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spk03: Greetings and welcome to the Max Linear Incorporated 4th Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Nicholas Aberle, Vice President, Finance and Investor Relations. Thank you, Nicholas. You may begin.
spk00: Thank you, Operator. Good afternoon, everyone, and thank you for joining us on today's conference call to discuss MaxLinear's fourth quarter 2021 financial results. Today's call is being hosted by Dr. Kishore Sindhripu, CEO, and Steve Litchfield, Chief Financial Officer and Chief Corporate Strategy Officer. After our prepared comments, we will take questions. Our comments today include forward-looking statements within the meaning of applicable securities laws, including statements relating to our guidance for first quarter 2022 revenue, revenue growth expectations in our principal target markets, GAAP and non-GAAP gross margin, GAAP and non-GAAP operating expenses, effective tax rate and interest and other expense. In addition, we will make forward-looking statements relating to trends, opportunities, and uncertainties in various product and geographic markets, including without limitation, statements concerning opportunities arising from our broadband, wireless, infrastructure, and connectivity markets, and opportunities for improved revenues across our target markets. These forward-looking statements involve substantial risks and uncertainties, including risks arising from competition, supply constraints facing the semiconductor industry, global trade and export restrictions, the impact of the COVID-19 pandemic our dependence on the limited number of customers, average selling price trends, and risks that our markets and growth opportunities may not develop as we currently expect, and then our assumptions concerning these opportunities may prove incorrect. More information on these and other risks are outlined in the risk factors section of our recent SEC filings, including our Form 10-K for the year ended December 31st, 2021, which was filed today. Any forward-looking statements are made as of today, and MaxLinear has no obligation to update or revise any forward-looking statements. The fourth quarter 2021 earnings release is available in the investor relations section of our website at maxlinear.com. In addition, we report certain historical financial metrics, including net revenues, gross margins, operating expenses, income or loss from operations, interest and other expense, income taxes, net income or loss, and net income or loss per share on both a GAAP and non-GAAP basis. We encourage investors to review the detailed reconciliation of our GAAP and non-GAAP presentations in the press release available on our website. We do not provide a reconciliation of non-GAAP guidance for future periods because of the inherent uncertainty associated with our ability to project certain future charges. including stock-based compensation and its associated tax effects. Non-GAAP financial measures discussed today do not replace the presentation of MaxLinear's GAAP financial results. We are providing this information to enable investors to perform more meaningful comparisons of our operating results in a manner similar to management's analysis of our business. Lastly, this call is also being webcast, and a replay will be available on our website for two weeks. And now let me turn the call over to Kishore Sindhripu, CEO of MaxLinear.
spk09: Thank you, Nick, and good afternoon, everyone. Our Q4 revenue was $247.9 million, up 8% sequentially and 27% year-on-year, with strong contributions from our connectivity and infrastructure in markets. Most notably, Wi-Fi and Ethernet product categories had breakout performances and grew in excess of 40% quarter-on-quarter. We exited Q4 on $100 million annualized Wi-Fi revenue run rate and expect to build upon this momentum throughout 2022. In infrastructure, 5G network build-outs are driving relative strength in 5G wireless access RF transceiver ramps, along with strong demand for wireless backhaul modems and RF transceivers. Our growth in Q4 and 2021 was driven by strong secular growth and company-specific drivers, including silicon content increases, market share gains, and solid traction with our new products across all our end markets. This momentum gives us strong confidence in our ability to drive solid growth into 2022. In Q4 2021, non-GAAP gross margin was 61.7%, and our non-GAAP operating margin hit a five-year high of 31%. Our Q4 end market revenue consisted of broadband access at 52 percent, connectivity at 21 percent, infrastructure at 13 percent, and industrial multi-markets at 14 percent of overall revenues. Now turning to some of the Q4 business highlights. End market fundamentals within broadband and connectivity space show robust growth trends as carrier and cable operators increase their capital expenses to expand network infrastructure and home CPE equipment capabilities to support the proliferation of bandwidth-intensive consumer applications and services. Operators and carriers are in the early stages of a multiyear network upgrade cycle, which is validated