Advanced Micro Devices (AMD) 2 May 232023 Q1 Earnings call transcript

Hello, and welcome to the AMD First Quarter 2023 Earnings Conference Call. [Operator Instructions].

It's now my pleasure to turn the call over to Ruth Cotter. Please go ahead, Ruth.

Thank you, and welcome to AMD's First Quarter 2023 Financial Results Conference Call. have earnings opportunity slideware. press should copy review you our of release now, had to the a By and accompanying

you've of documents, the these not be If on found they Investor . amd.com. can page Relations reviewed

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

President, call and Hu, be today's our conference call are Financial Vice Chief our Officer; on Su, live Chair Dr. website. Treasurer. Participants our replayed and Jean Executive and Executive a on This Chief Officer Lisa via is webcast will and

we will on Conference June XXXX begin Business on the May McNamara, Senior of Before note attend Global JPM Bank to Annual second Tuesday, Manager, like time Vice business President June Technology, the XX; Dan at and Communications is Unit, we America quarter today's And Tuesday, expected begin General to Media would on our close will that quiet Jean of Server Hu Technology and attend the call, XX. X. Conference Friday,

results Today's of discussion such, information refer and based factors contains to results risks assumptions differ more on current from cause the current to differ actual to involve statement materially. that could uncertainties actual today and that as press cautionary for only release speak materially forward-looking and expectations, Please could our beliefs, our statements as on expectations. cause in

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

delivered and in portfolio. environment, leadership and in our in progress our We and products Thank made demand executed customer across afternoon listening revenue launched our very good road well earnings we first as across engagements you, AI the map today. mixed accelerating multiple businesses to and those all significant a quarter Ruth, better-than-expected

embedded was quarter and of revenue data revenue and more year-over-year. in as $X.X overall revenue the of products of X% embedded year-over-year. decrease XX% billion, center Sales cloud quarter a grew contributed significantly First our than

Looking with first played business EPYC Data some inventory quarter cloud, lower expected. Center resulted flat of out results. cloud year-over-year lower the segment offset higher double-digit customers declined In the by revenue strong was in quarter sales. at sales, a the elevated largely $X.X billion with sell-in levels sequentially but we quarter. CPU grew as MDC TAM percentage a as sales by for enterprise year-over-year

offerings portion pleased this the further largest instances. and that providers quarter instances quarter, from including EPYC their backdrop, internal public workloads first of the instances the expanded in Microsoft confidential new in were XX Oracle larger processors. unique we AMD launched XXX available. of than Cloud cloud computing Against to total, power AMD-powered features public deployments Google their a AMD more Azure, now Cloud our the and we multiple security In have take of advantage

end sequentially Enterprise sales softened demand customer macroeconomic due as and declined to near-term year-over-year uncertainty.

our and X closed ramping and made pipeline automotive, with We in progress quarter, multiple wins continued EPYC growing enterprise our We quarter. financial XXX companies strong the Zen portfolio. the CPU in Fortune technology

centers and data on broad internal large their to have are deployments second their instances the public power generally our and running to customers of track All in in quarter. cloud begin workloads

platforms other HPE, EPYC enterprise, that entered and on Dell, the Micro general new their leading providers Super platforms. production For Lenovo, third-gen server existing complement

X, this Bergamo, XD later workloads launch in technical chiplets We our server with processor leadership Gen first to for our Gena track on are cloud-native EPYC fourth CPU quarter. and computing

response advantages the and to are and expect well the the second demand cloud GenX. year Bergamo positioned quarter, to footprint of to second the mixed performance of we strong Although we remain the in TCO and on our grow enterprise in half customer server Genoa, based

DPU Pensando second their by instances. launched center connections our intensive application broader per by at that XXx networking and to enabling significantly software can business. first workloads stack In networking, Azure looking Microsoft compared instance non-accelerated more data performance our Now increase powered for

expanded announced media accelerator center generation. supports supercomputer application build a accelerators improvements fourth-gen performance to We compared our launch of that video to first supercomputing, TCO and significant is the the Xx and expected In EPYC that Society increase of instinct ASIC-based to powered number current compared simultaneous EU, center MAX data data in product their plans in streams the CPUs to our system. the Alveo deliver Plug by MI-XXX our first portfolio prior the with Xx

used and instinct MIXXX Pie accelerators used now announced LUMI our early which of native We software. researchers for of finished with AI the largest our to X.X CPUs Our center by the offers model support April, engagements in the the powered widely significantly GPUs by customers. broad framework, instinct and ecosystem driven In set data expanded Torch train third-gen highlighted launch by date. for supercomputer in software they first a EPYC expanded language the activities increased the to embedded quarter, quarter, the first support

at quarter, support track and large customers. in Customer Lawrence interest readiness AI year Livermore made the language MIXXX silicon We of excellent and we're for instinct this our has next-generation and models. to on for and launch to the El achieving milestones AI progress exascale both supercomputer significantly inference large software training increased cloud National MIXXX Capitan later MIXXX GPUs win key Laboratory

expanding models To portfolio. accelerate group strategy optimized AI under hardware strategy and company end-to-end together ecosystem, has organization execute for AI the framework AI our a and owning a of product into new The full development across including key significantly driving software our brought this responsibility libraries, we part of complete our teams Peng. Victor AI single and broad from our multiple business,

as downstream Revenue we client XX% year-over-year to below to turning shipped million segment. $XXX Now declined our to reduce significantly consumption inventory.

