Joining us is Sanjai Parthasarathi, Chief Marketing Officer at Coherent. Sanjai, thanks for joining me on this Six Five Summit. It's going to be a fun conversation. Yeah. Thanks, Matt. It's great to talk to you again and really great to be here. Let's jump right in, all right, because there's a lot to cover. Of course, networking has become the bottleneck that everybody has been pointing to. In that kind of world of networking, everyone's gotten really comfortable with this concept of scale up and scale out, right? Terms that nobody talked about three years ago, everybody is talking about today. Now we're hearing about scale across. I think a lot of folks I speak with out in the marketplace, when I say that, there's a little bit of like, "Hmm, what do you mean by that?" Right? When we talk about scale across, what exactly are we talking about, and why is this all of a sudden showing up everywhere in AI infrastructure conversations? At its core, Matt, it's all about optical communications, right? I've been in the optical communications, optical networking industry for almost 30 years, and I can tell you, this is perhaps the most exciting time in photonics and optical networking. Now coming back to optical communications. People have been communicating with light is not new. The Phoenicians were signaling with light thousands of years ago, right? It's not something new. Jokes apart, modern communications began with the telegraph. That connectivity was all electrical. But when you need to go longer distances or you want to go at higher speeds or a combination of higher speeds and longer distances, the only way to do it is optical. The physics demands that you drive towards optical. So today, most of the world's communications networks are all on an optical backplane, right? That's the backbone of the optical communications networks. Let me give you an example. You pick up your phone and let's say you're sending a photo or you're talking to your friend in Singapore. The first talk between your phone and the RF tower is RF signals. But at the base of every one of those RF towers these days is an optical transceiver. So that takes electrical signals, converts them to optical signals, and pushes it through the fiber network. From that point on, your data, your voice is in the optical domain. It goes through the access networks, the metro networks, the long-haul networks, and some point of time, because the signal needs to go to Singapore, you enter a submarine cable landing station. There is one 100 miles from where we are right now. Where I am right now, there is a submarine cable that goes all the way to Singapore. Your signals go through the submarine cable. Then when it comes to Singapore, then you have the same old distribution, and then it comes into the RF tower and back to the phone. All of that is optical. By the way, Coherent, we have one of the broadest and deepest portfolios in the optical industry. We have the photonic components and modules that enable you to do all of that, right? All of those components that you need from this one end of cell tower to the other cell tower, we are able to provide. Now, let me come back to scale across, right? You started by asking scale across. Now, what's scale across? Data centers are power constrained. You know that. That's the single-- Any discussion on the data center, it starts with energy. It's about energy efficiency, et c. When you have large AI workloads, now these workloads are being forced to be spread across multiple data centers because there's just not enough power in one data center to process these large workloads. So that in turn drives a demand for these very high bandwidth connections between the data centers. That's what we call, the industry has started to refer to that as scale across networks. Okay, this is really interesting, right? This concept of scale across. Let's put this in the real world, okay? I am a frontier model provider. I have got a training run that is spanning across multiple data centers. When that happens, that networking problem is entirely different than plugging cables from one rack to another, right? So in that equation, what optical technology becomes non-negotiable for me? And part two to that is, if I am the person that is designing that network, what are the things I should be focusing on most closely? What are those specs I should be really paying attention to as I design that network out? Let me just start by saying optical networks have been becoming increasingly disaggregated over the years. Large monolithic systems have been sort of giving way to smaller, easy-to-deploy functional elements or functional blocks. There are two important functional blocks for scale across. One is data center interconnect transceivers, or DCI. Just by the definition, these are transceivers that sit at the edge of a data center. They are high bandwidth, high capacity transceivers that take electrical signals, convert them to optical signals, and then shoot it across to the next data center. But equally important is another class of equipment that is called optical transport equipment, and that equipment sits in between the two data centers. And again, as the name implies, optical