Advanced Micro Devices (AMD) 28 Apr 212021 Q1 Earnings call transcript

Hello, and welcome to the AMD First Quarter 2021 Earnings Call and Webcast. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation.

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

release welcome By first had now, a earnings to and results the XXXX conference review press our of call. you copy accompanying to you, slideware. quarter AMD’s financial opportunity and Thank should have

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to over Lisa. call the hand I’ll that, Lisa? with Now,

Thank today. to all those you, in afternoon Ruth, listening and good

best quarter Our in demand. year-over-year of the history, to straight revenue execution quarterly profitability. in strong the portfolio product record accelerate by market driven business our and continued robust our and significantly double-digit percentage We delivered growth, revenue sixth first quarter, and

revenue year-over-year in growth quarter all billion increased our $X.XX to First XX% with businesses. of

Turning our Graphics Computing and to segment.

First sequentially increased In quarter sales. client year-over-year billion, XX% in Ryzen percentage $X.X than we by double-digit as by strong and growing grew and a processor is revenue backdrop revenue for growth processor set commercial and to our increased significant particularly in segments. the computing year-over-year the gaming ultrathin, both Against revenue Radeon significantly revenue the ASP. faster client records PC market, demand, of overall and led

the As a gained result, revenue share quarter. we client processor we believe in

Ryzen XXXX processor for series generation. demand new the as launch has Ryzen and revenue processors in notebooks, premium on has delivered quarter sixth share In last record straight revenue of doubled two the our ramped as our expanded X,XXX products. prior have Our XXXX the series series fast we years over processor sustained as twice processors. the mobile Mobile of Ryzen we revenue, based

powered generation. new growth the as our on to We platforms XX% processors expect continued of our in increase notebook to XXXX number prior track is compared by by

Fortune PRO revenue XXX In secured multiple progress growth quarter, tripled as shipments for We OEMs wins sequentially. with commercial in and strong aerospace, wins good unit of we’re by Ryzen making also the a we We’re percentage companies electronics increased market our design grew further double-digit commercial high-volume year. as our processors graphics, well-positioned the this and in automotive, the engineering largest have notebook across our growth the for high-end the doubled this revenue GPUs featuring quarter. track prior gaming XXXXp We are RDNA XXXX our our architecture leadership launch sequentially, edge with mobile leading from by and CPU Desktop first in X sales as later led by introduced XT notebooks from on and performance quarter. more to Radeon a strong double-digit March, XXXX percentage Radeon year-over-year channel than

coming of we as year-over-year graphics accelerators largely production. grew center cloud We expect revenue significantly ramp GPU XXXX driven to Radeon series and grow Instinct HPC sequentially, Data over by quarters sales and customers. the adoption across

year wins, the We center AMD production progress great begin cloud the to creating are AI next exascale on generation scientific, of GPUs multiple software performance half U.S. next use class unprecedented making the will years. roadmaps and and revenue enterprise of the Instinct blueprint in to Frontier data to second supercomputer. and support a to capabilities, exascale coming ramp including our generation customers expect over GPU Frontier, enable CPUs, our grow first HPC we the GPU AMD computing AI and and for deliver scientific computing as

sequentially, our seasonality. semi-custom increased driven a turning to EPYC and Semi-custom Enterprise, billion, strong segment. in both and year-over-year XXX% which Now than better sales. growth is percentage $X.XX Embedded Revenue typical by Semi-custom revenue by to single-digit declined processor

of multiple remain adoption a our third offerings demand throughout was across to ramping doubled driven sales successfully for by third by than strong revenue semi-custom we quarter In expect by customers. both cloud the Microsoft gen double-digit percentage significant and processor server delivered our year-over-year as and grew EPYC processors strong sequentially. as and and of more gen Sony second EPYC increased Sales growing record sales complemented processors of generation another enterprise latest production sequentially We into server, second EPYC XXXX, consoles. gen processor

X and was Java, more Tier introduced to processors EPYC both, powered compared database, power virtualization, Third more and internal across our their watt per-socket demand generation, XX new AMD expanded XX% performance previous cloud data per-core leadership to particularly instances. of deployments deliver quarter processors infrastructure and per supercomputing as offer gen ERP, their the EPYC and Cloud providers strong workloads. in analytics,

gen offerings end of instances and processors. Azure, expand the XXX third year powered the Oracle expect AMD the with Microsoft double EPYC to number to significantly Google, as We by IBM, Amazon, Tencent of their

ownership. for their more high-volume ramped center than Kingdom’s the faster and new and National with back, Cisco, last have HPC, Science the cloud our announced of forecasting Research, we to cost for climate modeling weather national step several that with For previous XXX HP solution Sweden’s most and than the Enterprise, on-prem the expand gen service years over Taking we third Center pleased the offerings, Atmospheric weather platforms the built as United that In a a new unique as server Institute significantly performance and enterprise, processor in EPYC with powered generation wins, momentum new has of the Lenovo, Dell, plans progress including EPYC AMD-based superior as be total Supermicro will data business made deliver well all processor powerful each world’s I’m very supercomputer. generation.