first earnings launched processor that on X XXD fastest technology. the XD our bottom As desktop quarter our the leadership we our the chiplet combine gaming series in with our quarter. was processors desktops, Ryzen CPUs we In Zen industry-leading We portfolio our we stated core packaging business. processor industry's and XXXX the for believe last client call, expanded notebook significantly with

a CPUs fastest demand, XXXXHS third-party XX by is launched In highlighting first processor Dragon CPU now X our multiple mobile our the strong mobile, available. the Ryzen core how notebooks with range powered reviews

also in production XXX for Lenovo. Acer, and gaming series notebook from wins the first our Ryzen Zen HP to design notebooks ramped Dell, track We ultrathin than X-based and CPUs and support quarter Phoenix more XXXX this gaming ultrathin launch Asus, of year to the commercial on

expect we to grow Looking product in our down the year, to PC client CPU sales second to the on the XXXX million year. Based seasonally we quarter XX% expect of in second the of units. for at be the XXX approximately to strength approximately continue and half TAM stronger our portfolio, the

X% demand $X.X consoles the year-over-year strong offset billion Now our as for year-over-year by revenue gaming remain sales. graphics grew was to Revenue semi-custom following Gaming holiday higher premium turning revenue declined as Semi-custom lower to segment. cycle. SoC

of series We launch gaming expand channel on sales GPUs in saw the Radeon with graphics, XXXX this XTX Radeon the Radeon Radeon our XXXX RDNA strong In and new first XXXX GPUs of sell-through GPU portfolio GPUs to of mainstream increased track X quarter, we're quarter. high-end our our sequentially. XXXX series and

and strength the increased Revenue to saw as markets, increased significantly care, our Embedded by our actively customers. for vision embedded care health We to of at across and Demand defense industrial, adaptive health grow our their majority solutions $X.X and segment. advanced year-over-year test aerospace demand computing automotive industrial communications, add and compute led work product lines. emulation, more capabilities continues a across customers and Looking vision billion. record to from

medical also camera, applications. customers We libraries platform AI enable released and adaptive new vision that launched for and our next-generation smart our visualization leadership Vitis and turnkey provides machine to advanced a capabilities industrial for software capabilities our solution to computing AI deploy

In new infrastructure Communications, as with production. wired strength saw wins into ramped design we customers

solutions We to and SoC to radio accelerate DPUs deployments also formed first CPU, launched and on SoCs, in based markets validate Zinc AMD RF our telco XG XG solutions FPGAs, and end-to-end products software. adaptive lab cost-sensitive

of rolling range platform in quarter, AI our full iSIGHT across solutions vehicles. for features its by adaptive AMD-based X and In ADAS silicon of automotive, Subaru their out high-end grew the highlighted deployments

In focus share efficiency portfolio performance networking and series XXXX launches addition, EPYC embedded growing our leadership storage embedded in we processor the server security, we and markets. with the XXXX with and edge of as on Ryzen expanded processors

embedded to drive we scale more portfolio are across our deeper great business, making our Looking progress our embedded engagements and expanded broadly customers. with largest in together bringing

by Based second segments, sequentially and with Embedded flattish quarter on in center and on first the macro In the uncertainties summary, I'm see based the demand expect performance revenue modest pleased mixed near signals, client with will our Gaming data to segments. operational in quarter. our a In in and declines we growth environment be offset our demand customer we continue environment. term, financial in the

driven remain ability our business grow half of the and MIXXX early We of accelerators by and confident of our client demand ramp our the our improving Zen product in HPC portfolio, instinct X in adoption the trends to AI. for second in year,

significant Looking accelerating and products. by strategic maps AI our priorities, adoption data longer center property opportunities executing based our and ahead have road successfully we term, on our delivering led growth embedded of

faster of We and and is the history. the than growth of any technology are in era, rate other the very recent adoption in AI stages computing early

capitalize AMD require the other compute language the generative significant to is cloud, bringing AI capabilities. recent and demand in compute large interest capabilities on as based a of and of and with adaptive well the in endpoints positioned have across models broad large of customers and increased to markets, very highlights, expanding And performance. to AI benefits high-performance software edge established deep our this compute set we relationships on portfolio engines, our diverse increases

coming part the sharing the and and engaging about data our CPUs MPSoCs, opportunity adaptive VXX grow excited very XXXX accelerators progress AI market, Ryzen AI, bring to our is strategic GPUs, the look Versal forward are of solutions deeply our are center business. broaden we and #X joint We led instinct our inference Zynq AI to UltraScale+ I set portfolio to MIXXX LVO SoCs. quarters more priority, Ryzen our Series AI. by as strategic customer and across over edge in with data about our center upcoming This our we

to color Jean? turn some Jean our first on over like provide the I'd Now results. additional call to to quarter

