Advanced Micro Devices (AMD) 1 Aug 232023 Q2 Earnings call transcript

Greetings, and welcome to the AMD Second Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce to you, Mitch Haws, Head of Investor Relations. Mitch. you, Thank

begin. You may

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

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

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

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

will on Jefferies Communications Conference Sachs Before Lisa Hardware & will and August attend Tuesday, on IT Dr. Su we Deutsche the X. September I Jean attend the Thursday, like begin, Semiconductor, Bank Summit would and to XX, Technology Tuesday, Goldman the note XX. Conference Technology on Communacopia August Hu XXXX that

expected XX. XXXX close Friday, on Our third business of time September, the at to quiet begin quarter is

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

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

products, our engagements, latest EPYC, Mitch, today. product multiple listening and the our quarter, in We expanding Zen and executed all AI leadership in you, Ryzen good second those ramping X, families. Thank well launching and to afternoon significantly

future declines or declined more billion. as and engagements our multiple initiated flat by year-over-year, expanded cluster grew customers and supporting in XX% as expected scale. Gaming of than software was growth Sales MIXXX Instinct hardware revenue sequentially deployments seven MIXXX Client were offset Embedded and AI programs $X.X and by quarter Segments. Second Datacenter segment at sequentially to times

results, down up revenue, business quarter second was Datacenter the year-over-year, $X.X and at billion of segment Looking X% sequentially. XX%

EPYC cloud their Although mixed, quarter, as multiple offerings. announced deployments market demand adoption to provided sequentially with second Xth new accelerated infrastructure the the Alibaba, and Microsoft, expanded nearly In with revenue CPU and public instances doubling quarter, AMD power the launched in XX internal cloud, instances Genoa by AWS, instance in Oracle. remains Gen

far, and most to making enterprise processor. times up competition, Genoa X.X cloud applications, than more the in it, and the delivers by performance times higher X.X industry's performance per watt more and server performance efficient

As best an its instance AMD-powered by the performance end instances of is there largely Genoa are and they example, In Genoa price-performance highest that we deployments. available, to and year, XXX to number general publicly the new than expect MXa AWS the XX%, grow offer. cloud total, which instance, now driven more purpose xXX nearly XXX announced by

to offer Zen by launches We we to competitive also Genoa-X. more software than with global power including to offering Meta, Genoa-X xXX their offerings HPC event across technical and Facebook, computing datacenter Bergamo Bergamo, our deliver cloud-native Instagram, than in to were applications, at and full workloads X server for launch they announced deploy performance quarter prior Microsoft that the portfolio joined infrastructure times where our generation. With product in expanded of the instances the the double more WhatsApp. We while performance five compatibility. their higher Azure first be plans broadly than compared Bergamo excited applications, announced

closed platforms their In on resulted enterprise, track macroeconomic we EPYC large of sales the and other enterprises as large energy, grow. wins healthcare to multiple begin to companies. grew enterprise sequentially weaker large pull Dell, HPE, Bergamo financial customer new year-over-year, continued Overall, uncertainty demand from while in ahead, server quarter. with processors technology, Looking and in are services, launching Lenovo, third for Supermicro, servers providers

For enterprises, adopted EPYC the SAP with in on BNP processors processors large and to power all de Petronas, quarter. Google And example, other EPYC applications Uber, Brasil, Banco RISE Cloud. SAP hosted selected Paribas,

ramp. We grow percentage revenue expanding to EPYC double-digit Gen in by the EPYC quarter, the Xth led expect a third sequentially by CPU

In to server, Edge for is launch addition, track Siena, this leadership, our first quarter. on teleco EPYC infrastructure processor and optimized

largest for top-XXX processors the key fastest second the solutions. our systems latest we of the most Instinct the address most by powering Turning customer to to list, of highlighted DPUs met our systems efficient of supercomputing, strong in Pensando supercomputers AI, be pull adoption the seven EPYC solutions Cloud. the and deployments milestones in Datacenter choice XX In the their progress AI list. new business, with quarter, the hardware continue broader on in cloud on and In to the the and expanded quarter we powerful Oracle and growing datacenter the of networking, made providers Alibaba GreenXXX as software in XXX for world,

three Our focused on AI areas. strategy is

a computing solutions GPUs, multi-generation AI and deliver CPUs, broad portfolio for adaptive inferencing. First, and roadmap leadership of

deployments quarter. and expend three open fronts proven scale. the deep We accelerate the across partnerships hardware easily. solutions collaborative of we And on be AI have Second, established established to at AMD-based second the enables deployed and that we and third, platform software AI to in the delivered our ecosystem have broadly expand all

software plans side, to for Hugging optimize Radeon, Face On and EPYC, models announced Instinct, Ryzen, of thousands platforms. AMD partnership their Alveo Versal, the and

AI leading features feature the like latest ROCm significant in performance our and it frameworks, AMD silicon full and across make and of to support software, a OpenAI for and expanded tap To the TensorFlow, update PyTorch, easier for delivered Onyx, into our Triton. hardware, we including developers technologies performance

on stack partners. our We of customers our software new ROCm improvements the the and AI positive and are feedback receiving latest from capabilities ecosystem

