The third-quarter revenue showed significant growth, primarily due to a 54% year-over-year increase in AI data center demand and a 21% boost from the telecom sector. The company is on track with its 1.6T transceiver ramp set for calendar year 2025. Expectations also highlight the introduction of a new 3.2T platform and an indium phosphide fab, aimed at increasing margins. However, the gross margin strategy is under pressure from the current product mix and a sequentially flat revenue outlook.
Q3 revenue growth was largely driven by a 54% year-over-year increase in AI data center demand, alongside a 21% growth in the telecom sector.
The 1.6T transceiver ramp is on track for calendar year 2025, accompanied by expectations that a new 3.2T platform and indium phosphide fabrication will enhance margin leverage.
Gross margin strategy faces challenges from product mix variations and a flat sequential revenue outlook, raising concerns about profitability amidst strong revenue growth.
AI datacom revenue experienced significant growth, with a 54% year-on-year increase in Q3, mainly due to heightened interest in various transceiver technologies.
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