Thank you, of of the for afternoon, first fiscal the financial with results our for then start XXXX. Lisa, provide quarter review I'll and second good our and current outlook a quarter everyone.

quarter partial of purposes, only acquisition included closed comparative in financial for February the XXXX. first reminder, Xilinx, a quarter the which XXXX results As from results

billion, was segment was Client Revenue strength primarily down performance. in segment the X.X points a a margin was fourth year-over-year XX%, percentage as from Embedded X% by Client decrease $X.X impacted segment offset lower Gross by of quarter year ago, revenue.

operating the year-over-year, acquisitions. from Xilinx billion, due $XXX was was expenses Interest full of and billion, million. $XXX primarily $X.X million year-over-year, Pensando were expenses and to $X.X increasing and quarter income was Operating margin XX% a other of inclusion Operating XX%. taxes expense, down

For revenue the diluted share quarter, per better-than-expected first and operating earnings to $X.XX due was expenses.

was for of our with server the Starting by Now Center processor turning revenue by higher to to processors sales. Data cloud offset the segment, enterprise billion, flat segment $X.X customers, year-over-year, quarter. sales driven reportable primarily lower first EPYC

income operating and or increased $XXX address segment of investments R&D Center was to revenue opportunities operating to Lower a to ago. income compared million Data XX% of or large mix was primarily us. million due year ahead $XXX XX% product

Client we shipped segment downstream consumption was inventory. as XX% million, to $XXX significantly year-over-year down revenue reduce below

ago, lower second second to segment year was seasonally quarter a stronger operating loss in revenue Client income improvement an compared million to expect operating and primarily segment of million Client a revenue. $XXX $XXX due half. We

$XXX Gaming which XX% operating segment of was was million a graphics due ago. percentage X% or grew more lower graphics Decrease gaming lower XX% billion, primarily revenue Semi double-digit year revenue year-over-year. gaming was offset revenue million year-over-year, revenue. segment by than revenue. income $XXX to $X.X customer was to or compared Gaming down

the Embedded of driven year-over-year, Xilinx of $XXX primarily markets. the full primarily billion, ago, Xilinx. multiple operating $XXX end was million to year inclusion was or of of segment and XX% $X.X across strong performance full quarter a up revenue $XXX Embedded compared or a segment million revenue quarter due million by revenue XX% income to

the and sheet balance cash the flow. to Turning

shareholders generated model the demand by despite million million. $XXX our from In $XXX in Free end increased financial of At and $XXX and primarily ramp short-term first environment. inventory the process such advanced repurchases. reflecting was the cash, the to million, the and equivalents through strong quarter, in Data $XXX quarter, $X.X billion, anticipation we the in were of quarter, node. During we operations, cash investment new cash mixed we Client product cash share returned million flow of Center

well, macroeconomic repurchases. have billion We executed an authorization a delivering and AMD summary, earnings. uncertain very in team remaining for better-than-expected top $X.X environment, revenue in share the In line

our to second outlook. turning Now quarter XXXX

billion, decrease segment expect million, partially or offset and flat approximately decline. minus to we approximately $XXX $X.X Year-over-year, segment Gaming be a the sequentially. growth. and Embedded year-over-year revenue segment by expect plus Center and to Sequentially, Data to Client, of we by XX% the Embedded decline, Center expect Client segment We and approximately Data Gaming be growth modest offset

we addition, rate to margin gross approximately be shares. non-GAAP share Non-GAAP expected to diluted tax approximately be XX%. In expect operating Effective be billion. expenses to X.XX And to be approximately XX%. billion $X.X count is the

closing, In execution. strong top I'm our line with line bottom pleased and

a offerings the drive have in financial strong term. accelerating our priorities, and value including our over long long-term to we'll creation AI model, continue We invest strategic very to sustainable

With that, back to it for Ruth I'll session. turn Q&A

pull happy we're Kevin, the Thank audience you, for questions. And Jean. to

[Operator Instructions].

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

one, I be half that your that Data Center, right? the look Lisa, at into first go versus suggest visibility outlook your confidence year the what assumptions for For second XX% growth, in I'm and my right, view? and could curious, full that of is when some some half, Center implicitly first the Data up And

Is think ramp about -- us it half ramp it the that give sense visibility your should Is a new recovery? the and how second in outlook? just is for Is you confidence Center bigger products? we think there in strong pricing? of is a So much implied the Data enterprise do it

Right.

me Data question. right going on some now. give the for Center context what's the thanks Vivek, in let on So Maybe you

