Coherent Corp. (COHR) Earnings Call Transcript & Summary

Good evening, everybody. It's so great to see all of you here are, so many familiar faces. For those of you who don't know me, I'm Sanjai Parthasarathi, I'm the Chief Marketing Officer of Coherent. We are so excited that all of you could join us here in person and those of you who are joining us by webcast for our launch of our PhotonLink platform. PhotonLink is our integrated optics platform, purpose-built for AI data center connectivity. Before we get started, I'll have to refer you to Slide 2 of our presentation, which contains our forward-looking statements and disclosures. The presentation in its entirety will be available in the Investor Relations section of our website after the event. Moving on to an agenda. We've got a great program for you today. Jim Anderson, our CEO, will start us off by introducing PhotonLink. Jim will be followed by Beck Mason, EVP of semiconductor devices, who will present the generate section of PhotonLink. Beck will be followed by Julie Eng, our EVP of Optical Components and our CTO, who will present the shape, guide and receive sections of the PhotonLink. Julie will also present our Integrated Solutions. Without further ado, please join me in welcoming Jim Anderson, our CEO, to the stage.

All right. Thank you, Sanjai, and thank you, everybody, for being with us here today. We've been really excited about the launch of PhotonLink. We've been looking forward to this for a long time. Thanks. We're here in Spain at ECOC. Thanks to everybody that's joining us on the webcast. But thank you, especially for everybody that's joining us here in this room because there is a beautiful sunny beach, about 200 meters away from this location. And so the fact that you chose to sit in this conference room instead of on a sunny beach, I appreciate it. But there are a few people that walked in with flip flops and shorts. So -- but again, thanks for being with us here today. We're really excited to share this with you. Just to kind of kick it off, so what is the motivation? Why are we launching PhotonLink? And the motivation or the reason for us to launch PhotonLink is very simple. It's to try to make it as easy as possible for our customers to move from electrical connections to photonic connections in the data center to make that transition seamless and easy to bring the complete solution to our customers. If you look at any particular distance of links in data centers, if you look at long distances, but connecting to data centers. If you look at the very short distances, connecting maybe 2 chips that are sitting right next to each other on a board, regardless of the distance as you increase the data rate, as you increase the amount of bandwidth you're trying to send through that connection, if it's an electrical connection, you'll eventually hit the limit to that connection. And what you want to do is you'll have to convert to a photonics link in order to achieve the data rate and the data transmission goals that you're trying to achieve. And that's what PhotonLink is all about is making that transition from electrical to photonic link as easy as possible. So if you look at the data center today, actually, a lot of the data center is already completely optical photonic, the telecom network, the scale-across, the scale-out networks, all of those originally started out as electrical networks, but we're long ago converted to photonic optical networks. And over the coming years, we'll start to convert the only remaining electrical portions of the network, the scale-up network, and even the chip-to-chip links will become photonic over the coming years. And that's what we're really excited about helping our customers make that transition. Now for Coherent, that's also a big opportunity for us. When we look out at the end of this decade, at 2030, if we look at our addressable market, it's about $60 billion for the existing portfolio of products that we have. What PhotonLink does is it allows us to access another $30 billion of integrated optics market opportunity by the end of this decade. So another reason we're really excited about this technology. Now as we've engaged with customers across integrated optics over the past months, actually, the level of engagement and the intensity of engagement, the number of engagements with customers over just the last 6 to 12 months has ramped up really significant, and so we've got a number of different engagements across many different architectures. It's very clear to us that there's not just a one-size-fits-all, one particular architecture that will be implemented, we're going to see a wide range of different architectures that our customers are going to implement as they implement integrated optics. So some customers will adopt co-packaged optics right away. Some customers will first adopt near-packaged optics and then over time, move to CPO later on. And we are already engaged with a number of customers talking about photonic links between the individual chips themselves. So a lot of different architectural options that we're working on with our customers. But regardless of those architectural options, one of the things that our customers are struggling with is if you look at the amount of optical technology that needs to be pulled together there's a significant amount of complexity there. That's a combination of laser sources, the fiber optic cable that has to be pulled together, the complex optical assemblies, passive optics, lot of technology has to be stitched together. And so a number of our customers came to us and asked us rather than just providing components or a subset of