to the in cloud customers, AMD have terms developing HPC consistently We enterprise and marks multi-generation strategic trusted an as established and inflection based XXXX largest roadmap. partner a delivering point on a CPU leadership customer a ecosystem of year-over-year of our and scale, Instinct processors. percentage high-teens overall product quarter, and support more first than the revenue. adoption and EPYC doubled the In center of represented our revenue data

center first our increased as market significantly for strong by supply supply growth data higher product our to driven accelerated adoption strength and and new from by go quarter chain wins. the enterprise year, of partners. the through products, in our year, We overall we expect We the pipeline business driven additional grow now customer HPC cloud, and for significantly see revenue our

closing, strongest milestone quarter pending In by with approve of overwhelmingly remain of year. another as to end the track passed in entered high-performance voted customer deepest mega We also the products with acquisition close our We the shareholders Xilinx the a major the we relationships computing our the to acquisition cycle history. in transaction. the on and strategic have

built consistent a delivering of Our success leadership is products. on cadence

to setting the our the industry growth pace driving our and years. deliver over roadmaps increasing the are and of for continue investments We coming best-in-class aggressively R&D innovation

provide the I’d the over quarter additional on performance to Now, first our to Devinder? turn financial like defender. color some to call Devinder

you, Thank afternoon, financial in first and quarter. excellent and everyone. Lisa, strong the AMD performance very execution had good

results ago, delivered revenue revenue this billion, was first record and ago. to from XX%. was primarily driven strong a a Operating Net free X% higher from our invest were we $XXX product cash from year to from year effective by $XXX XX% $XXX from up was $X.XX Our and compared compared quarter we product driving the up share acquisition-related year Current flow. year ago, of million, a $XXX costs. a million from growth, year is excluding sales ago, X% significantly a include roadmap million, income ago, semi-custom expenses significant to Gross by ago, delivered share, growth $X.XX we business. multi-generation a growth. momentum, Driven revenue results margin financial million up ago. a $XX and $X.XX million, year compared to was was XX% ago per in as $XXX million businesses. year tax driven Diluted a continue despite increases increased XX%, in Operating up year income by Operating flat share tax per Year-over-year a million revenue. margin Xilinx a per all quarter rate across quarter. rate to of prior XX% $XXX earnings

XXXX. to rate a approximately continue X% for anticipate of cash We tax

EPYC Enterprise, was year-over-year. segment Graphics year. Now, year $XXX $XXX sales and to XX% was doubled processor million, The loss The growth the income to revenue to XX% and in of and was or Embedded operating compared Computing Semi-custom segment results. driven revenue more due $XXX by or revenue billion, revenue. semi-custom income an processor compared Computing operating very was $XX segment driven operating higher higher million from turning a operating higher was a of revenue. ramp million Graphics XX% and up segment of increase revenue, significantly ago. which $X.XX year and income strong revenue the year-over-year was product business by than XXX% ago. graphics revenue $X.X client million million to EESC prior the $XXX up segment billion, of

the up the Free $XXX remaining. $X.X cash in debt in quarter flow Cash, investments equivalents million compared XXXX. billion, $XXX to in million was end flow to XXXX cash million our and notes, balance was short-term reduction including have $X Inventory $X.X free quarter. of from million, negative Principal prior was sheet. only of were billion $XX $X.X first quarter at $XXX billion. million which the cash the first the a convertible Turning of

second XXXX. on based quarter for to the expectation global current of turn customer the demand Today’s me the environment current and is outlook and supply outlook contemplates Let signals.

$X.X expected increase approximately growth increase to in growth be increase expected be be data of to approximately to billion, revenue sequentially. X% in $XXX driven by plus an businesses. million, The sequential minus an center all by year-over-year expect is and driven or XX% The is and approximately year-over-year increase primarily We of gaming.

be to be interest In addition, we to X.XX $XXX gross margin and XXXX, non-GAAP million; $XXX count expected in taxes expect the be expenses non-GAAP approximately QX approximately quarter approximately other is billion the share XX%; shares. be million; operating approximately to to and for diluted non-GAAP second expense,

we XXXX, growth year XX%. full prior over now expect guidance the across from of revenue by approximately For up all businesses, driven approximately growth of the XXXX, XX%

expect to tax be in be gross expenses non-GAAP excellent closing, to In strong XX% non-GAAP XXXX rate to growth non-GAAP tax continue approximately we start had XX%, Company’s of cash year-over-year and segments. be approximately in revenue, very we an We both with to margin XX%, rate be to effective X%. approximately operating the expect

business and to Ruth financial I’ll Ruth? back With in the returns. session. question-and-answer strong the to that, continue invest for it turn We drive

for you’d like questions, if Thank poll to operator, audience please? you, the And Devinder.

