MaxLinear, Inc

Hello, and welcome to the Max Linear, Inc. First Quarter 2022 Earnings Conference Call and Webcast. At this time, all participants are in listen-only mode. Question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Nick Averly. Please go ahead.

Nick Averly Okay. Thank you, operator. Good afternoon, everyone, and thank you for joining us on today's conference call to discuss Max Linear's first quarter 2022 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 remarks, we will take questions. Our comments today include board-looking statements within the meaning of applicable securities laws, including statements relating to our guidance for the second quarter 2022 revenue, revenue growth expectations in our principal target markets, gap and non-gap gross margin, operating expenses, effective tax rates, and interest and other expenses. In addition, we will make forward-looking statements relating to trends, opportunities, and uncertainties in various product and geographic markets, including, and without limitation, statements concerning opportunities arising from our broadband, wireless infrastructure, and connectivity markets, opportunities for improved revenue 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 a limited number of customers, average selling price trends, and risks that our markets and growth opportunities may not develop as we currently expect, and that our assumptions concerning these opportunities may prove incorrect. More information on these and other risks is outlined in our risk factors section in our recent SEC filings, including on our Form 10-Q for the quarter ended March 31, 2022, 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 first quarter 2022 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 from operations, interest and other expense, income taxes, net income, and net income 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 Maxillanier'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 with that, let me turn the call over to Kishore Sindhripu, CEO of Maxlink.

Thank you, Nick, and good afternoon, everyone. Our Q1 revenue was $263.9 million, up 6% sequentially and 26% year-on-year. while gross margin was 62.8% and non-GAAP operating margins expanded to 33.5%. During Q1, we saw accelerating growth in our Wi-Fi connectivity, fiber broadband access, and 5G wireless infrastructure end markets. These end markets continue to be the most significant growth drivers for the company, where our new products have solid traction and are gaining multi-year business opportunities. We are seeing tailwinds to our growth driven by the increasing infrastructure capital expense spend. Specifically, telco carriers are upgrading to support multi-gigabit fiber, porn, broadband, home access, and expanding 5G network build-outs. Our gathering business strength is born of product development success, content increases in customer platforms, as well as the strategic expansion of our portfolio into adjacent technologies and markets. Turning to the business highlights, in broadband and connectivity, Wi-Fi 6 and fiber gateways are the two most significant drivers of growth for the company, and we expect continued revenue expansion over the next several years. Most notably, in Q1, Wi-Fi had another breakout performance, growing 37% quarter on quarter and nearly tripling year on year. We are benefiting with the transition to Wi-Fi 6 and Wi-Fi 6E, increased market share, higher attach rates, and higher average selling prices. Furthermore, the Wi-Fi market itself continues to demonstrate strong growth as consumers demand speed and reliability within the connected home to support voice, video, gaming, and internet in parallel. Looking into Q2, we expect to diversify and expand our Wi-Fi revenues beyond operator-driven broadband gateway markets as we begin ramping into third-party standalone routers. The standalone Wi-Fi router addressable market opportunity exceeds 100 million units annually. Based on these trends and our strong product traction, we confidently expect to more than double our Wi-Fi product revenues in 2022 and are firmly on a trajectory to deliver at least $200 million of revenue in Wi-Fi in 2023. Lastly, our soon-to-be-launched innovative next-generation Wi-Fi 7 standards-compliant product will be a strong positive catalyst for increased average selling prices, future share grains, and market expansion opportunities in Wi-Fi connectivity. In broadband gateway, we are ramping into several new fiber access applications with new products, technology, and renewed focus driving meaningful design interaction. One example is our industry-leading URX family of gateway SOCs and network processors for 10 gigabit WAN access that is driving customers to build around our fiber gateway platform offering. Additionally, new fiber gateway wins will pull through over $20 of bill of material content, additional content of peripheral content including Wi-Fi, Ethernet, and power management solutions. As a reminder, fiber as a category within the broadband end market is seeing strong unit growth driven by the move to 10 gigabits per second broadband data home access, increased capital deployment by carriers to add subscribers, and to benefit from government funds to deliver services to underserved homes. We are very bullish about our fiber pawn growth. Moving to infrastructure, our 5G wireless access and backhaul products grew in aggregate by over 50% year-on-year in Q1, driven by early-stage build-outs of 5G infrastructure in North America. Even as we benefit from the long-term 5G secular trends, new products are driving higher content opportunities per platform and incremental growth. For example, our bill of material per platform has doubled as we ran per 5G millimeter wave products into multi-band radios for wireless backhaul applications. Another example of content increase opportunity is within the 5G wireless access portfolio. We recently announced product Sierra, which is a fully integrated single chip per 5G open RAN remote radio units. Sierra's integrated approach dramatically optimizes performance and cost for customers while more than doubling our content. For high-speed optical data center interconnect, we continue to have positive strategic engagements with Tier 1 customers and remain bullish on our long position in the large and quickly growing hyperscale data center market. At the Optical Fiber Communication Conference in March, we demonstrated Keystone product family, our 5-nanometer 800 gigabit per second BAM for DSP, deploying 100 gigabit single-lane optics. Customer reception was very positive and further supports our confidence in our competitive position as the market continues to expand. In summary, we have multiple company-specific growth drivers, including market share gains, product cycles, and increased silicon content per platform, which are fueling growth in all our target markets at both new and existing customers. With our continued focus on developing new and disruptive technologies across our high-value end markets, we expect to outperform semiconductor industry growth rates over the long term. With that, now let me turn the call over to Steve Litchfield, our Chief Financial Officer and Chief Corporate Strategy Officer. Steve?

