Advanced Micro Devices (AMD) 27 Jan 212020 Q4 Earnings call transcript

Greetings, and welcome to the AMD Fourth Quarter 2020 Financial Results Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to your host, Ruth Cotter, Senior Vice President, Worldwide Marketing, Human Resources and Investor Relations. Ruth, please go ahead.

to Conference Quarter Call. welcome XXXX Full and Results Financial you, AMD's and Fourth Year Thank release slideware. By opportunity copy press to you review accompanying now, should a of have our had the and the earnings

Officer be President, If you these call Treasurer. Participants and the and reviewed and Chief have are amd.com. Kumar, Chief Dr. Relations of Executive today's our Devinder website. found President via Executive a they page and is documents Investor on live on be yet, will not Financial webcast can Vice conference Lisa our our on This Su, Officer; call replayed

will Before I TMT conference. the begin, Technology on Papermaster, Morgan note that Chief the Engineering, second Officer and we President, attend like March, Vice Mark would Stanley of Executive to and Technology

first speak such, as quarter March on business quiet based on assumptions XXXX close actual materially. cause expected from current contains results statements factors time and Friday, statement more the could at that on to our refer forward-looking only to addition, beliefs, In Please results press to could the in of expectations, to information our today begin cause involve current expectations. materially as release of XX. discussion Today's our that differ is and for uncertainties actual differ risks and cautionary

GAAP amd.com. We will on available are reconciliations in to call. refer slideware today's non-GAAP posted primarily to release full non-GAAP this financial measures The press and during

to like I'd that, call to Lisa? with the Now over Lisa. hand

as center ramped billion. new challenges XX%, industry-wide data significant production built business our by to our AMD the journey PC, volume We Annual as growth at XXXX navigating of and successfully an we in substantial marked good $X.XX revenue momentum establishing long-term computing record while our gaming Thank goals today. setting aggressive We than and accelerated leader. you, made inflection we Ruth, more all for a exceeded those throughout high-performance products. X-nanometer grew the year XX year afternoon in COVID-XX. the listening significantly caused and as point progress

gross than doubled net the expanded straight also prior year margin fifth We for income the year. from and more

also market our time approximately processor more units as client significant AMD surpass to by revenue million XXXX, as annual first since increased. than Server for new data client for than grew Adoption While set XXXX. EPYC XX% total revenue processor high-teens enterprise doubled in accelerated of more processors grew our are gained We annual record processor the than Ryzen of delivered XX% We the and now customers annual revenue. PC processor and XXXX in adoption sales all-time share our in year-over-year, we record XXX more across percentage revenue. a processor server a XXXX. sales cloud, overall HPC significantly annual center

very to fourth strong. year ended the record income billion, at net while the a grew we year-over-year XX% quarter, $X.XX Looking Revenue increased XX%.

life. by was in year-over-year. channel. desktop Ryzen systems CES this XXXX. in notebook XXXX processors our as and prior processor new Computing X In billion. demand ramp Fourth than processor XX% performance unit We our mobile particularly driven and segment. strong to At our to up OEM we increased launch and mobile our CPU launched life X processor. core, XXX sequentially compared the shipments Sell-through mobile, notebook Zen generation more higher any generation sales design percentage, of core shipments doubling of Ryzen of featuring double quarter our featuring extend Ryzen processors annual processors XXXX increased digit wins processor both strong, Zen shipments for gaming Graphics records mobile a and to our to performance battery launched earlier leadership, notebooks. for revenue percentage previous commercial new of sequentially and continued quarter revenue to battery for and the ultrathin, quarterly Turning month, set by a by the family and These Ryzen in Desktop year-over-year CPU our double-digit and strong XX.X Ryzen support grew our both both year-over-year delivering XX% $X.XX hours XXXX

than are We In by Desktop in of further increased increase watt of compared prior us revenue up powered increased GPUs, more our deliver significantly architecture notebook XX% sequentially. by generation. year-over-year prior our to featuring Graphics, prior track RDNA our performance to per on series sales Ryzen by new new well XXXX the for GPU our XXXX the driven quarter, and performance Radeon that designs positioning processors to number ramp from and declined our growth the X XX% the twice generation, XXXX.

our demand for are with above We than XXXX $XXX. strong ever high-end fastest-selling shipments very are Xx AMD our quarter GPUs. series larger prior launch new The Radeon seeing gaming priced any GPU GPUs

initial CDNA We teraflops architecture Instinct the is GPU portfolio industry's and production to Data but expand and year center new RDNA features MIXXX fastest HPC data first first Data the center barrier. with shipments decreased desktop mobile of GPU of ramp continue break and research, the MIXXX to our the Radeon for GPU increased AMD including and accelerator track accelerator. our XXXX to sequentially, XX the our GPUs. in scientific GPU new revenue strong X-based year-over-year the are to meet half demand, center the on

