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: David Vogt - UBS Investment Bank, Research Division - Analyst
: And just two for me. One, Alan, going back to the inventory question, I guess, can you kind of help us understand, you made a
comment that you think you're undershipping to industry demand, where that demand might be today? And how you see that
demand sort of progressing as we move through this sort of more challenging period of time in '23 into '24? That kind of colors your
view about recovering back to growth in calendar '24.
And then maybe a longer-term question, I'll just give you both at the same time. When you think about mix of the business today,
obviously, Consumer and Industrial is a lot smaller than it was last year. And presumably, that's a relatively strong gross margin
business. How should we think about the operating leverage as growth recovers in Telecom and Datacom in calendar '24 from a
margin perspective? Obviously, it's unlikely that you're going to get back to the high 40s gross margin, but I want to get a better
sense for maybe gross margin trajectory as we move through the balance of this -- the next 4 quarters into maybe fiscal '25.
Question: Samik Chatterjee - JPMorgan Chase & Co, Research Division - Analyst
: I guess from -- first one, if I can just ask you to delve a bit more into the AI-related demand that you're seeing? How much of that are
you seeing in terms of interest on the VCSEL side versus EML? And when you think about also the customer set there, how much of
the engagement is hyperscalers versus other newer sort of companies coming into the ecosystem? Any thoughts in terms of what
you expect that demand to look like in a couple of years would be useful. And I have a follow-up.
Question: Samik Chatterjee - JPMorgan Chase & Co, Research Division - Analyst
: Got it. Got it. And for my follow-up, just rotating back to the results and the guide for the fiscal first quarter. I think with 3D sensing
in the past, you've obviously had a certain seasonality to the business through a year. Any thoughts of how you're thinking about
seasonality this year? Should investors expect, sort of as you get to beyond 1Q, to see sort of sustained sequential growth in the
business? Or given some of your comments about the sort of calendar year being inventory digestion impacted, it's really more of
a step-up into the second half of the fiscal year?
And I think what I'm trying to get to is we all understand the earnings power of the business at this run rate is depressed because of
the lower demand or the inventory digestion. But in terms of revenue increasing, your OpEx savings coming through, what do you
see as the normalized run rate for the business where you want to exit the year?
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