Marvell Technology, Inc. ($MRVL)

All right. Good afternoon. Welcome back to this session at our BofA Global Technology Conference. And as a real huge surprise and positive surprise, we have the team from Marvell join us. Really honored and delighted to have the CEO, Matt Murphy; and Ashish Saran, the Head of Investor Relations. And I was told that Matt actually just landed back from Taiwan, where I think he had a little bit of a quiet trip, right? It was quieter than usual.

Very calm trip. [indiscernible]

Very calm. Nothing happened at all.

[ Chasing ] wafers.

Exactly. So I'm sure we will talk about market caps and such, but let's get to fundamentals. So Matt, how would you kind of describe Marvell for the next 5 years, right? What -- how do you see Marvell fitting into this ecosystem where you have 1 or 2 really large companies who have both kind of compute and networking resources? And then you have other companies who are good in compute or in networking, right, but not in both. So how does Marvell fit into this ecosystem? What is kind of your strategic plan for the next 5 years?

Sure. Maybe before I talk about the next 5, just for a moment, just a quick recap because it's important to understand how we got here and where we are, right? So actually, I'm coming up on June 20, 2016, I was announced as the Marvell CEO. So you can believe that for those of you guys have been around, I can't believe it's been 10 years. But the first 5 years of the company was really about rebuilding and transforming into really to try to get to where we were today, which was our aspiration to be a leader in data center and data infrastructure silicon. So a lot of ins and outs in the first 5 years, selling businesses, acquiring businesses. But net-net, even though there was a lot of ins and outs, and we shrank to grow a couple of different ways, we doubled Marvell actually in the first 5 years. We were at $2.2 billion in the first quarter run rate I was CEO. We ended 2021 post-Inphi at like $4.5 billion, $4.6 billion, something like that, pretty well positioned. Took a big risk with Inphi, if you guys remember. Actually, fun fact, the banker told me this, the 2 highest multiple transactions of any scale in the chip industry in the last 25 years, number one was Inphi, 13.3x forward multiple. The second was the divestiture of the automotive business of Marvell, which was 12-plus times forward. So I've been involved in a couple of these high stakes ones. The Inphi one worked out really well, but that was sort of 15% growth in the first 5 years getting ready. We took a breather. We digested. We integrated. We fired up the M&A machine again. In 2025, we did the auto divest. We acquired Celestial and XConn really to address the scale-up opportunity, which we're going to talk about because that's a key sort of call option in front of us. And so if you just take The Street revenue this year of $11 billion plus, we'll have grown the company about 20% a year compounded for the second 5 years I was here. And actually, even if you go back to the Investor Day we did in 2021, when we closed Inphi, the whole company was at $4.3 billion run rate. So we've actually hit the high end or more than our Investor Day targets, which normally are 3-year targets, right? And then you sort of reset it. 5 years, we've been growing the company. So that's all been great. I am so fired up on the next 5 years, right? I mean, the last couple of years, we've been growing at a faster rate, right? So first 10 years was like 18% compounded. Obviously, shareholder returns were way above that. Data center went from sub-10% of revenue to 75%. So next 5 years, data center is going to continue to grow in importance for us in terms of the contribution. Total top line, I mean, if you just look at the last couple of years, data center last year grew 46%. It will be like 50% this year. And then we signaled our current indication for next year would be like 55%. So it's accelerating, but that's all on the back of 10 years of blood, sweat and tears, man. This isn't some overnight success, some new PowerPoint presentations, some new concepts. I mean you had to start on this a long time ago, okay, to be ready. So why we're well positioned, I think, to keep this kind of a growth rate up and the position we have is that -- and here's where we're unique. As you mentioned, there's a lot of the big scale AI players -- and I said this in my COMPUTEX presentation, there's 3 big compute ones, and these are all $1 trillion or close to and then $5 trillion for NVIDIA, compute-heavy companies with some networking, but they're compute-dominated, right, compute-heavy. And then you have the memory companies, those are obviously like big companies and solid, they're all memory. If you look at us, we're like, whatever, majority is connectivity, not compute. And that's one of the reasons why NVIDIA invested. By the way, we can come to that investor if you want to talk about it, but we're very complementary to the rest of the ecosystem. We're not battling it out in some compute war. It's a part of our business. But even the people that use us for our custom are typically using us because of our connectivity IP and our I/O IP and the fact that we can stitch it all together with the rest of our solution. So when you look at the, let's call it, the 70%, whatever your number you want to pick is, the connectivity, which includes a whole bunch of product categories, that has a ton of legs to it because that's -- and I'll pause in just one second, but that's today, the growth has been driven just by the scale-out deployments, which has really been in our traditional DSP business but also even like in scale-out, the switching is really doing well now. But you've got scale-up all in front of us. That market is probably as large an opportunity for us to scale-out in terms of connectivity. And then you have scale-across, which prior to that was just really DCI, that's moving now AI workloads across. So I don't -- that's where I think a bigger opportunity exists -- and we don't know how big that can be, but certainly, we're well positioned, again, because of the last decade of investment, which at COMPUTEX, I said was basically $22.5 billion of acquisitions, $18 billion of organic investment and $4.5 billion of divestitures. So $36 billion of kind of net spend has gone into this to get to where we've gotten to today.

