Lisa, my first question is on the MI300. You're taking up the full year outlook from $3.5 billion to $4 billion. I'm curious what's driving that incremental $500 million in revenue? Is it new customers? Is it additional bookings from existing customers? Is it more cloud? Is it more enterprise? If you could provide color there, that would be helpful. And then on the supply side, there's been headlines or chatter that CoWoS and/or HBM could be a pretty severe constraining factor for you guys. If you can speak to how you're handling the supply side of the equation, that would be helpful, too. And then I have a quick follow-up. Lisa Su (CEO): Thank you, Toshiya, for the question. The MI300 ramp is progressing very well. Over the past 90 days, we've closely collaborated with our customers to qualify MI300 in their production data centers, focusing on both hardware and software aspects. Results have been positive so far, and we currently see increased interest from both existing and new customers committing to MI300. This encourages us to raise our forecast from $3.5 billion to $4 billion. The market is dynamic, and we are engaging with over 100 customers in both development and deployment. Overall, the ramp is strong. Regarding the supply chain, I am pleased with how supply has increased. This is the fastest product ramp we have undertaken, despite the complexity involved with chiplets, CoWoS, 3D integration, and HBM. We have received great support from our partners, and we outperformed our initial expectations for the last quarter. I believe Q2 will also see significant ramping. We plan to increase supply every quarter this year. While we are currently tight on supply, there is strong demand for the product. We will continue to address these aspects throughout the year. Overall, I am very satisfied with how both demand and supply are progressing.

I would like to hear about your Data Center GPU roadmap beyond the MI300. We notice that your nearest competitor has been quite open about their roadmap extending into 2025 and often into 2026. Maybe this isn’t the best time to share too much, but how should we view your roadmap and your competitiveness in the Data Center beyond the MI300? Lisa Su (CEO): Yes, sure. So look, Toshiya, when we start with the roadmap, I mean, we always think about it as a multi-year, multigenerational roadmap. So we have the follow-ons to MI300 as well as the next, next generations well in development. I think what is true is we're getting much closer to our top AI customers. They're actually giving us significant feedback on the roadmap and what we need to meet their needs. Our chiplet architecture is actually very flexible. And so that allows us to actually make changes to the roadmap as necessary. So we're very confident in our ability to continue to be very competitive. Frankly, I think we're going to get more competitive. Right now, I think MI300X is in a sweet spot for inference, very, very strong inference performance. I see as we bring in additional products later this year into 2025, that, that will continue to be a strong spot for us. And then we're also enhancing our training performance and our software roadmap to go along with it. So more details to come in the coming months, but we have a strong roadmap that goes through the next couple of years, and it is informed by just a lot of learning in working with our top customers.

The non-AI side of the Data Center business, it sounds like the enterprise side has some good traction even though the sequential drop happened seasonally, Lisa. But I was just wondering what's implied in your second quarter guidance for the Data Center CPU side of things? And generally speaking, how are you seeing that whole kind of GPU versus CPU crowding out dynamic playing out for the rest of 2024? Lisa Su (CEO): Yes, absolutely, Ross, I appreciate the question. Our EPYC business has actually been performing quite well. The market is somewhat mixed, with some cloud customers still working on their optimizations. It varies by customer. In the first quarter, we observed some very promising early indicators in the enterprise segment, with large customers beginning refresh programs. The value proposition of Genoa is exceptionally strong, and we are noticing that it is being embraced across the enterprise. In the second quarter, we anticipate that overall Data Center growth will be strong, with double-digit increases. Additionally, we expect server performance to be up as well. As we approach the second half of the year, we foresee a couple of factors driving growth. We expect improved overall market conditions for the server business, and our Turin launch in the latter half of the year is also expected to strengthen our leadership in the server market. Overall, I believe the business is performing well, and we are confident that we will continue to be well-positioned to capture market share throughout the year.

