Jack Kober: I think as we had discussed in some of our prepared remarks, we’re working closely to monitor what’s out in the channel, and making sure we understand where things are going there. We have had some positive trends over the past quarter, that are somewhat encouraging. But we will continue to monitor that. And with regard to MACOM’s inventory, I described the uptick that we’ve seen some of that uptick, is associated with some of the acquisitions that we’ve brought on board when you look back over the past year. But we’re also continuing to purchase inventory to support our backlog, and I think most notably the data center backlog that we have.
David Williams: Great thanks. And Jack, in the past, you’ve talked about the flexibility and the model on the extent [ph] side. And just hoping you could give us a little more thoughts in terms of modeling and what’s appropriate. And if you’re — if you restrain growth or development efforts here, just kind of through the software demand environment.
Jack Kober: Yes. So we’ve been pleased with the gross margin performance of the business, in light of the slowdown over the past few quarters. We’ve made a fair amount of structural changes to the business to manage the improvements that we’ve seen over the past couple of years from an overall gross margin standpoint. So we do have the flexible manufacturing model, as I had described with some of the products being manufactured in house, in our internal fabs and others that go to third-party. So that helps us in terms of being able to mitigate some of the costs that that we have with a portion of them being essentially variable. And then I think the other piece that I would like to highlight is our internal manufacturing fabs are generally medium volume, we don’t carry the same large overheads like some of the mega fabs have.
So that helps protect us to in periods where there may be a slowdown. And then as we look out into the future, and hopefully as we get back to some of the higher run rates that we were at from an overall revenue perspective, I think that will support improving gross margins as we go forward.
Operator: Thank you. And our next question coming from the line of Quinn Bolton with Needham. Your line is open.
Quinn Bolton: Hey, just a quick clarification on the 400, 800 gig. Is that almost entirely optical or are you starting to see copper applications, active copper cables starting to take off within that higher speed PAM4 business?
Steve Daly: Obviously, both. And some of our chips are four lanes of 100 on a single chip. And you can use two of those to achieve 800. And the other thing I’ll know, which is sort of a benefit of the linear driver approach is it can really work with a whole variety of architectures within the module, whether it’s a silicon photonic based solution, whether it’s DML, or EML, and also thin film lithium-ion [ph] base. So whatever technology the module vendor wants to use, we can support those and including [indiscernible] as well, if I didn’t mention that. So very, very flexible technology from MACOM’s point of view.
Quinn Bolton: And a follow-up on the linear drive. It sounds like your comments, it’s mostly in the Ethernet around Tomahawk 5, but InfiniBand seems like it’s much more close channel, you have effectively one vendor, I think, that dominates that market. So it seemed to me that the InfiniBand could be a pretty significant opportunity for linear drive. Where do you think we are in adoption of linear drive in the InfiniBand Market?
Steve Daly: So we — I would agree that we can serve as both sides or both protocols. And I think we, in fact, demonstrated a solution using a InfiniBand application at OFC. So yes, we are supporting that as well.
Operator: Thank you. And our next question coming from the line of Richard Shannon with Craig-Hallum. Your line is open.
Richard Shannon: Hi, guys. Thanks for taking my questions. Steve, I want to follow-up on the responses to an earlier question on GaN. I think you mentioned you’re expecting a great year in fiscal ’24. Maybe you can help us understand those dynamics and maybe even quantify what you see as the opportunity for your — for that in that year?
Steve Daly: Sure. And I’ll sort of define grade as we develop the process, and now we’re selling it. So that we’ll start selling it in 2024. So we’re starting at zero for our .14 micron process. And we are getting design wins and we expect to see growth in that fiscal year. So that’s our — right now that’s our definition of grade, that’s a win. And so our sales team, our business development team, our fab engineers are excited to make that happen. We haven’t put a fine number on the goal, our internal goals, and we haven’t shared that externally. And I think it’s premature to do that. But we just look at that as another vehicle for growth. We have the full support for major OEMs here in the U.S that want to use the technology.
We’re doing some novel things regarding R&D, as I mentioned on my prepared remarks, including bringing in sort of next generation process steps to improve performance beyond what we currently have. And so certainly we think next year will be a great year for GaN.