AI no delivers accelerator with training software. our or example, MIXXX As MosaicML, recently performance underlying an leading competitive Instinct minimal software company, the to AI that highlighted changes

our These CDNA the memory with be side, designed generative to industry's Instinct combines new for largest GPUs are MIXXXX memory AI GPUs announced in numerous providers, critical world's Customer very Engagements AI and architecture On the we MIXXXX and significantly advanced is top-tier X expanded Instinct interest fastest footprint large bandwidth. high. enterprises, companies performance. most in the our the accelerators cloud AI. MIXXXX leading inferencing and hardware MIXXXA with next-gen factors quarter. in our

cloud We production on both access and and early are lead in with quarter. products remain sampling system and providing track now, to HPC, AI, ramp launch our fourth customers the and

XXXX sequentially segment, largest launches to led Client year-over-year CPU declined Turning billion. revenue as Client grew significantly, the series new sales notebooks OEMs. XX% Ryzen to from $X segment of by our increased revenue XX% the

powered processors OEMs Lenovo, our We More leadership grow of AMD-powered important and this offerings year launched new leading business. X. commercial Pro to this platforms are PC Zen commercial other also than from our notebook and first XXX Ryzen launch as on part HP, with by desktop client track we our

with segment are Ryzen including the AI We of expect year our in dedicated the the strength will efficiency, and engine. CPUs Client and of the based XXXX of our increased leadership the stronger our performance second-half ramp our processors that XXXX a deliver product Ryzen mobile CPUs, on seasonally first adoption and xXX grow industry's energy of portfolio

other we offerings. AI large into software Microsoft see significant incorporate as PC their Going providers forward, demand a AI generative driver and as

which, with the a ecosystem fundamentally will processor executing PC multi-generational AI are rise experience. We together our partners, roadmap in change

had revenue in billion Now, with XX%. Sony healthy sales. and based on mainstream launch lower turning the in improved as Semi-custom we second quarter Gaming graphic to semi-custom $X.X XXXX console graphics, the XXXX for of more of gaming declined the than gaming quarter declined games. Microsoft revenue our year-over-year series by X% retail availability launches AAA globally, segment revenue Sequentially, In our Radeon RX cards segment, GPU to new XXXXp sales our as was expanded strong SoC were gaming. demand higher and offset the

We are third further launch cards the new, Radeon on XXXX X offerings expand track series the in enthusiast-class quarter. our of with GPU RDNA to

demand as infrastructure Sequentially, healthcare, industrial, X% Embedded XX% to operators with automotive, by Turning their segment, billion. softness customers some and offset vision upgrades. and customers to increased our communications $X.X declined as revenue was revenue solid slowed with year-over-year broadcast

new portfolio ASICs and our advanced expanded performance packaging, Premium largest product the quarter, next and the industry's launching adaptive VPXXXX generation with chiplet most Versal SoC computing verifying adaptive our We SoCs. leadership and solution in emulating for

the In cost FPGA of announced our we Spartan industrial, optimized, and family robotics UltraScale+ low healthcare new a end, to range vision, applications. computer address

that Adaptive SoCs. customers platforms We also for our of easier for highly performant Versal to and our make software Vivado versions it released applications Vitis enhanced develop

vendors. storage sales powered the CPU and Embedded in AMD new leading the Fortinet with networking launches and of quarter security, solutions from HPE, grew other

as we inventory growth, after into second-half six back-half year, the lead Looking and the revenue very the customers year-over-year of levels. Embedded some in to times delivering of their reduce the quarters year normalize strong segment of decline expect

our be to product the and very design embedded in particular, on momentum continue adaptive processing growing synergy portfolio. our based we opportunities We combined see revenue with pleased win and embedded

the well quarter strategic our priorities. summary, against in executed we In

expect PC market to Looking at the the the normalized seasonally more with the of across inventory second-half year, chain. we supply grow levels

expanding. mixed a datacenter are AI environment In we deployments market, the as see

fourth our customers sales higher XXXX shipments continue quarter. and we new accelerators backdrop, with compute fourth optimizing strong by cautious in EPYC cloud Against remain gen MIXXX growth Instinct processor initial customers the deployments. However, driven datacenter their this of enterprise expect and Ryzen and

increasingly while are AI in dollar of cloud, is represents still endpoints. we new multibillion a AMD for era it clear and across the an term, Longer AI, of that opportunity days early of intelligent very the edge number diverse growth

expect to market XXXX. billion the the we datacenter over for accelerators by In $XXX alone, AI reach

investments ecosystem this We emerging R&D, of have enablement significant related market. our AI capture to share go-to-market a and increased

our we AI Alveo executing makes deliver solutions which inference our are platforms leadership, strong us AI, and Ryzen progress powered very for and by and partners. EPYC, AI are can ecosystem expanding instinct hardware the we confident and at our we and of customers training The pace Versal roadmaps software our making rapid partners

to for turn and on Now second quarter Jean our the QX, outlook Jean? results additional over like to I'd provide color to call our

