Advanced Micro Devices (AMD) 24 Oct 172017 Q3 Earnings call transcript

Greetings, and welcome to Advanced Micro Devices Third Quarter 2017 Conference Call.

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Laura Graves. Please go ahead.

Thank you, and welcome to AMD's third quarter 2017 conference call. have earnings opportunity commentary release should copy review and you our of and now, had to the a slides. By the CFO

be a quarter based on will Devinder at have of as on Su, call and Financial President on you is replayed quiet and the Those not close Executive these would Senior Credit and materially statements Lisa they December contains If Treasurer. This Officer; Vice Chief present we assumptions and Friday, on from a of to Chief highlight at via statements like reviewed time November beliefs, on see and differ Media our involve and will be Dr. AMD's live our Participants ir.amd.com. for can Officer website will such, Technology Suisse Conference fourth and dates I our on cause webcast amd.com. on to as the begin business Kumar, currently of Telecom that actual XXXX. environment Su risks and results you. are it. as couple based Tuesday, important forward-looking could today's current call documents, found President, XXst Lisa uncertainties Annual Today's only the XX, the current discussion expectations. our speak XX, expectations, and date, at

their quarterlyearnings.amd.com. during to in refer measures operational on financials press financial press GAAP for release referring and today's our CFO information. to in Additionally, reconciled the The most directly website results, a CFO and be the on statements this except comparable are commentary GAAP please are earnings more basis. for commentary referenced release note cautionary measure we that and posted Please at to which non-GAAP call, revenue segment will non-GAAP financial

for risk AMD's discussions July the You'll report Lisa. on about also filings I With XX-Q Lisa? particular, that, hand in our to Form quarterly the X, will SEC, XXXX. call factors and our detailed quarter in find the with ended

Revenue you, was for and AMD, demonstrating leadership potential all afternoon our listening Thank strong IP, billion. quarter ago also we growth increased achieved year quarter. the to today. significantly strategy. and of free significant those in from $X.XX year-over-year products, high-performance long-term improved Gross cash QX the strong good XX% us, to a driven profitability margin Laura, in generated positive and flow by a as

Graphics and graphics CPUs, processor the increase a of segment, in in Ryzen Looking the revenue strong well to desktop revenue X a excellent growth, X we as Client significant market XX% as computing and double-digit share success QX, demand desktop at ago, Graphics the the percentage year Ryzen family in combined continued market. we with a resulted and from year-over-year. ramped Ryzen strategic our of and segment saw in desktop e-tailers increased family by market, worldwide. Ryzen our have Computing processors channel increased expanded Computing XX% progress XX% made at our in reaching

financial combining to our shipments demand weeks year ramp coming AMD for GPU in mobile PRO-based by our we PC of adopted initial quarter, the XXXX. Ryzen unit cores quarter higher as market the their including providers, markets. holiday space. HP, our Ryzen achieved and in Vega-based on premium value into HP, were the high-performance Also, ago. which had Lenovo, power in shipments a the CPU record and in notebooks. mainstream advance adoption an CPUs, desktop the GPU graphics, in launch and in across and launch of strong APU have and In began In based Zen been consumer commercial assortment and processors we of presence expanding Dell, and quarter, in and X, expanded commercial by and improvements offerings, Ryzen we cycle. These GPUs launched addition, OEM designed Ryzen segments, Polaris and early the all Vega QX gaming expect our Ryzen Lenovo new major and qualified shipments portions we in cores processors, the plan reach Ryzen improved launch and two-in-one solutions. the to driven our ASPs customers both revenue mobile-based GPU the we the In Acer, In premium with notebooks expanded including is Threadripper the expanding from market accelerating ultra-thin market, returning further a high-end sales quarter, of of blockchain products graphics systems additional to significantly to professional

GPUs Our enthusiast-class And channel customers. in family professional our significantly WX late Radeon the premium high-end content also compute the XXXX initial of market, shipping GPU the volume these targeting Vega targeted Radeon cards, the Radeon Radeon RX to creation started Revenue in segment. shipping solution, from products graphics shipments in previous MIXX, mega-cloud professional gaming GPUs. launched outpacing at of Instinct Pro datacenter quarter. is began

deployed saw In to AppStream quarter, Amazon X.X, delivery cloud Radeon in Radeon adoption AMD cloud with driven customers by driving Amazon Pro GPU Services our applications. technology that virtual they in the announced GPU-accelerated expanded addition, Web AMD compute. power of have investments we