by their recent earnings commentaries on capital expense increases. We also expect the U.S. federal government's initiatives, such as the Rural Digital Opportunity Fund, to stimulate additional demand for delivering fixed broadband services to millions of underserved homes. We are well positioned to grow solidly and to outperform broadband connectivity market growth rates through share gains, content increases, and new product ramps. Our industry-leading suite of platform-level solutions, including our URX family of gateway SOCs and network processors for supporting 10 gigabits per second WAN access via Ethernet, PON, or coaxial cable, and our Wi-Fi 6, 6E, and next-generation Wi-Fi 7 in-home wireless distribution products. Recently, our latest Wi-Fi Wave 600 Series 2 chipset was selected by the Wi-Fi Alliance as its access point testbed device for its Wi-Fi 6 Release 2 certification. In 2022, we expect early-stage fiber RAMs of new and existing design means to more than double our share in the large fiber-to-the-home market, where we are historically underpenetrated. Additionally, we have several Wi-Fi 6 design wins outside our core operator gateways, which will drive solid connectivity growth in the second half of 2022. Moving to infrastructure markets, in 2021, our revenues exceeded $120 million. In 5G wireless access, Q4 marks the fourth consecutive quarter of 20% plus revenue growth, which is primarily driven by 5G RF transceiver shipments to North America. Also, in wireless backhaul, 5G network buildouts are driving strong circular growth trailwinds for our microwave and millimeter wave backhaul transport RF transceivers and modem deployments. Our microwave RF transceivers are the industry's only integrated backhaul solutions to support multi-gigabit links using channel aggregation, and they are rapidly replacing legacy discrete RF solutions. Microwave RF transceiver revenues doubled in 2021 on a year-on-year basis, and we expect them to double again in 2022. In the optical high-speed data center interconnect market, we shipped modest volumes during Q4, with a more meaningful future ramp dependent on the availability of peripheral components to build full system solutions. Given the lack of visibility on supply in the near to be term, we expect subdued contributions from our 400 gig PAM4 DSP products in the first half of 2022. Despite the continuing delays to our optical ramp, we have high confidence in our long-term success as the 400 gigabits per second PAM4 market is still in its infancy. Meanwhile, we have new customers designing in our 60 nanometer 400 gig PAM4 solution in parallel with our next generation 5 nanometer CMOS solution. In the optical data center market, in 2021, we have expanded our portfolio to include TIAs, retimers, and support for active electrical cables. We are also bullish on our position in the 800-gig PAM-4 DSPCs with our industry-leading first 5-nanometer CMOS Keystone product family. In summary, our company's specific growth drivers, which include market share gains, new markets, and product cycles, and increased silicon content per platform are feuding growth in our target markets. These company-specific growth catalysts are prevalent across both new and existing customers and all our end markets. Our continued focus on developing new and disruptive technologies across our high-valued end markets should enable us to outperform semiconductor industry growth rates over the long term also. With that, let me turn the call over to Mr. Steve Litchfield, our Chief Financial Officer and Chief Corporate Strategy Officer.
spk04: Thanks, Kishore. I will first review our Q4 2021 results and then further discuss our outlook for Q1 2022. Total revenue for the fourth quarter was $247.9 million, up 8% versus Q3 and up 27% year over year. Broadband revenue in Q4 was in line with our outlook at $129 million, up 3% versus Q3, and 14% higher year over year, driven by solid demand across our full portfolio of gateway solutions, including cable, fiber, hybrid DSL, and fixed wireless access. Our connectivity in market had a breakthrough quarter in Q3 with a revenue of $53 million, which was up 39%, quarter over quarter, and 53% year over year, driven mostly by strength in Wi-Fi and Ethernet. Our infrastructure and market had a solid Q4 with revenue of $32 million, up 10% versus the prior quarter, and up nearly 80% year over year, largely driven by strength in 5G wireless access and wireless backhaul. Lastly, our industrial and multi-market revenue declined 7% to $34 million in Q4, but increased by 16% year-over-year, coming off a robust performance in the prior period. GAAP and non-GAAP gross margins for the fourth quarter were approximately 57.2% and 61.7% of revenue. Non-GAAP gross margin was up 40 basis points versus the previous quarter, driven by product mix and continued operational efficiencies. The delta between GAAP and non-GAAP gross margins in the fourth quarter was primarily driven by $10.8 million of acquisition-related intangible asset amortization. Fourth quarter GAAP operating expenses were $112.4 million, up sequentially and above the high end of our $105 to $109 million guidance range due to higher than expected stock-based compensation and performance-based equity accruals driven by strong fundamentals and stock performance during FY21. GAAP operating expenses included stock-based compensation and performance-based equity accruals of $28.4 million combined, amortization of purchased intangible assets of $5.9 million, and excluded $2 million of R&D costs funded by outside parties. Non-GAAP operating expenses were $75.9 million, up $1.4 million versus Q3, and we're slightly above the midpoint of guidance range of 73 to 77 million. Non-GAAP operating margin for Q4 2021 of 31% was up 210 basis points sequentially and reached the highest level since Q2 of FY16 when operating income was less than half of today's levels. Looking into FY22, we believe we can continue to drive strong operating leverage and operating margins above our Q4 exit levels. Gap interest and other expense during the quarter was $0.9 million, and non-gap interest and other expense was $2.8 million, which excluded a $1.9 million non-recurring gain related to the sale of a legacy asset. Cash flow generated from operating activities in the fourth quarter of 2021 was $16 million. In total for 2021, we generated $168.2 million of operating cash flow. During Q4, we made a $20 million prepayment against our long-term debt position, and we have since made an additional $20 million debt prepayment during the month of January. Within the quarter, we also purchased $15.4 million worth of stock and continue to be active with our buyback program and would expect to see similar levels spent during Q1. We expected Q4 of 2021 with $132 million in cash, cash equivalents, and restricted cash. Our day sales outstanding for the fourth quarter was approximately 44 days, up slightly from Q3 levels due to shipment linearity. Our inventory turns were 3.3 times, down slightly from the previous quarter. With that, let's turn to our guidance for Q1 2022. We currently expect revenue in the first quarter of 2022 to be approximately $255 million to $265 million, up approximately 5% at the midpoint of the range versus the previous quarter, and up approximately 24% versus the prior year. While we continue to expect supply chain tightness to continue throughout FY22, we are expecting to see incremental improvements to better support the success of our customers. Looking at Q1 buy-in market, we expect broadband revenue to be up quarter over quarter, driven by growth in gateway SOC for both cable and fiber applications. Connectivity is expected to be up versus Q4, driven by continued strength in our Wi-Fi end market. We expect infrastructure revenue to be up in Q1 as wireless backhaul and 5G wireless access shipments continue to ramp. Lastly, we expect our industrial multi-market revenue to be flat quarter over quarter. We expect first quarter GAAP gross profit margin to be approximately 57 to 59% and non-GAAP gross profit margin to be between 61 and 63% of revenue. As a reminder, our gross profit margin percentage forecast can vary within a quarter depending on product mix and other factors. We expect Q1 2022 GAAP operating expenses to be up quarter on quarter to a range of $108 million to $114 million. We expect Q1 2022 non-GAAP operating expenses to be above Q4 levels within a range of $76 million to $82 million. We expect our GAAP tax rate to be in the range of 15 to 20 percent and our non-GAAP tax rate of 6 percent. We expect GAAP and non-GAAP interest and other expense to be roughly $2.7 million. In closing, we delivered a strong fundamental performance in FY21 and made significant progress towards our long-term ambition of delivering sustainable and profitable growth at a pace faster than our semiconductor peer group. We continue to target and invest aggressively in key markets with the goal of expanding our total addressable market by delivering innovative new products, while also increasing our market share position by winning new designs and expanding our silicon content per platform. Furthermore, our end markets are poised to grow strongly over the long term, driven by proliferation of global networking and ever increasing consumer dependency on reliable and robust connectivity. Finally, We remain steadfast in our goal of garnering significant value for our innovative and differentiated technology portfolio. Looking into FY22, we anticipate continued revenue expansion and operating leverage to drive margin accretion and ultimately create value for shareholders. With that, I'd like to open up the call for questions. Operator?
spk03: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Thank you. Our first question comes from Tori Svonberg with Stifel. Please proceed with your question.
spk07: Thank you and congratulations on the strong results. First question for you, Kishore. Kishore, when you were talking about Wi-Fi, you talked about some design winds ramping second half of the year, perhaps outside of your traditional sort of cable markets. Could you just elaborate a little bit on that? And is this really the result of trying to diversify that business beyond traditional cable?