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

second and per billion revenue diluted are quarter share pleased with of $X.X results with our a We of $X.XX. earning

was was revenue revenue in compared flat lower the expected Embedded to segment Datacenter Client the segments first Gaming more On and as segment in Revenue as than declines both declined the the segments. a basis, Embedded was quarter, by and revenue. by year-over-year the client offset primarily offset growth growth XX% in

approximately strong primarily Embedded down driven segment four XX%, by percentage a offset points Client partially lower segment was from margin performance, year Gross by ago, performance.

margin was R&D X% billion, of primarily $X.X year-over-year to expenses due was increase million year-over-year operating XX%. Operating billion, income $X.X an $XXX were Operating higher and down investments.

expense, and Interest million. was $XXX taxes other

For performance. to the to same per second $X.XX in primarily EPS last quarter, was Client share earning declined the year-over-year segment period on $X.XX, a compared due diluted year. basis,

Now, to softer year-over-year, were starting segments EPYC inventory the $X.X as second the quarter, processor with mainly elevated third reportable was enterprise Datacenter demand at our XX% certain segment lower due sales to down for MDC revenue billion, generation turning levels was and customers.

revenue grows or decline with $XXX by offset XX% SoC of our strong EPYC year Datacenter million specifically fourth sales. of Datacenter processors, to sales ago. XX% generation operating compared $XXX million product partially in income sequentially or was adaptive segment a X revenue, Gen

year-over-year, shipment was PC revenue PC XX% processor growth. due Client revenue was and inventory increased R&D chain. income primarily operating Lower support future million investment across a lower to weaker market significant reduced the correction from $XXX to resulting supply segment and to down due

basis, compared loss PC and revenue. to operating the year conditions was series our sequential $XXX XXXX improved. ago, market segment due million, grew primarily million to lower XX% Ryzen ramped we a revenue operating of income On processors $XX as Client a

to to the the quarter. expect in We Client profitability return third segment

million Semi-customer $X.X expectations. ago, was which XX% revenue. was income semi-custom revenue or million grew line than year-over-year. Gaming revenue, higher gaming year-over-year to sequential segment compared year X% or with operating declined revenue basis, gaming more to lower was Gaming XX% offset revenue segment our On billion, of due $XXX by primarily a graphics revenue. $XXX in down XX%

or On revenue Embedded declined segment market. billion, primarily emulation primarily year-over-year, sequential segment up XX% million healthcare, Embedded strength year million segment by higher to a test Embedded revenue, in was basis, the to industrial communication driven of market $XXX $XXX income ago, due demand. operating compared a primarily or was revenue driven X%, $X.X XX% vision, by automotive, XX% weaker and revenue.

support Inventory the generated flow increased product we to the as $XXX to in the by we ship from quarter, Technology this of during customers to inventory million. balance products, Turning sheet the million continued decline the cash second-half and flow, the operations. $XXX in year. we $XXX million Advanced was Free ramp cash cash of to expect

end $X.X and the equivalents at of cash drawn cash, At billion. investment the short-term quarter, was

our and approximately expect or billion minus quarter turning be $X.X $XXX Now, increase of plus revenue third an to X.X% year-over-year and XXXX million we to X.X% outlook, sequentially. approximately approximately

Client Year-over-year, Client the to to segment the Datacenter we and expect Datacenter segment segments the and and for to percentage double-digit the Embedded be and segments up, we Gaming segment by expect and Sequentially, gaming to revenue Embedded be flattish, each a the decline. to grow decline.

the to be XX%, be XX%, be rate to X.XX to billion, shares. expenses approximately is margin approximately to approximately share non-GAAP operating expected Non-GAAP effective non-GAAP be gross and billion $X.XX tax diluted count

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

Client drive into Datacenter new We expect the third and the across quarter. to segment growth product our sequential ramps

leadership position us financial priorities for growth. portfolio, our AI Importantly, and long-term strengths datacenter and well product investment

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

happy Thank the for John, Jean. you, we're audience poll to questions.

you. Thank

with now question. question-and-answer line will Ramsay Please TD of a We Matt from proceed Cowen. your with And session. comes conducting first the the question be Instructions] [Operator

business. afternoon, and guess, Lisa, my Datacenter questions, I on and thanks congrats Yes, my around is first good results. the question taking for the

given the quarter, seen. obviously think observing sides in the Last I we're Thanks. patterns arguably, how potentially CPU some like about around for that spending year had of we've, company a space. you across bit maybe in to drivers across a XX% could to both on grow accelerator and And the and second-half shift able your a that participate strength, of business datacenter and and never us all, of position versus on the milestone great of you is maybe industry, on CPU in your us AI back-half? the in by first-half. you're being metrics growth And the the the give an thinking little update workload

the Thanks for Yes, question. sure, Matt.

dynamic very So, in right. datacenter. some absolutely pieces. the go It's me you're We through -- now certainly see a market the right let of

certainly acceleration a we see side, our in positive we of standpoint, couple the see on demand. ways. So, that From AI it

GPUs, number with AI a CPU that of as goes design as have the accelerators. as deployments We in well wins other

is And that the on nodes, head fourth strong We've that shipping currently interest the see production accelerator, right seen quarter. positive very side. in the starting So, we've in strong the seen on now. also some CPU our we MIXXX accelerators are pull in which MIXXX

those of market the So, the we are as dynamics positive into go second-half the year.