[Operator Instructions] America coming Bank today Vivek of Our from from Securities. question Arya first is

live. now is line Your

has my give Thanks you raising and full $X.X guiding talking taking the year increasing guidance us some competitor almost in you’re about -- last digestion, the cloud was Could what you’re three question. $X.X billion. changed by you’re sense $X.X months? billion, your Because for by of Lisa, billion. guidance recently

guidance if last if impact? And on how the this crypto any be and the or from markets there driving helpful. So, which really us parse increase, this could color any semi-customer, help are you curious or in would very changed increase contributing servers or is year to much products what’s strong I’m what end for three So, PC months. or

for Vivek. Thanks absolutely, Yes, the question.

overall -- for So, pleased quarter very are we started year. performance the with the we see year and we strong, the very first what

second We year. guided on and year So, We to the in Particularly, the year. throughout an you are is second the that we’ve is what of with visibility picture, we’ve and year demand the last we need center. into the increasing strong our they overall demand, half through our data seen customers was true. quarter, in certainly the quarter, strong full from that’s we XX then the following. over asked very What guidance. strong seen consistent days about the What carrying first up exceeded came

for signals in saw I a think, data first be strong would actually quarter that we strong the year us. center it

products with well. Radeon the cycle. a launch the Ryzen with on ramp gone on has XXXX. product third-generation products on We’re our side new We graphics side launched mobile We in launched very XXXX. the new of And very, then, Milan the PCs actually

of our We closely ordering our demand supply patterns products. semiconductor we’ve with overall that terms we And the very tight have very good then, chain we industry. strong for in working what seen So, backlog. customer we partners. see, for and been the see strong And also chain has supply see been

good have visibility additional And go supply to we the so, as we throughout year. also

the place, how year say, feel in that I about good shaping very So, would with is all up. we of

the In the again, data would strength you and our terms see overall, close businesses, see good, strength say very but where center particularly and in visibility we it’s just, working very I all good strength with customers. of relationships also is across

not You negligible crypto. crypto asked -- We about have in we here. do

really products just new adopt and So, the really and foundational customers quickly. the the ramp this is business, seeing

keeping getting Because for constraint? XX%. And still it, are and steady now margins that constraint, or from is follow-up, you’re adequate Lisa, assume we that is, which a market? of at supply helpful. my in perspective end is gross a up it should year if supply Got a supply, kind very longer And no you’re caught full so you

impacting to was there if So, decided input impact is gross could any which or you last from versus flat kind be rising outlook? costs supply that to your curious margins, I keep of your

say, year. still the would Vivek, it’s in Yes. early I

So, supply chain semiconductor the very very, entire is tight.

been our think, marketplace. our we’ve with all supply from very said, closely I That partners. the peers you hear in being of that working chain

year have to that the improvements seen improved led have We full guide.

now, -- customers or We’re continue I the very supply would talk going low the on to say to the entire work our are throughout channel because inventories you whether at that right chain, the in about channels.

so, That actions the And partners to work do. our well quite take case, continue to I think, like we to of that would being able we more with there. there’s be and lots

things of that. to and that, component it things, relates think, costs the are I we like and watching As overall costs those things logistics and some from like

we is we’ll ramping gaming little And of the have products. So, also of bit below reflective ramp our of how the we gross -- go there’s mostly some But, average. margin year. we new products, guidance that have things progress the fact do see as a throughout the which corporate are

is from Curtis question Blayne Barclays. coming from Next

Your line is live. now

seasonality, following for just about Hey. was of curious, constraints the well. up a on there semi-custom Maybe results. the any sort Vivek’s and as obviously following question, nice talk Thanks question. of I is not just but business lot there’s taking supply

no in in much saw basically not You like it and it’s growing seasonality June. March, seems

by year? impacted other and perspective on shortages, not that the just any that business just, your is maybe still for just maybe but So, shortages

Yes.

Blayne, question. thanks, the for So

business, launches look very, I they if console that you good last year, products. semi-custom launches, were mean think, phenomenally I the very at right, happened good the

such through you’re right. the we down There’s completely than a We were of had So, in seasonal. better it’s year a half as first down the from strong this We go is typical a digits. year. the but starting growth point quarter sort different but Seasonality bit of just a of single first than year. year, high

or for ecosystem, about strong you’re there’s you’re sort a I or whether is you’re PC way talking gaming, of the about it talking about a demand. overall I talking is, And say would gaming think significant secular demand the gaming. So, there consoles,

and we to And believe demand, to strong supply that. meet we’re there’s continuing ramp so,

to And then, I client want on just on landscape side. ask the you the competitive

you competitive in change You a landscape of rest product. the about clearly aggressive gained are was about the you share the through XX-nanometer? as look as couple landscape And talking they their Intel that seeing year? of on of to more ramp Maybe talk they’re points being just of percent any March. XX-nanometer