spk09: Hi, Tori. Thank you. And Yes, I think you read that absolutely right. You know, we have one of the most valuable assets in Wi-Fi technology across the world. And it would be really in our interest to expand and address the entire market that's available for Wi-Fi. And so we have been trying to penetrate markets outside of the operator platforms. And we have had very, very good success, and we're gathering momentum on that. And these are on target to start shipping in the second half of 2022. And outside of the supply constraints we're facing, we would be able to even ship a lot more product than we are actually sort of trending in a positive direction or commentary here. So one of the things I do want to mention is that a Wi-Fi 6E and 6, are the premium access point solutions. And you must have seen the most recent announcement of the Wi-Fi Alliance. We have one of the three platforms to be selected as a testbed. So that really lends a lot of credibility and with the proliferation of our gateways to our interoperability in other platforms is also very strong. So we're very pleased with the way our connectivity portfolio is evolving.
spk07: Great. Thank you for that. And as my follow up for you, Steve, Steve, last quarter, I know you entered the quarter with a pretty strong backlog position. Could you just talk a little bit about how the visibility is now going into the March quarter, please?
spk04: Yeah, sure, Tori. Absolutely. I mean, actually, we're very excited about the bookings. I mean, they have continued to be very strong backlog. We've got solid through, you know, kind of the beginning of 2023. And so we've never been positioned better with regard to visibility on the backlog. Great. Thank you, guys, and congrats again. Great. Thanks, George.
spk03: Thank you. Our next question is from Quinn Bolton with Needham & Company. Please proceed with your question.
spk06: Hey, guys. Congratulations on the nice results. I guess the first question, Wi-Fi, you guys talked about hitting the $25 million level in Q4, $100 million annualized. It sounds like Wi-Fi should grow sequentially in March. And I know you're not giving guidance, but you talked about these additional sort of non-carrier platforms beginning to ramp in the second half, which sounds like there's additional growth that layers on. And so I guess I'm just sort of thinking about Wi-Fi for the year. It feels like you're on pace to do well north of 100 million. Am I kind of reading the two leaves right on that?
spk04: So, yeah, Quinn, absolutely. So we are excited. We've seen a lot of good traction. We've You know, we've talked a lot about that attach rate. We're still, I would say, you know, we're not yet closer to that 100% point on the attach rate. So there's still a lot of upside coming from that. We've got our fiber platforms that are just beginning to ramp. So we'll see a lot of growth from that this year and the third party that we mentioned earlier. So all that combined, yeah, it does feel, you know, kind of. feel very good going into the year that we'll be north of 100. And then I think we're already starting to look out into 2023. And I think you can see the potential of being up north of 200 in 2023. Great.
spk06: And a second question, just I know I've gotten this question from investors, you know, kind of across the semiconductor industry. So looking to 2022, how much of your growth in 22 do you think comes from your ability to pass along higher input costs in the form of higher ASPs versus how much of the growth is coming from units?
spk09: So, Quinn, that's a very complicated question to answer, right? So, obviously, it's a very, very competitive landscape we are in, and supply is a very important element of it. So we try to be strategic about how much of that cost increases we're incurring we can pass versus not. But ultimately, that's not a sustainable strategy for growth, right? The growth is going to come through market share expansion, new markets, new product cycles, and content increases, right? And for us, the focus has been about connectivity, connectivity, connectivity, infrastructure growth, and new markets in broadband. And fiber is a huge area of focus for us, and we're having very good success as we speak here. So I think that ultimately when you talk about Revenue increases, ASP expansions, our strength comes from our product offering and the value we create. More importantly, the question that really is buried underneath is what happens after capacity is restored and you're not seeing supplier costs, right? As a company, we've always had a very, very long-term strategic view. We were up front of the shortages, at least in the beginning of the shortages, where we have deployed engineering resources heavily, actually. We're spending a lot of money. in trying to find robust, long-term, sustainable supplier relationships through diversifying our production base. And I think ultimately that drives cost excellence and sustainable profitability as well. So I think the improvements you're seeing on our side is very naked and very clear in the product portfolio. And I think because we have an exciting transformation that's happened in the last two, three years, and you're seeing the benefit of that. Are we passing some costs through? Of course. We have to, and so are our customers doing the same. It's part of life, right? So, yes, I hope I addressed your question comprehensively.
