All right, we're gonna get started. Good afternoon, everyone. Welcome to the MaxLinear session here at the Stifel 2024 Cross Sector Insight Conference. I hope you all enjoyed lunch. I apologize that it was a bit political, but that's just what the topic was. My name is Tore Svanberg. I'm a Senior Semiconductor analyst. I cover analog processors and connectivity semiconductors, and it's my great pleasure to introduce MaxLinear. With us from the company, we have Dr. Kishore Seendripu, who's the company's founder and Chief Executive Officer. Leslie Green from Investor Relations is also here at the front. The particular format of this session is a fireside chat, so with that, we'll just get started. Kishore, thank you for coming to our conference. Great, great seeing you.
We tend to start these sessions with a very simple question, which is to give the investor just a general overview of MaxLinear, especially those investors that may not be that familiar with the company.
Thank you, Tore. Good afternoon, everyone. Thank you for attending this session after lunch. You know, when you think of MaxLinear, the first thing you want to think about is whenever there is high speed, high frequency, RF mixed signal, digital communication links, be it networking or wireless, those are the technologies we specialize in. And those technologies form the basis of the end markets that we have targeted from inception. We first started in the broadband access markets, branching out into connectivity around the broadband access and then moving subsequently from that to infrastructure markets. The big focus for the company over the last few years has been, you know, growing our infrastructure business to develop a nice, you know, diversified portfolio with good gross margins and operating profits.
On the infrastructure side, you know, the main components of our business are, this is very, very fledgling right now. We have been investing for a few years to enter the optical data center market, also known as the PAM4 DSP interconnect market. And then we, we have had success in our wireless infrastructure investments over the last few years. That is the main portion of our infrastructure revenues today. And the last couple of years, we also made forays into enterprise Ethernet and, as a part of our infrastructure markets, basically. There's also an investment that's gone into hardware accelerators for storage compression and, decryption that those are the components of infrastructure that we've been investing for a while.
The other big part of our revenues, historically, has been the broadband access market, primarily starting out in the cable DOCSIS market, and today we are expanding into the PON markets. And, as a companion to these platform offerings in broadband, we also have Wi-Fi connectivity, which is basically Wi-Fi 6 and Wi-Fi 7 offerings, along with the network processor or host processor that is there on these platforms. So on the broadband markets, we compete with a full platform solution, and on the infrastructure market, where it tends to be RF transceivers and modems or pure SerDes kind of products like PAM4 DSP. We have another part of our market where we call the industrial multi-markets.
Basically, the IP that we generate in the various other markets, we tend to productize into slower, really, really sticky, long product cycles, good cash flow generating, but slow growth rate in the industrial markets. These are primarily, you know, interfaces, interconnects, SerDes interfaces, and bridges from one standard to the other, basically. So that's the composition of the business. So basically right now, the focus is on the optical data center market, and we are trying to enter the market with our 800G PAM4 DSP, followed by our 1.6 Tb offering called Rushmore.
Great. Thank you for that, Kishore. And I think an important question that I've been asking a lot of semiconductor executives here is, you know, now that the industry has finally gone through a big upcycle and subsequently a downcycle and now starting to find a bottom, could you just take a step back and think about the last couple of years and identify some of the things that MaxLinear did really right, and perhaps also emphasize some of the things that did not work well? I mean, were there some things that you would have done differently, you know, now that you look back? Because it was, it was clearly one of the most difficult cycles we've ever seen.
Yeah. So that's a very, very good question. If you rewind back to 2022, our revenues hit a peak of about $1.15 billion, out of which if you take the broadband access and connectivity businesses together, it was about close to $800 million in revenue. And today, the same business is around $150-$200 million. So you can see it's a huge, almost like a 70% reduction in revenue. So it's been very, very, very difficult. Actually, our infrastructure revenues have done well. There was not the crazy demand, nor and we were actually short in supply material, so we didn't have this inventory accumulation that the broadband access and connectivity business went through. You know, looking back, clearly there was not a new paradigm.