AI with of datacenters. collaboration and flexible platforms a Instinct computing in Baidu the Radeon to our announced powerful their build on more based GPUs also deployment We

as server was processors. flat Enterprise, segment, sequentially. our growth semi-custom to on and Embedded seasonal based XX% Semi-Custom from growth was and approximately in datacenter as in revenue EPYC Sequential revenue increased increase a our year-over-year Turning revenue, well

we In from EPYC OEM our ramping began our key expected processors with Xbox year One and revenue platform and seasonal of with mega with seven and the period, continues engagement X. the our datacenter healthy EPYC providers. a cycle EPYC holiday the processors In super our planning short including anticipate and business, customers. And list as to implemented as tested a of are of joining as to remain PlayStation cloud customers as sales cloud ago and announced to growing Tencent business customers server three processors. increased datacenter sales Tencent. JD.com server enter features their perform the true deploy and X publicly hyperscale is EPYC-based deploy datacenter we and Customer plans the to to we Azure year with products into Pro demand strong have Baidu, other the have Sony's major for semi-custom Microsoft Our Microsoft's environments, of engagements providers performance

and large market systems in addition, actively accelerate process of are QX, of datacenters and the bringing platforms first and In engaged validation are Enterprise EPYC-based Dell across EPYC-based HP them to to testing in we in based enterprise of their with remain set expansion of number feature broad the and the rich over customers. presence product. a coming quarters steady on confident the and the EPYC high-performance on datacenter medium of We and focused our

our our with closed as differentiated market successfully delivered IP, ongoing year-on-year and transaction a customer patent of we XXXX, our significant closing, results. margin milestones. strategy we addition, Throughout third and In revenue part to in major product, licensing very we achieved a as multiple quarter. are quarter pleased have the monetize In we expansion growth

business. companies final look in long-term XXXX forward our one and the into make AMD we we quarter our tech continuing year, confident the accelerate previous above to to our head of tracking is the growth of the ability remain estimates premier now in annual industry. we revenue growth to As

over turn like financial the to color I'd performance. to provide to our on Now Devinder third additional call some quarter

income gross year-over-year, everyone. Thank We expanded $XXX share. $X.XX Lisa, of I our increased you, with net good XX% diluted net XXXX. per afternoon quarter of for and revenue both pleased and achieved earnings performance margin and am operating the with million third income of and

our our EPYC Radeon portfolio products offerings. of Vega We many are executing years well with including and strongest Ryzen, in

quarter provide third XX% for of our Graphics our XX% revenue $X.XX Computing was to while billion since quarter. quarterly segment, by specifics sequentially. Graphics me as the This revenue. revenue and segment some the and XXXX. Year-over-year higher growth Let due segment Semi-Custom of highest year-over-year primarily was and is Revenue as Embedded sequential the Computing Enterprise, well grew and seasonality, growth driven fourth

in of for XX%, took wafers agreement X patent points agreement our year-over-year, another monetization revenue both our closing and driven a IP primarily also costs Graphics and by which mix another by had richer that efforts up wafer impact step on percentage segments. was the We margin at a positive partially foundries licensing IP-related a Computing were from the supply offset global purchased segment, benefit associated by foundry. with Gross our

had the our which $XXX in good our improvement new million We products, ramp by due R&D-related Operating third on gross $XXX year expenses incentive impact of was compared performance. to primarily a investments ago. Operating XXXX, continue of income expenses employee of a year driven higher high-performance $XXX to increase on The annual ago. on related was million positive make million progress a million the to to our better financial quarter $XX a solid and margins. programs,

million Third other to ago. as million net ago. by includes $XX $X.XX offset was taxes a $XXX a convertible related ago. from taxes year interest from licensing a based our million, quarter or on Adjusted interest quarter up diluted was earnings XXXX revenue. Net expense, third share year XXX.X slightly was share Lower per the million largely $XX shares EBITDA per million year shares, was diluted XXXX income year compared million $X.XX calculation a of to withholding which The $XX ago per for compared million, and expense X.XXX earnings of was for $XXX million or to share $XXX notes.