Yes.

had has this very -- business I strong year is half a second of think, certainly last strong Blayne, year. the and So, PC

that, we premium about the progress, particularly particularly feel think, very and segments I good in our of notebooks. within notebooks in

So, business. our for quarter we had notebook strong a record

up Our sequentially ASPs were and year-over-year.

commercial. bit have segments are -- product. come ultrathin, in units competitive seeing on we’re think, there is feel that have a well. XXXX platforms and and premium very the the the will low-end I into our of done year. lots market, traction the I sort the We a Ryzen very gaming the throughout but very platforms of we good premium that about focus we have that have say

with competitive. environment and So PC very pleased the we’re feel overall, that

Rakers next is question Our from Wells coming from Fargo. Aaron

is live. line now Your

Thanks you’ve the a we the to ask the as where cycle. of their Yes. for server taking the of But, talked more was congratulations progression curious guys. with today, on an I kind far cloud OEMs, of of wanted little stand quarter. bit and CPU as about footprint expanding systems. I traditional question, know, the I about the

said on you you think the how of Milan systems. would to front? When will think market? relative context And those that do follow-up. And in all that be you a XXX-plus have I the I Rome shipping put

Sure.

each strategic data generation, business is obviously So, Aaron, with us. center very really focus And the to we’ve expand a EPYC the for tried with reach.

We Rome is first and so was deployed this half But, had that’s the of is in very we actually that very, a we what year-over-year. And then, extremely we into very good as we is would do well Milan Milan says, what expected mean, and results, And that ramping, good here Rome played per-socket have we saw footprint. but what footprint leadership, of that also be expected. it’s strong strength ramping. Rome both is again a which sequentially, the we It and we have expands think, cloud. what units up saw I saw saw year, Not the doubling well that quarter, come out. I we continue positioned. the on we only leadership, product. to first just in per-core this

in of internal go this couple cloud expect So, as cloud as and more enterprise, we question would through enterprise We all instances, we side. the were will deployments terms expect both quarters. about those quarter ramped. the your in both we’ll enterprise, Milan weighted strong first some of and that external, enterprise of in well the next year, market HPC see and as together adoption the increase as through Rome we But on versus

Yes. of dovetailing off a to response questions. in And other talked then, couple different the is, question of that kind you

You talked about visibility.

Our is It’s cetera. very strong. visibility improved, et

you relative you what the as to, cloud the the in three And how year? characterize was months as visibility the this there ago? So, confidence that’s more of through you confidence? with given it visibility your Has the something today guys, what say, that’s remainder gives been would happened discussions of far let’s growth

Yes.

So, that a we given just this when and design in started seen up. that But, everything XX terms I we product -- saw strong really to of we firm think last cycle, we’ve process. in sort wins, mean engagements we year, the expected Aaron, I days, have customer of platforms,

they of the liking in were the see. from all of the supposed to So, be schedules what customers met, that are think I standpoint consistency just

We are conversations. having multi-quarter

about the It supply And to That’s chain, in to environment. is everyone and tight that’s helpful very quarters more for plan the overall wanting ability their for tightness given clearer think us out. helpful a us, the transparent frankly. several gives needs. in us very I Just be

differences. that’s think I so, And the

we have what deliver. what We can visibility into want and strong customers

have that the confidence signals us right so, And place. in we gives that

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

is now Your line live.

verticals wonder with enterprise you business. ask place on in the Do wins business big Thanks. And support, speak to you wanted And if right highlighted are XXX. I I about to going a in the the might support, several support, relationships Fortune Lisa, little enterprise FAE the the different more customers? the have the cetera? question where you I you’re you that firmware a have notebook noticed Do design in really et notebook you bit building slides forward? in and release about enterprise ramp in people software that materially in

actually focus notebook Yes, It’s departments. a And the ramp share same us to as enterprise of business and for many enterprise definitely, Matt. as the customers been server our high well business. IT they

the we’ve And very good so, yes, notebook on enterprise progress business. made

ramped some customer that I of up think, in very design environment, on we we’ve our of with support platforms thing again, notebook deployment. is think, this our Overall, our set OEM we the have very wins. for application field models great also longevity commercial a for engagement partners. and focused the us, important nice to I win. business gotten And the We’ve stay

lot pipelines a And think the so, focus but go I And on as a lot as of the opportunity how both the to through we is develop, as coming on notebook we quarters. side side. on they and we’ve have of progress, commercial well those still good server made grow

that. for Thanks

follow-up, my a For bit it’s unrelated.