It was a pandemic-driven excess ordering, double ordering, and the anticipation that the demand is going to be much higher. So your customers ask for more products, so you do your best to deliver more products. So looking back, I've asked myself, "Would you have shipped less?" Actually, that was not even a proposition that we could entertain, because had we not shipped, our competitor would have shipped the products, and we would have not got the check, but we would still face the same situation we are in today. So I think on the broadband business access connectivity, there's not much we could have done about it. On the other hand, you know, where we could have done a little bit differently is the amount of focus we could have brought to the investments in infrastructure.
Right? And, you know, doubling down more on the data center than we did, that would have definitely helped the accelerate where the products are today relative to what it would have been had we accelerated our investments even further than we had done before. I think those would be the two that would be one thing I would have done differently. On the wireless infrastructure side, I think, our great success was turned into not so much of a success when the geopolitical issues cropped in and the 5G market TAM got split between China and non-China. I think we got caught in a situation where the broadband business was so big, and our investment profile in broadband itself was matching the revenue generation to the next generation of technologies, and we had to keep that pace.
So what happened when the revenues went down is that we still had to go and fill the vacuum and the gaps in our product portfolio for our success in the broadband space, and that's what you're seeing right now. But the good news is that all the big parts of our investments, be it broadband or all the new product investments in infrastructure, they're well complete now. We expect and a shift down in our R&D spend level, and these should generate revenues for the next five years. You know, they would comprise all the new revenue product growth drivers that we have in our portfolio. So, I think the painful part has been the revenue being down quite dramatically, and there's still the investment needed to continue to close out what we started, basically.
No, no, that's fair. So to zoom into some of the segments, and, you know, you talked a little bit about the 70%. And let's start with broadband, right? So it peaked at $140 million, you know, that did $33 million last quarter. So a pretty substantial decline. And I know you've talked about the broadband business in general, kind of being like a, you know, flat to up, flat to down type of market. But, I mean, is there a chance that that 31 goes back to 139 at any point? Or, you know, 'cause with—given the cyclicality and the, the steepness of it, you know, could that business go back to 139, or could it back to 100? Just, just, you know, if you have any data on that you can share with us, that'd be helpful.
It's really difficult right now at this point to bracket. You know, we can only conjecture here at this point, right? If you look at the peak revenues we had in broadband to revenues now, clearly at the peak, they were ordering 2x what the demand. So the answer is somewhere in between. So I don't see broadband access per se getting back to the pandemic peaks b ut I do see it recovering to pre-pandemic normal levels. That would put it somewhere, you know, in the $75 million-$100 million range of revenues on a quarterly basis. 100 will take some time to get to, but 75, I definitely see the recovery happen to that level in a 12 - 18-month window. Now, there's other things that are happening within our broadband business. The broadband business you saw in the pandemic period was really dominated by cable.
Cable and cable DOCSIS shipments, but now we've been investing in the PON business. And, you know, in the PON business, we had a major Tier 1 operator success in North America shipping gateways. Then at another Tier 1, we have had some PON success winning the SFUs, which is basically the fiber terminating at the home. And now that same operator is in bids, has bids out for more gateway business, and based on our track record, hopefully we'll have success. So then we'll have the top two Tier 1 operators in North America for the gateway business. That will have a drag-on effect in Europe, right? And that's still coming. They're a little bit behind the U.S., and they tend to be in a lower quality gateway. Still, that's all growth for us, right?
Last year, PON was about $50 million, and we hope to more than double that in the next two years or so. That's the landscape. Broadband as a category, access can grow, but reaching that $139 million or $135 million seems a little bit, you know, chimerical, if you will, right? I would put it this way, that the content quality is improving, right? Because getting some diversification going into the PON market, cable is sort of, you know, lost some subscriber base is eroding at the low end, but the ASP content is increasing with the new DOCSIS standard. Ultra DOCSIS 3.1 and 4.2 upgrade to the Wi-Fi 7, right?
On the PON side, too, you're seeing upgrade from gigabit PON to 2.5 G PON and 10G XGS-PON platform. So if you add the connectivity and the processing platform all into account, I can see the broadband access and connectivity associated with the broadband getting back to about $400 million-$500 million range, annualized basis. And when that happens, it's a matter of guessing, maybe 2 years or, I don't know, 2-3 years range, we get back to that number. I think I look at it differently, right? I think of the business, when do we get back to being a billion-dollar revenue company?
