The company’s cloud and networking revenue increased 25% sequentially due to strong cloud data center demand and contributions from the Cloud Light acquisition, but was down year-over-year due to widespread weakness in most of the company’s communications networking products. 25% decrease. Continued inventory adjustments at network equipment customers have resulted in significant line reductions.
Cloud and Networking segment revenue was $286.8 million, up from $229.7 million in the prior quarter. Cloud and Networking segment revenue for the second quarter was $286.7 million, up 24.8% sequentially but down 25.1% year-over-year.
Lowe said he believes the company has an opportunity to play a key role in delivering the optical bandwidth needed to support growing AI trends.
“As fiber-optic transmission reaches its physical capacity, network providers increasingly recognize the value of technologies like ours that enable continuous network expansion, reinforcing our long-term confidence in this business. “We are strengthening it,” he said. “We also have unique technology capabilities that enable new future AI hardware architectures that enable higher bandwidth, lower power density, and lower latency optical interconnects that are essential for training and inference applications. We are working closely with cloud infrastructure providers on new components and modules that leverage .
400G, 800G rise
As data center operators continue to build data centers suitable for supporting AI and ML, the ability to deliver high-speed, power, and cost-effective interconnections becomes even more urgent.
A recent Dell’Oro report suggests that in the short term Budget cuts and project delays are impacting 800 Gbps port shipments, and we expect shipments to increase in both back-end and front-end networks in 2024.
Despite the project delays, “800Gbps port shipments are expected to quadruple by 2024,” the research firm said. This is due to the adoption of major cloud service providers, especially Amazon, and the availability of his 51.2 Tbps chips in the market.
Lowe said he sees similar trends. “With the rapid construction of AI and ML data centers, it has become even more important to connect these data centers with high-speed, power, and cost-effective interconnects. “To that end, we continue to be successful in our 400 Gig ZR module business, which grew by more than 30% in the second quarter sequentially.”
Lumentum has also received positive feedback from customers regarding its 800 Gigabit ZR platform and plans to provide customer samples this year. “The market opportunity is accelerating and we expect customer adoption of his 800G technology to further expand as these certifications are completed,” he said. “Additionally, the initial launch of his 1.6 Terabit product by an early adopter of the technology has garnered a lot of attention from customers, giving us a first-to-market advantage given our vertical integration and lab testing results. I hope you get it.”
But data centers are just one market. This vendor realized that its coherent transmission product resonated with his traditional service providers. “Our out-of-datacenter coherent transmission products have received positive customer feedback and attention regarding next-generation 130 Gigabaud and 200 Gigabaud data rate technologies that enable next-generation coherent applications at 800G, 1.2 Tbps, and 1.6 Tbps. ,” Lowe said. “These high-speed products are available in discrete and integrated form factors to improve performance in next-generation metro and long-haul applications.”
Impact of acquiring Cloud Light
Lumentum said the acquisition of Cloud Light provides momentum in acquiring new data center customers.
When the acquisition was announced, Lumentum said: Accelerate expansion into the fastest growing multi-billion dollar opportunity for optical modules used in cloud computing data center infrastructure.
most of Over the past 12 months, Cloud Light’s more than $200 million in revenue came from sales of transceivers with speeds of 400G and above. In the most recent quarter, more than half of Cloud Light’s optical transceiver revenue came from his 800G modules.
“It’s been just three months since we acquired Cloud Light, and I’m excited about the team we’ve added and the many opportunities that lie ahead,” said Rowe. “In this short period of time, we have gained meaningful traction with customers on new data center opportunities, which will drive further significant growth as we develop new products and obtain customer certifications. I hope so.”
Lowe said the Cloud Light acquisition added 10% new customers.. Looking to the future, he foresees new opportunities with his 800 Gbps and his 1.6 Tbps. “We expect the diversification of our transceiver business to surge from the end of this calendar year into 2025 as new 800 Gbps and 1.6 Terabit products qualify with other hyperscalers and AI infrastructure companies.” said.
Further expansion of manufacturing
Given the surge in data demand for AI data centers and strong traction for transceiver opportunities, Lumentum is expanding its transceiver manufacturing capacity.
A key part of this expansion is the enhancement of production lines at our manufacturing facility in Thailand. The facility will manufacture 1.6 Terabit transceivers for multiple customers, providing the additional bandwidth needed for AI workloads while reducing power consumption and latency as customers move to 200 Gig/lane technology. Reduce data bottlenecks.
“Our Thailand facility has proven photonics manufacturing capabilities and has received numerous accolades from our customers, giving us confidence in our ability to grow rapidly,” Lowe said. “This capacity is expected to come online this summer and we will be delivering the first wave of 1.6 Terabit transceivers to multiple customers at this site.”
Additionally, Lumentum plans to leverage new transceiver designs from the Cloud Light acquisition. “The combination of our established history of customer partnerships, proven manufacturing leadership, and unparalleled breadth of capabilities in differentiated photonic components positions us for top-line revenue growth in this rapidly growing cloud transceiver market. We believe we are well-positioned to accelerate growth and margins,” said Lowe. Said.
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