components, can you bring the complete optical solution to complete assembly to make it easier for us to transition to optical, and that's exactly the purpose of PhotonLink is to bring a single integrated platform that's architecture-agnostic that works across CPO, MPO, chip-to-chip as well, but brings the whole solution to our customers. And when we look at PhotonLink, it spans all the way from the beginning where we generate the photon through the shaping and guiding of that signal to the detection of the signal on the other hand. So that's the complete PhotonLink platform. Now we believe that Coherent more than any other company in the world is best positioned to help our customers make this transition for a couple of key reasons. First of all, because there's no other company in the world that has that complete set of photonic optical technology. So if you look across the Generate, Shape, Guide, Detect and look at all the different optical connections, all the different optical technology that's required to make that happen. It's really only Coherent that's got that full portfolio that we can bring together, stitch together in a single solution. There's other vendors that provide the laser source, there's other vendors that provide maybe the fiber optic cable but only Coherent has all that technology in-house. And that helps our customers innovate faster and get those optical connections to market much quicker. So that's number one is the complete technology portfolio. But the second reason is the ability to manufacture that at tremendous scale, the scale that's required for data center. And so if you look at complex optical components, complex optical assemblies, over the past years, we've delivered hundreds of millions of components and optical assembly. So not just the full portfolio of technology, but the ability to ramp that quickly and ramp that at scale for our customers. So an example of the complete solution that we can bring, not just the component ingredient technologies. Here, I'm showing just an example, of -- this could be a CPO or an NPO example for a switch chip or compute chip using an external laser source. In this example, we'd be bringing the complete external laser source, the complete optical assembly that goes from that ELS to the switch chip or the processor chip that it's supporting and then the complete optical assembly that goes back out to the faceplate to provide the IO, the photonic IO to the rest of the system. So that completes of solutions and all the underlying components that go into that, and we can manufacture that at scale. So we have anchor customers already secured for both CPO as well as NPO architectures. We'll talk a little bit more about that. To give you an idea of the value of the content that we can bring, if we're using the full PhotonLink Solution, if we for instance a switch chip or a processor chip let's say, needs 100 terabit of I/O capacity and let's say we're using 200 gig optical lanes. The content for Coherent would be up to about $15,000 per system or per 100T chip in the case of where we're bringing all the content for the customer. So a significant amount of content that we're delivering for our customers. Now we'll talk about today, of course, all the different ingredient technologies I've got our two experts, Julie and Beck to talk to all the ingredient technologies that are underneath PhotonLink. But I think more importantly, what we'll also do is we'll talk about a number of specific examples that we're working on with customers with different architectures, we'll show a CPO example, a couple of different NPO examples,; a chip-to-chip example to of the solutions that we're bringing to our customers. And across these different architectural choices, number of different types of light sources, whether it's CW lasers or VCSELS arrays, et cetera. As I mentioned earlier, the customer engagement across these different architectures has ramped up very significantly, especially over the last 6 months. We now have over 10 unique customer engagements on CPO, over 10 on NPO and over 5 different engagements on chip-to-chip connections. So a lot of activity across the customer base. I talked about how much content we're delivering in the case of when we bring the full solution. To give you an idea of the production timing for CPO. Our first production will start to ramp in our December quarter this -- Q4 of this calendar year, that initial CPO will ramp for scale-out applications. And then about a year later, in the second half of '27, we'll start ramping CPO scale-up applications. And then NPO similar. We expect that to start to rank the second half of next calendar year, again primarily for scale-up applications. Chip to chip is a little further out there. We expect that to be further out in the 2029, 2030 time line but definitely a lot of intensity with our customers on designs around chip to chip photonic connections as well. So a lot of customer activity going on. So I'm going to pass it next to our two experts Beck and Julie. But what they're going to talk about is they're going to talk about -- think about it as two parts of their presentation. Number one is they're going to walk you through some of the specific technologies underneath PhotonLink that are really some of the key technologies that we stitch together into the full solution. But then Julie at the end will talk about three different architectural examples, CPO, MPO and chip-to-chip and give you specific applications and what this full solution is that we're bringing to our customers. So thanks again for being with us here today, and I'm going to pass it off to expert #1, Dr. Beck Mason.