Computing primarily approximately partially of to lower desktop by The improvement our million, and $XXX segment and revenue compared turning strong semi-custom was revenue. the SoC year-over-year to Semi-Custom a a segments. Now offset year-over-year, year Graphics XX% IP-related business higher $XXX flat revenue. operating due and was and solid due $XX sales, Radeon primarily $XX million segment revenue to sales was ago. processors. million, to million Computing graphics was Graphics income Embedded up Ryzen Enterprise, due of loss to

Additionally, of server revenue increased ago, year from products. by driven increased sales the EPYC a

million customer Operating deployment a primarily due down year higher plans are heard earlier was you ago, from $XXX costs. interest million As and income to million, $XX strong. Lisa, $XX from

to sheet. the Turning balance

Our including flow quarter, Free $XX from was million revolving higher was third which $XX line in rate. line interest Total of to down of interest secured secured $X.XX revolving credit billion. pay In quarter from million, quarter, the the on higher prior million the balance prior in revenue. marketable $XXX Inventory was to the $XXX quarter, million due at securities X% end cash, the cash in equivalents down sheet at primarily debt our quarter. the a the million billion. to Long-term of credit, cash has the year-ago compared total the from we $XX lower used $XXX was principal $X.XX million end debt, up and million long-term of debt, $XXX our period.

Before outlook quarter. our turning of purposes, a me remind fourth quarter, of quarter XX-week which fourth quarter for for is a let the to you, XXXX the comparative XXXX, XX-week that was

we information expenses $XXX plus increase approximately the operating than is share the quarter revenue revenue gross We For approximately are to count taxes, to strong high-teens expect decrease and not be fourth now share you approximately growth the interest diluted X%. other margin do online. new third minus XXXX, additional inventory and we sequentially. year-over-year. to momentum in or $XX to premium with At down this to quarter In XX% and We to non-GAAP revenue XX% of our approximately commentary, can XX% pleased to find of to significant compared anticipate which guidance the equates million, sequentially, be mid products. growth. the changes XX%, quarter expect be of prior be regarding fourth a CFO XXXX to non-GAAP in over closing, the approximately midpoint, count the by Non-GAAP of million, was greater to expense, posted and annual the the percentage XXXX quarter

progress making committed financial our Laura and turn back our margin our performance I'll Q&A multi-generational achieving Laura? objectives; long-term With session. to improves, expansion towards and targets. investing financial We to remain road we growth solid and for it that, in our are as maps

for ready we're first Thank please. you, Operator, question, our Devinder.

Thank you.

coming Please with question. proceed from America from is Lynch. today of Merrill question Vivek first Our Bank Arya your

for Thanks my taking question.

the the QX benefits For a could beyond? if one, quantify segments, you you is first in different this the see wondering in benefit Or help and do I IP one-off? license and of two ongoing was your

deals our spread in over a Sure, was Vivek. The and progress. patent a we're When several close a working going we licensing forward, We IP-related did thanks and question. revenue constantly we pipeline transaction. from was segments. we're Hey, have of at it at And the transaction. standpoint, IP It looking benefit deals them. for both look

So we product-related believe that and factor primary on a the product-related the we as revenue focus but will be IP-related growth. revenue is forward, go our

line heard just IP in the monetization the much us you, so, is talk this both line very that. – is in remind Lisa to said, efforts, And spread our Vivek, over Yeah, as segments. about benefit you've and with

I from Got of sort around it. Lisa, follow-up, you. product sales? your you And importantly, somewhat see better. Ryzen look seasonality, more line we will when new adoption perhaps more in products, then, mobile more the at of to with color your EPYC EPYC when your outlook, for it's my a us QX contribution tangible portfolio, give but Can start Thank the

Yeah, absolutely, Vivek.

you going at on So how the look, ramp with look we'll new up in year-over-year, XX%. we revenue the are very guidance, is products. pleased QX general When our be

the go the as business the second of year. half accelerating really we're we So into

business our is know, seasonal. typically you As

we're so semi-custom what we And revenue. due into Ryzen some of to new QX quarter seasonally going QX of peak down then we is ramp strong But the is products. to ramp. from see and the a QX see continuing to We fourth see the

ship mobile half the of and in will Ryzen the year. of first We then in more volume QX

We will of ramp and EPYC OEM will also an see Vega. see ramp of we a

we're In of some some have also be the cryptocurrency terms of the the that demand. will and there headwinds, of we seasonality semi-custom leveling-off predicting

it we've like look continues to a factor, at but channels in we and it, the seen be As stuff that. restocking

being side conservative cryptocurrency a on we're little the the equation. bit of So

you. All right. Thank

please? question, Next

proceed David Our next Wells question. with Please Wong question your from is from Fargo. coming

in idea datacenter and in discussions you or driving any whether potential have some applications? us streams customers any semi-custom Specifically, in accelerator might designs that give of you Can bring wins revenue semi-custom much. XXXX? very are new processor in for Thanks autonomous you with

sure, Yes, David.