Thank you, Kishore. I will first review our Q1 2022 results and then further discuss our outlook for Q2 2022. Total revenue for the first quarter was $263.9 million, up 6% versus Q4, and up 26% year over year. Broadband revenue in Q1 was in line with our outlook at $134.6 million, up 4% versus Q4, and 8% 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 another strong quarter in Q1 with revenue of $60.2 million, which was up 14% quarter over quarter and 119% year over year, driven mostly by strength in Wi-Fi. Our infrastructure in market had a solid Q1 with revenue of $33.2 million, up 4% versus the prior quarter, and up 15% year over year. largely driven by strength in 5G wireless access and wireless backhaul. Lastly, our industrial and multi-market revenue increased by 6% to $36 million in Q1 and by 24% year-over-year. GAAP and non-GAAP gross margin for the first quarter were approximately 58.6% and 62.8% of revenue. Non-GAAP gross margin was up 110 basis points versus the previous quarter driven by solid product mix and continued operational efficiencies. The delta between GAAP and non-GAAP gross margins in the first quarter was primarily driven by $10.8 million of acquisition-related intangible asset amortization. First quarter GAAP operating expenses were $106.4 million, below our $108 to $114 million guidance range. GAAP operating expenses included stock-based compensation and performance-based equity accruals of $25.8 million combined in amortization of purchased intangible assets of $6.2 million. Non-GAAP operating expenses were $77.3 million, up $1.4 million versus Q4, and were within the guidance range. Non-GAAP operating margins for Q1 2022 was 33.5%. Gap interest and other expense during the quarter was $3.1 million, and non-gap interest and other expense was $3.0 million. Cash flow generated from operating activities in the first quarter of 2022 was $134 million. During Q1, we made a $20 million prepayment against our long-term debt position and also repurchased $26.3 million worth of stock. We continue to be active with our buyback program heading into Q2. We exited Q1 of 2022 with $171 million in cash, cash equivalents, restricted cash, and short-term investments. Our day sales outstanding for the first quarter was approximately 43 days, down slightly from Q4 levels due to better shipment linearity. Our inventory turns were 3.2 times and essentially flat from the previous quarter. With that, let me turn over to the guidance for Q2. We currently expect revenue in second quarter of 2022 to be approximately $275 million to $285 million, up approximately 6% at the midpoint of the range versus the previous quarter, and up approximately 36% versus the prior year. While we continue to expect supply chain tightness to continue throughout 2022, we are expecting to see incremental improvements to better support the success of our customers. Looking at Q2 by end 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 Q1, driven by continued strength in Wi-Fi. In infrastructure, we are expecting revenue to be flattish compared with Q1. Demand for our infrastructure solutions continues to be strong, but growth is being constrained in the near term by tightness in substrate availability. Lastly, we expect our industrial multi-market revenue to be slightly up quarter over quarter. We expect second quarter GAAP gross profit margin to be approximately 57 to 59 percent, and non-GAAP gross profit margin to be between 61 to 63 percent 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 Q2 2022 GAAP operating expenses to be up quarter on quarter to a range of $112 to $118 million. We expect Q2 2022 non-GAAP operating expenses to be above Q1 levels within a range of $80 to $86 million. We expect our GAAP tax rate to be approximately 25% and non-GAAP tax rate to be roughly 6%. We expect GAAP and non-GAAP interest and other expense to be roughly $3 million. In closing, we are continuing to execute with innovative product offerings that are enabling us to drive growth through market share gains and silicon content increases. We have significantly increased our total addressable market by delivering innovative new products for adjacent markets. We have prioritized customers and continuing to build increasingly strategic relationships that we believe will enable us to grow our presence in markets where we are today under penetrated. We believe we are well positioned for continued revenue expansion and operating leverage throughout 2022. which will create significant value for our shareholders. With that, I'd like to open up the call to questions. Operator?