expecting place, quarter. let's minus are our still in first-half. it, or as softer are We CapEx. still also fourth XX% we second-half and the towards of code are spend But for that cloud weaker is with all say of is ramp some their the plus see that AI enterprise, some would second-half outside weighted side. a of, a cloud optimizing of on looking I the in Datacenter the we vendors happening And And zip to at business, large call

components, certainly to big of think customer it's look pull this it's exciting in when there. the And but the that So, at part we all is I industry. the ramp, a be

still I Thank my as you for Datacenter Lisa. business. sticking with that, guess the follow-up,

Your those trying hardware time. There's ramp and programs conflicting software of side company deployments AI. aggressively whether to to the is as of to the all reports support are the been both some MIXXX

prepared customer the a about, question about hardware guys you're said the could software has been how is script, you with firstly, the performance think the in you've, and that of think the I itself? maybe hardware your work guess feedback little on that. itself customers, my I the bit lead what around give doing you really

you're will deployments into the your Thanks. work translate software through doing customer we customers other with think lead And secondly, as next how year? work you

Yes, sure, absolutely.

AI large category they're that strong some also So, with. AI-centric color the give sort of some these it, how that AI enterprises. this if engagements very solutions, hyperscalers are interest in I on let's we're our includes are of customer you and very just forward-looking how engaged the X some that terms tier building there's across includes And solutions. It call deploying includes, board companies of going, multiple of it new in customer

made stack. with software our So, from we ROCm that a aperture, of progress lot

I'm with also with progress some of with work that We're on we've lot the is real-time but work lots the the PyTorch doing these the to -- feedback of we're feedback I say been made that actually higher-level model there we're getting doing is a getting customers. benefits And would do, Triton. the the lead working more Onyx, from optimization, customers. frameworks, has we're key those significant Foundation, lead the significant. that seeing from of the We're so

So, at a learning pace. very we're fast

In able of a workloads, feedback feedback MIXXX, and have performance, on terms to broad a been good of you positive. look the has that's translation to companies of across now a as the MIXXX quite been range at number go and

either sampling there. Datacenter. far would customers their lab is on The or the very for the overall done, And hardware, feel work accessing very There about labs. systems, have be so AI the our of but of to progress we lot in positive. solutions We sampling say, I a they're our is good pull

Thanks, Lisa.

Matt. Thanks,

the from question. And Please with with Aaron question Fargo. proceed of the next your line comes Wells Rakers

taking question. for the thanks Yes,

implied double or the revenue you quarter, think, full-year, want the I building should for is full-year the growing Matt's year. or just for XX% business for for digits, seem, in a Datacenter XX% the go back-half expectation growth increase correct, still to I'm I'm guidance what to the exactly looks question, that. my comments trying underpinning in business, flat confirming to frame so last is, alluded XQ, Just I to trying on the just back had the Jean, how say, Datacenter of XQ. I about that the to, And into or ask you're of just really expectation? the implying thinking is sequentially the cadence would it math like, XQ year-over-year if of what you're Datacenter given

Thanks for question. the Aaron. Hi,

I puts think dynamic are as just it's and Lisa mentioned takes. market. There a very earlier,

tremendously strong have but still We market, is is continued a the it, optimization there portfolio, in call with product ongoing. our momentum softness also enterprise and

high balance, in really sequential strong it's not the see sequentially think strong of right, going year-over-year QX, double-digit -- earnings continued on single-digit. a And double-digit. we're more strong QX, probably overall ramp. only ramp, like So, to we course It's

then And well, Jean. helpful, mind, your that's partners ramp supply managed know that Yes, their following guys that with side? manufacturing that in through, the have capacity as you on how just expanding up talked chain significantly. about I

curious look what we that you're into of XQ? of quarter, being Just far seeing fulfill into, this able degree as as not just as demand to but

Yes, sure, Aaron.

So, we of been so chain, the us, has Datacenter investing to that this our supply strategy. the have in strategic really been part growth is

capacity, if ample supply components one in to look certainly confidence. So, the to time ensure But feel we from an supply of you that chain. of the that class aspects to we've into do this fourth for that with entire of is worked some the have supply at to backend we XXXX. ramp and you that all do have the We a something spent quite of the quarter MIXXX, the of need chain, aggressive areas the wafers the bit we specific that of

Okay. you. Thank

Thanks, Aaron.

question. Sachs. the Please proceed with question your next of from Hari with line Goldman Toshiya And comes the

well. question. I in to much what And to is wanted so of percentage implied growth Hi, dynamic. up I apologize for one in on first in speak just And you missed QX, the My thank supercomputing. follow Datacenter do but Datacenter if to the business the QX rate can you the taking QX this, I as on

a series well primary is there that's big And project in from QX. Instinct your as any supercomputing is I franchise? ship think server it or is outside the of slated to contribution there CPU

for Thanks the Toshiya. sure, Yes, question.