transport equipment helps transport the optical signal. And you say, what does that mean? Well, when you launch an optical signal into a fiber, after the signal goes for a certain distance, it starts to die down. It attenuates. So you need amplifiers to boost the signal again. You need signal conditioning. You need to monitor the strength of the signal, the health of the signal. You need to monitor the health of the fiber infrastructure. So all of those functions are being done by this transport equipment. So it is a pretty important class of equipment. So two main functional blocks, data center interconnect transceivers and transport equipment. Your question on what is it, what are the performance metrics, right? What is it? Yeah. that customers care about? Again, for the past 30 years, the longest I have been in this market, it always starts with bandwidth. Bandwidth, bandwidth, and then energy efficiency. That has been the mantra for quite some time. Other things like reliability are all a given. They are like table stakes. But in the AI data center context, it is a really big focus on energy. So customers are looking at how we can improve every little bit of energy efficiency within this equipment. Sanjai, this is interesting, and I have to say, as an analyst in the industry, and I think even casual observers who are playing out in the market, we keep hearing more and more about optical networking and more and more players entering the space, right? You mentioned Coherent has a very solid position and a really robust portfolio. But within that context, tell me what makes Coherent unique. What separates Coherent from everybody else in this space? Coherent, we have one of the broadest and deepest portfolios in the industry. It is not just the breadth of the portfolio. We have a deep vertically integrated technology stack, and that technology stack, Matt, goes all the way down to the material cell. We are a company of innovation, right? We have about 50 years of innovation, a long track record of bringing industry first advances to the industry. Many cases where our products have actually created a new market segment for the industry. AI is just challenging the industry to innovate at all levels of the value chain. That is a big differentiator for us because we have all the platforms within the company, and we are deeply vertically integrated. So when we develop our solutions, they are kind of tailor-made with innovation all the way down to the materials level and up to the systems level. A great example of a recent example of our innovation is our Multi-Rail platform. I mentioned earlier that hyperscalers and data center operators are driving big reductions in energy, right? They want to be most energy efficient, and Multi-Rail, it is really a groundbreaking innovation. Unprecedented levels of energy efficiency that platform brings to the market. So that is just an example. But our differentiation is not just about the innovation and the technology. It is our ability to manufacture at scale. These days, we have started using the word manufacturing at AI scale, at a scale that the industry has never seen before, right? If you take indium phosphide, a platform that is critical for AI connectivity, indium phosphide is a platform on which detectors, lasers, planar lightwave circuits for scale up, scale out, scale across, scale in everything, right? Yeah. That's what it's built on. We are doubling production, and we are doubling production again, and more than doubling production again. Manufacturing, and for Coherent, we were founded as a manufacturing company in Saxonburg, Pennsylvania, which is still our global headquarters today, right? We have over 50, and we have a diversified global manufacturing footprint. We have over 50 sites worldwide, but more than 20 are in the U.S., so we're super proud about that as well. It's interesting that you mention manufacturing at scale. I'd say it seems that every time you find a constraint in the supply chain, and you get through that, there's another constraint. It's interesting that Coherent is staying ahead of the demand by increasing manufacturing so significantly to meet those needs. Networking is without a doubt, perhaps the largest bottleneck that we see in the AI equation, so. Matt, that's a great point because that's one of the big advantages that we bring because we make pretty much everything that goes into our products. Okay. on the optical components side, and that's a giant advantage. All of our product lines are ramping up in this area, so it's pretty exciting time. That's fantastic. I want to loop back to something that you mentioned. We heard Multi-Rail platform in there, and I think folks that might be new to Coherent and certainly new to optical networking, if they hear that term cold, they're probably thinking, "What the heck is that?" Walk me through that a little bit, and maybe even more importantly, as you walk me through it and walk the listener through it, the viewer through it, talk to the customer problem that makes you think about building this platform in the first place. I mentioned transport equipment, right? Multi-Rail is basically transport equipment. This is equipment that does not sit in the