So, performing business look, to the a well business for semi-custom continues us. that's be

Atari XXXX, customer and their customized we be for we consoles. into Sony beyond next-generation. we go our this we that Microsoft will the set are game past adopting So quarter, a Actually, expanding as are traditional – announced processor

markets also have number of work. continue of markets And new of console, that a to mentioned. game outside in you are We that opportunities we including some the they

go be we and the we So product semi-custom XXXX. business will expect in as some into there the will will takes particularly and new second in overall, be revenue puts some ramp of XXXX do that there half

Great. Thanks.

David. Thanks,

you. Thank

proceed from coming with Lipacis question. Mark Jefferies. is question from next your Please Our

my for question. Thanks Hi. taking

it's might better outlook QX, have First for one on the given QX. gross versus And likely margin you sequential I expected I increase mix. like it the guess, looks will flattish that a have

licensing that, hoping I'm you cost if I'm impact just it's an So can that. on or wondering reconcile fixed had absorption?

Yeah.

Let Mark, then start, maybe will and add. Devinder me

IP-related When from yeah, have the look margin and some we gross and business margin with year-over-year virtue Computing well gross our puts transaction. the at look, gross in the as of the and we QX, takes Graphics from as multiple benefit were progress, we So, margin. we as that in of revenue both came mix look pleased at

have As to products ramp. new we go continuing into QX, we

driver having of the the is the ramp. QX sort margin see we Vega you'll the And in of benefit EPYC So QX. have for And the revenue. primary the and gross product IP of headwind do not revenue Ryzen,

So But the and is new accretive. the is point puts those to are outlook. takes. contributing gross gross that's product QX and margin margins our And the revenue main are the ramping

Okay.

had you Lisa new if to year. can look of gross And this we XX%, Analyst then are in I strength trend that's and referenced. are we XXXX And from at strength new If XXXX. the compared just XXXX be add, the Mark. financial XX% the primarily margin greater to we into product XXXX, expecting on of at on be Day Hi, from that expect in based track standpoint, we the And XX% the XX% than with that to ramping going model out long-term XX% to laid of the premium what on a products margin.

you. Thank helpful. may. if I And That's a follow-up,

to actually you right you who to can going applications. are into EPYC On datacenter testing live in what us deploying shipping understand help EPYC customers now through versus server Thank side, you're shipping extent are the customers who

Mark. absolutely, Yes,

going pleased we're with how things overall. look, the EPYC ramp So, are with

So been mostly early applications. deployment shipping in non-cloud cloud expect non-cloud we to of as we in In again cloud as both customers QX, both well to have testing. see some QX platform-type and level

With what from new Enterprise the Dell, customers. and we're and in HP ramp platforms coming opportunities, is actually particularly, a saying in new enterprise seating medium of large

and we So go is year. expect we as overall, more into EPYC going next the well QX and ramp into deployments

you. Thank helpful. Very

Mark. Thanks, next Operator, question, please?

Certainly.

next question. Ambrish proceed Srivastava Please is from Our question your BMO. coming with from

taking Patel, questions. Kulin Ambrish. is This calling my in for for Thanks Hi.

to you XXXX at in margins? Do You headwind highlighted you a expect in purchases external had be your could forward that related gross PR going foundry. in a to any wafers or another meaningful headwind GM buying that QX,

going want think at at that's scripts I the of related volume is from and volume a is forward the calls, in if guidance viewpoint the to way look why but I the way it and is that costs beyond QX look of the our highlighted at contemplated you our and you QX that's is look from the pretty the it's referenced a in standpoint high, long-term WSA models. and with all

seeing and Okay. meaningful revenues quarter. Instinct Radeon in discuss product? you MIXX launched last Thank you on outlook? that had the Can your XQ question you. Are maybe in the I seeing a – in you traction And XQ you're any

Yes.

multiple the see shipping the high We volume Radeon start Vega in the QX very So did in datacenters. interest for to portfolio. do customers. cloud product a Instinct MIXX actually is We

flexibility. the increasing software we lot that into usability focus And ramp and QX. continue to so to expect software the on of And a there's

very customers it's from in in And invest markets. of overall, with pleased But, MIXX those a so coming the continue areas. multiple in number interest actually to I'm we and

Thanks.

you. Thank

Next question, please?

question next Stanley. question. coming Moore Our from Please proceed Joe with your is from Morgan

CPU the Great. comments was Can in business of we graphics businesses $XXX now driven segment? close is take you a million Thank by graphics. the par you. two Computing the was and that business? interested sequentially, primarily that that? size in growth there that give in I the up if with Graphics your sense guess, I business is should to of the on just And sequential literally How us general

Yeah.

