Advanced Micro Devices (AMD) 30 Apr 242024 Q1 Earnings call transcript

Greetings, and welcome to the AMD First Quarter 2024 Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Mitch Haws, Vice President, Investor Relations. Thank you, Mitch.

You may begin.

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

had the found be Investor If you the have chance review they on amd.com. these of page to Relations can materials, not

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

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

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

call Lisa. will I the hand that, to With over

we for of significantly broad portfolio. capabilities executing our compute is across very business as is afternoon data ramp today. good driving demand the product center backdrop, markets. widespread a well enable are to deployment listening and AI This Thanks, our and as an across of this time AI incredibly exciting industry those we Under the range for more Mitch, all

Center $X.X year-over-year to revenue grew margin more year-over-year XXXx quarter, X and growth sales AMD XX% record in revenue server in CPU shipments double-digit strong sequentially a percentage and billion. and more the gained the than in points share at and ramp first expanded sales. billion. we client by The segment eased cloud percentage of than Data driven growth seasonally by Data Instinct gross was each We Looking $X.X We deployments. by the adoption to Center grew first and as segment expanded year-over-year. profitability quarter led GPU substantial XX% X% by increase down server CPU MI believe revenue enterprise a increased

Amazon, processors all environment as their new cloud, instances instances. and There and In globally hyperscalers power AMD-powered adopting internal while public are overall EPYC XXX deployments. offerings increased of instances the regional fourth-gen continue available workloads EPYC fourth-gen their and to mixed, nearly demand public remained now Google processor more Microsoft with

scenario aligns of footprint In maintaining the demand general current our needs EPYC infrastructure. AI and of processors. perfectly the more seen proposition add while with CIOs power of to This need we capacity compute have Enterprise, in the as signs purpose their physical value improving

more by Given energy competition, our amount same half up servers fewer by compared deliver cutting and high XX%. compute with lowering than of to core efficiency, and we initial count can OpEx annual XX% the the CapEx to

enterprises, Bank, CPUs Emirates Airlines, EPYC accelerating, is including with DBS, Shell by As result, a enterprise large and ST Micro. American highlighted deployments adoption of

also powering We're most and with the ERP solutions database AMD-powered building applications. momentum popular

EPYC of the now generation Oracle latest solution processors. exclusively by of the Exadata, of leading example XX database powered used is the fourth-gen Fortune one As XXX by

us and our x-gen workloads. rate. family performance capture and and turn efficiency We're In the the an processors first the EPYC Looking of larger both Zen position third-party of core. featuring cloud, share ahead, silicon turn significant even to we're X widely well increases about very of excited sampling

In addition, workloads. platforms fourth-gen Churn EPYC track compared development to launch remains in this SAM on are platforms, to additional server increasing later solutions partners our from with XX% turn year. for new more optimized there our enterprise

broader internal X data center power expanded We deployments XXXx our and straight generative quarters. to ramping of sales became in second AI history, MIXXX revenue center our quarter GPU production data for to billion less the in a Turning portfolio. than training total set Oracle inferencing of broad delivered Microsoft, public fastest In in AMD both Meta product as $X MI workloads at and and record offerings. cloud, passing

Super fly very working we're enter platforms quarter. Lenovo, this production others Enterprise, as with HPE, and Dell, the Micro For volume multiple MIXXXx

or In have developing addition, we actively enterprise deploying customers and XXX AI MIXXXX. more than

the software for AMD On platforms. compiler, excellent AI it for in made adding AMD open support we AI to progress upstream the making easier software AI hardware front, develop even Triton highly

We VLLM and and also integrating open stack like and significantly JAKs, features video support generative performance new released a AI FPA. major libraries, support source including update including by frameworks, attention algorithm sparsity ROM increases for to that for our adds software advanced decode expand

seeing performance AI partners strong their very in are Our workloads.

models, leadership inferencing As and we GPUs TCO are jointly performance substantial optimize to HXXX. delivering MIXXXX for advantages their compared

their partners instance, compared to For HXXX. of increases in flagship seeing Token LLMs several on our beckon significant each running are when MIXXXx

including continues to with from AI Ultra AI run as we the AI hardware term, in widely Ethernet the Long scale. are continuing engagements, systems and the at workloads we January. increasingly netback center of customer the working our also we road enterprise demand our customers MIXXX data and our as protocol software the GPU founding strengthen. to broad based data $X.X our And footprint. next expand and we enable member required to ecosystem maps working power center data billion generation exceed billion a cloud adopted consortium to expanding to closer GPU accelerate up revenue optimize center and grow to $X on in guided Ethernet of We're XXXX,

demand latest and desktop $X.X an quarter. saw was OEMs and by demand with segment X% billion, strong Revenue the in increase declined revenue generation of segment. for mobile driven year-over-year, client our to channel. Client essentially. resin XX% generation processors year-over-year in Turning our We latest year-over-year notebook strong Asus, Ryzen CPU Ryzen the a Ryzen and Acer, first grew by processors our double-digit as designs sales doubled from and nearly Ryzen Lenovo new HP, for sales others mobile XX-XX percentage CPU strong desktop ramped.