So Matt, you were just back from COMPUTEX. I was hoping if you could give us an update on what were sort of the key points, right? You made a 102-terabit product announcement as well. But I think bigger picture, I wanted to get your take that everyone seems very positive right now. And you have kind of gone through a number of these cyclical ups and downs. How do you sense kind of the durability of this cycle, right? What are your customer discussions indicating?

And you're saying cyclical from a -- take a long-term view of the semi industry, you're not saying Marvell specific.

Exactly right.

Yes, yes, yes. No, I'm in my 32nd year in this industry kind of on the front line from day 1 as a product manager all the way to general manager and VP and whatever, all the days for different things I did. So I've gotten to see all of the major cycles we all remember. And I also remember the ones that everybody has forgotten, by the way. There's been a lot of them. Remember the Greece issue? Remember that one? There was like a Greece financial issue and that had a slowdown, 1998 contagion. And anyway, there's all kinds of different ones. But this one is really interesting. I think one is we're just in a much more thematic cycle here because it's a true global infrastructure build on AI is kind of on the scale of an industrial revolution type of event. And I think -- so one, as you can see in our own numbers, right, just us as a proxy, one company, 46% data center growth, 50% -- 55% as we stand here today is the outlook. That cycle, to me, at least at the moment, looks very healthy. And the reason is there's -- this is with a lot of natural constraints in the system. There's still not enough logic wafers to go around, and that's going to take the leading companies several years to put that capacity in place. I think the memory shortages are understood and there's a path there, but that's going to take time. There's just the global power grid. There's permitting. There's -- so there's all kinds of, I think, constraints, Vivek, in the system that I think in the past, we had these kind of unfettered access to supply, which then created these issues like PCs over cycling or smartphones over cycling or -- and then COVID, by the way, was a supply-related shock. We're in like a demand shock now. But I don't -- we don't see it slowing down. And if anything, we're being accused of being a little conservative for next year because in our model to get to our $16.5 billion target, we do assume CapEx will moderate. We don't think it's going to collapse, but we have kind of a 30% plug in there for next year. We're not the experts. You guys have better data than us. But to the extent CapEx bias is higher than that, we would probably do better. And I think there's a chance that it does. But right now, I think everything is -- bookings have been incredibly strong. Backlog is laid in. And then I would just say on the design side, by the way, this point about really having the core IP developed and production worthiness of what we do. And I mean just take silicon photonics, for example. We've been in production for 10 years on silicon photonics. We have 15 billion hours of data in the field. We've gone to high-volume manufacturing on 4 generations. Customers, when they look at us -- and that's just one example, they're looking at us saying, if I really want to get there over the next couple of years with a partner who has all the pieces and it's proven, we're in very rare territory here. There's a lot of companies and concepts out there. There's start-ups. There's PowerPoints. There's proof of concepts. There's a demo at a conference. It's not the same thing, okay, as shipping in extremely high-volume manufacturing with the right capacity, cost structure, yield, et cetera. So I would say, if anything, not only is the setup great, I'd say in the last 6 months in a very pronounced way, I think our customers are realizing if you don't have all the end-to-end and all the pieces and you're relying on a cobbled together third-party situation of IP and back-end design houses and start-up companies, and I'm just going to cobble it all together, and I think I'm going to make it work, I think we're seeing that recognition that it might or I can have Marvell underwrite my success because it's going to work, and I can trust these guys. So that's kind of all in front of us, right? That would be incremental things that we would go off and do. But I'd say the positioning of the company is extremely strong at the moment.