very Computing the past the overall, has been you as the Ryzen growth And well business strong. side, growth in the the seen few particularly as in side. So the Graphics, look desktop side of we've quarters graphics both and when on on over

So of the in quarter in business, that result of product seeing as the of seeing the very size I growth we prepared stated new business terms for we're us remarks again, had a We're think the strong growth. GPU and launches. a strong record

the progress the Ryzen in e-tailers with as the X well world. and very did well you of at we're across Vega significant for performance. product both well retailers Ryzen when Polaris in the we're as did and And actually pleased markets. making channel X the seeing overall blockchain So and look across that the those Ryzen the us parts in quarter say segment, look I'll also business. in desktop We gain But yes, the in we're graphics the But gaming in very quarter. share

are both Graphics Computing to continue think expect of growth And we business as I go doing forward. So we well. parts and the

blockchain the possible it of size portion that? is to And

channels be, again, does. goes of it's in because separate of I as will the that tends it as we blockchain think some to say QX. blockchain the same sort gaming to expected behaved hard I through

benefit did we didn't expect. anything channel see that some we We So of see restocking. didn't

compared inventory blockchain inventories channel there's blockchain if July, into commercial into go off at believe expect that we channel is we the a and But continue also to we our as consumer you levels. medium look bit will we And component QX. level interesting healthier So likely today had that to term.

as of we we OEMs. start from GPU just ramping into QX, also the Vega OEM As though, growth we business look into see the side

very much. you Thank

Next question, please.

you. Thank

juggling margins, point Good calls is of proceed just Our your I (USA) you a how Suisse could Please next on about is a Ryzen John your we I'm more and - LLC Apologize, the wondering the see quantitative where to couple ASPs gross next the think of afternoon, Yeah. this start kind of Ryzen. margins? quarters? over us else. that kind Lisa. Credit if question I'm understand unit importantly, accretive several and some is Suisse. from everyone W. And relative Pitzer And repeat. the a PC apologize where wondering, just I we'll progressing think if more how John the coming accretive I'm from Pitzer business Securities help of now just accretive tipping gross guess, question. with like qualitative basis success given and do much But is you ASPs leverage significant the Credit to

Yeah. Absolutely, John.

we are at is how say of stages So market. the though really fair in Ryzen early It's the to still pleased competitively look, that ramp. performing with we're Ryzen the

in primarily phenomenon. and Ryzen has QX desktop been channel So a QX,

have the So been most in desktop of sales the channel.

ramping started nowhere have of will we continue as the go QX. client majority into space. OEMs in it's And But revenue. the OEMs ramping near desktop we the We

will on speak, should the because as that year, expect through consumer ramp we're platforms the commercial the first You on of and to and also front. both for more next more half we us adding continue Ryzen

ramping again, it's The well. see we good. so And ASPs are

be of just the it between differentiate bit customers sooner follow-on, - on increase So who half thinking QX, And of well ASP QX of how EPYC, about EPYC. your version some continue and end sort went OEM W. traditional kind if as we to hyperscale I'm should X% just share. take year John you how and curious just high-end of the little actually, will I exiting And we a Kind (USA) Ryzen as Ryzen about first from ramp a we think next year. potentially and versus ramp in EPYC? can about into about Lisa, you saw talked of might know to of next launched Securities of the question Suisse desktop we kind as have and guys you then, similar QX Credit at a my the Pitzer more LLC as around channel, that X

Yeah.

X% I'm next sizable a we by of XXXX. But end revenue portion expect So, said not EPYC John, ever the be say we is would in our what sure of I to year. that

the deployments. some second guys and doing The are early we're pilots early So hyperscale aggressive half they doing we're year, are and first. this

will the We point in revenue positioned, and But expect as strong. QX we we start launch. seeing in more into product the enterprise I look as we competition as the to some early go we're as product, XXXX. platforms And here of fill I enterprise positioning where the important at is think look is at the the

customers And seating. starting we're interest growing. their engagements seeing of platforms are the ramp available significant now are enterprise and customer so OEM And from becoming some as the

sizable EPYC (USA) Thanks. of Suisse - So be into in Securities XXXX XXXX. Credit to Pitzer and a to W. it will – we John LLC be continue a our overall, ramp expect should sizable portion revenue

Thanks, John.

Thank you.

is your coming from Ross today Seymore Please question with next Bank. Our question. proceed from Deutsche

letting mobile. the ask question. to Graphics because being The the of mix you down business, specifically, in sequentially for of were the Thanks me and back segment. highlighted that to go Computing ASPs and the client and I wanted

a turn ASPs John's start bit question, do Lisa, to of driver to to as a that headwind? positive opposed the you to a of in similar business Somewhat to be segment see expect your when

Yeah.