First we a environment have Data it's that all, in Center. mixed of said the

half enterprise. as first inventory year, well cloud some of larger the are of the a the So that working are optimization there some through customers as weaker and

into half second of go we we As see of the year, things. couple the a

road is very strong. our map First,

that It of on, feedback overall with terms we're very ramping differentiated TCO well. is the customers and our performance. working So getting in it's

half we go -- So done that as we ensure we've such in well of year. workloads half a very to year first that the across is think of work and complete into that Much broader we quarter second the first set the the of work in ramp in positioned. we can it's the of here all the the that of quarter second

improvement. notion depends I the enterprise ramping an we then as macro the with second overall market go Bergamo. expect we half of And still in Genoa, standpoint, then little And say, think a mixed that would year, I the on the will some into addition from be It to bit also situation. we're

second our in So here the that's the the and half MIXXX. also then will the second have on ramp track And launch towards we get GPU ramp end the of year, in as of to of we quarter year.

wins start the as we wins. quarter that, with as early cloud well our our ramp the supercomputing in AI So fourth of

So those the are all factors.

we're for positioned to have map the Center. about Of overall road how and product course, standpoint we'll see how from play Data year the an

how you you in in that products, share in Center evolve Center? and think Lisa, Do the Data second between a market Or the have narrowed? competitive second still my Data for that see your think do gap competitors' to the you your the And in follow-up, half, half? share chance right. gain has market the All you that the

it's Well, X I actually nicely our Vivek. progression, Data steady. you last Center share When look over absolutely, the mean, at years. gained Yes, pretty we've been

into believe I go have that think of we very strong we competitive the year, a As we half to second position. this continue

that So us do well share. we positions gain to think

as X they're with that customers, In the enterprise about it into think bring as Zen and workloads. cloud what having well we're can conversations enthusiastic workloads I

been is underrepresented. Genoa extremely enterprise where actually positioned for we think have well I

good competitive, feel obviously, about about it's I but feel we to road our ability the we to map. continue good mean, gain very So share.

Next question Hari from Toshiya Goldman is Sachs. from coming

Is it kind It's to be I this is Or in? QX your on expand Lisa, the the supply QX. you for and second kicking business business. If expectations the the would been really in macro/cycle there half, related? wanted sort ask strong the of of Embedded helpful. you're acquisition outlook about of since business sequentially that for something a can you down Xilinx, the guiding

for Yes, performed has doing it, we another the the When I segments X absolutely, there have Toshiya. or and was think last actually Embedded over we exposure to, very is Embedded . a record for broad look majority question. well. the mean I them Thanks the well X quarters. business are extremely business. underneath set market of QX that of the

and clear modest a will then and business. of much test process positioning aerospace business moderate that of process like we QX into and that we're backlog a that expect our sort is our the very and in for the we industrial, thought of the our of QX, in backlog sort clearing Our still did of our will We decline automotive that have growth bit. defense, bunch emulation

We as expect weaker consumer little bit wireless trends to be well a as trends.

are the our performed the takes of So and expectations. say business would But kind the I above the market. in well has puts those

That's puts on helpful. slide months? speak my Can side about gross over you then one think you're for margin margins as next of takes second And guiding the X half. your Jean half as think in half and drivers I and the the In to X to over deck, things. gross maybe follow-up, maybe margins you gross the the up

Thank Yes. the for you question.

Our mix. is primarily gross driven margin by

second half and in If margin segment. Center you first look the very quarter -- we at guide, Data gross with strong quarter pleased performance performance embedded are the the and first the both

our segment margin. We haven't been seeing headwinds Client from gross a impacting

The on going the second the overall, to pace will do actually expect segment be gross because largely improve. Client average. up the of We to below segment. to continue improvement But think Client is also dependent margin going it's Data margin improvement we be going be strong. Center the and half is the half, in second gross relatively Going to corporate Embedded

improvement the going So recovery business to gross longer our term, revenue the the second come pace Data segment. largest are for incremental the opportunities, margin in half. on Client of right, be dependent at Embedded opportunities we pace in look Center business the when of could But from and

are about continuously. very we longer-term gross going building margin So good up

Wells Aaron is from Fargo. from Next question Rakers coming

to guys I've discussion the some I been challenges. there's guess just back DDRX first Bergamo hear cycle this I to CPU the But on that launch with quarter some Bergamo. got it's well. you here like server two around throughout and And Genoa question track cadence the great of going here. as are last on think

I think there's PMEC characterize issues. have the issues if presented the how cadence ramp you I'm just at -- this you of of how cycle of Genoa curious would point? themselves those or

Yes. Sure, Aaron.

look, said, transition a would yes, to little of we it, a a Milan bit compared always more it So launched platform. new I we as be think longer Genoa, that it because is

X. Gen things So the for other DDRX, PCI it the top of new than other many customers, is And they're it's upgrading doing also our CPUs.

we I lot So in that the the ramp say forward. the workloads our workloads, lot we're data a work see about seen from together interest, that standpoint, feel a we of set We've is doing customers, we expected. about customer in expansion engineering of and as would of going the going great centers with

we the as sort year, of see coexist have. throughout half, So is, Genoa into overall, our platforms the more of particularly second just that Genoa the breadth given we'll going and broadly. to are But Milan ramp expectation go we

to course that And MIXXX, through come you if questions year, that about DDRX anything curious center just? beyond do look the then deployment think beyond on the quick guys just in my GPU how data is about specific we out the we success real this I'm of question think And just if second up? market the

Aaron. Sure, Yes.

just DDRX platform on anything it's we're to bring the back normal we So haven't DDRX. seen specific up that seeing. question, And

look, Now excited MIXXX, as relates the to it your we're AI about question about really opportunity.

