that which will expand the market even further but we were 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.
Thank you. Our next question today is coming from Ananda Baruah from loop capital. Your line is now live.
Hey, Thanks, guys. Good afternoon, thanks for taking the questions and congrats on the strong results.
And execution.
Thanks, two if I could yes, you're welcome you're welcome Steve.
Two if I could I guess part of massive mimo.
Where are you guys do you still believe I think believe I believe Paul you had talked about you kind of through last year.
Is it $200 million to $300 million revenue opportunity for you guys in massive mimo 300 to 600.
Three to four years you.
Do you guys still feel those those are the appropriate way to think about those opportunities.
How are you tracking.
Relative to how you thought you'd be tracking 12 months ago.
Yeah. Okay. So then you're talking about so I'm going to start with <unk> massive mimo <unk> massive mimo hundreds of millions of dollars I mean, this goes back a little bit of time once <unk> was rolling out.
There was a.
Big.
500 ish million dollars Tam opportunity out there now a lot of things have kind of pushed to the right do the China dynamics, and we continue to see that but absolutely see.
<unk> million dollar plus product line coming out of the wireless infrastructure wireless access side specifically.
Kishore kind of spoke a little bit like Sierra were seeing ASP increases so that the bigger market opportunity as well.
With regard to the PON side maybe.
Maybe ill take a step back so on the PON side, what we've said is that.
You look PON is probably three times.
Just kind of dependent on how you define it but call it three times 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 rollout and we see opportunities throughout the world in which is exciting particularly.
With the fact that you are seeing a lot of Gov.
Government subsidies.
Our help a lot of these operators rollout on the PON side as well are you seeing tons of fiber rollout, but even some of the fixed wireless access stuff that people are talking about as well.
We support and see and benefit from and we are tracking to our own internal metrics on the fiber side for sure and we led would seem that this would be the top drop one of the top drivers of our growth right now and on the <unk> side like Steve said, it pushed out to the right so sort of a smeared out a little bit the opportunity.
But we definitely expect it to be $100 million pledged.
Revenue revenue contributor to us.
In addition to the wireless backhaul revenue that it'll be in excess of $100 million right. So we have a valid to the in the 100 range rate noise of wireless infrastructure.
We are supply constrained.
That's super helpful. I appreciate it that's it for me thanks, guys.
Thanks Ananda.
Thank you. Our next question is coming from Christopher Rolland from Susquehanna. Your line is now live.
Hey, guys. Thanks for squeezing me in.
I guess.
My question is around competitive dynamics are.
Are you seeing anything there in terms of.
Their availability of competing product or lead times or supply issues that they may be having is this to your benefit.
Yes, Chris.
Good question.
I think.
I mean, there's kind of ebbs and flows on this front.
We've tried to be proactive I think we've been pretty creative early on I know I have 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 than I think we've had a lot of success with that and that's part of what's kind of contributing to that upside and how we can outpace the competition. So I think that's that's definitely helpful.
Great.
As a follow up on infra.
As you look at the outlook for the rest of the year or what.
I'll, let you guys kind of talk about this what do you think's going to be the biggest driver of growth or is that kind of be.
Pam perhaps in the back half for wireless backhaul or Transceivers.
How are you how are you. Thank you.
I mean look.
Clearly kind of dominated by the wireless infrastructure side, right, So transceivers, but transceivers on the access side as well as on the 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 is.
As key short indicated earlier, so I think thats going to be the biggest driver.
And frankly, I think I see that continuing through 2023, and I think in 'twenty three you'll start to see a lot more optical contribution.
Thank you we've reached end of our question and answer session I would like to turn the floor back over to Kishore <unk> for any further closing comments.
Well. Thank you operator, I just want to let everybody know that we'll be participating at these falling upcoming conferences. During Q2, the J P. Morgan <unk> annual Global Technology Media and Communications Conference on May 24, Craig Hallums, 19th annual institutional Investor Conference on June 1st Loop capital markets third.
Annual Investor Conference on June 2nd and Seafood Cross sector Insight conference on June seven 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.
Thank you.
That does conclude today's teleconference and webcast you may disconnect. Your lines at this time and have a wonderful day, we thank you for your participation today.