So, in said, sequential into EPYC. quarter, Jean the growth third primarily expect as that's we double-digit Datacenter,

that of let's Genoa that's to Zen call the and So, ramp. it Bergamo, continues as the combination primarily X,

significant As we an implied fourth in there ramp go revenue. into quarter, is the

I think to that. there are components multiple

in see first we win, large, will so fourth side is little Capitan to call is a continue it, ramp X the supercomputer sort as of -- there ramp. So, with lumpy our Zen quarter. be bit win server There the CPU the will in a quarter El primarily,

a of of AI we And start will it other then MIXXXX now a not customers very for are customers -- some large workloads AI or as sort have they that option to the their who as the as going from have call language initial of well necessarily models that parameters, view largest the MIXXXs contribution as the let's both workload. ramps, with good largest but number more

those implied big the a quarter components the is ramp. are piece clearly So, it Lots it, growth. pieces MIXXX the fourth to of of of but

Client Lisa. follow-up That's And helpful, little side. a you, gears on and thank then shifting bit question the

initiatives operating business to the still profitability Can the in it, path you're level about you where the And great. and ongoing to in back you from to cost there? back you there is talked perspective. of have Thank which a competitive get well to, 'XX client operating were Client? profitability Is 'XX that landscape you. in in any below margin You call to do returning XX%, But you an QX, business? XX% speak margins

Yes, comment. sure. some can then Jean let and start, maybe Maybe me add

all over last with. pandemic from the digestion the the the PC has I were of say fairly of volatile that that So, growth inventory product that been in we highs seeing quarters, I the I we I'm number business look, the can we're that think some dealing to during pleased strength we see of portfolio. that and second think say our is the the -- quarter saw second-half that to

is I customer XXXX well, Ryzen series good there's pull. doing the think

think I a standpoint, about. feel the always is but from competitive, dynamic competitive good business we

a was consumption bit we -- where a of low, inventory had normalizing some were below case the supply was as that in revenue on well sell-in of being we thing operating a was levels as little drag the chain. The margins as most the important the

will that to grow as we well. grow. what I the see Client that, believe past business into Client get we We continues is As XXXX think

R&D been, but some initiatives, of have optimizing the it, the footprint, Jean let of comment let's call overall of I'll cost more. sort some we maybe terms In

the on a optimize process done to Yes, on be to OpEx team Client, really during has the investment and this more effective. the the in segment side, efficient great job

flattish. and we common the our a has priorities been If which return you overall level, in But company are look have strategic we OpEx at investing much generate Datacenter, the on AI, investment. largely higher

we level So, good feel to to about have expense optimized invest We this Client, segment. it. of operating pretty in continue the

As model really Lisa we to leverage generate to mentioned, about back revenue. get we profitability, The it's XX%. should be to able

Thank you.

And of the Morgan. question. Sur next question proceed comes from Harlan JP Please with your with the line

and question. Yes, quarter-over-quarter taking for see targeted enterprise my good afternoon, thank you business to your customers. in at EPYC Good inflexion the

muted you to you're of corporations, think mention you a global team Are second-half drive continues contribute to the growth your the ramping But in share strong your anticipating business? Genoa. continued gains I did Datacenter to segment environment enterprise enterprise. with profile

It's us. We well underrepresented. the strategic because, to think Yes, very the putting value business enterprise. Look, that Harlan. look Genoa again, resources place X very plays that feel enterprise we we're of it proposition into and the for is thanks Zen we entire a more portfolio, when at question, we're

enterprise key that into these with and in OEM understood. here the And ensure of to pleased our of value the growth very investing is on grow so year, the well we're We proposition partners, in quarter. more second the the do continue to on activity, customers, folks is also our business directly together path a call that some that So, and investments go-to-market beyond. in see development to can believe second-half the

accelerated accelerated Perfect, were is significant compute large. are maybe not has MIXXX this they amount U.S. into that, soon, performance And compute, But quite know there last It thresholds place let's thank performance China-specific lower barring but might general purpose and I'm demand team region. the say there MIXXX or year, on And is here compute of a you. government developing I sure. muted unmet the then the in in platforms? for new that demand China, put SKUs, opportunity like looked your seems might again threshold if in

market. market certainly is China for accelerator across we Harlan, the us, think about Yes, look, as important a portfolio, certainly our very

controls, Our looking plan with we that is Export develop do opportunity an we'll continue to direction. to of in AI our customer for U.S. fully but China compliant to that solutions, believe and work course is product there's for set be in

you, Thank Lisa.

Harlan. Thanks,

Vivek comes with with Arya And Bank Securities. questions. your proceed America of the next Please of line question from the

question. you taking Thank for my

The first server would be this assume year, sales about, clarification, number, that that sales about GPU it this million X% reasonable one, it your just And does is say, effectively $XXX-ish year-on-year a datacenter could if your year? mean to X%, right the accelerator sales? be of so CPU are flattish

sales granularity. we a into ramp. product second-half fourth particular, of I the very have the the that don't know say transition of sort will go In first-half timing would that I the we'll year. as in go Vivek, Yes, GPU into we the were quarter, quite is in What we of year the MIXXX were low as

given we of much it the general, components And think first-half. product the we single-digits Jean second-half sales, see expectation the I MIXXX second-half think better of I as may the terms Genoa up and is to see in of GPU are your little year-on-year, as high the number ramp. of portfolio be all the business, dynamics, compared high market that, well datacenter but of and ramp as in I the bit ramp a said, key Bergamo, think overall our