Ridge the on at our our making the first in expanding progress supercomputer ecosystem system United data powered the the National for States, preparation are exascale software center We Frontier online Laboratory. GPU this go hardware road launch and planned of to all-AMD year in strong Oak map later

by to the year-over-year in demand of server Semi-Custom sales. increased billion Semi-Custom turning processor driven $X.XX Revenue strong and our sales Microsoft both year-over-year consoles. XXX% growth Now on based and increased and next-generation segment. strong semi-custom Sony Embedded sequentially and Enterprise, for

on this Our current are the we be half cycle, the based seasonality Semi-Custom SoC demand. first than sales faster year to typical sales better console the and expect last ramping strong than in of

processors the as we grew sales of and enterprise of fourth adoption to Now expanding sequentially. larger in portions EPYC critical had cloud remains continue both to Tencent power and Cloud Microsoft, as server, Google, turning their internal of expands. record strong quarter the from revenue to their of Google use quarter others cloud AMD-powered AWS availability confidential regions. fourth new VMs launched powered X Oracle, instances expanded infrastructure, Alibaba, the general computing in instances by processors their while cloud number and XX public EPYC exclusively and

providers For Fortune AMD-powered wins XXXX the as the Lenovo of cloud top XXX list the the adoption services to fastest In November manufacturing, verticals, Dell, of year, supercomputers on AMD-powered in across from largest XX XXX. grew including In accounts the and key of to XX than available financial more HPC, instances including top Europe. AMD-powered increased X with end and number of servers enterprise, the systems supercomputer customer HPE the new secured doubled and automotive. number the

we performance, expect began next-gen We of efficiency shipments with leadership cloud and extend Milan planned, with processors, as to in quarter business server our our as customers. the and our XXXX TCO the code data in further to production fourth initial accelerate center launch Milan. name HPC

accelerate summary, publicly in of performance now demonstrate high-performance Xrd Milan this of the the backdrop, XXXX competition proud our leadership Milan the AMD computing highlighting compute-intensive accomplished EPYC the our and firsthand on all what years the from based have leadership coming technology the as are end public portfolio supercomputing capabilities has dedicated XXXX accomplish we computing. very are essential play a Longer dual-socket launch of we momentum and We digital we and of high-performance to AMD role we for to to track our computing last and to products and Milan. pleased product deliver right the make am to see the the industries and strategic we industry. when growth of even for performance the established growing for very better the strong the AI. strategic can the for daily In and partners. Gen coming our our maps weather compared cycle, by cloud confident to what cadence even guidance robust opportunities strong long-term plays last Against our innovation term, seen very very adoption preview demand I'm strategy more and franchise. capabilities with processors and have premier of driven with experiences, lives, few of of We processors modeling strong we on adoption important I highest-end over as the the conducted a year, expect X us the and mega set date, strengthens XX% on customers services, simulation. mainstream our remain transaction with further new acquisition accelerating role growing adoption well broader at a employees March of and support. XXXX. larger a strong high-performance to across computing our years CES, of first by exascale of a years excited over We our over We're running the high-performance the our road enter results milestones transition computing an In we talented pace in ecosystem close regulatory to the several transformation Xilinx technology track passed growth markets. and positions about in

performance. over like call fourth I'd Devinder? our to on financial quarter to provide and year Now color to additional the Devinder some turn full

outstanding year XXXX for Thank you, Lisa, AMD. and everyone. good an afternoon, was

drove record growth quarterly Our annual product revenue and year XX%. industry-leading gains revenue and of market share full portfolio with

We cash and net also flow. annual achieved record free income

from ago, revenue strong up prior XX% leverage to in year and to revenue and was quarter XX% up model. with employee and from Net earnings driven Fourth increased processors a a XX%, were year up and year-over-year. $X.XX of was income ago XX% share million sales share investments XX% a pleased a XX% diluted compared higher by or Ryzen $XXX the performance income margin $XXX activities from our strong year Operating expenses. up margin XX% by $X.XX $XXX $XXX driven year was by billion, Operating year and ago compared Gross per million are quarter console year-over-year XX% ago. a was per up the significant in financial We ago. our semi-custom million, million, and million, $XXX R&D go-to-market variable operating or growth, flat expenses SoCs. was and $X.XX game approximately from compensation-related EPYC was driven

EESC quarter segment Graphics billion, $X.XX million, Computing results. Enterprise, $XXX business of billion, segment operating $X.XX the XX% processors. significant product by processor year and and revenue. Embedded to enterprise revenue. early driven revenue revenue operating ago Computing Fourth sequentially, million cloud was ago and momentum driven the segment or continued compared of income year-over-year turning was by a $XXX driven $XX XXX% third-generation processor EPYC EPYC up operating and revenue growth. by was Milan sales including semi-custom revenue markets. across grew year-over-year or to of higher of higher up segment by Ryzen strong Semi-Custom driven processor XX% to XX% segment and primarily million server EPYC was revenue income a million compared income year Now an Graphics $XXX shipments

