The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Samik Chatterjee - JPMorgan Chase & Co, Research Division - Analyst
: I guess to start off, maybe I can follow up on Alex's question here. How -- Seamus, as you move towards working with customers on the Ethernet
side, what are you finding relative to the competitive landscape? Just from the outside in, from our perspective, it looks like more companies are
in the manufacturing supply chain in relation to Ethernet. But can you share your thoughts about what you're seeing from a competitive aspect?
And what's sort of the differentiation that you bring there into that ecosystem? And I have a follow-up.
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NOVEMBER 06, 2023 / 10:00PM, FN.N - Q1 2024 Fabrinet Earnings Call
Question: Samik Chatterjee - JPMorgan Chase & Co, Research Division - Analyst
: Okay. Got it. If I can just ask as a follow-up on the guidance. Going from 4Q to 1Q, you had a sequential increase of about [$13 million] or so in
revenue with datacom easily -- the increase in datacom easily offsetting the telecom decline. As you look forward, I mean, you're carrying forward
the same theme where datacom does offset telecom. But the magnitude of it seems to be much lower just given the $5 million sequential increase
at the midpoint that you're guiding to. So maybe if you can help us with the puts and takes there. Is telecom declining more than sort of what
we've seen from 4Q to 1Q? Or is it the datacom in ramp is moderating, just given that you are maybe reaching more capacity with the customers
that you're engaged with?
Question: Samik Chatterjee - JPMorgan Chase & Co, Research Division - Analyst
: I'll be quick, I promise. Just Csaba, any color on -- I know you mentioned the gross margin moderated sequentially because of the merit increases.
But as you embed that now into the cost structure, puts and takes of how to think about gross margin going forward. And then Seamus, either for
you or Csaba, like with the automotive revenue declining and you said it will decline modestly, is that more of a temporary production-led headwind?
Or is this a falloff of the legacy programs while growth is sort of [continuing] on the new programs? Any clarification on those 2 items?
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