of Pro first clear are based on We the battery notebooks. accelerators our performance leadership Pro desktop commercial portfolio and additional for this partners. Ryzen And share industry-leading and enterprise launch mobile opportunities of life the Ryzen earlier delivered Ryzen offerings expanded dedicated, our PC in with commercial the offer desktop XXXX to month. Ryzen CPUs commercial processors commercial efficiency set CPUs our in from Pro OEM portfolio PC gain XX-XX on-chip series expanded processor XXXX AI of to PCs of performance an AMD-powered our We advantages PCs. see Pro our

the by AI unprecedented Looking the ecosystem XXXX, on be Microsoft ability the working adoption. developing Internet to very of usability end of experiences ISVs inflection of XXX for Ryzen AI of on to to track the AMD as refresh gains. powered processors, point growth forward, generation to a broad PCs return cycle year. and next more with by market believe with by We're track in driven We and and start AI partners the we enable AI the to annual deliver with is than closely the PC the PC biggest see in an enterprise since productivity

we efficiency strict We in will mobile AI premium delivering. We're this is strict. outpacing excited road later interest with for take faster lighter significant in coding uplifts experiences Customer very of the share next about our PC step Ryzen AI momentum this the based year. ever market. are our based expect the to revenue our the also CPU Design major grow before. win Ryzen the is for that we generations next-generation are processors, map strength the high enables growth on energy notebooks thinner, in than PC and And as strict launch of year performance on and next-generation laptops opportunities portfolio,

to turning segment. and XX% Now our sequentially declined Gaming XX% million. to Revenue $XXX year-over-year

family declined with projections line we SoC cycle. and fluid motion also increases technology of provide our declined AMD our semi-custom year that Graphics, large Series console can launch XXXX are Radeon expanded driver-based revenue global frames performance XXXX as introduced the and the games. We GRE quarter now our RX of In year-over-year Gaming our the in First sales Radeon fifth in in of sequentially. with thousands

We to efficiency pipeline and customers portfolio their year-over-year I/O million state-of-the-art Turning XX% our multiple and a Spartan with on inventory Embedded our seeing we're segment. across Ultrascale+ normalizing embedded security launched decreased XX% our FPGA of cost markets. $XXX features, Revenue power for levels. remain and strong counts, growth to high sequentially optimized focused as family

generation second AI quarter the wide for second with per expecting a year. conditions, gradual flat compute Given tops of adaptive industry-leading half announced across demand a the compared greater revenue prior in opportunity of in watt address recovery increased now drive of at as demand, embedded XXx this increase second SoCs. current to adaptive growth SoCs market To segment term, Longer a the be we large our that performance that see devices. deliver will sequentially of scaler Versal our range a we we're generation the AI a to Xx edge compute embedded and

be pleased series enabling iSIGHT Versal multiple compute and who products. AI ADAS the devices range on launch post that to handle We adaptive were X the of broad our single combine chip, add to capabilities are X processing inferencing generation and at adopted performant their customers Gen to highly rapidly announced efficient next a AI Gen Versal power joined a of SoCs only solution they to Edge Subaru, by engines preprocessing, to system. AI

of their Embedded adopt full to portion and needs. address Design strong as GPUs compute PGAs, our remains a CPUs, larger customers of very portfolio SoCs adaptive momentum win

growing to product of In summary, margin quarter, gross and revenue annual well deliver expanded first we the instinct, EPYC up portfolios. Ryzen driven by and strong us executed our adoption setting growth in

production Our our priorities EPYC processors. share Launch with XXXX extend instinct clear: expand accelerate our adaptive next-generation differentiated and gaining server X processors and for that leadership our computing performance ramping solutions. are by GPU and PC center data growth portfolio our Zen our with very

ahead, AI represents further AMD. Looking for opportunity an unprecedented

by While high-performance very an significant stages sustained is growth of early are the compute. AI infrastructure of still there period purpose driven has a for we what we going AI be insatiable to in both in and demand been build-outs, believe growth

our largest have rapidly investments opportunity accelerating increasing to for our capture software companies to AI to partnering large with company hardware closely maps, road AI AI expanding the workloads. important stack our and across our We solutions most this their growth co-optimize from entities expanded the go-to-market

the the about excited very ahead. the business are opportunities trajectory of growth and We significant