We of adjusted fourth free record billion, Turning ago, $XXX up cash to by from earnings. quarter was sheet. preparation Inventory to million million driven a quarterly XXXX had the prior flow $XXX higher $X.X in in year quarter. quarter million Fourth the EBITDA the was compared balance $XXX of sales. X%

the totaling portion Based had financial which strong a and results, benefit in EPS tax let allowance quarter benefit I GAAP year. fourth year and $X.X of me Before GAAP tax financial $X.XX item. for the released of turn of valuation full a results a significant a our $X.XX address we to billion outlook, our on the full

EPYC results. me product Radeon income XX% from XXX% revenue, was billion, from year-on-year XXX were sales. financial in year income driven the from the strong a $X.XX year. of or points revenue. prior to driven up full revenue segments. let XXXX. XX% growth turn of and expenses XX% XXXX of up $X.XX XX% Now semi-custom was operating year partially XXXX prior Operating by to up from $X.XX Net Ryzen XX% billion offset Gross was by and up improving ago was margin in year billion, both by XX% business basis our products,

cash Turning reduced the debt year flow marketable million securities the of debt. sheet. $XXX in million $XXX equivalents ended billion compared and $XXX XXXX. to in totaled at $XXX Cash, year-end million million $X.X We balance gross as with XXXX and by year free principal cash was to and full

of quarter to the the turning Now outlook first for XXXX.

in is in We $X.X sequential in strength driven X% business. $XXX primarily plus year-over-year all expect an of billion, growth XX% data and approximately approximately normal The center performance businesses. expected to semi-custom be businesses PC million than revenue to increase sequentially. year-over-year and be by seasonality increase minus and by our The is down our driven or better

non-GAAP million; for expense, diluted $XXX be to rate XXXX, we non-GAAP including expected QX other first expect: tax expenses billion addition, approximately approximately In to operating non-GAAP quarter be $XXX be approximately margin interest an and share effective gross to approximately and is of X.XX count million, be to shares. XX%; XX%; taxes

year full be product we our the pleased to XXXX traction which rate XX% businesses; driven results, company's customer In be in of expect share of expect of the approximately we approximately effective growth rate approximately margin tax X%. with momentum, revenue very to be market cash closing, XX%; non-GAAP and revenue; the strength demonstrate all AMD's and gains. growth to XX%; operating non-GAAP For we approximately non-GAAP expenses be to XX% XXXX, expect tax gross by I'm

in As to margin With we drive strategy, and question-and-answer are well our to execute shareholder business profitability long-term back continue the invest expansion, enter it turn gross deliver returns. Ruth Ruth? and that, to positioned I'll XXXX, the session. we for strong increase and

Thank poll audience for please you, Operator, questions. the Devinder.

[Operator Instructions].

Our Barclays. from question today Blayne coming Curtis first from is

annual results. very But on just very the strong robust. on obviously first, guide, Congrats maybe the

all color that be would product, robust segments I by But up. ones or than was very if by worse or any you segment provide wondering said You could XX%. which better either

Sure.

XXXX into us. for growth So Blayne. thanks strong we're question, quite XXXX. the for excited a Look, going Obviously, year was

businesses. strength As really the see our we of look we all annual at guidance, do across

businesses. larger So the our by led it's --

expect semi-custom graphics ramp So we the full center in our the significant see we significant also graphics XXXX. across lines -- as server, product consumer growth as PCs well growth console as business. growth growth But go in through we and we there in business data growth as in

think well new I strength environment. we're a portfolio positive as as overall, the of the So seeing demand product

to the about the a than how Obviously, PC several better as product I'm maybe seasonal just across think March how curious be the of thinking then year. curious just follow-up, seems about on And you're you shape I'm lines. overall much market.

think you curious didn't I quarters obviously, did semi-custom, think X the talked you first XXXX. as as half, second weighted. that. just much in half being you half of for first about probably then December about first how Intel And within of Kind

Yes.

our So QX guidance. you saw bit little that in a

and second as weaker half bit we than We I What normally normal seeing the environment. There's -- we shape a into year QX is the PCs better demand half center we're half consumer The guidance think given than better that's just our pent-up also standpoint, see strong from first is this bent. seasonality. of shape. a see and the year, is a seasonal. baked first the some than data guidance. see of the into little market coming But a gaming the different

both as ramp. our in So as we Milan see strength of products or our Rome sequentially well up that's server the current QX, the on and products

we normal, data shape different bit our across than and little center see but demand segments. a So PC strong gaming I think

question from from coming Ramsay Cowen. is today next Matt Our

to wanted in your franchise had and XXXX modeled server, I've bigger XXXX. with prepared Lisa, in prior for picked up you dollar And than to in accelerating I I the contribution much start the there years. growth in script, center data been that mentioned growth a

doubled think that probably I off that's year. last business a

a been will bit enterprise it the Milan have accelerate you bit. the past. than a that push And coming more Alibaba break saw in So maybe right slides that could do little that terms? you in a could think announced. I you've little in I down into launch There's percentage I

server helpful. would growth Some be drivers that really of

Sure. Yes.