Yes. And I think what's equally exciting is that we are a kind of revenue diversity as we get there. It's not about just more of the same product line. That absolutely is going to happen. But we, for example, called out 3 new $1 billion businesses, all happening in the next year alone, right? And this is -- by the way, this is before scale-up becomes really big, right? So I think that's the other nice part. It's not a single socket. It's not a single product line. It's not a single technology, it's not a single customer. I think that's very exciting for us is that the revenue diversity in this company is going to be very significantly growing in the next 2 years.

Got it. Right. I mean the nature of the beast. So one of the arguments you would hear is, well, gosh, you guys are so concentrated. But let's take a step back. First of all, the whole market for semiconductors today is AI. I mean if you just look at like the absolute spend now, what's happening relative to auto, the traditional ones we sell, you have auto, you have PCs, you have industrial, you have smartphones. Just look at the numbers, right, and where it's going. So AI is the market for semiconductors. Let's just accept that for a minute. So then which again has its own risk, I got it, but that is the market. And then you say, well, within that, how diversified are you? And we're not a one-trick pony. We don't have like one chip, and it sells to one customer, and that's like a bunch of our revenue. And that's exactly what Ashish said. We're -- and we had some of this issue on the ramp-up on custom. That's why there was a lot of excitement over the last couple of years, hey, your custom business is going to be a big portion of the total, and we had to kind of go through that cycle, but I look out into '27 and '28. And that's why we called out these things. I mean, broadband analog, SiGe components, SiGe, high-performance analog, $1 billion business. Cloud switching, $1 billion business. DCI with very little scale-across $1 billion business. Whole company was $4 billion a few years ago. We're layering in. And then within those, they have multiple customers to them. So -- and then even with our custom area, again, by the time you get to 2028, you're going to have 15, 18 products in production, some are XPU, some are XPU attached, none of them is going to break the bank here. So I think that's really powerful for investors to see that there's a -- among all the semi companies selling into AI, we actually have, I think, a pretty favorable diversification plan going forward. And I'm not saying the others are bad because they don't. They might be more concentrated because our customers have gone nuts. That's great. I'm just saying that's where we end up, and that's why we have so many shots on goal. We think that's a healthy thing to have. And we're able to do it in our OpEx envelope and fund all these things. And we think there's strategic value for us going back to like, well, how is Marvell different? We are generally agnostic, so we can work with pretty much everybody, including people that would be considered a rival like take NVIDIA. Yes, maybe we do custom silicon. They make GPUs. But even in their announcement, they're actually enabling us on custom with a lot of their IP to be more competitive because they realize it's going to be a fungible type of a solution out there. So that's -- if you want to just get to how we're different, connectivity heavy, I/O heavy, a lot more customer -- lot less customer or socket concentration and a diversity of technologies, which in the end, and we can get to scale-up if you want to, you pull it all together, it's very powerful to truly have the end-to-end solution you can provide.

Got it. Maybe a quick word on NVIDIA and the engagement, Matt, that you have, whether it is across CPO or NVLink Fusion or just in your core optics business. And I also wanted to take the opportunity to ask were you as surprised as all of us when you saw Jensen pop up on stage?