HPC is us in Clients overall MIXXX, us think well mean actually broader specifically, significant it AI positioned or part as supercomputing well doing MIXXX workloads than very I for both as as success workloads. is it of cloud. the relates I for AI a what is But for that is having to and opportunity. for also we're includes Embedded. AI

taking recent last I months, the AMD more has remarks, would software excited efforts I overall resources. over collapsing as And the with and one of generative the putting a organization them expanded work. the accelerate we're our work that. and of AI, here prepared well Xilinx the our interest in that's and the mentioned primarily about AI the few sort that doing, lot on considerably for AI into say We're MIXXX to as platform sort pipeline we're work

sure, growth about the think we is a significant cloud. positioned So of I AI success MIXXXX sort in good part we're there. feel for in for how the of And

from coming TD is question Next Matt Cowen. from Ramsey

continuing business like data kind into think recently, with by the big has in Lisa, of Yes. I of percentage bit business, way market driven be a the of particularly in second and the hyperscale. right, trended, quarter. in center It with year my question, data that's server first occurs to is being it the to just enterprise your center going China second the the U.S. seems softer me that and a half

to I my level question visibility the to you And have volumes, of pricing, to of guess timing ramps. unit is

have And little you data concentrated. us mentioned I some growth imagine a visibility. customer you walk center. given it's you could of If the through year-end level bit, that for

there, ask bit of bit about to be more just quantifying I the you If push -- helps growth year. could a comment a precise big dynamics, to market a it's understand little but me for the there's that's and

Sure. for the thanks Matt, question.

their have we plans think in workloads, instances. I as we plans cloud with customers in CPUs, EPYC qualification good what conversations look, segment, our terms the are, largest particularly which Center their what of our which Data very are, So ramp work with

and good view that Center. demand. a feel this Obviously, is macro of is our Data some overall still there But good situation on that overall of we have visibility. lot I in So progress dependent is the

we're will half, that signs the takes. seeing, improve go early My very into I quantification, of there's lot of I is as terms as in even enterprise say, as and of some puts improvement second in view and China some well. said, would Now we a

is, And next Data double-digit those of I over the Genoa we'd think, we like of products, quarters. piece as Bergamo view given them see certainly, a ramp couple strength is here to our we currently and grow what like So large see. Center to the share would growth

Lisa, that's helpful.

question, follow-up in my was I Client seasonal For the the sell-through think obviously of scripts, the was think And first prepared that the the undershipping in year. second business used in half. channel the I language half clear we're to improvements in the

expecting of are And you for top sell-through you for Client with in the just So second to improvements and about shipping the market? kind demand? guys half? if so to line stop pieces -- come to and of in magnitude think the Or under-shipping in moving on seasonal could help then back me that the

Yes.

chain be of So so been about shipments the certainly, normalize X that inventory supply to undershipping consumption the business in would has our sort the been to for quarters in closer Client we've And goal now. consumption.

improvements half the positioning. the comment in expect year, and that will we the meant believe that, happen overall We be will that there the second what inventory that in of that's

that And then market is the we Client stabilizing. also believe

our platforms on Range. half Dragon series. overall And was the our a do like excited leadership market product that the of well From what having be better notebook gradual the AI-enabled have Ryzen with be for we the I'm portfolio we in although XXXX we as QX year. for a business market. it should as the second bottom our see see We about So will overall set lot. improvements, of

quite Verizon desktop Our is with XXXX strong map our road of new XXD the launch also products.

should a so we'll shipments normalized I the seasonal second and improvement of some second And and the consumption, expect think between we be quarter, the And half still here consumption the more undership by we in second year, bit. into half.

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

terms guess the in of cloud same I Yes, question business.

combination Can And some of much of in in come sort how you has mentioned digestion much us down? inventory undershipping there demand of inventory it How maybe much hyperscale? segment. spending give you that of You how reduction. of kind a was are sense and

Yes.