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

a quarter with Client the XXXX. and of start in Thank I'll our Data our second current of growth our quarter financial provide review gross year-over-year outlook results revenue margin and segments you, strong the and good fourth delivered Center for XXX Lisa, and points grew basis of afternoon, everyone. then in fiscal expansion. We

growth For revenue billion, the Center the by first up X% partially was in segment. revenue revenue segment as XXXX, Gaming the year-over-year was Embedded offset Data of and lower in $X.X quarter our Client and

Revenue declined margin year-over-year, XX% revenue Data up partially ramp offset basis Client segment and AMD contribution revenue and Center the Instinct higher Gross driven lower the Embedded from segment by was from as offset lower revenues. Gaming sequentially of resulting by points contribution. Embedded higher GPUs segment, was revenue gaming by and data our XX%, XXX center

expense an increase was $X.X XX% a expenses ahead $XXX the investing R&D year-over-year activities in opportunities we $X.X aggressively to billion, Operating address of representing AI billion, marketing XX% and Operating margin. was growth income operating significant continued of and as interest other were million. Taxes, us.

share X% For an diluted earnings the of year-over-year. fourth of quarter XXXX, increase per was $X.XX,

growth revenue to up Now of than across primarily by billion, percentage process enterprise Data our a segment, the growth revenue, Center a as increase year-over-year. double-digit from and server ramp billion XX% XX%, led the segment record customers of quarterly Data our Center and $X accounted data with in turning result total starting sample a Reportable center. GPUs products. strong more delivered both revenue cloud of for Instinct of $X.X our AMD

investment offset basis, On Data increased income by in was partially GPUs, compared to CPU server or million XXX% income a $XXX as XX% operating X%, to year even sales. million Operating significantly of in was ramp up or revenue XX% segment by seasonal driven we due operating the our revenue leverage our year-over-year increased R&D. center decline ago. a sequential of AMD Instinct $XXX

income Client by processors. was sequential loss basis, X% was declined revenue Ryzen million higher revenue. segment $XX Client of of $X.X year-over-year, year segment billion, a revenue compared X%. primarily $XXX Client XX% ago up million driven driven revenue operating an XXXX by On a series operating to or

$XXX to GPU was or segment segment customer year-over-year income semi and a revenue and down Gaming million to year decrease XX% Radeon $XXX due or revenue sequentially XX% in million, a million XX% was compared XX% Gaming of down operating sales. ago. $XXX

Embedded XX% of sequentially income million customers inventory segment to down year-over-year as revenue revenue XX% million, ago. compared segment, to continue their operating levels. or $XXX a million Embedded $XXX and was $XXX XX% manage or year XX% was

to balance and sheet Turning the flow. cash

flow During we products $XXX billion, sequentially was client continued from the the operations, cash primarily by data generated $XXX to and in cash million support center increased $XXX process advanced million. to ramp quarter, in Inventory node. and million free $X.X of

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

of million have this debt June. As $XXX a reminder, maturing we

retire plan existing cash. that Given our liquidity, ample utilizing we to

XXXX Now our turning second to quarter outlook.

$X.X to segment, Sequentially, primarily Gaming the expect Embedded by demand revenue segment minus increase to segment on driven or decline by we We significant And by GPU current be to million. in $XXX plus the signals, double-digit data center revenue approximately revenue expect to segment double-digit increase. revenue percentage. ramp. flat. center billion Client revenue to data be based percentage,

Embedded and a Center revenue to Data our significant strength portfolio. the of be product expect significantly we and double-digit by to up segment The Year-over-year, by Client segment decline our Gaming percentage. the revenue driven

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

center In closing, revenue expanded segment We made the year-over-year the progress and significant margin. and we strong. started our data client priorities, gross the in strategic year delivering on our growth

AI Looking us ahead, large are we very ahead. the making well position will believe to address the investments we opportunities

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

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

with [Operator Instructions] first Our question Goldman Sachs. Toshiya is Hari from

MIXXX. the first question my is Lisa, on

sort You're taking new in then what's customers? it been a it up be provide on guys. curious $X.X the it billion million you chatter factor more there's And that color supply bookings existing $XXX driving if I'm full year cloud? more enterprise, can and/or for you could from customers? it $X or there, pretty Is Is be billion. helpful. Is the that would headlines constraining outlook that incremental to Is from revenue? HBM of CoWoS side, additional severe

a handling you supply the of would speak follow-up. side can too. equation, And If how that you're helpful, the to be quick then I have