Thank you. And now to conduct a question-and-answer session, we ask that you please limit yourselves to one question and one follow-up, then return to the queue. If you'd like to be placed into question queue, please press star 1 on your telephone keypad. One moment, please, while we poll for questions. Our first question today is coming from Torres Vanberg from Stephen Nicholas. Your line is now live.

Yes, good afternoon, and congratulations on the strong results. First of all, this is Jeremy Confortori. I'm not sure if this was part of the portion that got cut off, but on the infrastructure side, did you provide us an update on the PAMFORD DSP?

So in the prepared remarks, we did talk through PAMFOR GSP. I mean, we continue to be on track and very pleased. If you recall last quarter, we kind of pushed some of those revenues out to the back half of the year. But we just completed a really successful OFC show where we talked a lot about the 5 nanometer solution where we're seeing significant traction. And that, I guess I would also add that the market opportunity there, I think, continues to be very robust. And so we're excited to see those products kind of proliferate and start to penetrate with additional customers.

Great. And then in terms of the Wi-Fi 6 products and your, you know, penetration with third-party standalone solutions, Can you talk about any differences in terms of design cycles, potential ramps, and also maybe the ESP or gross margin, if any, impact?

So, you know, I think that the Wi-Fi 6 and 6C penetration is where we're getting a lot of traction. We obviously have, based on being one of the first people to be certified by the Wi-Fi 6 Alliance BED, that we're one of the top three access point solutions out there. So we're getting a lot of traction with standalone Wi-Fi, you know, routers, and it's based on the total performance of our solution. On the, what I call our differentiations, obviously the highest throughput, you know, data performance of any of our competition, that's hugely differentiating for us. And secondly, the overall competitiveness on the cost and versus performance relative to others. In order to be competitive in the third-party standalone Wi-Fi market, you really have to have the best, most robust, and really price competitive standalone Wi-Fi solution, which also includes, obviously, our Ethernet offerings. And so we're winning on the front. So we really are going to see in the latter half of this year very, very strong pickup on Wi-Fi on these sort of third-party standalone Wi-Fi routers. Okay?

Great. Thank you very much.

Thanks, Jeremy. Thank you. Our next question today is coming from Alex Vecchi from William Blair. Your line is now live.

Hey, guys. Congratulations on excellent execution. Just to follow up on the Wi-Fi question, Steve, maybe can you help us understand the potential impact going forward as Wi-Fi becomes a larger portion of the business and you guys get to that $200 million in revenue next year in terms of gross margin? I think historically that's been a lower gross margin product, but I know since you overtook Intel you've made some improvements. So maybe a little clarification there.

Yeah, yeah, sure. Absolutely. So very excited about Wi-Fi. I mean, when you say what the impact is, it's a great impact. We're very excited about seeing this growth. I mean, seeing this business, you know, get north of 200 million. I think it still feels very much like early days here. We're, you know, seeing nice upsides in supply. So we're starting to see more supply that we've been able to kind of move some things around and get more supply out for our customers. We do see, you know, third-party routers coming in. I mean, this is kind of, I suggested earlier, this is an incremental 100 million units out there that we can now go out and address. Gross margins of this business are good. It does get lumped into the category of kind of a lot of those Intel products came in at lower gross margins, and so we are making improvements there, and some of that's on the supply chain side with cost, but it's also our next-generation products will come out at higher gross margins as well. So, yeah, I mean, there's some lower margin business that comes into play in the second half of the year, but I think long-term, we don't see a problem as far as competing and being able to go after our mid-60s gross margin percentage.

Just one qualifier there, Steve. The Y560 we're talking about, is a product developed after the acquisition and closed out based on that. So it's not a legacy product. So it's got some, what if you will, max linear flavors to it in terms of competitiveness on the cost structures.