question. So the Matt, thanks for

business. the data center We with happy the in are progress

think see was strong We I year a growth us. for significant do XXXX. a into XXXX

there a think drivers. number I are of

I First think of the all, for we're strengthen us. seeing cloud business

I the very the So going on Milan. as first of as half into Milan the strong. that's well reception and as is current-generation the year, Rome said, The next-generation both to

started shipments the with pleased into QX. we're continuing That's We So performance. in QX.

we adopt new Milan perhaps of sort generation. on more -- see previous that customers, our to see sort had You'll of customers expect been than

portfolio. strong very You'll enterprise also see a

we time-to-market plan with very of a think OEMs, this later quarter. launch part So I the our and that's key strong have platforms

data think XXXX. I are we in the overall, center So optimistic about

a across is think very well Milan there's of positioned. and think lot I we and cloud enterprise, need

look magnitude number no about folks incoming to thoughts. I been one. with lot that a My company thought maybe I number had as Intel. ask growth that and But us constrained, as TSMC of incorporates guided of through with might CEO increase hindering if of growth I And characterize no those have better clarified obviously then or the It's could how the you've And has supply But partners. for to and a line you CapEx with second challenges from question, strong was. online. increasing wanted something really little an secret much noticed constraints. big supply wonder COVID, Maybe have to supply. And two, And supply the what how because assumption guidance maybe some do your you to industry bit your you of is that's the it they of your coming due year, supply some to this that the have might both of forward was sight think different. I of there what been is

sure. Yes,

very So in certainly, environment XXXX, look strong. when semiconductor it I at was the

across And market saw overall say strong our have we to did our market, increase we business ended constraints to The result, ramp It's manufacturing I the industry the we the that planning. think great as gaming PC of low in the in getting a the revenue PC year. markets. from some as fair a need does capacity our some end in we're supply That well the primarily, said, partners. overall as So were support Those levels. our would as the I peers. exceeded and being demand say, of

do through And these some but there's the added things. of as tightness capacity the in think half how in terms we so see about first then half. And second the year, of we

for for demand the full our the side. that across we So the year supply have on guide, And guidance do the both basis side was and annual visibility businesses. good the

question coming Arya from Our of Vivek today America. next from is Bank

to despite was and go for so dissect I with on outlook XXXX a get without strong all one the for business, question us one. you constraints. and of Lisa, outlook the congratulations year. semi-custom back drivers sense could moving the prior the the And QX help your just and QX industry to full a we hoping the in different both business,

Yes.

see. let's So

with me Let start QX.

So business and be earlier better a consoles see down seasonal. console market in than I the as we would double seasonally -- a do Normally, the quite said that PC the bit digits. bit,

modestly You the sequential We will into it, down. business we be, quarter would increase we're this scale. And at there. now in let's see expect consoles I server where products as XXXX, in say businesses it, business have, then as place we call well as three new do at call the would let's still as graphics go a ramp the we

demand just the encompasses significant space, that platform the portfolio. in new so as data business then across business consoles. as service a both for around in we And growth our And platforms lot and have launches the our the strength PCs, and very growth of center guidance in see the channel really do well the the we on console visibility notebook given of growth side there's

And products as we between consumer some addition, the three think drivers And center a our business have there. are it's balanced would in in those of three. the growth year. new also well I for of the So launched the and result I data GPU full say big then

the it, around So it's set call let's a broad of product fairly, launches. based drivers, particularly

Milan, center Got for also your it's it. as launching data my launching is And follow-up, interesting server. their you're that competitor

a near question. and then term And 'XX so both a of kind

know there digestion. near So I about sequentially. term, of talking you're discussion the growing actually business been in has some your cloud

and seeing But the looking So demand -- what term same actually manufacturing enterprise environment could both in I customers. competitor very were your very you will was near XXXX, and from almost HPC out the hoping you your you be node. and cloud address on to

one you your the I do that of is think dimensional at your a how who So Because role manufacturing think on times decision-making of play a customers. which discussion in of lot node. will kind becomes

to about, the to node take if CPU competitor, in on share what's business. server same talk confidence So and us as are ability visibility even your you your the market and

Thanks, Yes. very question. a good That's Vivek.

in strong seeing demand. So of what period actually is term, in we're cloud the the near a

And -- environment we demand saw as so first strengthening robust see that's the through and went fourth quarter. we quarter, it the in we

good So that's those -- a us. I are think signals for

I a think strong I very the for about excited product. it's we're year XXXX, Milan. mean

already Zen You've just in and notebook a can seen what our portfolio. X desktop do bit of

what think I did Rome. in upon it builds we

So I completely you. agree with

Both year technology manufacturing makes of in that our call performance, the than overall Milan is applications. balanced it would one I it, I overall what cloud the applications think aspect as and is visibility will for I most system have And past we've we better years have. environments. I the cloud let's enterprise we have of that third-generation that in a think on but focused set the starting very say performs this product had EPYC. we as been competitive, of with performance, visibility, is terms product broad this say well because in enterprise for, how

it, product. the were Many call to been testing relationships. confidence And ramp deep well. as customer they good So we're we have we're let's on, made have going now our decisions earlier that of out

marketplace. the how for year performing exciting But we're the is the data pleased interest and certainly, So center. with in Milan