MIXXX to production well. Thank standpoint, question. just Great. standpoint. very data the is look their from our over going we've we customers the both MIXXX you, happened Toshiya, days, last XX hardware qualify really been If software in closely Look, the working for a at with centers, ramp what's

as visibility quite going see new well current we are And just to is things customers far, to customers as MIXXX. So well. what greater now committing both

I and And in said to of So lots we're remarks have we it's billion. dynamic very well $X much deployment. with market, both a this the there from as confidence XXX we customers, us are customers go -- to that view on engaged as prepared very the in billion -- development $X.X that gives the that over as

overall, is So really the ramp well. going

that ramp As fastest is supply to relates I HBM. CoWoS, very It pleased chiplets, It's a absolutely the would say product, done. integration, ramped. we product supply actually, how complex it has very chain, with I'm XD the have

great far, from our We've extremely it's partners. well. so And gone gotten support

did just better first we And the bit finished, even started expected the than would say, little that quarter. actually so in we I a quarter we when

another going every supply ramp. quarter significant QX to year. ramp will And this think be we're I

is going supply chain the think well. I So

We tight supply. on are

question had the side, term as have pleased I'm through demand to demand there's if on going. elements think near for the work that I continue we is supply, very to that in So no and how the supply more going we and we product, year. the But the with we're go both side ramp those on

was your Data map my MIXXX. speak as could I you GPU follow-up, the then hoping road to And Center beyond

has transparent that oftentimes their your concern pretty is 'XX extends map we road competitor 'XX. and with that and other nearest been into hear The

maybe So MIXXX, venue your the and you your But to isn't this the much. how compete road to Center? -- map right beyond for about should we and too in think give ability Data

Yes, sure.

we look, road think start the a when map. with multiyear, Toshiya, So we I map, multigenerational always it as road mean, about

So in development. we have the well as follow-ons to well as next, next the generations MIXXX

our map getting closer we I need on the AI think we're what to customers, actually is needs. meet they're much road what is giving true significant their and to us top feedback

is architecture flexible. Our actually chiplet very

us allows necessary. road to the to as make And so actually that changes map

this So Frankly, I a more going to very, to ability sweet and continue I as later our we is that into to get for road our be go spot very spot our also then software inference strong products year see continue MIXXXx in bring XXXX, Right we're think us. competitive. in now, strong in it. competitive. enhancing additional that, confident to very think map we're to And very inference, performance be for performance. with training a I along will we're

top through road the in have So we months, of to by is in come informed more coming learning that a of and just lot next years, customers. a details strong it the working map goes with couple our but

Our is Bank. Seymore next question Ross with from Deutsche

enterprise center for out the wondering Lisa. XXXX? The of happened CPU generally of in just how And dynamic non-AI the it crowding versus second whole side kind data I traction side speaking, business, some are of rest side that seeing GPU has you playing for was things? quarter drop guidance out center though CPU sequential sounds of even seasonally, like implied good what's the the data the But your

thanks Ross, for sure, the Yes, question.

The bit a performed is business EPYC the -- well. I our mixed. pretty actually market has think

think of working I guys are cloud sort through optimizations. of some the their still

for some across I general strong that refresh that, enterprise we nice in second and quarter, pull data think proposition a server here the We space, well. year, some go there as is business. are within And we the through our the half seeing the half strong, we're did in to have overall I actually The digits. launch for In starting year in the it's early conditions position expect to drivers sort see we we improvement then also as expect second different be enterprise. in But We also, server think that quarter, the will up customer. very, programs. server the double signs up our And the believe, very the center the of of by market customers do Turin into couple leadership of overall large expect first second within very be market. of us. the extend of value we

we're So performing positioned and very is throughout to overall, continuing gain think I year. the that we be business share the believe well well, to

guess And of it and [Technical Difficulty] sequentially. I my perhaps client you quarter up just the importantly to sort that follow-up, as magnitude Any more guided the second side. for switching I around over noted

Gap] more opportunity the both term in medium [Audio even in, let's term. and call the it, near so

client on is the the on MNC side. channel business and both think I the well, performing

PC when into second And as quarter. of units be we half strict And the And see it's the portfolio. going they're expect the we suited versus really think AI at that's to of some up market. the as PC the across the The rest premium in sequentially XXXX, I we ASPs, as products, more products, of expect We increase well question see where think to into beginning. would you're second the content in units ASPs. to segments then the look about clients your you well the some strongest we the for go of year, AI as it in I go

next from Matt TD with Ramsey Our question is Cowen.