That's helpful, and thanks for that clarification. And then just a question on the constraints. When you talked a little bit about substrates and infrastructure, Is that more on the wireless backhaul side? Is it on the optical side? Or is it also impacting the 5G trajectory as we move throughout the year?

So I think that we don't break out where we have shortages, but the acute shortages we are having in high-performance substrates are affecting our infrastructure revenues. That's absolutely correct. In fact, while we never disclose or discuss the backlog on our product lines, but the infrastructure as a extremely healthy backlog, well beyond what we even expect in terms of growth. And it's really driven by 5G rollouts. And the 5G rollout is helping us in a big way in transitions to higher BOM content on the backhaul side from microwave to millimeter wave, almost doubling the BOM. At the same time, the access is growing. So a lot of good things happening. So I would say that this would be a spectacular year in terms of the growth we have. But it's not perishable demand, so we'll catch up to it. And we have taken measures as a company to bring in more capacity online. We have invested in certain high-performance substrate companies to have dedicated capacity for us going forward. So we'll get through this. So we are being more constrained on infrastructure than any other market because of the high-performance substrates. There are some other effects, some other areas, but they are not meaningful enough.

With that, I'll jump back into Q. Thank you.

Thanks, Thomas. Thank you.

Next question is coming from David Williams from the Benchmark Company. Your line is now live. David? David, perhaps your phone is on mute, David.

Please pick up your handset.

Oh, my apologies there. I thought I'd click that off. Thanks for letting me jump on, and congrats on the solid quarter.

Thanks, David.

I guess on the first side, just kind of thinking about China and you've got a pretty good portion of your business kind of shipped into Asia overall. Just kind of curious if you're seeing anything in terms of either demand or supply side from the Chinese lockdown that we've seen intensify over the last several weeks.

Yeah, I guess I wouldn't say that we have huge exposure. I mean, we've definitely got a lot of business there and it's growing nicely. But I mean, as far as the COVID dynamics and shutdown, I don't think the demand side we've seen too much on. On the supply side, we definitely saw some of that late last quarter and we're seeing it right now. But overall, I think we feel very comfortable and that was reflected in our guidance.

Okay, fantastic. And then maybe just on a higher level, but from a backlog or maybe the order book, have you seen anything in terms of cancellations or changes there? Are your customers, have they changed their behavior, just kind of thinking about the demand outlook, or do you still feel pretty comfortable that it's business as usual here?

So it's business as usual in a very positive way, right? For us, it's not business as usual because we are seeing a lot of growth, accelerating growth in the various markets. So For us, there's a lot of demand with the big infrastructure spend that's going on, whether it's in our wireless infrastructure markets, optical data center markets, or in the broadband fiber deployments, right? So we are benefiting from that. So we are not seeing cancellations or push-outs, but we do know that our customers are struggling still to secure products of other players in the platforms. Having said that, our guidance reflects our expectation of what I call an end throughput sales, which is what we track when we give guidance, but not what we sell into our customers per se. So we feel very good where we are in terms of our guidance and the demand out there.

Fantastic. Thanks so much for the call. I appreciate it.

Thanks, Steve. Thank you. Our next question today is coming from Sergey De Silva from Rose Capital. Your line is now live.

Thank you. Congratulations on the progress here. You talked about in the Wi-Fi market expanding to the router opportunity. I picture that as being different from the set-top box opportunity you've already done very well. Can you talk about what competitive landscape or just differences there are penetrating that market and what the timing might be to announcing some wins there?

I think we already spoke about it. I said the latter half of this year is going to be heavily driven by the gains in standalone router business. The dynamics of any of these markets are quite similar. They're very different from operator markets. However, typically, even the standalone router market, somewhere along the way, the end customer to those standalone router designs are operator class of businesses. However, the difference is here we don't get to compete with our full platform offering, with our gateway SOC, the fiber or the cable front end, and the full menu of products we bring to bear on the gateway platform. So we compete, you know, it's a hand-to-hand combat on the Wi-Fi side, and you win based on performance, and I think that's where you're winning. I mean, you want to keep in mind that we are a purely access point focused Wi-Fi product company. And so we really focus on building the best in class in that landscape, whereas the other competitors really come from the consumer side, and it's sort of a reverse migration to the access point. So I think we come with some inherent advantages driving straight from the access point side.