is of every different customer What a say sort way But overall I a cycle. though. it is at we're me their place different. different think, Joe, because this harder are bit customers seeing in this is let

have how from visibility of our Obviously, the some I think on terms workloads. also going the with macro a and viewpoint, for plays our that I quarter, the large for in we're will think Milan But of between of do all they're of customers we what some product and out. Genoa trying good through to these depend year. transition

to put that -- we So was second in relates year that's will comment all as the will why do we into second the business. things of conversation, if you that our be growth modestly the believe there'll those quarter more Data it then half the grow Center the and

they're AMD different expand the through go cycle. believe, next So number as every there we lots using be of on, of will quarters. a But overall, that to of workloads the going puts and takes, customers in bit few a we

hyperscalers? And where pipeline more a -- generative follow-up, Can is of in AI. MIXXX that to around interest indication is in for you then my interest I mean, out Just Or major of figure now sort of with mentioned that right of that level? to are kind market? Great. revenue you in talk terms you establishing trying yourself

say, time. would I for quite Joe, at been Yes. this we've some

bit for models. to and some mentioned optimization library quite that AI to remarks a MIXXX We do continued generative MIXXX, of with made really the has priority performance capabilities. been that was quite some with supercomputer for progress. the LUMI and the We've done software ensure we optimization prepared the of we've on overall AI could increase strategic very time. With in a work So AMD strong actually much

good. really looks MIXXX

everything have model language migrated terms has from ago, inferencing, think large Today, of focused in particularly of good a conversation which I much that sort training. to bit on of workloads primarily -- also for changed see, that the we is whereas the was GPUs. year a

XXXX. So will then revenue think meaningful in customers that I with the will do from an in cloud standpoint, quarter start believe we be it AI fourth and we MIXXX ramping more

coming question is from from Next JPMorgan. Harlan Sur

diverse see Valens FPGA Ryzen EPYC strong to adaptive here, year embedded dynamics billion to a markets. billion a team attached their given market position $X in market really or And very the their xXX to attach is the Embedded, share is per position to catalyze right? like in strong $X solutions, think I opportunity. and Good end good compute

So, give and with an driving sockets? the synergy compute year in a attached can Xilinx just to Lisa, higher the portfolio, unlock given on you update AMD you're us Xilinx

has to would a we strong, continue done the It's attached get great portfolio and extremely say, FPGAs with Very The Xilinx SoCs. question. adaptive the more I to Harlan. Thanks, Yes. content well us.

seen traction and good and broader cross-selling is beginnings CPUs that market. the have opportunity both into EPYC the Ryzen to take with We the of embedded

the think that. I are open very to customers

have I go-to-market helpful is force sales a think and a set customer that that. across this very for capability we

long-term for and grow So And some see a the embedded our already of we'll the we've believe of a business. and as result a I think forward. that do Xilinx AMD more this to the that lot portfolio design seen is of opportunity wins portfolio, us continue I combination to going the

these guys semi-custom after and right? solutions have capabilities customers a it AI or more portfolio this at Great. as to offload try terms around semiconductor there that of than very opportunities, right? other some a strategy have are of trend I compute, that hyperscale offload programs? And design companies world their in graphics, compute to go And and appears your look there well do you if or complex as team hyperscale of connectivity to be own ends, opting silicon Does towards the full-blown ASIC-based have cloud the the to the the less right, IP of handful SoCs, accelerated

and portfolio very think complete would CPUs, point -- Harlan, broadly. a put I capable is, the it team. very I the we We more And do, GPUs, SoCs, FPGAs, more and have adaptive broader semi-custom IP a across DPUs

higher we And that when higher there opportunities we so think volume custom game are sort are there look beyond opportunities of hyperscalers, I volume at consoles think beyond available. opportunities,

IP that very think combination So I is of helpful.

areas customers. we think the add think long-term of opportunity a where our largest and one for value us, we it's I to can it's

Bank. Ross Seymore coming Next Deutsche from question is from

pricing environment the general about in talk sense. to a want just I Lisa,

raise against customers You to could competitive increasing a guys market, But intensity the that to have weakness of done along work at that. those least increases, in benefits cost things. being and currently sorts seems and to -- the pass your the job great prices, the it able of

couple the market, going then can go and exiting year also in the to but into Data pricing just Center your in near think perhaps market? then next both most your is importantly, Client you So this term talk about you of where across years,

Yes.

what I is think, a of things. I say would couple Ross,

pricing performance more is customers think our that more Data adding it's where from from right? as to and Center are I is them more to stable. our And the that the one add TCO in comes our we going is -- relatively capability, where equation And market, Genoa, it's performance. what goal is advantageous for offer cores, to the Milan we're adopt a technologies we dollar per our to So solutions.

I So that. expect

get to watt to dollar, performance environment superior products there, a And normalization, healthier on that in per the in conditions most think business line of more some environment. a given with business, Client levels. competitive We're right? inventory thing the in back continue from offer that capabilities performance again, the there's we're I that's it's -- to product think per more is that -- consumption it's the important overall. my the values, the So ensure we inventory normalizing think standpoint, focused to market. with because ensure we in then, And all shipments our have I I

And you my advantages? demand. knows I what just that's tons There's AI your and pivoting as MIXXX. to competitive that's side now. the a of market would Everybody know exploding right for follow-up wanted describe on

to that all be IP a have there's to able as But guys it. very in incumbent large attack space the You well.

you core So to you about heterogeneity think cetera, that market that bring, of can bring what et when software, the you whether hardware, you penetrate products to can successfully? is can the what it's think the AMD advantage market, competitive do allow

come positive together, aspects, very And yes, supercomputing since of some haven't first the been for is those coming and CPU Ross. of has specifications will both couple -- we quarters. the MIXXX and solution of Yes. the has GPU the market. over that all MIXXX, yet There's a . will that the announced --