data center. Sometimes it does, but most of the time, this equipment is in between the data centers. Transport equipment, I mentioned it earlier, but they perform a lot of important functions. They help amplify the optical signals. They help condition the optical signals. They monitor the health of the signals, monitor the health of the fiber infrastructure. Just a whole host of important functions that this equipment performs. And the equipment is often housed in what we call amplifier huts or fiber huts. What the heck is that? Well, they look like huts. These are enclosures, and they could be anywhere. You've probably seen them when you're driving on the highway. Some are in residential neighborhoods. These are enclosures that obviously have power going into it. They have equipment sitting there, and in many cases, they're controlled. They're environmentally controlled, temperature controlled. Now with the AI networks growing and the demands on scale across networks, our customers want five, four times a multifold increase in capacity. And when they're driving those kinds of demands, just imagine the situation here. You've got this enclosure, but today's technology if you want to, let's say, increase capacity by a factor of four, you need four times more space and four times more power. Right. Imagine what that, just imagine this enclosure that is sitting by the street here. Imagine the challenges you are going to go through if you want to make it four times larger. All the regulatory environments and all the power issues, even if you could get the power, there may not be any power available in that location. Right. It is a serious problem. That is really where our Multi-Rail platform comes in. Basically, Multi-Rail, in this particular case, if you take the 4x case, you are able to essentially process four times, increase capacity by a factor of four Wow. within the same volumetric envelope. The heart can be the same size. Wow. Imagine now we are able to do four times more traffic. Yes, you need a little more power, but it is significant savings in the power requirements, where the platform sublinearly scales with power. It is a groundbreaking innovation. A lot of excitement from our hyperscale customers and our OEM customers. We're talking about some pretty interesting stuff here. I want to end on kind of a science fiction note, if you will. Everyone has heard about data centers in space. My gosh, my dad calls me and talks about data centers in space. You know it's hit the mainstream when [George] Kimball is calling me. So, in your opinion, maybe your opinion, certainly the Coherent position, how real is this, and how far out are we talking about? If in fact, this is grounded in reality. A couple of elements to, so that's the first question. Second is, what are the optical problems that exist, kind of trying to transmit from space versus kind of ground to ground? I know that Coherent's done some work or has given some thought around this, so I'd love to get your viewpoint on this. Yeah. Matt, believe it or not, my dad asked me about it. My dad and I had a conversation about data centers in space three weeks ago. So it is in the mainstream media, if you will, I guess. But today, we serve the SATCOM market today. In fact, we have one of the industry's broadest portfolio for free-space optical communications, which really is space communications. If you look at what are the components there, everything that you need, all the photonic components that you need for terrestrial transmission, you need for space-based transmission. So in the SATCOM market that we service today, you've got all the same components. But here's the twist. These components need to, there's a whole host of additional requirements on these components. They need to survive radiation. Yeah. They need to survive launch. They need to survive the shock and the vibration of, they need to be able to operate reliably in a harsh environment of space. Then, by the way, you are talking about a line of sight connection between two objects that are moving at 4,000 km/h. Right. So there is a whole host of other optical components that you need, telescopes and gimbal mirrors, so there's a lot of specialized optics, and a lot of which we make at Coherent. To the extent there are data centers in space, it's great for optical connectivity, and it's great for Coherent. I'm sure, as my colleague often says, I'm sure in the future, data centers will be deployed in ways that we've not imagined today and be inconceivable ways. Yeah. Wherever humanity takes the data center, Coherent will be there to provide the connectivity both within the data center and between the data centers. Those give us network. That's a fantastic close. I love that. I wholeheartedly agree with you. The one thing we, I think all can agree on is the future data center is going to look a lot different than the data center of today, and it's going to live in places we never thought imaginable. Sanjai, thank you so much for taking the time on this. This is our Connected Intelligent Edge Spotlight. This has been a really fun conversation, and I hope we can continue this at another time. Yeah. Thank you, Matt. I enjoyed it. Thanks very much.