Yes. Well, let's cover the partnership first. So yes, that's off to the races, and it's very strategic in nature. Certainly, we have existing -- and it's built on, by the way, years of the companies working together. This wasn't some new concept. I mean Jensen and I fired up the teams to work together. I mean this is -- I think it is even pre-COVID probably, if you go all the way back on just how do we sync up, how do we work together across a variety of their platforms, by the way. So this has been ongoing for some time in a collaborative way. We formalized it, which was great, and then we sort of wrote down some of the things we can do together. But most of it is very strategic in nature, right? It's about enabling us in custom silicon. It's enabling NVLink Switch and NVLink Fusion to be more broadly adopted. What a home run on the Celestial team joining us and joining forces with our own optics team, right? We had a team that did the 10 years of history of silicon photonics. Now we got Celestial in. That's very attractive because now that whole combined team can work with NVIDIA. We could drive standards that are interoperable. We can make all of our chips work together and all of our silicon photonics work together, huge customer benefit. We're even doing stuff on like 6G and AI RAN. I mean it's quite encompassing. So it's very strategic. It's really based on long-term kind of R&D alignment. So that's all positive. And then, yes, he was nice enough to support us. I did my first COMPUTEX presentation ever. Hadn't done that before. We got invited. I thought it was a great opportunity. I was honored to be able to have Marvell kind of be on that stage. So I said, yes, quite a while ago. And then we asked him to join us on stage, which he did and also Tien Wu from ASE, who is the largest back-end company in the world. And yes, I think he knows our story well. There wasn't a lot of prep. I mean, with his team a little bit. But yes, he came on and he did a great job. Actually, he rattled off my whole presentation in about 3 minutes, first of all. That was not -- he was not scripted. That was not a rehearsed thing. He just kind of knows what we're doing. And then, yes, he sort of dropped this very exciting comment about Marvell is the next trillion-dollar company, which was quite a surprise. You can watch the video. That was definitely not scripted.

What was your reaction and then you...

Watched the video. I'm like, I think, I said, we have a little work to do still. But he's a great guy and his team has been just outstanding to work with.

So your reaction was makes sense or...

No way. It's a long-term journey. I mean if you -- I would say, though, if you go back, I mean -- and again, like 10 years ago -- guys, 10 years ago, Marvell's market cap was $5 billion and its enterprise value was $3.5 billion. You could have bought the whole thing for $3.5 billion. It's a real number. Go look it up, $1.5 billion of cash, $5 billion market cap. That was the starting point. So what could you imagine? I didn't imagine it could go from $3.5 billion of EV to $270 billion today in 10 years. That's like 80x -- so I don't know. What can happen in this market? It's unbelievable actually. It's unbelievable what you can accomplish actually in an industry that's so unique and so vibrant like this. If you have the right strategy, you align yourselves with the right kind of group of people -- I mean, for us, we stayed very -- if you followed me or invested with me for a long time, we're very consistent. We're very methodical. We grind it out year in, year out, quarter after quarter. We're -- and my whole guiding principle from day 1, and I told the Board this in my first Board meeting on June 11, 2016, I said, my job at this company, #1 job towards everything else is capital allocation. And a few of them said, what's that? And I said, my job is to steer the R&D efforts of this company and make the best possible bets with the best possible returns and have a vision for where this company is going. And that's pretty soon after I became CEO, I outlined this thing. I said, look, I think the whole market cap of the world is going to move to these data platform companies. And that's where the semi TAM will follow. And we didn't have anything. We had $200 million of revenue in 2016 in data center. It's actually $190 million, 1-9-0. It's like $9 billion this year or something. But we didn't have anything. I don't have anything to work with. So that was the M&A and the divestitures and all those things. So my point is, what's possible? I don't know. I don't know what's possible with Marvell. But I do know that we're -- if the market continues and the AI infrastructure build continues, where we're sitting now, we couldn't be in a better spot relative to just how we're performing on the engineering side with our customers. I mean it used to take us 5, 6, 7 spins to get a chip out. I'm not kidding you. I had some chips to add one product line, took 14 spins to get a chip to production. 90% of our chips now that are 5-nanometer and below -- actually, no, I think it's almost 100% now, but A0 first-time success. So as long as we keep performing, and I think the products that we have for scale-out, scale-across, scale-up, custom silicon, switching, storage, I mean, all the key pillars we outlined 10 years ago, moving data, processing data, storing data, have those key IPs, bring it all together, that's still kind of the recipe that we're following. It's the same playbook from 10 years ago.