question traditional a established strong several already options, kind the market, edge a others, on for Thank Supercomputing, I'm and et commercial accelerators the AMD's Capitan are are broader there players, just in of number number of a know follow-up, And you, ASIC there You market? in El Lisa. ramping. the so Intel specific kind and merchant also excluding AI competitors, this cetera. of projects, my and of startups What are is your

niche my product is this question sample is starting now. So and in just AMD's is, the market? value your specific proposition What to sustainable is you're what because how it,

and niche be big is I'm in of this sense some differentiation realistic the market? So, what get it to how of can kind and AMD trying for specific

sure Vivek. Yes,

think and just investments maybe take our me So, of I sort AI. about step in talk back a let

are So, there's but client. us lose interest question our well in in But your very our many And shown in look value the as AI. have AI, as you've AI as is know proposition don't datacenter, around lot datacenter, investments different have want as I very with and to edge then, of a what I broad of the to are the you I of investments on track on capability that at types we mentioned. supercomputing, there the what think is we strong

you there and drives inference, actually what largest looks these segments. across the look flexible and across designed we highly when look is some sort be products MIXXX the in training performance different models of to that MIXXX, all of family of at If of language a

And of where sort is particular, seen interest language we've lot in of large a model in the inference.

memory the training believe workload, being so forward So, and we forth, investments we it's if strong highest with we memory competitive that capacity. not actually definitely that well. on those And today, that said, that making, value a roadmap. proposition you That going have a at has just it's things. the also workloads MIXXX our so we we're bandwidth, across a but and very hardware generation have next those you look highest inference series look believe very When and as MIXXXX and the capable has dependent very, on very and

a about Number has AMD, here bit change side. software do one, the I a put resource of amount roadmap, software think a frankly, and been on the always on it. the of tremendous see discussion we about we've

now focus based level with the increased resources. sort So, bringing of been team, former of the on higher dramatically together our Xilinx software these at And sort also we've optimizing models. together software has team, the AMD

think you companies the Triton a frameworks centric us. and around working with think I and at PyTorch the if many they're very So, new of level, closely and actually about Onyx, AI optimizing different are

there as side I is with actually Xilinx we well sense winners. we multiple Ryzen there the be as we place we in So, in where accelerator do the our with the think first embedded think in on are the AI be will to multiple unique side CPUs, fairly PC our this And that that winners. GPUs, will is portfolio. have portfolio tremendously technology But have AI exciting, say

it's pretty So, portfolio. capable I a think and broad

Lisa. you, Thank

And next Rasgon Research. Bernstein with Please question. from of the Stacy question line comes with your the proceed

to I first my datacenter questions. the guide. go for wanted Thanks guys. back to QX Hi, taking

I it's if something math to right, QX in my sequentially So, million $XXX like do from datacenter QX.

lumpiness So, QX the how the El of into most that it much does seasonality imply CPU? as given for of of versus And that rolls piece, the MIXXX potential off? Capitan what is

sure. Yes,

So, quarter. Stacy, the ramp, a it large is fourth into

the MIXXX I also think significant I of piece EPYC with, But there is ramp X the a just that's ramp. as portfolio. that the is the component processor largest Zen said,

into In and lumpiness goes the revenue terms where it of XXXX. of the

you give pieces. kind of few me a Let

was let's So, the of I AI. think how much but it's MIXXX call question about there meaningful was supercomputing AI larger revenue a is from contribution centric centric. The earlier versus revenue it piece supercomputing,

very is of customer As to we high. looking on go into interest are as quickly possible. are customers let There back to go the number our me MIXXXX deploy XXXX, as that again, a is expectation

we we then first-half those into would of and expect the XXXX, fully deployments would as So, of expect the in we things early go qualify. more second-half as volume 'XX

lumpy there But a possible. next multiple we little going bit as them to our is quarters. co-engineering to it very that with looking visibility And are through be necessary is soon few get such working deploy do we're the them to as So, get closely to are the as that ramped. customers

million like El big how million, it $XXX or piece? is is it's Capitan million of the it El But $XXX Capitan like, like million the of $XXX $XXX or

Capitan assume that El is can the hundred million. several You

hundred, Several okay.

back up follow-up, for the just sitting up they mean, know I of exit second. quarter. see they the gross like margins I in guiding the you we still they my QX. where in kind missed XX.X%. in in rounded to do you're QX the I gross For XX know coming Jean, but margins XX%, were year? as

discussed QX. headwind gross in we past, it's more one look improvement in for And declining mixed. of very Yes, it's margin really the driver the is, at gross margin I XX%, think despite from guidance of significant business the us, sequentially or embedded of outlook our you QX, if percentage as than point primary

margins, actually business datacenter which sequentially expect are offset gross and a grow and double-digit the to more the the on So, positive client the impact embedded provide business. from than headwind

declining QX on going headwind is QX, to right. thing same would the Datacenters not it's to significantly. again guiding very you expect and business similar to a say going we're depend going I At grow we're mix. dynamics, sequentially. have from So, have same one will embedded to time, the

this level So, to expect improve margin forward. we gross going do from overall,

Okay, thank you.