strong you the the new there. or of supply gaming parts about been gaming. not coming that there’s growing gaming wanted everything that right in incumbent more a now, think business where well, of RDNA I that is maybe now? might about of piece but are gaming new brings bit much the online the it’s of see how just are bit the so franchise a and you opportunities lay just there features, you businesses some going right could better, had business in that a other supply I talk competitor X land one ask Because support I competitively think quickly, else obviously The market. One to architecture some the there’s you’ve Maybe maybe

Yes.

strategy X. us. this consumer started grew a the the as talk gaming well deliberate past We digits cards It graphics now double introduced We about, as products. notebook from a for additional graphics of then, variants. quarter. more top done RDNA actually both our launch channel, the you business, sort very you’ll or at So, OEM big has with here into had and with the as see of adding of And additional business couple product. systems we’ve Navi board well the of that the And stack

it’s important segment for market an So, us.

with progress. the happy We’re

demand think, really fair the It’s I to the the is that high product. very gamers say across appreciate marketplace. graphics

quite into of bit but the demand product still So, the a supply. market, put exceeds we’ve actually

You’ll see overall, we growth that increase half year. and as with we’ve believe is that continue And the is that think, RDNA go we through second of to gaming the overall progress I the story. X fantastic, made secular a great

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

Your now live. line is

GPU wanted I ask still the Lisa, center I relatively about to it’s data percentage a the business. small business. realize overall of

talked in of the second year. this ramping half You about production

as a GPU center talked bit I about data customer then, you pull of business? kind But, seeing a got And Frontier in You little are follow-up. well. quick what your

for the thanks Toshiya, question. Yes,

the making the We We’re the now, compute the the optimized launched so business. GPU or center year. data progress nice architecture architecture very investing in in heavily investment business. CDNA we’re It’s last in mode

strong as that the our in technology Instinct terms will to business, into but really with AI this out just And capabilities the half The the heterogeneous on is, we Frontier It’s and the second revenue rest of our of of idea size side technology software the we the very with lower see updates relative been to actually our is right? the GPU getting investing in, with bring capabilities. strategic, the HPC see systems systems bringing machine of You’ll CPU really albeit, putting and business have the growth with we year together together and systems. learning EPYC the here of generation as well as year. that with business next

half will is a much this growing be And see what second smaller frame really this it end-to-end couple next story years. sort key we of in need will So, the center. that the business, of very to growth time of satisfy but see you data It in in it still the workloads we year. the strategic over

as a to solutions. as your some client launched potential competitor internalizing perspective. introduced ARM the about obviously the Within client thinking my -- your ARM-based obviously your runway on ask CPU CPUs threat how hyperscalers And their ARM-based from business? about term. business well both of follow-up, talking are got multiple xXX, But, then, server or about wanted potential Great. as in years share got from internal the side, You’ve rather you closest from GPU out. And you’ve threat I Apple significant processors, longer market

So on any xXX would helpful. thoughts versus you address ARM how and be that

so, absolutely. Yes,

I focused on. here have a we’re key product point very really really think the to that is roadmap, very, what have is strong and you

is important. I think the becoming overarching trend that very computing

time, I And so, at there that to are particular, at trying been And roadmap. things center additional we data different optimized the think for look in workload our more expected. the looking been when ensuring that is entrants computing, address becoming I are be thinking trend long to that think we’ve is address about also and an These a aspects in trend. important the of you we’ve that computing is

the also as solutions sure very the to competitive, well have is customize continue make are. ecosystem, what PC needs focus the strong our our IP what is customers’ portfolio. And have to we and across So, data solutions to across that we optimize addressing with ability center

So, all good front about in is feel I of that the very being the we have but case, think we market, us. roadmap that competitive the answer very

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

line now Your is live.

Law to could it as versus with from on semi-custom question, the purpose xXX doing engagements? Moore’s -- wondering actually is know sort up another ARM. I some versus of prevalent. or result. you you have semi-custom compute Congratulations ability do playing perspective more out coming see general towards to address maybe to semi-custom how issues much purpose if have versus compute do semi-custom. question is ASIC you I’m Because last and said you’re over answer way Toshiya’s move that solid Do general you that you ASIC Lisa, ask the clearly, the the And time? of of the to and ASIC.