Makes sense. On -- you mentioned the transition from -- before I get to scale-out, I wanted to ask you about any constraints that you're seeing in the supply chain, right? Everyone seems to be tight and Marvell has gotten very big. There are still much larger players also. How are you ensuring, Matt, that you get your fair share of allocation from whether it's foundry or substrate or other parts?

Yes. Well, we definitely retooled the machine here about 5 years ago when we hit the pandemic, and we were kind of woefully prepared for that. I think -- the reason is, I think, Marvell had operated very tactically relative to supply chain and kind of reacted and they have 3, 4 sources for everything and kind of get cute, and it was like how do you save a penny. And I think that was born out of the business model back then. So I'm not -- it's not like a criticism, but that's how it was. And I think for consumer, that made sense. We started getting into all of these data center projects, and it was like this is not going to work. And so we retooled the supply chain. Chris Koopmans took over as our Chief Operating Officer. We got very, very strategic relative to these engagements that we formed in partnerships, including a very robust long-term forecasting process that we run as reviewed by me and the Board once a year. I push it out to my suppliers and then I show it to them. So I got to tell you, my supply chain for 2026, even though, again, there's a lot of concerns over the last few years of what's happening with Marvell, guess what, I told them what I needed. I forecasted $10 billion of growth to my suppliers back when I was $3 billion, $4 billion in revenue. I did. So I'm kind of getting what I told them, to be honest. And if you look at where we were last September, as we kind of started to reorient investors, back then, we were saying $9.4 billion for this year and $11 billion for next year, and then we went to $13 billion for next year, and then we went to $15 billion for next year, and now we're at $16.5 billion. We've been getting the performance out of our suppliers. It's very tight out there, like I mentioned, on not just logic wafers, but across the board. So it's a battle. But it's been a battle since the pandemic. This isn't like some new thing we're not used to. So we're pushing the supply chain hard, but we form these very deep relationships with our suppliers, and we do more with fewer. That's why Tien Wu. I mean, he's never been on stage at COMPUTEX before. He runs the biggest back-end company in the world. Super strategic, right? And he bet on me and Marvell like personally, like I think you guys are going to crush it. And look, they perform incredibly well for us. So we'll keep working on it, but the demand is not the problem right now. Supply needs to be -- continue to be worked and planned for. But I think we keep planning our business well. We can keep growing quite aggressively. And we have enough supply today to do everything we've told you guys. So the question is -- yes, so that's all in place. The question is, if CapEx bias is higher or some of these projects really take off, can we do more? And that's what I'm trying to prepare my suppliers for.

Got it. I think on the networking and the optics side, there is kind of broad recognition that Marvell has led important parts of that market, and it's a diversified business to your point. I think it's compute that I wanted to dig into a little bit that over the last 2 or 3 years, at least from the outside, it looked like the business went through a lot of volatility, right? The expectations got very high, right? Then even though from the inside, it might have been more predictable and kind of more according to a plan. If you look over the next 2 to 5 years, Matt, do you think that you're now at a place where you have visibility on not just the size of the opportunity but also your share in those opportunities? Because that is what has created, I think, angst in the last 2 years or so.

