Chip company MaxLinear is looking to make a name for itself in the fiber access market, expanding beyond its traditional play in the cable space to tap into what it views as a substantial multi-year revenue growth opportunity. While the segment remains a small part of its overall earnings picture, CEO Kishore Seendripu revealed it expects fiber access revenue to more than quadruple year on year in 2022 and likely double again in 2023.
Speaking on the company’s Q3 earnings call, CFO Steve Litchfield noted the fiber opportunity is one MaxLinear is “really excited about.”
“We're very underpenetrated in the market, and I think our customers are looking for some alternatives here,” he said. “We have some new customers that are ramping in the second half of this year. It's still relatively small in the whole scheme of things, but we do see a lot of growth, especially going into 2023.” Those new customers include multiple players in North America, and notably an unnamed Tier 1 operator.
The comments came despite a 5% year on year drop in Broadband segment revenue in Q3 to $120 million. Litchfield attributed the drop to “crosscurrents in the business” and a moderation in a growth rate that had been “running ahead” of expectations in recent quarters. He added he wouldn’t be surprised if the segment’s growth rate slowdown carries into next year as MaxLinear continues working to ramp fiber business to offset sluggishness in cable.
Overall revenue, however, was up 24% year on year to $285.7 million, with Connectivity segment revenue rising 118% to $83 million. Within this business, Seendripu said the company is “well on our way to doubling our Wi-Fi revenues in 2022 versus 2021 and on target to deliver $200 million plus in sales in financial year 2023.”
Infrastructure revenue increased 22% to $36 million and Industrial and Multi-Market revenue jumped 30% to $47 million. Net income more than tripled year on year to $28.4 million.
In its 10-Q filing, MaxLinear noted a single customer accounted for nearly a third (31%) of its Q3 revenue. Its 10 largest customers collectively accounted for 68% of revenue in the quarter.