I there's a very market. the and relationships value side, of think relates EPYC on the conversation, as the between synergy it GPU customer lot strong a both XXX per think think -- EPYC sort And customers. also of have think deep there's again, our customer the we it's given dollar of there's actually between a the I a CPUs set proposition I AI, and generative performance a demand to we from lot and in hardware

think large position view sort think demand I together, do AI. that And can these So these our look needs. when that. at that confident that strong is satisfy very of very, strong I there we few very model language for I And we can we also feel our are is think all given products really is

Next Arcuri question coming from Tim is from UBS

had would Lisa, software supporting these on successful forward. there this a ROCm X.X how call you step software this you're PyTorch how be lot Do to AI. successful internal And you AI? was group. the is is new new that say talk great to be you group, more now have forming a can capabilities much You AI about obviously, in But mentioned for dictate this workloads? going

is Tim, think answer the yes. I

capability, that, in significant the I edge brings as added think team background especially AI significant capabilities. with inference. think And should over year made cloud. a is progress we of of think you broad well. talent software I in have in across of the terms AI lot as the AI as We've portfolio our And sort last a about really even and portfolio well client our our it's software way Xilinx

many the customers, beauty that opportunity of not workloads. cloud And it's that it's particularly the not is and many

a targets, of customers when for clear have winning with very that very what clear very, for closely So That you handful very in a volume. on target optimizing the is we're working sort us significant market. gives our customer of generate workloads

that AI. to multiyear about journey. in good our say a like it's feel we So And opportunities I'd

we is next X a the think this market X the to significant very years. what beginning is So opportunity for us over

And follow-up. guess my I as

half? It of that you said a I see -- can and I us revenue know that you can of just back you the profile Center up Data that to wanted probably Center Data like double up up year-over-year. total this revenues sounds I be think will be year. digits. also this the you will So for But sense confirm also sort year into overall give Embedded that

Tim. Right,

guiding So not year I think the puts we're said, all given we the takes. as and full just

QX then exactly across But in out out. So . half see the side, return year-over-year. enterprise. sort good in the macro play of how plays see to flattish data And the and we we'll half have yes, of growth We'll growth -- to rest Center PCs feel how we about growth. see Data center is growth the second Embedded, on double-digit segments

is Srivastava question from Your next coming Ambrish Markets. Capital BMO from

a to time. wanted first I back first think a big would That's a for the Center. share This lost basis gap long in Xx. business I Q-over-Q almost And a pretty is time come your Intel. versus Actually, to on between Q-over-Q -- on basis quarter Data on have you the

but acknowledge please it that you quarters pretty large I So address pretty seems And be could that? gap. be can a to volatile,

kind enterprise? as cloud the the full Data my just for for well of again, assumptions And in for embedded please, growth year for Center, then remind as what's follow-up, us

Yes.

me I make sure question, Let get your Ambrish.

about Center Data lost you're on and we've share we sequential a whether So basis? QX asking think

that a versus and Right. just a it comparing a I'm on gained basis. share. Xilinx look reported Q-over-Q unless Q-over-Q clearly basis, If Data down a imply what million basis, I at Center share you loss versus you $XX on year-over-year so on that the versus was you down business have had also just report GPU But what Intel your them and significantly reported, would the

is that the GPU, analyze and share. QX, both bit we when in from maybe other lost case. of don't definitely including look from Ambrish, Yes. I'll the networking have down the a been the revenue little share QX believe is give definitely at overall perspective, business, But color we you data, reported a sides we

Ambrish. that's Yes, right,

quarter-by-quarter it so at we takes. go that wouldn't you the I we might overall, there think I gained or So each I I look a server lost If From an we little overall closely what on basis believe a puts a good share have as believe see progression But overall, from share. are pieces. through don't just to year. have a anything, go EPYC of we we think think because But bit. through we have standpoint, we the and

for And then the full for underlying assumptions year Data Center?

year. full Underlying assumptions for the

QX, cloud about expect growth. be still that talked key the optimization think call some happening. to We pieces I I are let's modest it,

as supercomputing fourth that second beginnings that, dependent of the we'll see MIXXX into the believe some half As stronger of is Bergamo, year. but and and year, we into go the we'll have do on half of of of the more then we our the of macro, enterprise ramp second improves the workloads. ramp we beginnings a both think ramped the go the AI still Genoa quarter And for in we early

question Rasgon Stacy Next from coming Research. from is Bernstein

for my me. just For one, can clarify explicitly like Lisa, this first you

you So statement? that second a for Or Data statement Data said half-over-half that Center? half full a double-digit Center. was Was year-over-year a Or was statement? year that

Yes.

a That statement. Let me year-over-year clear. was be

versus for So XXXX the double-digit growth full Data Center XXXX. year of

something are needs and just of QX Got in what like Which did to second growth the get it. QX in implying year-over-year sort half there. for given you XX%

you're So -- endorsing you're that those endorsing now?