Yes, yes. And there was definitely some lessons learned, but just to kind of provide the kind of what really happened and set the record a little bit. So we basically had effectively a $0 custom silicon business in data center when we bought Avera, which was out of IBM, GlobalFoundries, IBM. We did a good job winning designs there. And along the way, we actually kept abreast investors up to speed. At one point, we had said for calendar '24 that we could do. $400 million in revenue, and we did that, and we exceeded it. And then we actually told everybody in April of '24 for calendar '25 that custom would be about $1 billion business. And I never updated that number. I just kept saying it's going to -- it will do better. And what I learned from that was that, yes, I think people's expectations ran away from what I had told everybody, which is I only told people $1 billion. And we beat it by 50%, by the way. I never said it was going to be $3 billion or $4 billion or $8 billion or whatever people. People put stuff in their model later, and they're like, well, I thought it was going to be this. I said, well, I didn't tell you that. I mean, guys, if you worked with me for 10 years, I kind of give you a sense of where it's going to go and like we're generally pretty close. You should do better actually. So -- and that's on us, too. Like I'm not blaming people. I'm saying that's what happened. And so the reset that I really did in September -- and I'm going to get to your question, but I just want to make sure people understand, what should have been a huge success story is you guys took this spin-out of IBM that hadn't -- was stuck on 14-nanometer at Global. And we moved them to TSMC, 5-nanometer, SerDes worked the first time, won a bunch of sockets and got to $1.5 billion in revenue in like a couple of years. So it was like an unbelievable success story. But it was sort of like, oh, you missed and you screwed up. And so that was all shame on everybody. So in September '24, I just said, look, at September of last year, I said, look, I'm just going to be very prescriptive now. I don't want anybody getting confused. I don't want this to happen again. I don't want my investors to go through this stress anymore. So we just been -- I've been very clear, hey, I think it's going to grow 20%. Why is it going to grow 20%? Can it be more? Shouldn't it be double? No, it's 20%. And then in the last quarter, I said, well, it will be more than 20%, but just a little bit more, like don't go crazy. And all the way, the reason I'm doing that, too, is I did said at the same time, you say, well, you're so conservative, Matt, you're always so conservative. Well, guess what, April of '24, we did our long-term model for the first time in custom silicon, and we put -- basically, we said it's a $40 billion market in 2028, and we think we can get 20% of it. That's an $8 billion hanging out there. My whole company was $1.1 billion a quarter when I said that. So say I'm conservative or not, we put a model out there. And then we said, CapEx is probably higher last year, so it's probably going to be more. So call it, $8 billion, $10 billion. So we're tracking to that. We're tracking to that. business is performing better than I said it would last year for this year. Next year now, we had -- last time I had said custom was going to double year-over-year. It's going to more than double. Again, don't go crazy, go crazy, but more than double. And part of the reason I'm doing this, too, Vivek, is I'm trying to guide everybody to the fact that we still continue to have conviction as we've had for the last 2 years in our model that gets us out into 2028. And now I think people are starting to realize, oh my gosh, I think these guys might hit these numbers. So we still got to go hit the numbers. We're not there. But it's really about just trying to -- especially on that piece of the business, just being much more kind of prescriptive so that we don't have a situation where expectations get too high. I'm really mindful of that. And the nature of those, by the way, they're very specific programs, and they're so confidential, like I can't talk about them. You guys want to talk. I can't talk about them. But the nice thing is it's very diverse now. There's like bunch of XPU sockets, a whole bunch of XPU attached sockets. By the time we get to 2028, there's enough shots on goal that even if one does better or one doesn't do better, like we're going to be okay, net-net. And -- but at the same time, we're extremely well positioned there. We have a great competitive platform at 5-nanometer, 3-nanometer, 2-nanometer. We'll be there when we get to the angstrom era. And every generation, by the way, on XPU and XPU attach, die size, die costs are going up because there's more density. Core counts are going up. I/O is getting more complex. ASPs are going up. Everything is going up and volume is going up. So at some point, I know these sound like big numbers to double or you going to triple it or something, but we're still relatively low share relative to the whole spend, too. One final thing, one investor say, I can't believe you're -- I don't know, is it $4 billion next year? It's so small. So tiny. Like why do you even care? I'm thinking, sir, this company was $2 billion in revenue. That would be a nice number. So we're good. Like just going to keep making progress against that and keep investing in the technology, do a good job for our customers, keep our mouth shut and just try to really do a good job delivering for you guys. So you have confidence in that base. But then let's let it ride on the connectivity, right? That's where I think there's a lot because that's the whole market. That's a market we can create, we can control. That's our engineers, like we can make the TAM happen there. The other one, it's our customer that's really got the control point. And we're their like Oz behind the curtain to make sure that they're successful and help them out and do their business model and let them get all the credit. It's their ship.