Rasgon is coming Research. Bernstein from Our next from question Stacy

start first. wanted margins I on to

of is actually just they gross guess kind basis I $XXX like which quarter, or surprised, the the margins a high sort revenues, teens, of something you console points. time, looks bit little to upside. was guidance. that million we've a you I'm quarter? million at came I'd barely in good. upside $XXX missed few record like same mean time, it pretty all a gross to said you tens upside had only I that server by of same in and So But consoles put with in much the got At the that else like got And guess better-than-expected And guide We've mix? margins. margin a I consoles on got gross see servers wouldn't of relative growing, comments the little we've little of everything down. line same yet the bit in

So help would I me that square or helpful, if be could that square guess you with please. what that you're seeing,

Yes, sure, Stacy. Be happy to do that.

first, fourth So the quarter. on

to we a strength across guided. think relative I we couple of saw businesses different what had

PCs. So business. weighted -- PCs more saw well in of strength to the side we the bit be some the in strength servers some in business, bit a to fourth tend console quarter in as a consumer little as strength strength the of And

be. first were where those XXXX, into some to we was from then think than takes. I But we right margin better And and commentary of puts an consoles expected So the if the we going and see that about PCs quarter of you're standpoint, bit overall I were my a guide, sort talking expectation seasonal. think

be case So in digits, this that's it, not consoles down would normally and particular quarter. the double call let's

up. server have We

the full And see again, the the takes, so of business. for puts we a few as then sequential but into these And increase we QX. do just year, are mix and see

bit. little I it. that to guess on a Got follow-up, for my just push

on to What seeing a for ASPs quite servers. actually environment about you impacts in see especially you your the guidance trends for are their I data the competitive more you -- on actively some environment, your talked servers. of seeing terms mean guess We're margins. what and server And pricing did their specifically on of competitors are what in actually what So quarter. are starting in -- environment price pricing XXXX. kinds see I in in pricing you those the incorporating in center

Yes.

the in sequentially, actually that quarter, and in Milan. ASPs just the mix customers mix, of ramp of the up and we So saw was because mostly between business server

the I would go say we into again, So environment's as XXXX, competitive.

I it's know So that don't competitive. more gotten

about it's think always competitive I as it's been. as

on Our but ownership. focus overall has to not price, of on total and compete cost been compete to value

go cloud the would expect about think to and are I into go been As be for we between for XXXX. and weighted by is say XXXX, But any overall, ASPs us enterprise given quarter. We're mix weighted, the what still the cloud year. us, I ASP into last I again, would determined it's primarily as cloud environment we in

just thing is high Got QX, was or center, for -- teens that's the for of it. just teens And one the data last that in data percent quarter center. was revenue high

It teens year. for high was the

the For year.

was it What in quarter? the Okay.

strength... given the It was --

I think it's similar.

Yes. Thanks, Devinder.

Devinder, that, What was I'm sorry?

Similar. similar. It's

Similar.

Yes.

to center a business got XXXX You've we've XXXX. remember to data in where had server the lumpy, and is GPU the is little compared bit strength

Toshiya from from Our is coming next question Sachs. today Goldman Hari

year, of to And in results. strong congrats PC What's sort XXXX. on the the for bit a concern speak you of year can if side if strong This in on to your part there's us a full the Lisa, you on market. the for I'm obviously, sorry market your sort expectations I embedded missed an very this, following consumer, as second year market. would guidance the helpful. of commercial opposed then as update the to of question, that be your And PC traction can that but give

for Yes, the question. sure. Thanks

So XXXX was a very strong the for PC year market.

I first a sense from mid-single-digits would the are that. it, bit the normally than in is perhaps be. half OEMs XXXX, heard We let's growth. This bit it to normal is of similar the different people in something call the stronger than saying, a type that shape think that most a market. number you've see

of where focus we the could the clear Our actually in PC on stack. market, the sort though, has -- subsegments move very been is up

on desktops, as think commercial. And focus develop gaming, quarters. you And to made nice on our also a progress business at number I of tends the look So premium if consumer well gaming and commercial side. as we very particularly that over notebooks

commercial, Ryzen growth. very as gaming consumer growth the overall, think of desktop overall to from actually -- mobile into element our particularly, it's expectations So PC OEMs we're being go be platforms. launched I focused the well market That case, we segment. XXXX. the on both the in And in are the have we as of of one in just our growth will continue and gotten in series terms And premium in as reception that XXXX sort strong strong

on a do your is target. have which then your over future you remind XX% of in are of very clip. next fast growth And very XXXX. said, how you're top spending at -- you with as it. out focus you Can couple years? that the us But follow-up The that into I the spending terms Got long-term spending this at growing growth OpEx. profile? rate And where consistent is a mean, through line today see target translating quick You

year. You just grew XX% last

You're this right the XX% Could number? up to we something better? XX%. guiding Is envision still year

Sure. Yes.