those the and getting competitor about has that folks guess Lisa, follow-up -- primary shorter-term I've longer-term been questions How a if how of lot a I juxtapose customers, have multigeneration, to helpful yourselves experience I go to your and from one. from you as guys could like the get? ASIC question announced, whether one would customers, or using training. your is, merchant obviously, talk more ASICs to those internal investments it be what guess, and programs they sort at be about a not your committed of customers silicon internal with of a inference the they then of we us really a your their are versus map, I more give some road supplier footprint across long-term other can that described how doing guess of maybe your you advantages continue for I they primary map, folks road a internal might multiyear conversations it. large hear doing and company

question. the Matt. Sure, Yes. Thanks for

see think the one that in things to highlighted a We is So AI TAM for in we've extremely is And case be and billion of look, continuing see XXXX. all $XXX the growing compute quickly. conversations. that TAM that I had let's of said call it, we we the

thought that some AI compute announcements even people to guys. aggressive largest at overall very, that the you've we I the But talk is as some cloud very customers needs, seen of recently in And strong. time. the the with of think some was

are my of several it. From aspects there view,

AI really continuing there innovate many architecture inferencing CPU think the also architecture, When solutions. preferred will optimize models are relationships is that evolve GPU. great still idea the all, solution especially look time. models And favors of of one our together. The these over just DPU want of And although sort we as I our everything ability and to is at algorithms don't with be you top all. fit there's and to will -- that all the the there, there that with you we and large companies. for language have First the and to need

partnerships we're from have. the very my think I we happy with So standpoint, that

done And we to what as EPYC years I a huge that's, some to over opportunity with this that think of see testament going we've all really very forward. working strong is much multiple And commitment innovate well. road the that happened think, past, a map a of work that I together for very and is in us the together. there's to the

I appreciate that, Lisa.

follow-up, a time. long bit I super having followed shorter for term. my company a As closely guess little And the

there's or been always $X a the of is in there's consistent there's share X.X the with last I -- in $XXX, the noise sense. system months other. think the kind that from price been always been been whether noise has extreme stock But

And reports planned consuming changes so I to just got wanted of by from for inbox some I demand about in -- product. random or your MIXXX demand customers your

their answered now the been and you ramp there with think supply has earlier partners or that from situation that there. about down your the gone soon be because of than with in periods about change you're that fact, it? Or in demand? is maybe keep how I you're in recent I what strengthened working But you any will has customers questions intention getting for rather

repeat it Look, maybe I'll I but it have Matt. think again. said I earlier, might Sure,

sort and I new of very are who through very about also good And that about and ramps to very we really is we full-scale the moving to And I let's tracking what is it, from, very what demand across actually POCs the process. customers And customers workloads. sequence production feel initial I right that ongoing with think earlier have on deployment pilots we're we customers in well. side moving that to multiple now. are strong. deployments see feel our call good closely

going demand But pleased we're on ramp build standpoint, supply the So standpoint, And continuing as build we standpoint, of speed to supply the continue engagements well similarly, from actually progress. momentum. forward. as a to a with from really I'm backlog build

Wells Our next Aaron question is with from Fargo. Rakers

relative to offered potential? enough earlier, about Would if know I'm new kind upside supply capacity this of I supply would characterize last characterize support upside we as know but MIXXX. for? apologize ramp having you now target think how to the a your talked context having you guide curious you to $X quarter -- quarter, securing as about offed last significant missed that still I it you the to of I I capacity that billion. the that

Aaron. Yes,

goal So guidance, we that that said true. current is exceeds supply that our ensure we've before to that is and the have

we upped we've $X.X -- So billion, that. we significantly visibility beyond as our $X to still guidance have billion supply from

Yes.

Okay. demand, on going a And traditional earlier back more follow-up, an quick server to then as question server.

you how that expect the server move of curious share that through in 'XX more even growth maybe you traditional you'd trend? see As we characterize you CPU see opportunities a market more to traditional ramp the longer would how as enterprise, or I'm characterize growth term,

Yes.

what there. the of, I certainly there think, it, let's is equipment call Aaron, refresh older I are is would for -- need say

a see refresh we So cycle coming.