I am...

right. Yes, your is math

Okay.

why going doing that space you question, right? made that's where gross expect getting the in is half my better. I I that you get what For something did margins on especially margin hear why better, was on second a sure, in been everything? has comment given that of in want margins the gross And Jean, just Intel dependent margins I increase to second to gross to said make protect happen? would should Like Client Client

margins is think you Center have the look Yes, strong and both XX%. about margin performance. you question. Embedded The a gross And around Stacy, Data if our and guide to QX it gross that's way good know, our QX at very a as

supply are chain. under that downstream headwinds margin digest to on And so the talked really what also about, impact gross our the which, inventory in significantly we side, the shipping the PC and consumption client is as is we

margin those typically, the normalize you don't environment, the on But will normalized. challenged. be much plan kind very it's pressure it a ASP continue That's half, you segment why in is know the our side front. not a As us on important side, that's that's and been very to will to we wrong demand inventory, the the be time price get has of are on the reduction less. know, you In that significant be funding, get fact digesting the the you funding going so gross competitive we and everything, because Client and second channel supply, when better

will second better the gross the margin first be think side, half. do we will than half So

XX% And Center, it. misspoke not well. were in half of I I as Data Got year-over-year. half apologize,

So we're all doing it.

from Our from Curtis next question is coming Blayne Barclays.

Could I comment had prior quarter? Maybe just March down with did you in two. question. just the I to what assume ASPs they're on on mean I a Stacy's following start decent client amount.

in was color competitor could March? any but what the Your you down, environment on was provide

Yes, Blayne. sure,

a the you're were that's supply on the the environment was was about Client environment year-over-year ASPs a business. Client ASPs in overall And the were the higher given the talking So quarter, that down we're first in lower. 'XX, of that demand if quite is, is also the think in just you half the undershipping bit what ASPs or basis, if first are And that. what about

down, business, part like you Got wanted in sequentially. comment down a to it's But the it it. drop, on too. and in Can operating of profitability margin just just enterprise profit it. down I Center? think I drop talked is ton on why And And a Center you that Data being about gross the looks big probably a Data is you that's ask then bunch

a question. that's Blayne, good Yes,

is you There largely Revenue year-over-year, significantly. the you're operating drivers. X major at right. dropped I absolutely margin are think flattish, look when but

we the is AI. investment especially networking increased have in first and The significantly,

or last As recall, May closed the Pensando you June. may we

also for last full bucket. versus under investment investment. quarter all expenses Data AI That's So GPU Pensando Center the Plus this year. is we under increased the

enterprise Secondly, Lisa digits significantly sales cloud double grew actually I year-over-year declined. mix. and mentioned said about product

be Typically, going gross enterprise. we So center in back. will balanced market. balanced to -- enterprise QX. heavily do is We in versus indexed the forward, expect, will cloud come in data year think margin it side do QX, in than last revenue cloud even and the our more lower QX, is

I the decline big guess But sequential. was

So down cloud I'm sequentially? assuming was

it's revenue. Sequential, Yes.

right? the revenue, significantly, down bit it to the too. look If very was at is indexed mix also And little cloud sequentially more a you

Yes. It's the same factors.

Yes.

as expense So both especially opportunities the data mix AI. the large increased has just as R&D and center cloud the we given well the to across that have

Harsh Kumar from Your joined Piper final question from today is Sandler.

Lisa, X+. I about had generative on ask you AI for a I market question. views wanted inferencing the to your

wanted on. able the kind CPUs to I I timeliness to be ask the instances. there's but to Specifically, because are then think hearing that enable inferencing, We're way we're do going currents not a of function CPUs hearing best these some as to cross of there is

you what curious had then was think. And follow-up. I a So I guys

CPUs saying lot -- you today, mean, think, were Well, if Harsh, is I I a for inference. are I lot. a used used inference think

to demand Now highest for need sort most model language GPUs right AI sophisticated is is of and now model. you to generative the the train large inferencing, have horsepower where the

those So as X, say, think are I crosscurrents. the you

workload adoption I important we'll And AI of for the much the more on GPUs. a on becomes CPUs, but tasks tasks smaller rate the for board. inference just larger across think given I think that see

Okay.

MIXXX that generative talked about curious the successes Ai series. you HPC But still wins So then the XXX or specifically, talk in it And you if could on kind lot stories a you or the series? with for I might similar a MIXXX on defers any those. any was back side or of success know have success about side. to GPUs question I

Yes.

very bit of So and as work language MIXXX public is on with work we what large AI said large that example good results. is with with what quite earlier, we've And really a and MIXXX. customers models. finish the we've on some we're training The is some done doing models. We're seeing of positive done of the

competitive about the quarters. be is of MIXXX evolution next generative revenue AI. customer that think couple and go So we sort more talking of for we'll over very as we

to for everyone Operator, that call. today's Thank Great. us. you concludes joining

Thank you.

and wonderful now may have day. disconnect You a