think in happy So March, to long-term this right it's long-term time great going the I growth just the rate That growth is the we're in standpoint, And a I yet. the with that business. invest to change rate. We set our don't we're of our from very and being said, think business. growth

get leverage the So it, slower growth we than revenue has the let's the model. call always been, rate in model invest business, in so let's that at a

out allowed to of see the percent the as that. the just couple doing well we're But Yes, of dollars build will of down over XXXX. have the so as and a OpEx can last considerably, foundation and us company. expand overall down has percentage revenue And you in the really come of years come

have the competitive the and our have hard expanding offerings product that foundational portfolio. our the CPU, as So GPU GPU spaces. across leaned between split on both IP we on We've so we out really the side, R&D, well in in architectures very both gaming as compute, are foundational IP, investments

forward, and GPUs of system the that IPs link As investment go well the CPUs investments software we to more on on the and go some side as investments as then market. in

well of So depth becoming, of objectives. let's support that call across the scale. have we growth customer I to that support map and helps the sort it, board, breadth road long-term think the ensure of as And as a company we're

today question from Aaron from Your Wells coming next Rakers is Fargo.

commentary. processor want to I congratulations back on Milan to the go quarter And as well. the

the talked market. the continually about at Day, you to address Analyst your in enterprise expanding workloads think just I ability

relative how the we Milan we about -- to consider possibly is uplift a of one about the ramp? Rome? ASP as there it potential should that Milan, to with think compare As would And starts you how positioning should think that

Yes.

definitely. So

sort see it, call well expansion the as competitiveness of cloud let's of, set broad of across enterprise do our workloads. we of set So the workloads as the

life sure ownership make to that improvements customers. is Our in total to of in we're offering our cost goal

the expect the as improve the from significantly up, do But generation. generation overall, a some ASP single-threaded Milan, important it's of that very goes able cores helpful. we benefit really to very, be the And expect given as -- performance so for customer enterprise with we'll performance that perhaps So of standpoint, we workloads all some Particularly of TCO to performance. well. uplift some can't lift the is from overall just have use Milan that in on we -- the

that the later launching feel Milan. said, Like about I we tell we're more But of be So to overall, about this quarter. we'll positioning very good excited it. you

And the a then quick center as as data side well. on follow-up

it's of been might But over couple see and point time growth foresee next growth us that it looks like to the a side, should lumpy, is business. I know key consistent a kind the the we lumpy it continue thinking of in to years to a as driver additional that there a On actually about being GPU company. that for incremental What driver? be you get revenue be

coming is the driver CDNA over for GPU a architecture center business well see Look, it more year that as data lumpy in customers GPU, of a own. center of the for growth as around especially into But company, driver some next in doing the as production is installments growth as we Yes. as still And and see because comes as XXXX And we're the HPC number Absolutely. machine importantly, of couple learning larger not its the I the and cloud, growth work manufacturing just be terms of and that large. likely data will the some into a into goes quarter-to-quarter it multiyear think AI. years. we definitely

very the CDNA It's So architecture. positioning. we feel about good

this GPU us growth and for for think an the an important years. next is it be business, data year few the driver I over will center important

Seymore from Deutsche coming question from next Ross is Our Bank.

the of quarter really question so on GPU the I Congratulations more on had the equation. the a side of strong side things, and just on year. traditional competitively Lisa, client

taking the a XXXX. is continue You've and share the so in us job the side market the do differences, walk going and/or you've much the of business in Can you're optimistic GPU where of about of in ton share taking done already of a of on opportunities sounds to like great some CPU versus just side. things? It to GPU succeeded challenges some the will CPU through what you client

Sure, Ross.

been the has I consistency in So similar CPU road on the very side. really map, ensuring graphics to think, focused business,

we just So fill ago, going And second per in XX% a then I generation is first portfolio demand that think pent-up a we first RDNA we lot improvement. attractive as that few it and And architecture the we're watt that months see generation RDNA an that, We for gaming. and road important the performance graphics X, had market. map. launched out half year. launched of the of to the here see consistency a in cards of is There and

graphics grow see that the will do So in XXXX. I consumer business

next-generation both there's We as X very with expect as well team on working OEM hard the add-in the business over -- years, the well. continue RDNA progress, business. to to And the as board architecture the coming make is

strategy map, using sort I the road of of relationships really sort consistency our bottom in the and think the there. to and is of customer top depth our So the breadth stack

or on as for you follow-up guess either I margin. the one Devinder, my And gross

something grow have mix of or quarter, whether the but the it guess improving, You rising example, And wanted one whole. up with walk to area it XX% to percentage in as going margin first gross it's semi-custom to the answer is target. see the quarter between ask Or about or just gave as a the to server, rise that? some I year-over-year. It's core be puts substantially that shorter-term XXXX the is through takes to business semi-custom wanted the the to that that question for if a I that. on and good fourth and up I within is keep going segments, your like for revenues, segments there is to is that? also what's so Is offsetting graphics that again

Yes. me Maybe let start...

and go Let then Lisa -- ahead. ahead, me Go start Lisa.