Yes.

think years our compute I have compute to there’s So the computing right about solutions a heterogeneous John, this you that is a right back the And way few the I whole for you conversations workload. would that need. need to ago, is of range address being

the be our that’s that largest general think compute so. overarching purpose business, I aspect piece is business continue No will of to it. for question of the and our

if We that and do certainly large I customers when are expect our that And ability they to specific for optimize specific think -- it things architectures I a allows and we think today. we optimizations on of that. you are at do And these doing that, -- doing like customers, the architecture, basis. more we that. look that’s We that, have cloud chiplet really the do for evolution

there good lots be able CPU with the I then, with a cores, that’s and building on of adaptive IP interconnect, the the the customers. blocks. think gives solutions best GPU capability, with Xilinx, on going optimize So, to having of to well, solutions the to as bringing best what having having computing engagements we’re have And right, great right on, the of us options lot overall, focused is key and customers

some those where think wondering of I’m sort gaming in you That’s if Lisa margins pretty end it the of you’re the overall console is you follow-up, can might would my if in as this characterize That the cycles through for helpful. margin you gross want helpful. And uplift. that dilutive be just typically of year. to still cycle. tell where console think are products help your early margins you how And and cycles, the go to business. had us new by And gross relatively you good kind gaming

think still we’re we’re Yes. John, it. quarters from I into if would of about cycle. it, early console a you that only -- very in couple And the say

So, the in there’s momentum cycle, a and lot I big of think a this is cycle.

to things we on improving there and continue to opportunity We’re couple say through going ways But, costs as improving to years. I work a go lots and and margins go next of that. would the we still have of that like

from Our next is today question Lipacis Mark coming from Jefferies.

now is line live. Your

about at least suggests X is acceleration previous the quarters. calculation you guess, I a on share thought share of you the believe estimate I back quarter gained you in which service, Lisa, envelope said the over had you believe of my points in server My share an -- X% you gain gained of market. indicated you four

your gains? customers can increased a just and or ecosystem you me embracing ramping level at you this support? you new up follow-up, materially supplier? tipping point a comfort, higher I higher if And is of up just and a not, is share you really math your have customers offerings give tipping where Are Do higher you if as your server a guess, your a the is what are for if And us about rate embracing may. picture AMD I And I this my at tell is think maybe they a Can point? chalk to? at off? Are would -- have for rate. So, what guys

sure. Yes,

And of expanding been when very in So, quite qualifying particular things drivers we in mean, qualifying it look And deeply with center the that, that performance the of look I quarters terms very, a strong. together. cloud there that, our coverage. of internal the regional capability quite really of the have was our we’ve of strong. the underneath I workloads, I I all, saw quarter, are first mean new customers data in instances, when in of at our last first engaged at drivers couple come new number

that has Milan, strong different. Rome it And you when of have is, And of in I the from ramping we’re of people if terms a seeing seeing I set of coverage we’re transition in, on of the that is to just in switched nicely, good that all those What a Rome. strong What bit so, of are that. this transition, And a very much the that, was which pretty is led things, we’re applications Rome other Naples forward, demand. top is recall to in to going Naples think that we overall some then, data center they’re did having product piece lift top think, very cycle are business. very then adding that on

case, So, quarter. a are bit around That being things from those this to of the seeing I what that right some think we’re different quarter things are now. move perhaps about

seeing positive. center that would data So, that the I are signals we’re say

customers. very the we’re We’re excited we’re current for lot about also seeing. is And main road map. with important a engagements year as focused what on the long-term is us of It’s thing the as

Zen And on X now engaging we’re beyond. so, and

with customers. a So, top multigenerational is really our discussion it

development, heterogeneous Great. solutions. That’s kind semi-custom go you but And that or have very have keeping in develop your resurrect, are server -- ARM component server update questions like been Because helpful. that? idea And embracing IP? give to something server from the back architectures tell, ARM, and coming that Can I I then, your delivering a the asking ARM talking discuss looks state about it? working you and with the your offerings follow-up that on solutions don’t for it, Is you -- service platform, just If quite semi-custom on help us and customers answered AMD don’t an an to customers capabilities. an you had three back, on can in of there’s providers previous can ARM development the in have offering you working of can what having to cloud with -- their that it that have before. ARM a the of lot

could it? I talk more you back IP the you So, that that if asking if you And was customers for are about your hoping are just had? specifically bringing

Yes. Sure, Mark.

IP in ARM engineers well. the we Certainly, ARM in our aspects We consider many look, know well. ARM partner various architecture it our a So, of devices. we respects. know And use

right now. have In terms plans that design, custom in we of that don’t ARM specific

custom of idea think answer we business. semi-custom the is I ARM the whole That’s terms the do would whether designs, of yes. In

it’s think xXX at we way I help address to ARM right that combination It’s are about the much capabilities have solve? at the problem sort to collection right let’s less look more versus we And in issues. have trying of so, the the to what of it. we solutions. look that’s sort of that of And IP the sort having and customer and IP And about you of satisfy the really that of set sort

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

now line live. Your is

the guidance, question conceptual on a Lisa, you congratulations to ask the I ask wanted results of bit the me In strong revenues and kept you the and little to you letting clearly very question. but a number, guide. for a strong same. Thanks year your full raised Hi. margins the

operating understand gross the you But, surprised opportunity HPC, great back it it margin think, of that to on you’re a data front side the things, go just in given strength up. in didn’t you half I’m side opportunities an the about of surprised, grow. a that the kicking the I have the things talking of little center people invest Frontier, those the business, of margin to and in year. I’m little that

Now, time can’t gross you’ve time, puts just year. and increases guidance missed you gross guidance. keep are But, the wondering margin and flat would takes consistent over for margin your very the improvements delivered I’m I that that recall last and what the guidance

Yes, Ross, sure.