as AI we in, see market. another We it, SDU also head where nodes the place see growth traditional more call let's

extending strong third-party both and sort see call of are, let's now first-party is we spot workloads on-prem. hybrid environment, is a sweet count, really space, efficiency been that that core performance, cloud and call the it, cloud workloads well. where also Our let's playing in in the very high is cloud enterprises highest to in, it, more of energy AMD and out And who adopting we're -- traditionally we've

for as overall, So good and XXXX business continued server we us progression through beyond. with going a it I the think see

is Vivek America question with Our Arya Securities. next of from Bank

go wanted back to the question billion year. outlook Lisa, $X to supply for I and just the this

a I that constraints. at think number, $X supply supply the resent you think point, But that. significantly at are there I that some there billion point, have suggestion was you visibility that beyond still right, said

better have the about thought would the you are at half. would that Given of have back we much I the year, middle that visibility almost

sales could some the is sense GPU give supply the of if your is of Or us of what billion constrained So you it $X number? number be. number? rate exit a relatively, demand Or constrained could

the last your I of a it billion that call, in think MI this Could be for lot year? exit terms more on than rate was suggested. of $X.X

back From make that. sure full do we It weighted. half -- a capped clearly. capability year we is not billion more supply number standpoint, question try have me answered sorry, cup. to that yes, Vivek, Yes. supply It is let supply $X our above I'm this is it's not --

say, demand have pulling that So to of By near to if is is not supply do second all issue. than of in quarter, and example, at in AMD. right on term, would you're looking some an the work overall we the I we related we're supply. continuing industry I sort have This this way, think more at for now, the

I anyone's in expectations think demand XXXX. exceeded overall, AI has

So it you've from the guys. heard memory

from We're as it the through the ramping capacity all we You've heard foundry go year. guys.

to as into And happening. visibility, good it what's have do we relates visibility

full that pass said, are we engagements going My put guidance that quite progression they're we as well, are AI. ramping milestones, continue going, as workloads how make expand pass in we're with the customers for I all sure terms customers. we into customer continue have of the overall products. bring As great to we current and year our and to those new things to going of we forward. And But customer on milestones that we is actually goal

Vivek. so And the that question, hopefully, clarifies

in Maybe one embedded maybe business. MI, but not the on

heard embedded rebound I half? I in margin embedded that half, puts back margin in which the lot center to and of the don't in Or expect, expansion? and think inventory have mix? expansion margins what where then have clearing peers. the to gross you more means second more takes a of are if a we of the continue industrial back similar cycle? data any has rebound, on half And what the But we in XXX sound basis quarter a of because gross from it the about measured mature a and what does bit implication just Can know, for gross somewhat is points auto terms you QX

thank Vivek, question. for you the

to been the really embedded the has little a some I bit expected, than demand of markets, the due very weak. weaker communication specifically, declined more in think business

and it's as with And automotive, industrial of some the quite pockets consistent mentioned, you peers. actually

do you half, ramp data QX gross half. the second guide the and driver side. at look continue will think both the QX, is center to Second our margin margin expansion performance to gross is is strong primary gradual we on see and to the the your going half center when half. bottom embedded The in data of in the first will back recovery in business And question, start second the

in to major I driver expansion the gross think continue that half. margin of second will be

is doing half. in the a course, tailwind we'll have Of if more embedded better, second

question Arcuri from with is next UBS. Timothy Our

to ask And per just data but to customers we also given of rack the square of that some constraints. like engaged, wanted data foot talk optimize because demand shift performance there's big say and center center they're scale systems I of try to power not your because MIXXX, road to The a what's really seems coming. GPU about that that map. it

be to as about So And just market you systems the all how can systems? you road your to you important need pieces are do going map? rack the have in talk shifts scale

Thanks sure, the Timothy. Yes, for question.

multigenerational our in sure, the conversation. comers are For look, engaged

it of capability make is over pieces. next as that sure investment integration, out in overall with of the significant and the a pieces. well to very the scale-out question is networking your going We important. quite to we we're It system relates as couple the to have is partners our do And definitely customers we've have That's there. on. So that years. working do And networking, it partners closely something absolutely the with working of number a

the across partners Cisco well and Broadcom with done our in that's Fabric and with think And in as like key with networking at our acquisition data Pensando center networking with December. our Infinity a lot we've of then expertise. we're are event AI who Arista, brought as the us I work that always ecosystem working

GPU. specifying not going just our is designs, specifying, now work forward. full something quite let's will be -- is that right important that's reference system So it, future It generations and call in a

as like be last back-half in CPU to follow-up. the of your could quick it business was server year. know like look full this held this it's I pretty it it and year of be. then know And loaded going you just on looks about last I back-end our a at what time year year could hands sort loaded like just how kind

give business of I your CPU is terms in of server how guidance if you So kind much on reasonable be year milestones of you piece can just this could the Is us XX% that year, for business? you some how back-end server of that this CP like loaded grow us year-over-year. wonder wonder, could it kind any a I up it bogey? could give