spk06: Yeah, I understand the strategy. Last quick one for Steve. It looks like you bought back $15 million of stock in the December quarter, looking for something similar again in March. Are you guys sort of thinking now that buybacks are going to become more of a, you know, steady shareholder return program, or are you just being opportunistic here?
spk04: Well, so, I mean, the board kind of approved this, you know, back last March, and I think we've been active in the market over the last couple of quarters. So things have picked up there. I think as far as returning cash to shareholders, I mean, we'll continue to pay down debt. We'll continue to buy back the stock just to offset the dilution and And then ultimately, we remain very interested in doing more acquisitions on a go-forward basis. Thank you.
spk03: Thank you. Our next question comes from David Williams with The Benchmark Company. Please proceed with your question.
spk01: Hey, good afternoon. Thanks for letting me ask your question. First, it sounds like the 5G build-outs or maybe that the 5G wireless is beginning to kind of break loose. Can you talk maybe about the puts and takes there and how this business ramps as you see over the next maybe three to four quarters?
spk04: Yeah, David, I mean, I'll start. Yeah, I mean, we're very excited. We've seen a lot of really good progress. Saw a nice pickup in Q4 from our 5G wireless access. Expect that to follow through this year. These 5G markets are slowly evolving, so they've probably taken a little bit longer, but we're seeing really good progress at this point. I think we've got some of the earlier dynamics around China are behind us at this point, and so we're starting to see some good traction. We've got the 4x4 ramping, 8x8 coming. as far as contributing to revenues on a go-forward basis. And then our DPD solutions are something else that are also contributing as well.
spk01: And I see maybe just from on the gross margin, what leverage do you have that are still available to you? Obviously pricing is helping a bit, but I guess how sustainable are the margins and how do you think about the cadence of that progression as we head through this year? Is this sustainable at these levels, or will there be some maybe giveback as we start thinking about pricing, kind of giving back as the supply chain normalizes a bit?
spk04: Yeah, so, David, I mean, so we've talked a lot about this. I mean, going back over a year or so ago, I mean, we've been working diligently to get our costs down and really move these gross margins up. I mean, a big contributor here is just the product mix. So we've got a big growth driver coming from infrastructure and a couple of other products that are contributing, pushing those margins up. And then, of course, always working for operational efficiencies. Kishore mentioned a little bit earlier about getting new qualifications, new vendors up and running. So we've got to keep doing that. I think that continues to pay rewards out the rest of this year and next year. and as we continue to work towards that kind of mid-60% number, which we think is our long-term goal.
spk01: Great. Thanks again. Appreciate the time.
spk04: Sure, David.
spk03: Thank you. Our next question comes from Ananda Baruch with Loop Capital. Please proceed with your question.
spk08: Hey, guys. Good afternoon. Congrats on the strong execution, the strong results. Thanks for taking the question. A couple, if I could. Any way to just Give us some context around of your various businesses, you know, which ones you think will be the key to contributing to the revenue growth this year, the most significant to contributing to the revenue growth this year. Sounds like Wi-Fi for sure. But what would be some of the key other ones?
spk04: Yeah, yeah, sure, Ananda. It's good to talk to you. Absolutely. I mean, the connectivity really saw a nice breakout performance last quarter, so that's going to be a big driver as Wi-Fi continues to grow. I mean, from a dollar standpoint, that's probably a big one. Ethernet is something else that's really contributed nice. I mean, for that matter, our MoCA, our G.HN are all growing right now and expect to grow this year and next year. Broadband's doing extremely well. Infrastructure's doing extremely well. So it's really good to see the contributions, some of the investments that we've made over the years starting to pay off on the infrastructure front. And then industrial multi-market, I mean, it's kind of even on that front, I mean, I'd say that we can see kind of mid-single-digit growth rates this year. So I think all of our end markets are doing very well, and some of these investments are starting to really pay off.
spk08: Yeah, that's awesome to hear. And just a quick follow-up, any context, new context to share on the 800G 5-nanometer conversations that you guys have going on at EF Silicon that maybe all of the all of the big US guys right now. And that's it for me. Thanks.