Great. That's very helpful, for sure. And then maybe, Steve, or perhaps Kishore, you know, you've done very well with Intel acquisition, tracking your history of acquisition. How should we be thinking about furthering organic activity now that you've had a couple of borders of, you know, kind of moving forward from this. What's the framework we should be thinking about? You have a lot of organic opportunities already going some periods.

So I just want to correct this misperception, right? Our growth or, you know, the intellectual business and ours were coupled because we had a strong broadband presence. So our organic growth in the previous two years without exactly picking the timeframe was in excess of 40%. So we don't break that out because we sell it as a full category right now. So I just want to correct the perception. We have been investing organically for a while in infrastructure, the last three to five years, and now the wireless infrastructure has really caught a lot of acceleration and momentum. And the reason I say this is very, very important for our employee validation as well, that we are a technology company. We take investments and we measure ourselves on how we execute. Engineering excellence is what we bring to bear on our product, and with levels of customer support excellence as well. So I just want to correct that misperception. This growth was coming, it was in the works, and we got a lot of momentum from our ability to execute acquisitions, right? And so this is going to be a story that continues. Steve, you want to add anything else on that?

Well, the only other thing, I'll just address the second part of your question. I mean, look, I think you saw in the quarter we're generating a lot of cash here, and so I think the message on that front is consistent. We'll continue to pay down the debt, continue to buy back stock. We had a big stock buyback this quarter, about $26 million of stock, and we'll continue to look at acquisitions. So all of those are still relevant today.

Okay, great. Thanks, guys.

Great. Thank you.

Thank you. Our next question is coming from Gary Mobley from Wells Fargo Securities. Your line is now live.

Hey, guys. Thanks for taking my question. I want to start by asking about Wi-Fi 7. I know one of your competitors put out some press splash a week or two ago, and I'm just curious from your perspective what you're anticipating out of Wi-Fi 7 in terms of product generation, product revenue, content gain opportunity, those sorts of things.

Hey, Gary, I'll take this question. Obviously, it is going to be a highly differentiated solution. We have not begun press releases too early to the market. However, it's around the corner, and we will be one of the first certified Wi-Fi 7 access point solutions out there. The offering is going to reflect what MaxLinear is about, high levels of integration, cost competitiveness, lowest power, and, you know, a very innovative BOM savings for the customer in performance. So we believe that with that, we'll drive a lot of market share gain growth and also expand our stickiness in existing markets and market share. In addition, it's going to allow us to differentiate in other ways where we can expand the end markets itself going to more adjacent markets. So that's the way we visualize the strategic rollout of our Wi-Fi 7, and I'm absolutely confident we will do a great job on it.

Thanks, Kishore. And perhaps a question for Steve. If I do my calculation correctly, it looks like your own internal inventory days was roughly flat sequentially in the increases supportive of your 6% sequential revenue growth guidance. But maybe if you could just speak about inventory in the channel where you see that currently, and given the current profile, your backlog in the improving supply situation, how many consecutive quarters of sequential revenue growth do you think you can string together?

Yeah, Gary, absolutely. So the inventory, we did see a modest increase in dollars, but days were about the same. You're correct on that. And we're not keeping up with demand, I guess, at this point. Visibility continues to be very strong. I mean, Kishore kind of shared a few times on the call, but we have a lot of, you know, new opportunities in Wi-Fi, in fiber, in some of our infrastructure opportunities. So we continue to see a tremendous amount of growth over a multi-year period, right? And so I'm not going to, you know, guide more than the quarter that we just gave you, but I think you can see with the product portfolio and the traction that we're getting, I think we feel very good. With regard to more of the tactical aspect of the question, like everyone else, we're always watching channel inventory levels, and they're still very, very low. And we've seen that across all of our end markets. I mean, it is a cyclical industry, so we're absolutely watching closely to see if that changes and when that changes and how do we respond. But at this point, you know, at least as far as our products go and the traction that we're getting, you know, with some of our new market share gains and the like, we feel very good about very strong visibility.

Appreciate the call, Steve. Thank you, guys.

Sure. Thank you. Our next question today is coming from Trevor Janowski from Needham. Your line is now live.

Yeah, hi, guys. This is Trevor Janowski on for Quinn Bolton, and congrats on the solid quarter in guidance. So following up on the China lockdown question, even though we know most of the end product ends up in North America and Europe, how much of the company's products are shipped to manufacturing locations in China? Thanks.