Thank you, Jim. I appreciate it. So I'm going to present to you today on our Generate technology. And so it generates maybe the core or the heart of the PhotonLink from a photon generation standpoint. And what I'm going to cover are the 4 main technology platforms within PhotonLink that generate the photons that serve all of that link capability. And these are our ultra-high power lasers, our high-power CW lasers, our VCSELS arrays and our high-density VCSEL arrays. So first, I'm going to start with the high-power or the ultra-high-power CW laser array. So this is one of the areas where we have really strong traction from a number of customers. It's an exciting platform. In this platform, the lasers are actually remote from the transmission and they're put inside an external laser source. That external laser source contains up to 8 ultra-high-power CW lasers each ultra high-power CW laser can typically feed multiple links usually around 4. This provides the photons that go into the silicon photonic modulators that are co-packaged with the XPU or switch chip or near package with that switch chip or XPU, in order to provide the source for the link. The lasers are designed specifically to produce very low noise, high output power and very high efficiency to [indiscernible]. And we're very excited about this platform because we have 2 long-term agreements signed with leading hyperscale AI data center customers for both CPO and NPO solutions. Our ultra high-power laser is designed to deliver industry-leading performance. It's a very unique design. It enables very high output power at very high efficiency and very low noise performance. And why that matters high output power lets the single laser drive multiple links with that solution, so you can split it and share it. That helps you drive cost and efficiency. High-power conversion and efficiency is important. These are producing very high optical powers high-power efficiency, lowers the overall participation in the system that's critical in AI data centers where power is key. And finally, very low phase noise and very low amplitude noise from these lasers delivers superior link performance with better [indiscernible] rate performance. All of the lasers today exceed all of our customer requirements. We're starting to ramp these in the fourth quarter of this calendar year. And we're having -- we're seeing significant volume throughout next year. And these are ramping on 6-inch indium phosphide platform that we have in our Sherman, Texas fab where we're seeing very good yield and very great performance from the lasers. The next thing we're going to talk about is our high-power CW laser for NPO applications. So in some architectures, the NPO solution or Near Package Optical Solution has the laser embedded within it co-packaged with the silicon photonic modulator. That gives you greater flexibility and a different approach to the architecture that can be valuable in certain situations. The smaller size and lower power dissipation, high efficiency of our high-power varied heterostructure, CW lasers is ideal for this application. And this is a laser that we're already shipping millions of units a month in because it's used widely in our pluggable data center transceiver solutions as well. It's a laser with proven field reliability and proven link performance and it's optimized for both low power dissipation and very high efficiency. And it's production ready now. So as I said, we're already shipping it. We've got a long history in indium phosphide, and we've shipped over 300 million indium phosphide lasers in the field so far, and the pace of that is only ramping up and continuing to increase. The next type of solution for Generate is our VCSELS arrays. Now VCSELS for NPO come in two different flavors. The reason why VCSELS are very attractive for this application as they enable the lowest energy per bit for NPO applications. They also allow us to get to very high channel counts in a very dense solution, giving us the lowest cost and the best bandwidth density of any application that you can use for integrated photonic links. The massively parallel optical inter-connectivity that we can achieve here is really ideal for NPO applications where we need high density. So I'm going to talk about two types or Type 1 and our Type 2, the Type 1 being conventional and Type 2 being high density. And Type 1 is designed for use with ribbon fiber assemblies. And it's similar to what we have been selling for many, many years. We've been supplying VCSELS arrays and PD arrays for more than 10 years. In fact, we're the world's largest supplier of Datacom VCSELS today. Now these PD arrays and VCSELS arrays are used in pluggable transceivers. These new arrays are high-density arrays. That means they are 2-dimensional. They have more VCSELS channel count. They're also available in flip-chip versions. It allows us to mount them directly on top of driver ICs. The photo diodes are also available in flip-chip versions, so they can be managed on TIAs. And because they're flip-chip, we can put lenses directly on the backside of the devices. Those integrated lenses will allow much more relaxed coupling, higher