spk09: So let me take the question. So the H energy, you know, you know, we sampled our chip almost a year ago, the the five nanometer Keystone product family, we are the first five nanometer solution for the data centers in the in the in what they consider the next next transformative place for data bandwidth per per per lane, right? which is 100 gigabit per lane. And these designs, different data center guys are working on a different cadence. And so that's going to evolve over the next two to three years. So we are getting designed into these modules, working with the data center folks. So I don't think it delivers revenue for, it's like we have to capture a place for the future of the roadmap. Reverting back to where we started this journey in the optical data center, we we tried to leapfrog what was a ramping market in 200 gig and move to 400 gigabit market. And being new to the market, even though we were the first ones to get there, we have had challenges getting, you know, our share of the market early on owing to, you know, income and strength in the data center places. And then even as we're getting qualified, we went into supply chain constraints that have become as, you know, in my script we talked about dependence in a full kit solution that has subdued the ramp. However, if you look at the breadth of the product portfolio in the meantime has really expanded to include TIAs, which we have always had. Now we expanded to doing some kind of retimers, supporting active electrical cables and so on to expand the addressable market. So we're really feeling very, very bullish about the long-term prospects of our data center initiatives. you know, just like in 5G wireless, right? It seems that these infrastructure markets take a little longer than we would all like, but we are feeling very excited about where we are.
spk08: Yeah, that's great context. Thanks, Kishore.
spk09: Appreciate it.
spk08: Thanks, Ananda.
spk03: Thank you. As a reminder, if you would like to ask a question, please press star 1 on your telephone keypad. The confirmation tone will indicate your line is in the question queue. Our next question comes from Christopher Roland with Susquehanna. Please proceed with your question.
spk02: Hey, guys. Thanks for the question. I wanted to dig in a little bit more on the supply chain commentary and the constraints that you guys had there. It sounded like there were some companion components for PAM-4 that might have been constrained. Maybe talk about that and how those may come loose, but also where you're seeing some other constraints as well.
spk04: Yeah, Chris. So on the optical side, yeah, I guess I would say in this case, our customers are seeing those constraints, and so it's other components in their system that is limiting them. You know, kind of broader than that, I mean, we definitely see other situations, as many have seen throughout the industry. We're seeing where peers aren't able to deliver, you know, whether it's analog components or, I mean, there's a variety of shortages out there on the competitive landscape. From a supply standpoint side, so still we're, you know, we expect to still be constrained on the wafer side. Substrates are still very challenging out there, and we're working diligently to get other vendors up and other packaging uh completed in order to get more product out and i think we've been really effective of that i mean we've continued to see really nice increases over the last you know probably nine months uh much higher than what those original expectations our engineering and our operations team have done a fabulous job so we've got to keep doing that and uh but i think things are going to continue to to show improvement throughout this year so having said that we still have
spk09: gaps between what our customers need and want versus what we're able to supply. And, you know, while we get slow relief, we don't think we catch up to the full scale demand, whether it's connectivity or infrastructure, which are two big growth factors for us. And, you know, in terms of, you know, what we can really do based on our design wins and content increase versus what the reality on the ground is. So I think this is going to be a battle through 2022. But we feel very good that compared to 2021, we as a company will grow pretty substantively.
spk02: Thanks, Kishore. And then my second question is around both the Wi-Fi and the Ethernet opportunities here. So I think, Steve, you said that the attach rate for Wi-Fi wasn't quite 100%. I don't know if you wanted to hazard a guess for us on what that might be. Also, the Ethernet attach here as well. And then just overall, you know, coming off a 40% year, would you like to throw out maybe an expected growth range for that product for 22 as well? Thanks.
spk04: So, yeah, Chris, I mean, look, I do think it's still early days. I mean, maybe we're getting about, you know, probably just above half, of the socs that we're shipping are shipping with our our wi-fi products so i think we definitely got some more upside there uh frankly really excited about you know the fiber pawn opportunity right and and we have just as much attached there i mean we talked about fiber and pawn being less than 10 million dollars of our revenue last year so now going into this year you're talking tens of millions of dollars coming from fiber and pawn and i do think it's pretty pretty early days on that front. And so that's exciting. And then earlier we talked about Wi-Fi even starting to ship on a standalone basis as well. So that'll start to contribute more in the second half of this year and into 23, of course. So yeah, I mean, really excited. We've seen that business double and hoping to see another doubling in 2023. So exciting times on the Wi-Fi front. And I think you'll hear more about our Ethernet solutions as well, because Ethernet, while it's an attached product, we have a lot of opportunities with 2.5 and 5 gig going beyond those existing gateways that we're shipping into. Thanks, Steve. Thanks.