So are ASPs are desktop definitely, ASPs mobile down. up;

initial OEMs, the the think pace into see a half be we'll desktop ramp, mobile. should then, expect going as we the I ship then first we and will in first, first mobile And in of of QX there notebook look platforms with consumer that I volume desktop, year, you the rate Ryzen and again, commercial significant in of – see with When ramping in then a will commercial but QX. channels amount QX, think say, notebook desktop ramp of well. the of Ryzen we see XXXX half be starting think the as of sort it's and into then, I at I

clean a excess of think steady we as imagine, I also should ramp go ASPs inventory be taking we So product. the to as some as you to some We're there transition new can forward. opportunity, up

a we what pleased and we're overall, that behaving part in with launch so some product we're have as the into expected, new that's And with we positioned But sense, how of the strong just ensure we portfolio. as product. to go we're doing competitively very

one OpEx quarter, as Devinder side in things, for a third of little was on And OpEx dropping the I to into guess, the sequentially the switching my higher quarter. follow-up, fourth

in XX% talked to for past guide the You've range OpEx revenue a about year. this

think as You're XXXX tonight. going there probably as takes and But we of to is for not puts move with that XXXX? as we sort any much guide philosophy your precision can of considering you are investment far into how guys

in of the invest ramp ramp, XX% products the the I a their I'll towards But to now, I will right where Ryzen just as ratio with moment, you They cost is ramping, what expense said long-term about XXXX, which think model up is but numbers is guidance XX% the which, probably our said out end XX%. the potential we of the at the to the as talk OpEx about XXXX Vega, up concerned, heard products. revenue you want had few months, we go-to-market on to last R&D. say had previously I think about of target we equation, XX% do heard strength of as targeting upper the especially think primarily lot is are and EPYC, recall, with in new business, opportunities far revenue revenue, as obviously, are, end about the first current thing we in on in at especially the an growth we investments and have side with the coming we the you

revenue; same because we'll obviously, approximately So pleased and see time, products, XXXX. would of revenue. actually, from the investments the the a bring then XXXX, pretty get of in cost in product support in guidance where viewpoint OpEx the that down the map, have a everything works of very being to percentage been and XX% we go-to-market road into in business over if new the of pleased and QX XXXX we able I'm the to gave, for out make at XX%; ramp We're the

Thank you.

Thank you.

your is Canaccord Genuity. proceed Matt with Please question coming next question. Ramsay Our from from

much. X-nanometer GF. stuff have group. on the Thank ask about in about very think forward talked gave Good Mark the year. bit you afternoon. And the roadmap, doing I you wanted that taking comments I some with Lisa, guys roadmap I XX-nanometer about to down a some a quite to bit public processor particularly, know next little

extent So some to road are ramping I on think that and products to things of follow the you. map it'd about be can you helpful currently. Thank might the that if the could you future that talk be

Yeah, absolutely, Matt.

So very and is major important It's us node. we've for industry. the important a about node talked X-nanometer, node a for an it's

a XX-nanometer. our we And our road So view across enhancement that performance to on a on small have will We is all do expect map. it engineering opportunity would of lift. as of products those XX-nanometer should working that now. be we're current businesses. you that. resources relatively I And lot with see an And actively engineering a

graphics road augment overall some into are looking. And But our of pleased map. makes in is I would go XX-nanometer on of see the look into our will the I well. at the some so for performance road that products XX-nanometer then, we to it our the We're are working and opportunistically X-nanometer, XXXX products, that's sense how progressing as products to resources with – on we on subset client performance and of taking significant say, map. a And

Particularly, think press Thank QX? the the impacts in us also into a foundries. all for of comparatively for you bit applies But comes revenue you console third And quarter at you. either Devinder, IP And, the get to out. of a any impact us the it. there or way harder of second, that lot wanted are gaming of the that little assume margin, gross wafers TSMC can from gross of that Got I out quantify charges other business a on the to I aware few is margin that you'll using on things I that called forward currently.

you. would those that clarify be could If things you Thank great. two

Yeah.

from it within if guidance. standpoint, at look at it's the look overall you if our cost an impact, all you think I

there, IP it of obviously, from premium of it think if in are opportunities products margin the look the it QX. provider have was the that's at we to the you in the Major IP-related Basically, And benefit likely able we that see close we an thought benefit standpoint, cost then, across you And put how turned both the in being be the a that from gross quarter, the uplift there's new we would for of viewpoint that equation. despite launching. out. And to IP IP P&L deals from deal at trend margin. if is standpoint, segments. we the and the ahead I a go-forward pipeline look on of we standpoint several from and that the overall go

Okay. Got Thank you. it.

question, Next please.