So, perhaps few a then and comments. Devinder start, let have may me

demand up, and comfortable we are I front. think So, on guide have with standpoint, I think supply revenue we just the the the very visibility customer front the that from an overall on given

the guiding And to think go a early then, are we year. sequentially dynamic look, a environment. we for And up it’s second I year, QX we margins, in as mean say very dynamic it’s QX. what is of from Ross, overall very the the the I half On would environment,

we’ll the takes. the that things through into puts a place. more updates anything product and that. you we’re come there we of in But, I takes, puts And And than that. so, and as confident on always play think watching we’re good year, But, more in go that the mix and give we’re isn’t there’s terms

we the what And where dynamic that’s don’t that? we the to add I just to XX% know, guide. the it’s given think, you environment us approximately Devinder, gives year. in I have are in marketplace, the want

only The as know, global add, as in talked tight, we you situation the I’ll supply Ross, I overall situation semiconductors. thing pretty about think is the

component seeing So, we overall some we are in increases are costs, managing it. but

is that. On quarter by billion, guiding XX. from for was The up are trend the are last very this the we XX% with And and guide maintaining is happy year. $X higher very, good, than which XX, XX, XXXX, last quarter we more revenue very

detail. helpful. the That’s for really Thanks

sort For the and of how will your percentage question. was to question throughout my a answer follow-up, would second could fold from for to year, And slightly the of changes doubling quarter between your the midpoint of Any That more be be, guide bit I X%, roughly two guidance growth, rest that takes the a tactical, that year? center the the longer-term your I give you but quarter into up data puts the somewhat of want you on sequential is teens it little main first being in us of little for of the guess, high year-over-year. first given your great growth color entirety part XX% think segments?

Ross. Sure,

well side. as as quarter, growth, So, growth gaming side on look the growth we in the so as of second some in do we center well data side on server sequential the at the sequential as the center see on as business, graphics terms data

of in consumer the as that center increase the percentage dynamic the first go company at in our is will And year, quarters. the the the through half. next we look that data As of the full is company that’s of the of percentage just the of expectation businesses the of sort some couple strength we

that So, center data to the of or normal revenue. go center just growth we higher that’s a data in percentage revenue higher the some see of seasonality. year not on throughout in business the And as would acceleration the we lead

from coming question Bernstein Rasgon from Stacy Next Research. is

line. now is line Your

quarter. center I first a had on question the data in

growth that of that split center how as did was majority growth, how must that see a and out between have a which up, it much you like that. million QX? in grew. But -- even CPU of data the more Rome XXX mix Rome that of how much Milan do and percentage was And -- of you Milan? and million. was means down, both know growth was up was EESC been almost XXX the up actual EPYC sequentially semi-custom Milan? Milan how EPYC plus the the than I the Was So, Can EPYC, it of was

Sure, Stacy.

we quarter, higher first both. quarter. would there and expect Rome in look And cross So, and good Milan by compared good would in would good quarter Rome. weighted expect I with to if Milan amount right? then, probably the quarter, in in Milan Milan still I would it that in growing we Milan, Milan, would as we faster, it into first be quarter the over in a ramps. Rome shipped as perhaps both growth than terms And well second we was more but a of fourth So, say, quarter, at shipped amount was growth we fourth third first quarter, see as to the in growth, the go of the that the

Now, obviously, ramps, we these their customers go things of but through as a bit see. that’s sort what change little

ramping quickly, demand point and of its the is So, And Rome good entirety. a revenue Milan the strong. stay customer robust in is is part year will meta for is and then, this adoption

go couple will it quarters. expect we that through next we the question. so, of as And quickly ramp answers your Hopefully,

about does. want OpEx. you. don’t mind. ask do follow-up, I if actually to have That a Thank a you question I

out right the I second spending half know, right forward? I back if the of So, is know think going of you’re Day you sort the the revenue the the way and now actually of spending run you that the OpEx that whatever revenue at of had you revenue the year. about Should sort XX.X% into you’re implied at I about it XXXX, is right guess, guess, like run everything enough more think the is? to that this like you ensure OpEx half, Analyst a do to of given than now. it’s to you’re XX.X%. And we guidance trajectory for think and OpEx I as right we point, ahead full levels cemented Are model on to -- Is -- think XX% for gave the firm? second actually And rate running rate, midpoint roadmap taking in model XX%, XX.X% sort roadmap? that actually OpEx, like you’re where for at I go do But, that, the at at get

question. good very Stacy, Yes.

