IIVI
#Can shortly.
Ask your second question.
We are feeling the effects of continued strong demand in China from China broadband and across the board.
As you know or as we have talked about in the past, we are a significant supplier of amplifier components into that market.
And so pumps and passives are experiencing quite a strong demand for that ---+ pumps and passives, in general, for that part of the market.
The ongoing demands and the baseline demands in North America combined with both the anticipated metro buildouts in North America and also the gradual adoption of 400G in North America and in Europe are driving demand across the board for everything, starting with amplifiers, for the amplifiers.
Yes.
So <UNK>, I was about to say amplifiers, optical channel monitors, our new optical time domain reflectometers and tunable optical filters.
So the suite of those components that will be deployed, are being deployed alongside amplifiers and in line with the transponders, we are experiencing significant demand across the board.
Sorry, <UNK>.
And finally, since you asked me, regarding ---+ earlier Fran made the comment regarding 980 pumps.
And that is for the OEM market, for our own internal amplifiers but also for the submarine market, which is growing in response to the large increase in data center interconnect traffic, as you know.
So regarding our capacity, we are managing our capacity very, very closely, very tightly.
We have expanded and authorized increased capital investments this year above what we had budgeted.
We have turned on our new laser chip on carrier line in the Philippines, offering us expanded capacity, as well as a path for lower costs.
And we do have some constraints that we are managing ourselves, but also we are managing our own supply chain constraints as part of that.
And I think that the team are doing a great job at it as well.
With respect to your question about the backlog, so the backlog in the sequential quarter in the first quarter was $61 million compared to this quarter's backlog of $85 million, and it was $54 million in the second quarter of last year.
I'm not sure, <UNK>.
Can you clarify your question regarding lead time.
I think across the board, across our entire supply chain, <UNK>, lead times are extremely important to our customers.
We stay focused on that.
In cases where we are surprised either by sudden demand or by shortages in the supply chain, where we have done everything we possibly can, in that case we may have to extend the lead times.
But we are absolutely focused on serving the customer, making sure that we've done everything we can for that.
Regarding pricing, I would say on ---+ in general, despite the demands, the pricing environment continues to be competitive, and we've had some success in slowing down the price erosion.
In some cases, we have actually increased the prices.
In other parts of the portfolio, where there were multiple sources that we are competing with, we have stayed on our typical track of 2% to 3% reduction in the quarter.
It's a great question, David, and you answered it with a great answer.
So coming back to my comment earlier and my response to <UNK> <UNK>, 35% to 50%, in that range, of the bookings were really laid out for us over a longer time horizon than we generally get.
So we're delighted to have it, and it will help us improve our planning for the next one or two quarters, and do our best to be able to break the constraints and increase our outlook to keep up with the demand.
And I would say we always need to have some headroom because we have been very, very aggressive about positioning both the performance and the ability of our teams to scale to meet market demands, to win business and to take share.
So we have been very aggressive about that, and we will continue to be.
Right now it's on, and we are expecting, based on our checks, our discussions with our key customers, we are expecting that the momentum that we currently are caught up in and creating should continue at least through this fiscal year.
We will have to update you again on April 26, <UNK>.
That's our best view as today.
Thanks for your question.
Give us just a sec.
In terms of whether or not there's a very, very significant movement from the first quarter, not really particularly in laser solutions.
As we said, our book-to-bill has been in the 99-100-101 type of range for a long time.
And to move some large amount of points on the whole quarter, almost 10 points on the whole quarter, we are really talking about the grade of movement that we ended up seeing in performance products.
So I don't know that we are seeing a really hugely big difference.
I think performance products, however, which has our main markets to serve, the semiconductor capital equipment market and the military market, those bookings as a factual matter are very, very lumpy.
So, in fact, we spent---+ <UNK> spent some time talking about the sequential growth in those just in revenue in those markets because some of those bookings were had, say, six months ago.
So it's tough to say we had big, big differences in performance products when the bookings are lumpy, anyway.
I do think we think it has a little to do with the economy and how the use of the lasers is ---+ it goes up and down as the economy does well and people slow down on their capital procurement.
The cutting head market, one of them, we think has that.
So a little bit of seasonality, but we are coming into the better part of the curve on that here in the first, third and second or the third and fourth quarter.
So seasonality, a little economy driven, quite a bit.
We are not giving, really, any forward-looking numbers on really any of the parameters for the acquisitions at this point in time.
I think, one, it's preliminary.
But do we think there is an advantage across a few dimensions, whether they are economic or technical on the 6-inch.
Yes, but I think in terms of its exact or even its ballpark movement on the margins, we are not commenting on that, really, at this point.
I don't think that you should expect as a conceptual matter that the R&D spending is declining.
Sometimes there are slightly seasonal factors of when various things happen or are delivered, particularly among prototypes.
But generally speaking, our R&D spending is fairly steady.
<UNK> <UNK>, I could add ---+ just to add, <UNK>, to what <UNK> <UNK> said, our teams more and more in this environment, especially in an environment which is demanding new products and is coming at our customers a little faster than what they expected, we typically will ask for NRE in certain cases.
And our teams more and more are finding that they can be successful in that regard as an offset to the R&D expense.
So when you see that, it's not necessarily a slowdown of the activity, but in some cases the treatment of how we paid for it, basically.
Thank you, Candace.
Well, first of all, thank you all very much for joining us this morning.
If there is a follow-up, anything on what we've already talked about, we would be pleased to talk to you later.
Fran, is there anything you'd like to conclude with.
Just to tell everybody that has been following us, stay tuned for how we proceed on with these acquisitions, and we are upbeat about the third and fourth quarter of our base business.
Thanks for attending.
All right.
Have a good day.
Thanks.
Bye-bye.