spk03: Thank you. Our next question comes from Richard Shannon with Craig Hallam. Please proceed with your question.
spk05: Well, thanks, guys, for taking my questions. Maybe the first one here on Wi-Fi, a follow-up from the prepared comments about Wi-Fi outside of your base markets here. Keisha, maybe you can discuss a little bit about kind of the approach to the markets, how you're winning here. Is this more of just kind of a socket-by-socket win, or do you have to deal with kind of bundling aspects as you go through that? Maybe you can discuss also the markets and the TAM opportunity there, and then how much of your overall Wi-Fi growth you're expecting from these new markets this year would be great. Thank you.
spk09: That's a load of questions there. So let me try to just keep it simple in terms of markets. You all know it's a big market. We're not clearly focused on handset markets, right? We will never be, is my thesis, right? But today, what do we have? We have one of the premier access point solutions in the latest generation. In fact, even in Wi-Fi 6, we have a solution that is double the bandwidth of anybody else's Wi-Fi 6 because it was designed to support access points. So, and it turns out that, you know, so we're one of the only solutions that can do that with the Wi-Fi 6 product. So we are winning them socket by socket. And why do I say that? Because outside of the operator, we don't have the benefit of the bundling of solutions, right? Operator gateways. And so performance matters and, you know, performance, performance, performance. So we have the performance for the category of products we are now sort of, you know, winning in the marketplace. And one of the missing pieces in our portfolio right now is for these markets, a processor family, which is when you can talk about bundling opportunities, right? And however we sell our Wi-Fi, we also have a unique product with a 2.5 gigabit Ethernet 5, And we also have a core Ethernet 5 that supports 10 gigabit, right? So that's very, very, really, really a valuable portfolio to have for routers. So the primary victories are in the router side, and that's a huge opportunity for us, in front of us. And longer term, I think I've hinted about having a bigger portfolio play with processors and so on, but that's going to take a little bit of while to develop. And looking forward, there's a next generation Wi-Fi 7, We should have a very, very competitive product that brings in all the technologies to bear in an integrated platform, and I think there also will be winning quite substantially.
spk05: Okay. We'll look forward to hearing more about that rest of the year. I guess my follow-on question or second question is on the fiber market here. You talked about kind of a flagship win here and want to get the update on the status there and then any follow-on opportunities and Maybe if you want to characterize the comments you made today and in the past, I think about kind of tens of millions of dollars of fiber pond-related revenues. If anybody can help us think through that a little bit more, that would be great. Thanks.
spk04: Yeah. So, look, with regard to fiber and pond, I mean, that business is really just beginning to ramp. It is still pretty early days. But that being said, we've shipped into some of these customers over the years just in smaller volumes. Starting to ramp this year, so we've got several customers already ramping in the first half of the year. We talked about a large North America carrier that will start to ramp this year as well. That's, you know, on track and very excited to see that grow. I think, frankly, Richard, I mean, this is kind of early days. We have a lot. You're seeing and hearing a lot more about these carriers rolling out more fiber around the world, moving to 10 gigs. That's exciting for us because these are all new platforms that we're winning. We're winning with similar content as we had in cable. We were seeing cable content up in the $30 range. Now you've also got a similar level or a similar opportunity with the Fiber and Pond guys as well to get that $30 plus of content. We can get all of those chips in those same gateway opportunities. Early days, I've said several times that we see this as hundreds of millions of dollars over the next few years, and I would reiterate that. Okay, great. Thank you, guys. Thanks, Richard.
spk03: Thank you. There are no further questions at this time. I would like to turn the floor back over to Kishore Sindhrupu for any closing comments.
spk09: Thank you, Operator. We reported speeding at the following upcoming conferences during Q1. the Susquehanna 11th Annual Technology Conference on March 3rd, and the 34th Annual Roth Conference on March 13th. With that being said, we thank you all for joining us today, and we look forward to reporting on our progress to you next quarter.
spk03: This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.
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