coupling efficiency and better overall link performance. So these solutions will be production ready in the first half of next calendar year. The other area is our high-density 2D VCSELS. And these are actually kind of some of the most exciting and interesting solutions, and we're actually demonstrating this product today in our booth on the ECOC floor almost said [indiscernible]. So these are super compact solutions for NPO, and they have very, very high-density arrays. And the VCSELS are so tightly spaced here that we're able to couple all of these VCSELS into a single fiber, which is a multi-core fiber. So we make fibers with up to 37 separate cores, and we have a VCSEL array and a PD array with 37 elements. We can flip-chip those, we have the backside lenses. And with that solution, we can get very high capacity in a single fiber. And so it's the most dense solution we have out there. And this is suitable for both PAM4 and NRZ applications. So it does slow and wider. I'd like to say, medium frequency [indiscernible] as well as fairly fast and narrow. And these will be in production in the second half of calendar '27. Just to complement this, I'm going to speak very briefly about our Photodetectors. Its important because to date, we've shipped over 1 billion photodetectors to the field, both short wave gallium arsenide and long-wave indium phosphide. Our latest generation of photodiodes goes all the way up to 200 gig today, and we have 400 gig devices in development. These devices are capable of being flip-chipped directly on to TIAs, for example, with backside integrated lenses to allow better coupling efficiency and they're an exciting solution for us for the other part of the CPO link. So all the devices that we make today come from our internal wafer fabs, and we have 4 major wafer fabs that are spread out across the globe. Our largest and arguably the world's largest and most advanced indium phosphide and gallium arsenide fab is in Sherman, Texas. Here, we have 6-inch indium phosphide lines and 6-inch gallium arsenide lines for multi different devices running. The second fab we have is in Järfälla Sweden, also running 6-inch indium phosphide. Our Järfälla Sweden is some -- is the place where we developed some of our most advanced devices. We've been in production there for over 2 decades, and we have a broad mix of solutions, again, there. The third fab is in Zurich, Switzerland. Zurich Switzerland was historically our gallium arsenide fab, where we run 6-inch VCSELS and very high volume for datacom applications, but we are now ramping up 6-inch indium phosphide fab as well to enable the immense ramp we're seeing in demand on high-power lasers for PhotonLink and CPO applications. And then finally, we have a fab in Fremont, California. This fab is running our 3-inch production line and is where a lot of our most advanced devices are developed as well. So that rounds out our complete suite of wafer fabs. We're expanding capacity in all of these fabs today. Our laser capacity expansion has really been driven by 6-inch transition. So about 6 years ago, we transitioned all of our gallium arsenide production over to 6-inch. And we've been running 6-inch gallium arsenide in both Sherman, Texas and Zurich, Switzerland since that time. And we finally completed around last year, the final transition, which was our Pump Laser platforms over to 6-inch. And through that period of time, we've increased capacity on our gallium arsenide lines by about a factor of 4. And today, we have capacity for over 1 billion VCSELS arrays per year. I can't even count the number of VCSELS that is, but it's a huge volume capability. Indium phosphide, when we have learned from the success of that 6-inch transition in gallium arsenide, we're now transitioning all of our indium phosphide to 6-inch, and that's been a tremendous success for us so far. We have the bulk of our high-power CW lasers, our EMLs and our photodiodes all qualified now in our 6-inch platform and ramping. Last year, we doubled our capacity of indium phosphide globally. We did that a quarter ahead of schedule. And this next year, we're planning to double that again or more than double that again. So we're laser-focused on our ramp, no pun intended, and we're doing it with our largest form factor wafer size in the world. We're the first to ramp on 6-inch indium phosphide of anyone globally. So that wraps up my section. I've gone through the 4 critical types of lasers that we use for Generate function for our Integrated Optics PhotonLink platform, our ultra high-power CW lasers that are good for remote applications with the highest performance, both CPO and NPL, our high-power CW lasers that are flexible and replaceable and can be easily used inside NPO solutions. Our conventional VCSEL arrays, which provide low power eye efficiency and high density. And then our ultra-dense VCSELS arrays, which provide the smallest and more compact solution for getting high-capacity data across these short links. Now I'm going to pass it to my colleague, Julie, who will give us an overview of the Shape, Guide and Received portion of the PhotonLink architecture. So Julie, thank you.