I we data very, data Server back way the on think, mean, CPUs, the certainly sure. best year. center strong Tim, ramp I half is it Yes. a segment very as the is go I think to our for say through GPUs of center

digits. segment I in don't to should So but I know expect double level could overall that general, strong to we're at you specifics, very be going into the say get

Moore is Stanley. question next from Our with Morgan Joe

couple about you wonder are of would said I you get talk ago be know that? the profitability above eventually could you few in but a it take quarters you that where I if MIXXX. there. of average, you quarters a it corporate would to Can address

you, Thank Joe. Yes.

an to incredible Our ramp job MIXXX. done team has

know, from improvement, very time ongoing. corporate year still the the gross you think we yield, As average. over should and it's are those the to complex things are testing of time, ramp still the and probably process both product, be accretive a first at We the do margin

follow-up. a Great. And separate then

the and On server, ramp compatible. do while kind transitioned there it were know that. said take platform server to on that much you could tour in within little might portfolio? Turn like be more I of a things and had ecosystem How our you when generally, think shifts quickly product you that see you seems significant transition

platforms. easier time coexist that of I think will Yes. deciding an bring out their the Joe, I because and they're think see, make same are Turin from think customers it new what ramp. so some to for general Turin we going is that does look, do amount platform when

of access a set give Turin broader expect We to workloads. to us

think actually faster SAM and I Man we our experience, enterprise for see you'll expands And both with from General. So went to cloud. than, example, Turin, transition in a from when our

is question Stacy Research. Our from next Rasgon with Bernstein

For my into first the MIXXX one, to I address QX. wanted ramp

said maybe in it billion, take cumulative $X or don't in give sales, I which at you've done million $XXX QX. you know, puts maybe, So

total got you've client guiding up, got but you've into QX, revenues about million $XXX You're up traditional data up. center

flat. going ramp that QX? guidance that more. . into total Is hazard now and is You've Gaming if less client more or the data got traditional a expecting? down, right you've but it not to offset corporate got MIXXX that ramp be Does the guess center built you're it, I'd into embedded than the

Stacy, the thanks question. for

You always ask question.

than is in the So overall GPU general, ramp it one data the more think company's I center $XXX-some million ramp.

Okay.

down lot, that data clients gaming a means So be right, like as the if must

If at right. code the gaming look the their has give very gaming, you're me business, maybe quite color demand and that's the weak, about down known -- you quite Gaming Yes, similar like let you is maybe So yes, also level. some right? been well zip inventory

lower half same we QX, first on gaming QX, based down XX%. is the we second So both actually the average. sequentially for have, be We first year looking how we're than half basically the that's think margin more than half visibility company our gross guided will Gaming's the And the lower at business. time, at than this

is a on will that's game But lot. gross overall, the side. on color the just So help the mix side, QX gaming down some right, margin you're

That's helpful. it. Got

profitability. to wanted question, For near-term data at my look I center second the

in to growth. would -- was filtering mean the are light? on know above relative going stay that CPU the Are they average. CPUs? guess, So just to be average I corporate operating you GPUs term, sequentially are, below profit said in clearly I down margins they the Is of X% I the GPUs eventually but And that revenue they XX% the near

Yes.

gross level. think I data It's center below you're the right GPU margin is right. margin now gross the

in down -- one the increased think side, expand of we slightly. our reasons quite coming the AI to, significantly actually, the reason the are Lisa the income operating I investment as accelerating and is drivers map actually major mentioned, major road for X that's there to

said center margin the server the past get your average, corporate the to question, we over On margin. GPU believe but will the gross margin continue case Data level be is. and while side, accretive take gross going in it will to to time we back for a to to gross

with Our next from is Harlan JPMorgan. Sur question

to a just move strong get just with the On call engineers them with stronger driven How more GPU production of year it up by full collaboration to customers and of up to customers' GPU. of your your a faster? their platform important to be given aggressive And their center bring shipments, maybe by to expectations what for your and segment them much appears versus is initiatives? data prior your plan urgency your forward latest much software build-out pretty faster faster customers' it given you is how AI frameworks just time

you our passed is Roam and that we're validation you And was it, question. huge everything think the for their us verification you optimize both And really hand get models. AI important the area. key some demand all, in would thank has Harlan, the well stock our customers really to confident is first that doing of customers for with feeling is the in said, important ramp? run hand And think compute. there it is, a as and milestones done is, to sort more if other in broadening I about thing Because and now that we've it What of well. then

get and And that up help great. in that our is participate so and customers to running ability

of as And Each about ups. complex we very overall, as ago. with very, this happy bring we a in you we're ramp these think by just way, I'm were I aggressive only here it, where pretty they've gone. look at So the has been quarter think how sitting very April. And are

customer of and there's the So there's great lot go, still a to in XXXX process. a momentum