Our next proceed Curtis Please question. from question is coming Barclays. your with from Blayne

for Thanks taking Hey. my question.

the could two about year been Just talk It's bit. last better it December slightly down XX%. if embedded between wanted business to guidance segments. The understand tracking Maybe year-over-year. down was you a the

December? then, is think that the way want I And this the can side, the on you just to maybe segment about commentary. So talk understand right graphics about to that

out restocking. of crypto of blockchain kind and said was some that You were flattening getting or kind you that

moving kind that what when Thanks. understand Just growth at you pieces? of in segment, look are the

Yeah.

me let that answer question. Blayne, So,

go that due does think at the business, same. standpoint. believe I QX the where seasonal overall, again, of believe the how you see the business We have We down and we see year of our fifth business. down, of on bit us. we you of down X I the a dynamics have into go We've because we are expect the we So GPU looked would to an the business some although into the as When overall, We the pattern expected. sort a the I Computing year-over-year Xbox the little overall, revenue from grow blockchain offset to And we're ramping see Graphics strong. the One think as We a sort compute to see and that and demand. perform ASP new on standpoint. Microsoft business in from OEM of higher quite the graphics with which is QX, of basis. will little peak ramp mix But we be semi-custom QX. We're launch look bit is that year-over-year as that's that those units and product semi-custom console, at Vega QX. see a cycle will a basis, continuing primarily in leveling-off be of that's a for positive

a following maybe just questions node. question, And on of Thanks. some up on then, second process the

TSMC as this with terms had in think the at track, at that? cost think were the the XXXX, about a required to do dual reuse doing you R&D should doing into look high you you product You you do GloFlo, core time. OpEx if about how of server How one a versus

Yeah.

part our engineering of it's So model.

we IP X-nanometer. a where And that So of multiple model our use we've continue go at will sort engineered can into foundries. as we

So XX-nanometer we year, in if and multiple this at XX-nanometer. you look have products

XXXX beyond, into and go we thing. As same it's the

related So there additional sourcing strategy. no dual our costs are to

strengthen and foundries. our what GPU these markets, overall Devinder we But multiple it's continuing doing new to from ramp to with invest sales R&D go to to primarily line our the think particular look our compute an standpoint, invest as I impact there's continuing and in OpEx broad opportunities, market around spending as said, in continuing side we the using new And revenue. with on marketing in will we're no market products. to of

Thanks, Lisa.

Thank you.

Our Rosenblatt from question Hans question. proceed today from your Mosesmann Securities. Please is coming next with

be you for node? can us terms that give in Lisa, timing X-nanometer and next initially the focus products what Hey, Thanks. of would for year

Hans. Sure,

to But not R&D products product timing X-nanometer. general lot done. will be I'm of going obviously advantage to say of I of on because would directly there's portfolio take comment yet that our So in a

as server we portfolio, X-nanometer of as density some the our from all get like that expect in at we the should shrink it. you client advantage So and portfolio And time. point to well our and the portfolio graphics take power performance our

it again, think will positioning so we forward. And competitive as really move help to we our improve

it right. if can All me. follow-up, was forgive answer a so and you then as already this answered And maybe

what IP what relationship type or or about? all you of is location in the indicate geographic market application front did what end IP On the QX,

Yeah.

say transaction. licensing So the transaction IP related did was that patent we a

that we a did markets, licensing. about from different that's patent sort thing THATIC. And great it This broad straight So our across our of core a has was the technology the markets. range with patent for applicability licensing, example, portfolio is of beyond

was transaction not technology so And transaction. licensing and a patent a this

Thank Thank you. helpful. you. Okay. Very

Hans. Thanks,

Thank you.

with is Mizuho. Vijay question. today from question from next Our proceed your Please Rakesh coming

Yeah. Hi, Lisa.

much out So the when strong. quarter mentioned and you the break was December sequentially and how see into wondering datacenter it going the just you EPYC, from on if have of I at wondering was datacenter grew how side, can sector I out – revenue came was look EPYC as it you you well?