Hi. Good evening, everybody. It's great to see so many familiar faces. And for any of you I haven't met, I'm Julie Eng. I'm EVP of our Optic Components Group and also the CTO. And as Beck said, and Jim, I'm going to share with you the Shape, Guide and Receive portions of the PhotonLink portfolio. And then I'm also going to give you some examples of how we're bringing these integrated solutions to our customers. So as Jim said, what we're going to do here, we're going to follow the path of the photon from where Beck generated them, which we called it the heart. I think rest of it is like the cardiovascular system. Shape, guide and receive. But actually, if you double-click on it, it's much more complex than this. And this is a picture of what it actually looks like. There's a tremendous amount of optical components and technology that are between the laser and the receiver. And I hope I'll show you today that we have the broadest and deepest portfolio of products and of technologies. And also, as Jim mentioned and Beck mentioned, we're manufacturing these at scale. So in these optical components that I'll introduce to you today, we shipped over 650 million optical components. So we're in high volume in all of these components. So if you start first, Beck showed you about the laser. We have to get the laser light into an isolator into a fiber. And the first way we do that is with glass molded lenses. So the glass molded lenses give us efficient light coupling. We have excellent coupling performance. These are in production by the end of this calendar year. And if you look at our entire lens portfolio, we've actually shipped a 0.25 billion of lenses. And these lenses would go inside of the ELS and focus the light into the isolator and into the fiber. So once the light gets focused, the next step is the isolater. Now the isolator protects the laser from unwanted back reflection that otherwise harms the performance of the link. So isolators are based on a magneto-optic material called Garnet, and Coherent, we're vertically integrated in Garnet. We literally grow the Garnet Boule in the United States actually. And then we slice that Garnet Boule up into substrates and polish them, we grow the Garnet epitaxy on top of those substrates. We dice them and then we attach polarizers, which is how you make an isolator. And we actually supply a significant fraction of the industry's garnet and isolators today. And isolators are becoming a key component in the CPO and NPO ramp. And in fact, we have customers securing capacity for garnet and isolators with long-term agreements. And then the ELS, you can really think of the external laser source as an integration platform. It provides a platform to integrate that laser with the culling lenses, with isolator. There's other components in there, like an ELS fiber assembly, a thermoelectric cooler, which keeps the laser at the constant temperature and all of those internal components, we design and manufacture and then we integrate them into the ELS because we have all those vertically integrated components, we can give faster responses to customer specifications, and the assembly and test of an ELS is built on our transceiver line, which we have demonstrated manufacturing at scale. And we are sampling ELS to customers today. Okay? And then we have to get the light from the ELS to the receive side. And the way we do that, of course, is by fiber. Now it's not -- maybe not so well known, but Coherent, we have an internal fiber design and manufacturing capability. We've actually had that for 25 years. We've shipped over 300 million meters of fiber. But what we focus the specialty fiber like really hard to make fibers. We're not competing on standard commodity, SMF, MMM. Its really hard stuff to make, and we're really, really good at making the hard stuff. So one thing that's hard is polarization-maintaining fiber. So polarization maintaining fibers is key for the silicon photonics with the remote laser CPO architecture, and we're production-ready on that fiber now. Here at the ECOC 2026, we're introducing this mode matched fiber. And what this is, is a fiber that improves coupling efficiency to edge couples on silicon photonics. And then finally, on the right, we have multicore fiber, and as Beck mentioned, that's very valuable, especially for these VCSELS, highly dense VCSELS array based solutions, and from NPO, CPO and chip-to-chip. And right now, we're undergoing and executing a very significant fiber manufacturing expansion for both CPO and NPO. Okay? And once we get the light through the fiber, now you have to get the light into the receiver. And so in the silicon photonics implementations, making micro lens arrays. So micro lens arrays are lithographically formed in-silicon lenses. They have to be very precisely uniform, one to the next and all have good focusing capability. And if you're using grading coupled silicon photonics, they turn the light also. So that's called prism, prism micro-lens aarrays. So we're making those. And then Fiber Guide. So this is a precisely v-grove etch that then holds the fiber. And the two of those things together help you get good precise coupling efficiency in your integrated solution. Then we can integrate those components with our polarization maintaining fiber into a fiber attach unit. So that provides