Yes, absolutely.

just kind going the Just March back of quarter. to back rewinding

the at March the math, was server business your X%, of X% range. GPU x seasonal over? looks like you center. that similar drive -- data did make around to drove So sequentially. It else right, down guys the little like data a down it instance more but to Client competitor? was like I in was that also that's lower looks assumptions declined adoption, certain enterprise better a pattern the And low cloud seasonal assume data center I your it PC half seasonal decline your end seasonal than sounds the the like that business, than And CPU also less it so, of business, declines? By my like the of slightly of out bit If range. was share at right? end which for center? of Is if some anything gains, less better drove what

this is Harlan, Yes. Jean.

continue very increased we digit, there. feel it actually well. I has the about business double is share I server think It performing seasonal, strong sequentially. a good more been gaining but really Year-over-year, think,

And your of some if see we has that Harlan, the I'd think did normal the offset I perhaps seasonality. just question, first And to in that enterprise add, -- quarter. strength in

Our next O'Malley question with is from Barclays. Tom

on launching environment. ramping CPU a competitive QX. I ask the count now Obviously, on the kind into so in a and quarter, just product coming core of high the wanted competitor more to had about side, talk you

risk you function that really the good as core more for year? ASP about Can of any ramp of Do the seen seeing pricing talk higher capital. a would tailwinds think pricing, You've rest the impact in for that there's your aggressive what you're market? which you

When they're of ASPs, actually Yes. our we look at CPU server sort stable. very

our I leadership, of be per that our sort into translates would and to performance the environment the counts. advantage towards for watt, think sort for -- higher and sort is we I indexed our is our performance customers. the tend CCO TCO environment Overall, usually stable. pricing we customer This of again, of core say about and

broader Helpful. And to up here. follow just then a question

how is to move So I competitive Ethernet with and today, of obviously that that kind enables maybe map? a asked talk be way road And standard and assets when importance internal accelerate can important timing think that have know systems? industry you you to can -- Ethernet got you the think the to being But side? on comes end, your you able of is the to others. the that forward on consortium to earlier you could there you of about Open I But consortium market some is then about systems. you an you there before partner

Yes.

of don't the systems. we to our important build We're ecosystem. that, open supportive large-scale the very very think I to consortium. I to limiter say very supportive is are But it's a ability believe Ultra Ethernet of that

to lot that. work many internally Ethernet these industry have and will long-term a the well as think we enable our networking something in as answer the for that systems, with that with be in I of is and feel customers doing partners we're

Piper Our Harsh with from is last Sandler. question Kumar

Lisa, One for for I one Jean. and had two. perhaps you is

mega large hosted up we they coming GPU not in a kind centers range data for about million. midterm, near in recently a to to the about of talked X XXX,XXX-plus company So And the potentially up custom very and call. talking maybe

kinds chip in look somebody all we placed reliance they out to perhaps where centers as the Winner will next right situation where from it's or at board your So gets data takes be a of these the sockets? if standpoint, of board an somebody where on not a line. maybe your get architectural Or else's separate kind all can

understand us such center? more data how help play something X competitor would there's for Just like if than in to large a that play out a chance there's a

Yes.

a So maybe I'll more bit strategic level. the at little talk

are sort be at look you're large over that's of about. we how what and AI environments as shapes training next think would very looking at customers perhaps I there years, few who talking the up

to attractive you technology a that be area optionality out. I be for view those desire have we think think of And It's we we of the competitive believe the there. an very as our one, terms build very number where AMD. view that have in is, I how area would to

of question very very I is takes to systems. case, in So believe is lot positioned think being obviously, it, AMD overarching think and don't the large-scale well to all. a call winner But that of there. play has That happen I we those, so. let's between here your it

That's And for Jean. one quick a maybe then wonderful.

the for a put or I more Jean I quarter get over March. the model rise that everything $XXX June less in about you So about June, talked into million

June. here? off to segments am million mentioned I MIXXX in about of way You sizing relative both Or -- will is getting getting within $XXX I'm that roughly ballpark? MIXXX Is number help make you I I'm the for grow think I'm trying could that about a -- us EPYC X Curious and am growth? the point for if the those the

We're revenue. not going to guide a specific segment below the segment

there. grow is say most thing double there that a I center digit we will lot important is it over details. of leave I data did to going sequentially. Subsegment, are think the

floor further I'd at like this questions There for any to no over comments. hand to closing back are the time. management

to for you That us Great. call. today's Thanks of all concludes today. joining

conference. This concludes today's

time. your disconnect you at your lines participation. may You Thank this for