Lisa, I have a longer-term question followed by a shorter-term follow-up. One question I've been hearing frequently is about your primary competitor announcing a multi-year roadmap. We also keep hearing from others about internal ASIC programs at some of your main customers, whether for inference, training, or both. It would be really helpful if you could discuss how your conversations with those customers go, their level of commitment to your long-term multigeneration roadmap, how they weigh investing in their internal silicon versus using a supplier like you, and what advantages your experience across a wide customer base might provide that those focusing on internal ASICs may not have. Lisa Su (CEO): Yes, Matt, thank you for the question. One thing we have observed is that the total addressable market for AI compute is expanding rapidly, and we see this trend continuing in all our discussions. We've previously mentioned a TAM of around $400 billion by 2027, which some considered ambitious at that time. However, the demand for AI compute from our customers remains very robust, as evidenced by recent announcements from large cloud companies. We maintain strong relationships with major AI companies, aiming to innovate collectively. When considering large language models and the requirements for training and inference, there will be a variety of solutions; no single solution will fit all needs. The GPU remains the favored architecture, particularly as algorithms and models advance, which benefits our architecture and our capability to optimize CPU with GPU. I believe we are in a strong position with our partnerships and see a significant opportunity for collaborative innovation. There is a strong commitment to work together over several years, which is a reflection of the successes we have achieved previously, including our work on the EPYC roadmap.

Lisa, as a follow-up, there's been consistent noise around the stock price, whether it was $2 or $200, but the last month and a half has been particularly intense. I've received various reports about changes in demand from some of your MI300 customers or their planned consumption of your product. I know you addressed the supply situation and your collaboration with partners earlier. However, has there been any update from the customers you are currently ramping up with or those you will soon be working with regarding their demand intentions? Alternatively, has their demand perhaps even increased in recent times since I keep getting inquiries about it? Lisa Su (CEO): Sure, Matt. Look, I think I might have said it earlier, but maybe I'll repeat it again. I think the demand side is actually really strong. And what we see with our customers and what we are tracking very closely is customers moving from, let's call it, initial POCs to pilots to full-scale production to deployment across multiple workloads. And we're moving through that sequence very well. I feel very good about the deployments and ramps that we have ongoing right now. And I also feel very good about new customers who are sort of earlier on in that process. So from a demand standpoint, we continue to build backlog as well as build engagements going forward. And similarly, on the supply standpoint, we're continuing to build supply momentum. But from a speed of ramp standpoint, I'm actually really pleased with the progress.

I apologize if I missed this earlier, but I know last quarter, you mentioned securing enough capacity to support significant growth in the ramp of the MI300. I understand you've raised your guidance to $4 billion. I'm curious how you would describe the supply in relation to the context provided last quarter as we consider this new target. Would you say there is still potential for supply capacity growth? Lisa Su (CEO): Yes, Aaron. So we've said before that our goal is to ensure that we have supply that exceeds the current guidance, and that is true. So as we've upped our guidance from $3.5 billion to $4 billion, we have supply visibility significantly beyond that.

Yes. Okay. And then as a quick follow-up, going back to an earlier question on server demand, more traditional server. As you see the ramp of maybe share opportunities in more traditional enterprise, I'm curious how you would characterize the growth that you expect to see a more traditional server CPU market as we move through '24 or even longer term, how you'd characterize that growth trend? Lisa Su (CEO): Yes, I think there is definitely a need to refresh older equipment, and we anticipate a refresh cycle ahead. Additionally, we see growth opportunities in AI head nodes within the more traditional SSD market. Our focus is on delivering high performance in high core count and energy efficiency, which is progressing well. Historically, we've been strong in cloud first-party workloads, and now this is expanding to cloud third-party workloads as enterprises in hybrid environments adopt AMD solutions both in the cloud and on-premises. Overall, we view this as a positive trajectory for our server business as we head into 2024 and beyond.