an integration step that we can deliver to the customers. Here at ECOC, we're also introducing our Detachable FAU Connector, which helps with serviceability and installation. And we can integrate all those FAUs also into a precision fiber assembly. And this helps route and protect the fibers for ease of deployment and also for reduction of fiber damage. And then all of those things put together are either in production now by the end of this year or early next year. And this is one way in which we can help solve the integration problem for our customers. And then once you start having fiber inside, say, the rack and very high amounts, it becomes very important to our customers to try to reduce the fiber count. And one way you can do that is with a component called a circulator. So circulator takes a beam that might be going this direction with a signal that might be going this direction and combines them out on the same fiber. So it reduces your fiber count by a factor of 2. And circulators are also based on Garnet and they also require a crystal called yttrium vanadate, which we also manufacture and design internally. Then we have WDM multiplexers. These take many wavelengths and combine them into one wavelength. And those rely on super precision optical coatings, which were also an expert at and we deliver in scale. And finally, fiber shuffles organized that high fiber -- high-density fiber routing and can help reduce fiber breakage. So we can put the circulators and the WDM multiplexers in that fiber shuffle in the ELS or in connectors. And all of those products are in production. And so now as we get to the Receive side, Beck told you about indium phosphide and gallium arsenide receiver. Some of the CPO and NPL implementations have silicon photonics receivers. So we have an in-house silicon photonics design team. We use multiple foundries as is common in the silicon industry, and then we do in-house assembly and test. So we've demonstrated 200 gig per lane silicon photonics, and we're shipping that in production in our transceivers today. At OFC earlier this year, the Optical Fiber Conference in March of this year, we've demonstrated 400 gigabit link based on silicon photonics. We're the only person in the world to my knowledge, that's shown that and demonstrated -- we demonstrated on the show floor and also got a post-deadline paper at OFC on that topic. And then just like the ELS can integrate a lot of components, little NPO modules can also integrate a lot of the components, do the integration for our customers. So here at at ECOC and also at OFC, we showed our 6.4T Silicon Photonics NPO Module. So this integrates the silicon photonics with the drivers. So the silicon photonics has modulators and photodetectors with drivers, TIAs and all the optical coupling and this is 32 lanes of 200G. And we -- in addition to that then, if you look at NPO, you can have a common form factor, a common socket that can accommodate either silicon photonics or VCSELS. So we also showed our VCSELS NPO at OFC, and that integrated the VCSELS, the photodiodes, the drivers, the TIAs and the coupling optics into a single deployable NPO. We are a founder of the Open CPX MSA. So we are helping to develop an open ecosystem for a common connector among vendors, which gives our customers actually architectural flexibility. Okay. So hopefully, now I've shown you the products and the technology portfolio, both the depth breadth, the ability of us to manufacture it at scale. And now I'm going to give you some PhotonLink examples of how these integrated optics come together to solve the solutions for our customers. And I'm going to give you four examples. I'll give you a CPO example, 2 NPO examples, and then a chip-to-chip example. So starting first with CPO. So this is a CPO solution with an external laser source. The CPO architecture is putting the optical engine actually literally on the package, of the switch or XPU chip. So it offers the lowest power consumption and in many cases, the highest density. So we have an end-to-end solution for CPO with ELS and a remote laser. So you can see we can provide the ELS with our own laser, lens, isolators, [indiscernible] fiber assembly, you can couple from that to our FAU, which has our PMLA, our fiber guide and our [indiscernible]. We can integrate all of the FAUs into a precision fiber subassembly, so handling all that fiber routing and fiber protection for our customers. And finally, then we can provide the modulation and the detection with our 6. 4T silicon photonic. So what you can see here is we can provide an integrated end-to-end solution for our customers. And as Jim mentioned, we have over 10 active customer engagements in this area. Estimated our content at $15,000 per 100 TIO. And we do have an anchor customer, an LTA secured. This is our NVIDIA agreement, which is a public agreement, which we can mention to our customer for that agreement. And we see -- expect to see scale out in Q4 of '26 and scale up in next -- second half of next year. Okay. So now I'm going to take an example, NPO solution. So the NPO solution takes that little 6.4T silicon photonics socketed NPO, I mentioned, just for those of you who think of this way, this is actually 15 gigabits per second per millimeter, you think about that like the end of a pencil is like 1 