question the your Joe from line comes the proceed Morgan Please Moore with Stanley. question. of with And next

Great, thank you.

move talked weakness about are infrastructure for second-half. of or the that us market as embedded part the market? you And that much? decline give declining You've a the a seeing function beyond you sense Can the common of is how you into business

Thanks sure, the Yes, Joe. for question.

when strong well we're six overall look, embedded growth. has start the business. business momentum of coming mean, at and this think very off should we of remembering pleased in I I performed look that I extremely So, the quarters very business, by the with

seeing To question your hold aerospace defense what we're strong; the and it pretty vision markets, of actually so markets up emulation well, test call strong; healthcare, core in exact the and let's we're and strong. industrial seeing

communications are We weakness. seeing

league also is second-half the commentary. that down And several you there's inventory since primary last driver over some So, as have our the months. might expect, times the optimization, come of

off that's for business in strong cycle. current in the think think and decline as we as the would So, us, But is code, of third double-digit I overall, terms that so quarter, come of the sequentially been expected has have. it zip an say we the I view extremely down this

beyond sense kind you we've do but contraction? any there And to many quarter, asked continued already some is that bottom since of so any for the QX this you be questions today, level or expect sense Great.

say. not guiding of sort that we're should what say, zip in that's would Jean I embedded As think Yes, code. similar you for quarter, I fourth the expect would but

Okay, great. Thank you.

Arcuri with question proceed of your question. comes next Timothy UBS. line Please with the from And the

inventory. first on my question is Jean, lot. a Thanks

Where You that XX said QX us? it's shape exit a were going in of to of big come inventory inventory down going kind this, to days? a of out bit Before terms as you're you do you normalized ramp Can days into the for think days. have XXX to QX, you sort QX. obviously, you

Yes, Tim, thanks question. for the

QX, you those will think QX see ramp in as and again. we I first down lines QX inventory product come QX in and

inventory cycle probably is, four days six. technology, thing they of long. key to think The nanometer, are XXX I if five days. lot our look like will inventory nanometer, you process The is right, be a the at tend be manufacturing around product, advanced of XXX to

That too the should from XXX around more or in technologies. days. term, really for longer days process advanced you like short So, inventory traditionally to expect us days most days XX be will be versus of XXX XX

Thanks can mean several for the And Lisa. me, seems kind up to follow-up of easily a MIXXXX thousand is lot. units, then, year. you the units, add interest, the to hundred I you, get my next it if customer for you

been think the trying know factor you a question the you? supply and Can Thanks. you do do you chain, been and bottleneck to become more about a be expanding of that of So, capacity. could that that's is sort supply they've that I year? really next for you sort I talk going there. Cohost, limiting on to you've particularly procure think know

Yes, absolutely.

on it's to is time. say the we've There's industry. for for I tight comment supply It that So, units, is no been tight. going question on MIXXX exact chain I'm will the not that focused but the some in what quite

have significant commitments for supply However, capacity chain. of we the across sort entire

a a of and it demand high for responsibility that's AMD, what driver so our piece been to customers, to co-host on. we've just our the memory I the great growth general provide the is the significant one it, opportunity. it's requirements We and bandwidth love then market capacity is goal is with this of think it's So, and working engagements make another supply for piece look,

lot. a Thanks

Tim. Thanks,

question And the comes your Please of the Christopher from with Rolland line with proceed next SIG. question.

And Lego in that only then, the FPGA of you the growth thanks to Have was put more looked you might a to terms dollar Are but that seller on be as on the wondering had expect more here? MIXXX? question the excited any is it other potentially guys Hey that over around specifically, at version, and frame MIXXX? movements semi-custom that here And have you for perform? you X include multibillion even uptake, the you biggest multibillion the have of version, out you kind guys, dollar the of about or How Thank time guys do performance? GPU called LLMs MIXXX that? kind opportunity you I if an MIXXX perhaps could ported a hyperscale opportunity configurations opportunity, they you.

Sure.

So, aspects there that were to question, a lot of Chris.

believe don't you What to So, a multibillion yet I let think about talk give framework of it's some we here. ready me dollar we will try to timing say revenue numbers. we're is opportunity. do

for I think XXXX is year a very important us.

next Ramping very is in several customers MIXXX over multiple quarters the important.

at think with see new also I Q&A performance class in up that think are then of these efforts. the would hyperscalers. which of is The of But It the great. looking enterprises and sort the is of have closely us, terms AI very focused working some sort ramping what that is includes companies you large we Tier-X customer been their strong. I diverse, I mentioned actually interest in large the expect earlier of

on model large as it MIXXX, we've the of work we've done, language a well think training done I lot very we've inference. and as seen good both that's that on results

think we go I again, as results through strong. the early MIXXX are

applications, MIXXXX. For is we're what AI now seeing

GPU of one of closely sort is the the So, GPU let's and CPU have call prevalent where it AI we in most the more version interest. the sort that which the of is together engagement. the actually, also MIXXXA, coupled only But is customer is

on. that trying And think that's enable. best I for kind think what the of working that for we've the allow is built workloads I to key choose platform they're models we're a does people is the to what So, and

as few Siena of you a then, just there. over Telco. They your you competitor them lot What owned a the Telco years? of do market quick a by kind And share Telco is follow-up, Great. software of have market in think can take from around the kind next

about excited Yes, we're Siena.

focused been haven't previously said, as Siena on. a again. you niche it's I we think that fits It's

that Genoa I or performance use applications anxious Siena of it are other is we'll perhaps end also be interactions with the portfolio. on X, the part the Siena Zen need applications, have have our edge to think we that suppliers let's and they're heavy the but of platform Telco their one that Bergamo. lower a for call not

do a we low we're So, point. starting very from think

an there's we'll So, opportunity to share and over focus on couple years, next the of that. gain

Thanks so much, Lisa.