Lisa, I just wanted to go back to the supply question and the $4 billion outlook for this year. I think at some point, there was a suggestion that the $4 billion number, right, that there are still supply constraints. But I think at a different point, you said that you have supply visibility significantly beyond that. Given that we are almost at the middle of the year, I would have thought that you would have much better visibility about the back half. So is the $4 billion number a supply-constrained number, or is it a demand-constrained number? Or alternatively, if you could give us some sense of what the exit rate of your GPU sales could be. I think on the last call, $1.5 billion was suggested. Could it be a lot more than that in terms of your exit rate of MI for this year? Lisa Su (CEO): Yes, let me clarify this question. Our $4 billion target for the year is not limited by supply. We have the capability to supply more than that, but the availability is more weighted toward the second half of the year. In the near term, particularly in the second quarter, demand is currently outpacing supply, and we are actively working to increase our supply. This is an industry-wide issue, not specific to our company. AI demand for 2024 has surpassed expectations, as indicated by various stakeholders in the industry. Everyone is increasing capacity as we progress through the year. Regarding visibility, we have good insight into the current situation, and we are engaged with our customers. My aim is to ensure we meet all the milestones as we ramp up our products. As we achieve these milestones, we will incorporate that information into our full-year guidance for AI. Customer engagement is progressing well, and we continue to onboard new customers and expand existing workloads. I hope that clarifies your question. Jean Hu (CFO): Vivek, thank you for the question. I think the Embedded business declined a little bit more than expected, really due to the weaker demand in some of the markets, very specifically, communication has been weak. And some pockets of industrial and automotive, as you mentioned, it's actually quite consistent with the peers. Second half, we do think the first half is the bottom of Embedded business and will start to see gradual recovery in the second half. And going back to your gross margin question, when you look at our gross margin expansion in both Q1 and the guide at Q2, the primary driver is the strong performance on the Data Center side. The Data Center will continue to ramp in the second half. I think that will continue to be the major driver of gross margin expansion in the second half. Of course, if Embedded is doing better, we'll have a more tailwind in the second half.

I also wanted to ask about your data center GPU roadmap. The customers that we talk to say that they're engaged, not just because of MI300, but really because of what's coming. And it seems like there's a big demand shift to rack scale systems that try to optimize performance per square foot given some of the data center and power constraints. So can you just talk about how important systems are going to be in your roadmap? And do you have all the pieces you need as the market shifts to rack scale systems? Lisa Su (CEO): Yes, sure, Timothy. Thanks for the question. For sure, look, our customers are engaged in the multigenerational conversation. So we're definitely going out over the next couple of years. And as it relates to the overall system integration, it is quite important. It is something that we're working very closely with our customers and partners on. That's a significant investment in networking, working with a number of networking partners as well to make sure that the scale-out capability is there. And to your question of do we have the pieces? We do absolutely have the pieces, I think the work that we've always done with our Infinity Fabric as well as with our Pensando acquisition that's brought in a lot of networking expertise. And then we're working across the networking ecosystem with key partners like Broadcom and Cisco and Arista, who are with us at our AI data center event in December. So our work right now in future generations is not just specifying a GPU, it is specifying, let's call it, full system reference designs. And that's something that will be quite important going forward.

And then just as a quick follow-up. I know this year it looks like it's going to be pretty back-half loaded in your server CPU business, just like it was last year. I know you kind of held our hands at about this time last year sort of on what the full year could look like and how back-end loaded it could be. So I kind of wonder, could you give us some milestones in terms of how much server CPU could grow this year, how back-end loaded it could be? Is it like up 30% this year for your server CPU business year-over-year? Is that a reasonable bogey? I just wonder if you can kind of give us any guidance on that piece of the business? Lisa Su (CEO): Yes. I mean, I think, Tim, I think the best way to say it is our Data Center segment is on a very, very strong ramp as we go through the back half of the year. Server CPUs, certainly, Data Center GPUs, for sure. So I don't know that we're going to get into specifics, but I could say, in general, you should expect overall at the segment level to be very strong double digits.