And look, and I look at that and say that, let's say broadband recovers to about, you know, $400 million range, including connectivity, $400-$500. And then infrastructure, we have a lot of growth drivers with optical PAM4 DSP, we have wireless infrastructure, we have Ethernet enterprise we have storage accelerator. Together, the new incremental revenue opportunity, $300-$500 million over a 3-year window or 3- or 4-year window. And then we have our Industrial Multi-Market grow, growing steadily. So I see getting back to the billions somewhere between 2026 and 2028 time range, right? 2026 would be an awesome outcome, but 2028 is a great shot for getting there.
Really, it's about waiting for the recovery in the broadband to settle in after the inventory's burnt and normal booking patterns recover. You know, bookings are recovering, but nowhere near the normal, because I think you're also going to see the opposite effect, where your customers are not going to place orders because, you know, they, they're going to try to see how much they can drop their inventory levels, too. On the meanwhile, I'm warning them that we are not going to hold inventory either, so the lead time is the lead time, and, you know, good luck to your revenues if you don't place the bookings in a timely manner. I think that game is just starting. That means that by end of Q4, maybe things return a little bit normal.
No, that's great, great perspective, and, and just to share that, some of that perspective with the crowd here. So, MaxLinear just guided for a $100 million quarter, right? So $400 million run rate. Clearly, the ambitions are to get to a $1 billion in that 2026-2028 time frame. What about the connectivity side? It went through similar cyclicality. I believe it peaked at $105 million. It just did $10 million last quarter. But here, the dynamics are a little bit different, right? Because you're looking at Wi-Fi technology, which, you know, can be leveraged into other markets. There's clearly the upgrade cycle with Wi-Fi 6E, Wi-Fi 7, and so on and so forth. So, should we think of the connectivity business as more of a growth business?
So connectivity will be a growth business, but getting back to the cyclicality of it is, you know, substantial. 99% of our connectivity revenue is one-to-one linked with the broadband operator platform. So whatever happens to the broadband, it happens to connectivity, number one. Number two, you know, the attach rate to the broadband is still not 100% for us, right? So connectivity will grow purely by attaching more and more in the broadband side. So there is the broadband connectivity, and there's connectivity at large. The connectivity at large is a very, very diversified, large TAM market.
So far, we have not had enough attention cycles given coming from the pandemic supply shortages and then biasing towards the operators to really targeting Wi-Fi as a standalone product that we sell in other products. I think right now we're making changes. We're bringing in the right personnel whose sole focus is to focus on Wi-Fi as a standalone connectivity product portfolio. So the connectivity Wi-Fi is a growth portfolio. The transition with 6E, 6, and to 7 should help us dramatically. But even more so, taking Wi-Fi to different end markets is going to be hugely helpful.
Great. Very good. So moving on to Industrial Multi-Market . I'll just keep it to one question on this one. So we should think of this sort of as an analog, traditional GDP plus market. However, I do know that you've done a lot of restructuring in this business, a lot of new products, much better quality of the SKUs, and so on and so forth. Is there anything you want to share with us on Industrial Multi-Market that could make this business a bit more growthy than its single digits?
Firstly, it has grown since the time five, six years or so. We had a recent pullback which is natural, but given it's such, it's an industrial market, and China has been pretty slow, and there has been surprising pressure in the market because when the, you know, all the industrial guys are trying to ship to the same guys, and too often. Hopefully, we build on this momentum, and, we get some interop quals done at the larger data centers, and they'll create a big pull-through into next year and the following year.
Yeah. No, it's a great question, if I may add. It's also a function of time. I mean, it took MaxLinear a long time to finally get traction. In fact, you know, it took so long that I think investors sort of, like, didn't give credit for it anymore. And now that they're finally ramping, as you can tell from the stock, it doesn't seem like everyone's giving credit either, right? So, but it's. I think it's a great, great question.
Unfortunately, we've run out of time. Thank you, everyone, for attending the MaxLinear session, and thank you, Kishore and Leslie, for coming to the Stifel CSI conference. Thank you.
Thank you, Tore. Thank you very much.
Enjoy the rest of the day.