Chris. Thanks,

line from Citi. Danely comes the And your of the next with question with proceed question. Chris Please

if is Lisa, that margin? in. Would mostly ramp or of on Hey, be MIXXX, margin what or for impact net dilutive gross have neutral squeezing or gross me Thanks AMD GPU to margin? kind accretive gross still your that only, would so revenue the cetera team. an the XXX, et corporate

Yes, thanks Chris.

Let me I just statement make sure get clear. the

to where into the And part the So, MIXXXX, bit of And the learning, year level. little ramp, we both particularly accretive AI overall towards of go will there's in at specific expect the sort level, are we at gross we a that as the your gross will corporate be you applications, be software be just the question the and next as is corporate MIXXXX about for we written. quarter. MIXXXA so ramp, weighted margins to AI to gross margins. of our And would more given heavily but expect corporate start it margins fourth obviously, business to accretive our

then, it at like revenue orders that guess are them you're purchase true? to the we now how And hard spend it customers clarification, is is had MI for most of the some maybe for telling from so -- follow-up interested," the order?" or a the And revenue time I hopper sounds Great. or just go you least the for takes from, is us other, "Hey, you guess, have with or that, "Here what confirmed working committed in to, do LCAP, I I have right just

Yes.

committed is other your have yes. other the question is we LCAP, answer may MIXXX do if who be customers So, are than to

the We reliability things an is because they go, are a the how starts I works, deployment, ramp one of I then that and with goes, difference datacenter, AI way very will different have the of agility these the are that's go sort customers a ramp it's accelerate compute and in is, that. of think, who not software willing There a quickly. server we initial desire not want amount actually ensures actually out in to committed. I deployments have AI right? number of different, the customers capability say we all than the from And very and all mean that to ensures there.

are customers so, in than faster of And of engaged a which normal, sort sort in and regular environment. the speed are would customers decisions actually And making they is great. that's

helping significant ramp learn, the capabilities software, think I earlier, of place the us, perfect in that's for next get said all a as I year.

Great. Lisa. Thanks,

Thanks.

John, we have time for one more question.

your Piper Harsh proceed Okay. And from our of final the Sandler. Please line question. with Kumar with question comes

exciting me an the that. And second-half heard Historically the your Do we we ask that question. that then are hey, theoretical there and company. pervading server Lisa, forward I letting share. through XX/XX you think limit question for is initially busted AMD to a to can a looking quick rule, on Thanks get? for a Yes, was guys. you share had the

say customers like hearing more XX/XX is it. are we Now

I are XX% importantly, where XX% anything XX% business, server share? a have there significantly say, let's follow-up. share, And for have vendors More or than your even large you more

important customers that count that can most thing past and the trust it's building roadmap Yes, server over the And roadmap, four years. sure, they working Harsh. the have we is roadmap, and or on. we've Thanks of the I business, that model, five for been the question. strong our a that a sort Look, in think for

there of don't a customers who sort AMD software. the the been where breadth place there multiple share. theoretical cap on XX% that's of are deployed the enterprise. I I is enterprise enterprise just breadth in And view, any look our matter the So, today, we of more bit perhaps from would customers share. of have and more in their underrepresented have datacenters a is if think we And than say, us

is are that market. server in very share continue the believe leadership that to very, that, to and So, in we an market. the today, we gain And leadership we have continue there we with focused on ensuring opportunity

us on trend where CPU you Lisa. AI say and think On dollars for generative let's can do some years. today? one, kind about bit can couple think dollar a of be spend, how of a you let's a there you, in press think spend metric, today you there of? help spend? it Is generative that Is the server customers Thank little metric each my can you from And many side a your so, of if second are seeing AI can we say, of regular

Yes.

years. is of to going -- three the on answer are for as AI we all no happen a to compute next question next There of, or I let's four very way lot years. the to plus to four ball CAGR the think, we and high, it Harsh, way XX% sort there perhaps that generative capacity again, what's market call that, at all minus best is size is that and is, crystal The in. it's solutions needs rate the the put five demand or it of or can grow over a over

take billion So, to to us we by the XXXX. would get $XXX time that

an includes so to that think market. accelerators a we in large other datacenters, have other that opportunity the of But GPUs, portion that's Now, that ASICs address includes all accelerators. and I

to strategic GPU one between closely clear number CPU and very it priority, optimize our our as and or work spend. makes It's with that will us. for they customers So, continue priority we

Lisa. you, Thank

Thank you.

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

time. for Ladies this lines may disconnect you at Thank your your now and gentlemen, you participation.