I wonder if you could address the profitability of MI300. I know you said a couple of quarters ago that it would eventually be above corporate average, but it would take you a few quarters to get there. Can you talk about where you are in that? Jean Hu (CFO): Yes. Thank you, Joe. Our team has done an incredible job to ramp MI300. As you probably know, it's a very complex product, and we are still at the first year of the ramp, both from yield, the testing time and the process improvement, those things are still ongoing. We do think over time, the gross margin should be accretive to corporate average. Lisa Su (CEO): Yes. Joe, I think from what we see, look, think Turin is the same platform so that does make it an easier ramp. I do think that Genoa and Turin will coexist for some amount of time because customers are deciding when they're going to bring out their new platforms. We expect Turin to give us access to a broader set of workloads. So our SAM actually expands with Turin, both in enterprise and cloud. And from our experience, I think you'll see a faster transition than, for example, when we went from Milan to Genoa.

For my first one, I wanted to address the MI300 ramp into Q2. So you said you've done $1 billion, give or take, in cumulative sales, which puts it at maybe, I don't know, maybe $600 million in Q1. You're guiding total revenues up about $225 million into Q2, but you've got Client up, you've got traditional Data Center up, you've got Embedded flat. Gaming is going to be down, but I'd hazard a guess that the client and traditional Data Center offset it, if not more. Does the MI300 ramp into Q2? Is it more or less than the total corporate ramp that you've got built into guidance right now that you're expecting? Jean Hu (CFO): Stacy, thanks for the question. You always ask a math question. So I think, in general, it is more. The Data Center GPU ramp will be more than the overall company's $200-some million ramp.

Okay. So that means Gaming must be down a lot, right, if the client is not performing well. Jean Hu (CFO): Yes, you're correct. The Gaming sector is experiencing a decline similar to the first quarter. To provide some insight into the Gaming business, the demand has been fairly weak, and inventory levels are also affected. Based on what we see, both the first and second quarters are projected to be down sequentially by over 30%. We anticipate that the second half will be lower than the first half for the Gaming business. Furthermore, Gaming's gross margin is not meeting our company's average, which will impact the overall gross margin mix. So, you are right, Gaming in Q2 is significantly down.

Got it. That's helpful. For my second question, I wanted to look at the near-term Data Center profitability. So operating profit was down 19% sequentially on 2% revenue growth. Is that just the margins of the GPUs filtering in relative to the CPUs? And I know you said GPUs would eventually be above corporate average. Are they below the CPU average? I mean they clearly are, I guess, in the near term, but are they going to stay that way? Jean Hu (CFO): Yes, you're correct. The GPU gross margin is currently lower than the Data Center gross margin. There are two main reasons for this. The primary reason is that we have significantly increased our investment to expand and accelerate our AI roadmap, which is one of the key factors contributing to a slight decline in our operating income. Regarding your question about gross margin, we have previously stated, and still believe, that over time, the gross margin for Data Center GPUs will exceed the corporate average. However, it will take some time to reach the gross margin levels seen in Servers.

On your Data Center GPU segment and the faster time to production shipments, given you just upped your full year GPU outlook, how much of it is faster bring-up of your customers' frameworks driven by your latest ROCm software platform and maybe stronger collaboration with your customers' engineers just to get them to call faster? And how much of it is just a more aggressive build-out plan by customers versus their prior expectations given what appears to be a pretty strong urgency for them to move forward with their important AI initiatives? Lisa Su (CEO): Yes. Harlan, thank you for the question. What it really is, is both us and our customers feeling confident in broadening the ramp? Because if you think about it, first of all, the ROCm stack has done really well. And the work that we're doing is hand in hand with our customers to optimize their key models. And it was important to get sort of verification and validation that everything would run well, and we've now passed some important milestones in that area. And then I think the other thing is, as you said, there is a huge demand for more AI compute. And so our ability to participate in that and help customers get that up and running is great. So I think, overall, as we look at it, this ramp has been very, very aggressive as you think about where we were just a quarter ago. Each of these are pretty complex bring-ups. And I'm very happy with how they've gone. And by the way, we're only sitting here in April. So there's still a lot of 2024 to go, and there's great customer momentum in the process.