Final question, Matt, scale-out to scale-up, how does your scope of opportunity change? And when do you see CPO becoming like a real product with like the depth with which you describe numbers in compute. At what point do you think you'll be in a place to describe the journey of CPO? And do you see customer diversification? I'm just kind of wrapping all these questions.

Sure, yes, I'll do the final one. So scale-up is all in front of us. Like I said at the beginning, the scale-out and the build-out of the AI infrastructure has been led by scale-out, and that's what's in our numbers today. That's what's driving interconnect growing 70-plus this year, right, as an example. It's ripping. Ripping last year. This year, it will continue to do well next year. That's scale-out driven. So scale-up, a couple of things on that. First, from a switching standpoint, I literally -- on any number I've ever given anybody, there is $0 today ascribed to anything on switching. That's -- I mean -- and by the way, it's not like I'm not investing. I've got UAL projects, ESUN projects, PCIe with XConn and now -- and then an opportunity with NVIDIA, right, with them. So that's going to be a big investment focus for us. That's all in front of us, more to come there. But that's all new incremental TAM that's going to get created, right? That's coming. And then from an optics standpoint, I think people got it, but we called out actually for next year, $300 million in revenue from scale-up optics, scale-up optics. So that's CPO, that's NPO, that's our light engines. It's not just Celestial. Celestial was a company we acquired in December, which had a lead customer and that's like, say -- that's on track, so let's say half of it. But I mean, it's actually starting next year. And that's like beyond early stages. It's 0 this year. So you're going from 0 to $300 million with -- who knows where it could go. So I think we're at the very early stages on that. So the only number I've given you is $300 million.

Yes. Maybe just one other thing to consider on the switch side in particular, unlike scale-out switching, where we enter the market, but at that point, somebody is already well established and you're -- we've done well, right? We've taken it from 0 to $100 million, $300 million, $600 million this year, $1 billion plus. Scale-up switching is completely greenfield. It's fully available. We could be leading the market from day 1. That's a massive opportunity. That's a very big difference, something to keep in mind. And because we also do XPUs and we also do the interconnect and we do the switch, that's a massive advantage. The scale-up...

And that is the discussion. I'll just end on this. The discussion right now that we're deep into across the board is pick your scale-up switch. We have it. We're not making some holy war bet on this thing, by the way. I'm investing in all of it. I have the R&D capacity to do this now. I don't have to take that bet actually. So I got them all. I can absolutely prove and show how we can attach and integrate our optics there, whether that's CPO or an NPO-based solution. I can also do the same thing on the XPU or GPU, and I can provide that as a chiplet. And with our expertise, whether we make the XPU ourselves or we don't, we know how to integrate with that. And we know how to make the whole link work. We already do that. We know how to do this. So that whole discussion -- I mean, always in semiconductors, you talk about the platform and the solution and then a lot of times, people say they have the platform and then you just pick one piece. But this is one, guys, I'm telling you where I think certainly in this first wave to make all this hang together, it's really going to be powerful to have proven manufacturing and reliability and technology for the scale-up optics and have flexibility on the architecture, whether it's CPO or some version of MPO and all the subcomponents around it, have the platform teams to make it all work together, have the switching IP and technology and be able to deliver reticle-size chips with hundreds and hundreds of I/O at the bleeding edge and be able to control that I/O, so you can pack it all in and optimize it and then have the ability to do the attach on the XPU side or build the entire XPU and integrate the chip directly as CPO. So that -- I mean that's not in any revenue forecast today, that thing. And the optics alone are worth almost basically just assume whatever the switch ASP is, that's the content opportunity on the...

Optics side.

So it's potentially very large, and we have not sized it other than saying, hey, the initial scale-up optics only for next year, which is year 1, has gone from $150 million when we bought Celestial to $300 million in like 6 months.

Got it. We have 6 minutes over.

Yes, I know.

Thank you so much.

I'm running on fumes from Taiwan. I'm done. I'm out. All right. Thanks, everybody. Really appreciate it.