Devinder. ahead, Go

You start.

average XXXX revenue the the initial you the client And are XXXX, as the a consistent. grows of guidance in to we look right, semi-custom XX% obviously, offset gave, in and And couple lower you ramp in server. we the So have is up at with a we've And semi-custom, been from an client helped basis. gross Server businesses, that obviously, if and overall higher year margin. does in are quarters, it XXXX. then and about corporate in XXXX, year-on-year year XX% for on there going with talking full from than pretty

Right.

maybe to that, Ross. to add So just

premium on, growing the we is operating the the answer And the So within some as the above although call quite reasonable focus it, call -- are, for part some business -- in it, let's do average the and we drivers is consoles yes, see PC Server margin, business, mix is, substantially I server what think margins. you corporate those of more are PC XXXX. XXXX. that And of the the let's stack. also margin to improvement asked in below

Suisse. from John Pitzer Crédit today question coming next Our is from

And question the can in differently. the Lisa, maybe that quite given was console gross as quarter gross typically low, the gross but fact about margins unfold, able were we the I time. 'XX I think of little ask I'm you margin margins that December console margins there about were in understand of first argue, mix a kind over ramp, the And good quarter would business, it should start up is of relatively just to we think and gross put to good. the kind trying how the bit ex improvement Ross' console.

rate being unfolds. the kind higher? just isn't tailwinds but so guide? XX% year like And as be the And a I what's are margins your of It it conservative, you you year exit might gross it of in got guys of lot that guess full why seems

Yes.

and think it's So see again, start like early Devinder, maybe, to add in you'd I'll this. John, if year. I the to

So state me let that.

We puts statements a of months. places. you into But have lot next do various in think the that obviously, the good unfold the made are the and I takes XX visibility over there's to accurate. sort all

to think, I standpoint, the all the an out. again, QX to time. mix from for a and guiding of we'll velocity the business at that And year. console plays history overall do XX% just the So though, does have improving of over exit it for XX% have as we're look businesses, then

the amongst is So we over the key mix is year. the will see given businesses And improvements in what the any quarter.

more of you're anyone part my you're pretty competitor to governments. is as seem would for some like a the how it's on to taking, semis, Because of as you you're trying lobbying semiconductors And just pretty that hard that lot much portfolio that chief get as your champion Lisa, I'm argue given does strategic Washington the have, be but clear then, curious in and manufacturing. And kind domestic to of share helpful. conversation? That's is I states the clearly, world are much manufacturing. given nation incentives national a follow-up, speculation becoming IP that focus it there's

So ear how understand important do whole you to you the Washington of in them how this make kind of get are mix?

is think that. John, think point overarching make, believe increasingly I and becoming we right the all the you strategic. Well, which that And semiconductors one, important are increasingly is I

think documented. relates it well important, is on certainly As focus manufacturing the to what's I

supported research leading-edge a and in there's also research very sure is making conversation. leading the focus well on edge that I overall the also think

next envelope participate to research sort manufacturing the we conversations. continue industry is on to important to we the and sort both the as in edge And agree that's both we in the many industry and as investing that XX reasons continue the X an we're much And and invest So of push associations it's to to of as the are, key we leading also years. invest. of that the continue at to one of

of out more that foundry direct come of Washington? will think through a incentives do you'll it partners? Or Lisa, any your indirect beneficiary be So be you

Well, I of think out. still that playing much is

side out. and So of in as some terms side, involved would to it But some the out. see manufacturing through do foundry We've of research plays we'll been partners in in think that so. terms research, we'll I the be the our of certainly plays continue how that of very

coming Our from Mitch today Markets. Capital is next question from Steves RBC

Mitch, you are there?

me you Can okay? hear

Yes, now. hear you Yes. we can

Okay. Perfect. Yes.

So there's two questions.

side, look feel like manufacturing gross are poking products first ramp the when up. the margin. I at you actually The on people company, about X one's But the guys on are you driving

So and you same the that what look meaning like years are then you ago, as I what you after had similar of margin yields -- the would kind to is to -- had about didn't improving follow-up the want yields I X environment? per a if your if have rate the gross here question your that. at foundry TSMC guess a normal And partners I pose overall

road we're says mean level setting be, with our conversation the Yes. maybe Well, let we by Mitch, where start would margins. me gross I map right right.

mix a long-term road target Our to set XX%. than says, be greater map of the the out business, we given

that. for we're right think I on track

well. ramps, say, we through growth as I And each call thing are flows. as the the X important -- we're across, the are right them track it, large is case, X product of and there seeing expect But that think X I'd on yields the now where ebbs be think the with being go I or to let's most we businesses.

sort And between between center the and ebbs them, cloud are between and graphics. the the mix some so mix consumer and again, and just mix commercial and then there data consumer flows between and of enterprise,

to I in line and year, year, and again, margins margins coming X points points road that and growing we overall grew pleased this like with we're guiding last it's that So we're map. think together, all right X I put said, our

Okay. Perfect. to complete Yes, that makes sense me.

so gross the line ramping up yields many now. right grow with to margin difficult very it's think I

I had, the happened last one The big second guys think But is as the of PC you that that year one things guide overall me I surprised addressable on market, upside. the segment. just terms in by I of realize don't