So, Trevor, you know, we are a chip supplier, right? We supply chips, so most of them are manufactured pretty much in the location where the wafers are. So to that extent, we're a very, very heavily Taiwan-dependent wafer consumer. So I think that answers your question, where our products get manufactured. And because so much of our revenues are outside of China, most of the business goes through ODMs who are placed in Taiwan. And so to the extent that the ODMs are present in Taiwan, they have diversified their supply chains in the last few years to be both dual locator even outside of China. So we feel that our end markets outside of China are very well serviced by being immune to this lockdown to the extent that they have to supply to their customers. Now, I cannot really project on what pieces they bring out of China and Beijing into their boxes. I cannot say that. But we feel for now that they've got sufficient diversification geographically on manufacturing capability for their product.

Thank you. And as my follow-up, are there any particular cost headwinds in the second quarter that cause gross margins to decline 80 basis points at the midpoint in June, or is it mostly just mixed?

So, Trevor, so we saw a nice improvement last quarter of 120 basis points. And so this is really consistent with the guidance that we had kind of talked about as far as, you know, that 62% at the midpoint here is pretty consistent with what we talked about. And it is a product mix. We continue to feel very confident in the gross margin kind of getting up to the mid-60s over the next couple of years. supply chain constraints start to ease. There's nothing that stands out that's super concerning to us in Q2 whatsoever.

I also want to add one more element of the supply chain constraints, right? I think there are constraints. People are talking of easing of supply chain, but it's very, very choppy, to put it least, right? So there are constraints based on technology nodes. There are constraints based on packages, and So I think the constraints will continue in the kind of quality of high-value end markets we are in, but we are navigating those constraints as best as we can, and we have done a decent job of it. And there are some suppliers who are communicating cost increases moving forward as well. So we have taken that entire expectation also into our guidance for you guys.

Thank you.

Our next question today is coming from Sam Peterman from Craig Hallam.

Your line is now live.

Hi, guys. Thanks for taking my question. I wanted to ask a little bit on the broadband segment. You talked about it growing quarter over quarter into the second quarter here and mentioned cable and fiber both being growth drivers there. Obviously, on a percentage basis, fiber is probably going to grow faster, but I wonder if you could talk about in dollar terms, is fiber kind of taking the lead now from in terms of driving the majority of your dollar growth in that segment? And then on fiber as well, are you still on track to ramp with that large North American tier one you've mentioned before in the second half?

Yeah, so absolutely, Sam. So yeah, broadband continues to do very well. We do expect it to be up again this quarter. You're absolutely right. I mean, it is contributing from the fiber side as well as the cable side. We've been talking a lot about the fiber opportunity, and, yeah, on the large North America supplier, we do expect that to ramp in the second half of the year. That's on track, going well, and that'll continue. We'll see continued growth into 2023 because it'll end up being somewhat supply constrained throughout this year. And it's not just that one. I mean, we've got multiple suppliers that are ramping in 2022, and we'll continue to see that growth in 2023. It's still a small number, right? I mean, we've talked about that business last year being less than $10 million, growing to kind of tens of millions of dollars this year. I think as we look out into 23, I mean, there's a good shot of seeing that kind of double again next year in 2023 because it's still pretty early days on the fiber side.

Okay. Thanks for that. And the second question, I just wanted to go back to Wi-Fi and this third-party access or third-party router market that you're talking about. That sounds like a good opportunity for unit growth for you guys, and I wonder if you could talk about kind of unit growth opportunities you see for Wi-Fi and kind of the core markets, I guess the core operator markets that you've been in, in cable and fiber at this point? Is there a lot of unit growth runway there still, or do you see much of the growth coming from kind of more content as you move up to new generations at this point?

Yeah, yeah, look, I mean, still very much early days on the Wi-Fi side for us. I mean, we're still, you know, barely keeping up. I mean, we've talked about our attach rates still not one-to-one and even our main gateway customers, right? So we've still got continued growth coming with that attach rate. We've got, you know, more significant growth coming from the fiber attach that's all new business for us. So that's going to contribute. And then, of course, the standalone routers is yet another market. So we're by no means keeping up yet. The market opportunity itself continues to expand. And so I think there's really nice runway as we roll out 6E and Wi-Fi 7 coming beyond that, which will expand the market even further. But we're hitting price points and good profitability levels. We're getting traction with customers, and we have significant more supply coming on late this year and into 2023 to satisfy that demand.

Thank you. Our next question today is coming from Ananda Barula from Loop Capital.