I model. above long-term revenue taking the company think year, our model. investments model. And our year, Last R&D our was above it’s -- in And the well our And we’re long-term opportunity that we well from really, long-term certainly above in this invest. standpoint, few is to well support are across it the And and it sort years the as making as you of company say, the cementing was field well infrastructure surrounding in roadmap, and customer-facing much investments than support. a some sales of all our since we’re of a frankly, ago. it’s larger investments just

So, the yes. is answer I think

think And or... we’re to taking with enough. to investing very the add aggressive -- that given want opportunity you those of be the I investments Devinder, We’re to revenue to Maybe, strength the growth.

good. No, I that’s think

It as OpEx. results Stacy, the mentioned, leverage, -- with than you does think you obviously, a Company. years very-disciplined, that in up revenue. lower is been over managing But, scale the rate And revenue. the for lower about up as model financial shows standpoint. the is growing We’ve going than covered The margin the know, I operating it. from OpEx you

UBS. from Arcuri Timothy from coming is question next Our

now is live. line Your

to also Lisa, I share about ask gains. wanted

sort other done offering this xXX stem they’re changing. relationships. they cores client job You’ve tactics And same about Intel’s definitely in share that. tone the some is arrest data their the both, now in foundry year like a great losses. and via of was center. leveraging of time They as referenced And and use things or At talked before, to word

sort of competitive is the beyond pretty the because set. much year question environment this I this year, is guess, So,

extrapolate we into intensify think and ‘XX do think years? had environment you’ve you Thanks. will success do the the the year this competitive So, you in ‘XX, can few next or

be the very would do. we expected Well, always that to Tim, I have we say competitive environment still and strong,

customers, partnership. effort, From learned there. the to about we’ve where with set standpoint, built relationships. think the past the a a I way, and customers, over years are important ton deep the generations, the we’ve record what’s by think and time, So, of And we’ve past a built few few track out a close lots there and we I of where spend need to competitors our

where feel but we’re about we’re excited positioned And we I feel very slowing I about the So, mean this forward. good year, going what down. in I not very map road have

And lot a the have the be bring resources more very going we’re to to in and competitive there’s And forward. So, capabilities market. we roadmap. more to I think going

about seems maybe sense as correct? give just it’s this the you half Is back some is It -- Totally, back to give that follow-up year. first versus loading guess, half half can going of front for half? thanks. even to like I my be semi-custom then, what Devinder,

then, in started second strong slightly second the new Because We’re of of the out launch in up the would And last slightly as half I in second a maybe it’s console year up half. well generation. half product the because say.

final is Joe coming from today from Moore Morgan question Our Stanley.

line Your is now live.

are source the bit constraint, You talked wafer kind where when you constraints and other about where And you you’ve progress? or a talk progress a that supply what’s constraint, that been coming that little of the more -- dealing out, supply substrate about stuff? with. from? getting making Can of talk Is about those both

Yes.

are into with types think, overall, And year, that would work sort on. partners. of I this of coming chain has we there sort been very closely demand industry-wide our the things at going I expectations. than We So, look higher demand Joe, of the are if say our supply

product we line by it it’s assembly or back-end line test, substrate or on product level. whether So, work wafers capacity a capacity,

So, and product a to I for to what move would things, point and back are a would I the that things that is done forth. single out. end, there back we’ll particularly we’ve in line continue flexibility on don’t there that us sources level know ensure thing say that gives multiple that is I what do

substrate in think, the particular, We on continue underinvestment has I there the industry. been side -- in

taken in we’ve do capacity we AMD, so, some to to and invest continue substrate that’ll dedicated be the that to And opportunity going something forward.

we just at with I we’re productivity TSMC the and well support. sure right system. to into forecasting together the we, getting We’re are also teams make that mean in And work the closely fantastic have also ecosystem, we -- very how engineering more that get just looking

I ensuring So, that it’s think, in it’s included in above of -- mention, of other all not it’s making I’ll ecosystem. also thing the the but capabilities. Joe, is processors, we about terms the it’s sets And just that sure have they’re the matched just

our also OEMs necessary. are closely full And so, system teams they’re that ensuring that sure our working the together we’re with components make to very

tell progress. by everything because So, And it like I environment. that supply will do get that I’ve And the make is to markets capability a hot. environment. But it given is supply complex complex been to you, the plenty we chain There’s more seen, I’m not we’ve happy done, are a all that so more would right? in we’re able to way, environment

partners closely working we’re board. so, And across our with the

in very definitely impressive results context Great. of you. Well, on. Thank the going everything

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

and we’ll joining for engaging everybody to to Thank thank today’s you, forward everyone. call, quarter. the Kevin. throughout like with look Thank We would you you,

does you. today’s conclude Thank webcast. teleconference That

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