X and terms So CPU of set us could side in level the GPUs, maybe serve. major servers. you guys PC markets you

way, to our you for to a that guys come year, full conclusions do? Just an -- can and what view we at means as total industry is us you of This do idea own our what you sorry, of what kind think going the give can conclusion, least AMD. maybe on then

Yes.

sources So of are with I my we look that. what commentary would at think and PCs, was agree say, would various sort just we saying, if think growth, you I mid-single-digit

that of we growth. sort you call portfolio take a cycle. I let's market, different the gaming a we it's product see, then call look think growth. that rates, And and market have ramps server different call that if backdrop, much enterprise Within it, but it, product And let's think XX% because as have. I they the of is of again, is modest a to at because, cloud, growth and again, hard

with the beginning think have projected happens XXXX significantly We the said, the was what the in as because, the case, to XXXX pleased being of So at stronger see That than you of we're we'll we're market. most growth. market growing XXXX. ahead

next Our Morgan from from Stanley. is Joe question coming Moore

And for business if wonder cloud your server. us give you sense. I maybe a talk could about

You've about about past the sell to need talked the in twice.

workloads workloads of How of where internal you it selling enterprise-facing service. are sort sort You're that to you that versus within internally provider, they the selling they're And and on enterprises cloud? service the are doing then cloud to the focused they're with with that? cloud

the for Yes. question, Joe. Thanks Yes.

at workload. well would couple just in ramp year. in here look internal We've into next cloud done say a we've seen Joe. very of call second quarters, this last half you environment, of external-facing the and of number workloads with if the I the as the it sort internal going both we year as of applications So well

internal the Milan. workloads. pleased with to carrying We So we're the over performance on that see

from move to is too heavy Milan a not And the the sort call lift. -- of let's it, Rome

sells well of spent into our, frankly, that engine let's in business vendors it, of, bit along sort it, of OEMs. sort And call we expect building so that terms cloud enterprise effort call that, development We've quite a will sort let's workloads. continue as, the as of And going external-facing the the XXXX. with of

And a to on-prem, hybrid enterprises EPYC can conversation. if -- so buy usually AMD large our want you with It's is tell what do. conversation me you let

wide want we use the If vendors. across that's to instances variety cloud you have actually of instances, progressed largest cloud of all a And cloud nicely. very

as as to sale think, positive both So cloud of well motion. on commentary the external some with seen have progress that overall, I that's leading is we our in internal

driven some center center how And of has of terms of investment about expect Great. customers your of emerging by status GPU applications. GPU, What's in some be data a to made. XXXX? gaming the cloud wonder, the business an talked in of then that But been cloud your you've that? you data have big gaming do portion I And

Sure.

So I portion gaming let's of the would engagements cloud portion that I the of of the gaming In business the smaller think business would center HPC in was have the portion in call say data become, of it, of sort XXXX. will portion larger the the ramp. it a the And business. would be But past cloud business for XXXX, larger years GPU. we do additional

coming final UBS. Arcuri Our is today from Timothy from question

TAM QX. XX.X% revenues ASPs It server million data CPU like that center So commentary is Lisa, share my and on on running and question, your I sounds guess $XX use. based your you splits, your in base question about you a mentioned like on first before

on ramp Milan talking lot you're and of about have this you So that ramping a year. visibility

maybe us if the exit your you next share or in look be year. think can to next terms year of would you milepost wondering sort and implies of of as what maybe of give sort CPU what guidance of sort I'm So server the into

Yes.

said question. I as annual So through view revenue I I percentage of what business server. high-teens and say market. a the would of revenue, all the it sort the predominantly of it percent you And center I in What just share data good the have business prepared is. is, And was remarks, say was of market new variance for thanks we've I the think in target. of given the the But don't Tim, given is a will

very it was center that, was server. the piece data predominantly So small and GPU of a

you see as we'll it's terms as of we into would go give And of in growth. the business. As of growth how along the XXXX, again, the it's we significant we say way size a the relative go company. I in XXXX one growing key for updates drivers

And year-over-year. Can double it think point was maybe in Okay. big then could to a looks business. to this center comes from And of just midyear. could how it's about as view. you flattish much dollar year-over-year? But be going quickly Got It I mean Frontier double give obviously, it as it. this it year like could on sense just it's GPU. year, that I year-over-year? Frontier of sort you Maybe us grow. terms not how in data grow just some talk a it of big could understand contributor maybe

Yes.

year-over-year. actually data still relatively previously business stated, So us. -- small center down I is think for as I GPU It was the

down it XXXX, the to year-over-year of in XXXX paused in XXXX actually some was because cloud from ramps XXXX. So gaming

see it of In terms yes, could a it of we in as could growth terms double. XXXX, in size, do what it driver relative

But business as would is we I that that's think the to, said And I I think what it. like milestone. good milestone. it, let's the towards progress that of making would though, $X.X say about get call way we're think about to that to first billion we it, sort

call. Great. Operator, that Thank you. our concludes

you. That today's Thank does teleconference. conclude

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