Your line is now live. Hey, thanks, guys. Good afternoon. Thanks for taking the questions, and congrats on the strong results, and congratulations and execution. Yeah, two if I could. Yeah, you're welcome, Steve. Two if I could. On, I guess, Pond and Massive MIMO, you know, where are you guys? Do you still believe – I believe Pond you had talked about, you know, kind of through last year as a $200 million to $300 million revenue opportunity for your guys, and Massive MIMO $300 million to $600 million over three to four years. Do you guys still feel those are the appropriate ways to think about those opportunities? And how are you tracking, you know, relative to how you thought you'd be tracking 12 months ago?

Yeah, okay, so I think you're talking about, so I'm going to start with 5G Massimo. 5G Massimo, hundreds of millions of dollars. I mean, this goes back a little bit of time once 5G was rolling out. There was a big, you know, 500-ish million dollar TAM opportunity out there. Now, a lot of things have kind of pushed to the right due to the China dynamics, and we continue to see that, but absolutely see, you know, $100 million-plus product line coming out of the wireless infrastructure, wireless access side specifically. Kishore kind of spoke a little bit like Sierra. We're seeing ASP increases, so that's a bigger market opportunity as well. With regard to the pond side, maybe I'll take a step back. So on the pond side, what we've said is that you, you know, look, pond is probably three times, kind of depending on how you define it, but call it three times bigger than the cable market, right? And we're very under-penetrated. But we've said that we've got the potential to see hundreds of millions of dollars of revenue from the pond business over the next few years. So very exciting opportunity for us. And we get lots of dollar content as those gateways roll out. And we see opportunities throughout the world, which is exciting, particularly with the fact that you're seeing a lot of government subsidies kind of help a lot of these operators roll out on the pond side as well. You're seeing tons of fiber roll out. But even some of the fixed wireless access stuff that people are talking about as well, we support and benefit from.

And we are tracking to our own internal metrics on the fiber side for sure. In fact, we led with saying that this would be one of the top drivers of growth right now. And on the 5G access side, like Steve said, it pushed out to the right, so sort of smeared out a little bit the opportunity, but we definitely expect it to be $100 million plus revenue contributor to us. in addition to the wireless backhaul revenue that will be in excess of $100 million, right? So we are well into the 100 range right now as a wireless infrastructure, and we are supply constrained. That's super helpful. I appreciate it.

That's it for me. Thanks, guys.

Thanks, Anand.

Thank you. Our next question is coming from Christopher Rowland from Susquehanna. Your line is now live.

Hey, guys. Thanks for squeezing me in. I guess my question is around competitive dynamics. Are you seeing anything there in terms of their availability of competing product or lead times or supply issues that they may be having, and is this to your benefit? Thanks.

Yeah, Chris. Good question. I think, I mean, there's kind of ebbs and flows on this front. I mean, we've tried to be proactive. I think we've been pretty creative early on. I know I've shared this before that I think, you know, we're trying to move, get other, you know, vendors up and qualified. Kishore mentioned that we're doing some investing as well to try and get these guys qualified to get out product quicker. And I think we've had a lot of success with that, and that's part of what's, kind of contributing to that upside and how we can outpace the competition. So I think that's definitely helpful.

Great. As a follow-up on infra, as you look at the outlook for the rest of the year, I'll let you guys kind of talk about this. What do you think is going to be the biggest driver of growth there? Is it going to be You know, Pam, perhaps in the back half for wireless backhaul or transceivers. How are you thinking?

Yeah, I mean, look, it's clearly kind of dominated by the wireless infrastructure side, right? So transceivers, but transceivers on the access side as well as on the backhaul side, both have been constrained. But, I mean, we're starting to get more product out. Demand has been extremely strong, as Kishore indicated earlier. So I think that's going to be the biggest driver. And frankly, I think I see that continuing through 2023, and I think in 23 you'll start to see a lot more optical contribution.

Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over to Kishore for any further closing comments.

Well, thank you, operator. I just want to let everybody know that we'll be participating at these following upcoming conferences during Q2. the J.P. Morgan 50th Annual Global Technology Media and Communications Conference on May 24th, Craig Allen's 19th Annual Institutional Investor Conference on June 1st, Loop Capital Markets' 3rd Annual Investor Conference on June 2nd, and Staple Cross-Sector Insight Conference on June 7th. With that being said, I want to thank you all for joining us today, and we look forward to reporting on our progress to you next quarter. Thank you. Thank you.

That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.