Yes, absolutely. Just going back, just kind of rewinding back to the March quarter. So similar to the PC Client business, right, which declined at the low end of the seasonal range, if I make certain assumptions around your Data Center GPU business, x that out of Data Center, it looks like your Server CPU business was also down at the lower end of the seasonal range. By my math, it was down like 5%, 6% sequentially. Is that right? And that's less than half the decline of your competitor. And if so, like what drove the less-than-seasonal declines? I assume some of it was share gains. It sounds like Enterprise was also better. Looks like you guys did drive a little bit more cloud instance adoption, but anything else that drove to a slightly better seasonal pattern in March for Data Center? Server? Jean Hu (CFO): Yes. Harlan, this is Jean. I think the Server business has been performing really well. Year-over-year, it actually increased a very strong double digit. I think, sequentially, it is more seasonal, but we feel pretty good about continuing to gain share there. Lisa Su (CEO): Yes. To add to your question, we did observe strength in enterprise during the first quarter, which helped counterbalance some of the typical seasonal trends.

I just wanted to ask on the competitive environment. Obviously, on the CPU side, you had a competitor talk about launching a high core count product in the coming quarter, kind of ramping now and more so into Q3. You've seen really good pricing tailwinds as a function of the higher core capital. Can you talk about what you're seeing in that market? Do you think that there's any risk for more aggressive pricing, which would impact your ASP ramp for the rest of the year? Lisa Su (CEO): Yes. When we examine our server CPU average selling prices, they are quite stable. We are particularly focused on higher core counts. Overall, I would say the pricing environment remains stable. This relates to total cost of ownership for our customers, as well as our performance and energy efficiency, which typically results in a cost advantage for our customers. I think it's very important to say we are very supportive of the open ecosystem. We're very supportive of the Ultra Ethernet Consortium. But I don't believe that, that is a limiter to our ability to build large-scale systems. I think Ethernet is something that many in the industry feel will be the long-term answer for networking in these systems, and we have a lot of work that we're doing with internally as well as with our customers and partners to enable that.

Lisa, I had two. One is for you and one perhaps for Jean. So we recently hosted a very large custom GPU company for a call. And they talked about kind of mega data centers coming up in the near to midterm, talking about nodes potentially in the 100,000-plus range and maybe up to 1 million. So as we look out at these kinds of data centers, from an architectural standpoint, it's not a situation where winner takes all, where if somebody gets in, they kind of get all the sockets? Or will there reliance where your chip perhaps or your board can be placed right next to somebody else's board maybe on a separate line? Just help us understand how something like that would play out if there's a chance for more than one competitor to play in such a large data center? Lisa Su (CEO): Yes. So I'll talk maybe a little bit more at the strategic level. I think as we look at sort of how AI shapes up over the next few years, there are customers who would be looking at very large training environments and perhaps that's what you're talking about. I think our view of that is, number one, we view that as a very attractive area for AMD. It's an area where we believe we have the technology to be very competitive there. And I think the desire would be to have optionality in terms of how you build those out. So obviously, a lot has to happen between here and there. But I think your overarching question of. Is it winner takes all? I don't think so. That being the case, we believe that AMD is very well positioned to play in those, let's call it, of very large scale systems.

That's great. I have a quick question for Jean. Based on the model you discussed for June, I estimate an increase of approximately $400 million in the June quarter compared to March. You mentioned that both MI300 and EPYC will experience growth. Could you provide insights into how those two segments compare in terms of size within that growth? I'm estimating around $900 million for MI300 for June. Am I close to the mark, or is my estimate off? Jean Hu (CFO): Harsh, we're not going to guide a specific segment below the segment revenue. I think the most important thing is that we did say Data Center is going to grow double digits sequentially. I will leave it over there. Mitch Haws (Head of Investor Relations): There are no further questions at this time. I'd like to hand the floor back over to management for any closing comments. Lisa Su (CEO): Thanks. null (Operator): This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.