millimeter, and we're cranking out 15 gigabits per second in every millimeter. And so you can start from that optical engine go into our FAU, the same precision fiber subassembly. And if you're doing it remotely, you could have an ELS, of course, you could integrate the laser into the silicon photonics NPO also. So in these type of applications, we have greater than 10 customer engagements also. Similar Coherent content. In this application, we also have an anchor customer and an LTA secured, and we see this ramp at the second half of next year. And then as I mentioned, because NPO gives you a common form factor part of -- I forgot to say, but the NPO is moving off of the package onto the board right next to the package, and there are trade-offs with that. An advantage of the NPO is it gives -- it's easier to deploy and is more serviceable. But it comes at a price. And that price is you move it a little bit away from the chip that requires power consumption and that socket impacts the signal integrity. So there are trade-offs with all of these architectural decisions. But one great thing about the NPO is it's an architectural platform. So you can use silicon photonics or you can use VCSELS. So this VCSELS, one I'm showing you on the left is our NPO solution with the 2D VCSEL array that Beck mentioned. In this case, we integrate the substrates, the drivers and TIAs our 2D VCSELs, 2D photo diodes, a heat spreader, a lens array. And we've actually demonstrated this at 1.2 picojoules per bit, which as far as I know, is the lowest CPO or NPO power consumption, including the laser. And then we also have an NPO solution based on our high-density VCSEL that Beck mentioned, and we have the high-density VCSEL and photodiode there. We integrate it with the TIAs and the drivers. And then some of our customers want to take the light out the top at some of our customers want to take the light-off on the side. You take the light off the site, we incorporate also a turning mirror. We have lenses, we have a lensed fiber array. And so we can bring that whole end-to-end solution for our customers. And then the last example I'll tell you about is called chip-to-chip interconnect. And we're seeing a lot more interest in this in the last, I would say, 3 to 9 months. So this calendar year. And I think the way you can think about it is that is the bandwidth between compute and memory scales, the optical link moves from the edge of the package the interior of the package. Or another way to think about it is, as Jim mentioned, I mean, with Photonics transition from electronics to photonics always happens when the data rate goes up and the distance is fixing. And so it happened first on the intercontinental telecom then the terrestrial network, which is a shorter than intercontinental, then the next thing was inside the data center. Now we're talking about inside the rack. So this is the next frontier inside the chip package. And we're seeing people look at multiple architectures, including ELS, with ultra-high power lasers or integrated lasers, but also high-density VCSEL solutions for this. One of the things you see is with all the lanes here, there's a lot of discussion about using WDF. And this is a case where circulators and WDM multiplexers come in as a very important architectural tool. So here, we have over 5 customer engagements, and this type of deployment is more like an end of the decade deployment. Okay. So hopefully, I've been able to demonstrate through the CPO, NPO and chip-to-chip, how we bring this PhotonLink platform, an integrated end-to-end solution for -- as I mentioned, we have a ton of customer engagement on all three of these areas, and we've discussed the timing of this year, end of next year and then 2029, 2030. But more -- what I also wanted to point out was because we have -- one of the ways in which we can be the trusted adviser to the customer is because we have all these technologies. So if you as a customer come to us and say, "I'm trying to solve this architectural problem, we can openly tell you. If you do it with VCSELs, here's your power consumption, here's your cost. If you have integrated laser, here's your completer's your impact to your signal integrity. So we can give you an honest assessment of all the choices if you tell us your architectural requirements. And so I think that our customers find that very powerful that they're not just being sold as solution. They're being -- because we have all the solutions. We think about your problem and try to give you the best tools in our toolkit to provide you an integrated solution with PhotonLink. So with that, that will conclude the formal part of our presentation. Hopefully, I've been between myself and Jim and Beck, we've been able to show you that we do have -- I believe we have the broadest portfolio and the deepest portfolio and technologies in optics the integrated photonic solution. And with our PhotonLink platform, we're pulling this together as a complete integrated end-to-end solution for our customers. And we're highly capable. We've demonstrated in the past that we're able to manufacture at scale, and we're definitely scaling all of these technologies and products today. With that, I'd like to thank you all again for coming. Thank you for your attention, and I will hand it off back to Sanjai. Thanks.