Yeah. Okay.

a up think Vijay, I but little bit broke You question. I got there, the

server had sort small revenue the saw going do So strength small in QX. growth think base was I a revenue, for off a we since of it see shipments of the question of we into where EPYC we had in growing Obviously and the quarter. Look, a it's QX. certainly and EPYC unit good but base

as more as ramp to QX, we some long-term growth deployment EPYC We well. should think trial OEMs interest And more And turn the platforms, number industry. a more of the be will into about more available see growth expect especially platforms activity. of enterprise into as growth we will runs seeing these or from see our we're in a growing But customers driver. as more

see will of XXXX. QX, revenue growth be as we yes, sizable a but will our into we it go portion So into

start Got – do enterprise, that doing it. then like breaking out peers see out of semi-custom your you you And would are (XX:XX-XX:XX). datacenter and

a and we've hear, as second that. And we please. begin do to decisions I hard breaking then ask that question think the whether don't Vijay. would was any it, was We'll I to the out made you very know segment, question to enterprise repeat separately

Yeah.

do see on inventory inventory channel channel Just in you GPUs. the How side? GPU

Yes.

Okay.

your the I start as product-related haven't Laura how determinations of it I segment different we clear for EPYC, the said, product, first the any reporting. And So more of you as markers will think just is that But revenue. we on ramping made will nature we given growing. impact you'll think see accretive business give question, about be

The believe be light. little as healthier than it's in it second healthier Polaris question certainly well in a channel certainly but bit yet, that it in is restocked the some timeframe. October products. as inventory not would fully was in the relates Vega I We've both channel to say in graphics for It's was is might still it graphics. July July. inventory channel inventory the that as than I here channel of restocked

Great. Thanks a lot. Very helpful.

please. time Thank you. two have more questions, for Operator, we

Certainly.

Chris next question from Citigroup. Danely Our is from coming

line live. Your now is

Wayne and Hello. you Thank This did feel Chris Danely. you you my I you ask is for CPU Can Loeb for QX? share-wise taking how GPU question. in in

Yes.

to have obviously wait in. come the will until we So share results

feel about desktop think doing business, channel. when how CPU the at I look Ryzen in side we is of really we the good the

think we made progress So there. definitely we

overall a ship we the quarter us look we'd saw the significant few for volume record that until see you out in. significant have results a and to a strength the As how us. overall, products current new which wait again, come products our side, And in I well is was our GPU on overall But, weeks. again, important across growth, saw as come as ASP for and we would we results

also expected? you. you it Thank The view As Could your the on Was PC better? Worse? give industry? overall same?

good I think – that's a question.

the And that's is a and was in of There's little I is good doing in – China. about are dynamics Maybe the geographies a of overall, we better. change low-end geographical what think particularly tad think PC market. of I expected But, North at expected. sort softness PC about China thing. industry I about and particularly market see would think expected. some there's the the overall say well a But bit we what America what bit Europe. I good the We in

very you Thank much.

Wayne. you, Thank

Thank you.

Operator?

Certainly.

from Our today Tristan Gerra coming proceed final your Baird. question. with Please is from question

Hi. Good afternoon.

up reach more target for line design-wins EPYC. do Or get in seen the the you to Have You've design-wins share? have you there? announced design-wins to And you need longer-term what quarter? number that of some market XX% increase enough is of to

very Yeah. good question. That's a

believe one So platforms platform customer and then, design-win with targets. coverage now terms we our who multiple in the have platform at we or seen of we goal EPYC. increase exceed share design-wins customers seen with and We've quarter. coverage, meet have engagements looking in design-win to started And

win help not a our conversion revenue It's the we really to design-wins statement. coming it's design ramp in a as quarters. So of customers

time. base that have over we So those platforms to and with happy progress; in very number platforms the of we the customer customer happy the continue very with expand

platforms? of a Okay. my do enterprise quick And how solution setting – to Vega in versus and one factor EPYC then, follow-up this as selling opportunities customers just system architecture? value you that in the a will Is be notably see

Yes.

their good that customers software as from a customers machine interest seen MIXX together. actually PXX we both a And at have machine, have We We end of we have and looking product using SIGGRAPH. at OEMs to a their well as the working application. petaflop number trial EPYC on announced and/or that actually

well think very with system-level customers we do do to continue for want but say, that products as work those other and products point. integrated I selling as they well, it's work I but the on customers. And solutions do so, will always operate believe standalone yes, a we system solutions, some

management for you. turn to any over reached I'd Thank the our of the question-and-answer comments. We've further end back session. like closing to floor

and everyone, Thank you joining proud call. We thank for results of joining We're these our operator, us of you AMD. you. you ladies gentlemen, appreciate today. and appreciate and Thank support your

teleconference. Thank you. today's That does conclude

line day. You today. you wonderful may your and this for time disconnect participation a thank your have at We