Thanks a lot. Dave, I just wanted to see if you can clear up some of the confusion on gross margin that sort of came out of the innovation event. You're now coming out of the year at 46.5% but you did roughly 43% for the year. And I think at that event, you said next year is going to be up but probably not a couple of hundred basis points. So did you mean off of the Q4 run rate or do you mean off of the 43% for the year? And can you kind of shape that for us throughout the year? David Zinsner (CFO): Certainly. Let me take a moment to discuss the third quarter because I was really impressed with the team's performance in achieving gross margins just shy of 46%. They executed well in managing spending and improved inventory sell-through, which greatly contributed to our strong gross margin results. Looking ahead to the fourth quarter, we expect to return to a more typical range for fall-through, possibly around 60%, though this is slightly dampened by the ongoing efforts related to our five nodes in four years initiative, which does involve some spending. As we think long-term, we feel increasingly confident about reaching the 60% gross margin target for several reasons. Firstly, once we complete the current transitions, we anticipate a shift from headwinds to tailwinds for margins as our process leadership enhances gross margins. Improvements in product execution will contribute positively as well. Additionally, our internal foundry model, which we are formalizing next year by measuring manufacturing and the technical development organization as a separate profit and loss entity, is already beginning to show benefits. We are currently aligning our operational reviews and long-term planning with this framework. This has started to enhance collaboration between functions, leading to better decision-making regarding test times, sample management, and overall fab operations—areas that have gained newfound importance and focus. Manufacturing teams are also becoming more conscious of loadings and P&L performance, aiming to maximize revenue while minimizing costs. Thus, as we move into 2024 and beyond, we expect to uncover numerous opportunities that will positively impact our gross margins, reinforcing our confidence in achieving the 60% target. John Pitzer (Head of Investor Relations): Tim, do you have a quick follow-up?

Pat, can you share insights about the dynamics and allocation from your major foundry partner? They emphasized that your 18A would be competitive with their offerings in the same timeframe. Now that it's clear you're making progress, has there been any change in your relationship and the allocation you receive from them? Thanks. Pat Gelsinger (CEO): Yes. And first, I'd say, we've come to a different conclusion than what you might have heard from them. We feel that our five nodes in four years, the leadership position that we expect with Intel 18A, this is a remarkable set of work. And as you heard me say in my formal comments, we think of 18A as a work of art. This is the finest transistor, right? And we've invented the last 30-years of transistors. This is the best one that's ever been built, right? And that and PowerVia, we feel very confident that we are on track to the leadership position that we described. And as we've also said, hey, we're well underway on the things after that. And things like high-NA, the next generation of EUV or advanced packaging with glass, all of these are now being backed up and reinforced by their customer commitments. Three 18A customers now making commitments, the prepay customer I spoke about earlier, two additional customers, partners, we announced the ARM relationship in April, and they're now seeing very positive results on power performance area from 18A. And as we think about the relationship with TSMC, hey, this is a great company and one that we partner with, one that we are a competitor to, one that we're a customer of. We collaborate with them. As you saw, they became an investor in the IMS business this quarter as well. And as a customer of those, we're very happy with how they're supporting us and our products as we're raising many of these products forward to there, a critical supplier to us as we're a critical supplier to them. This is one of the most critical relationships in the industry. I spent a lot of time personally on it. We're very confident in our roadmap. And this is really an exceptional quarter for five nodes in four years and getting back to process leadership. We are well on our way to doing exactly what we said we would. John Pitzer (Head of Investor Relations): Thanks, Tim. Jonathan, can we have the next question, please? null (Operator): Certainly. One moment for our next question. And our next question comes from the line of Ross Seymore from Deutsche Bank. Your question, please.

Hi, guys. Thanks for asking a question. Pat, I wanted to follow-up on one of the topics you just mentioned about your partnership with ARM. The flip side of that is there's been reports recently of a number of people entering the CPU business for PCs using ARM architectures similar to what we've seen over the last couple of years on the data center side of things. Can you just talk about the competitive landscape of x86 versus ARM? And potentially, more importantly, if in fact, ARM was gaining traction, would you consider using that architecture and broaden your technology internally? Pat Gelsinger (CEO): Yes. Thank you, Ross. Overall, the industry is excited about the AIPC. Since I introduced this generation of AIPC at our Innovation Conference a couple of months ago, we have seen that excitement translate into interest from customers and competitors alike. Generally, ARM and Windows client alternatives have taken on relatively minor roles in the PC market. While we take all competition seriously, history suggests that we don't anticipate these alternatives becoming significantly impactful. Our momentum is robust, and we have a solid roadmap, with Meteor Lake launching this AIPC generation on December 14. We have already demonstrated next-generation products like Lunar Lake, which offers notable improvements in performance and capabilities. We will be signing Panther Lake, the next generation, in the fab in Q1 along with Intel 18A. We also announced our AI Acceleration program, which currently includes over 100 ISVs. We expect to see over 100 million x86 AI-enhanced PCs in the marketplace within the next two years, which represents an extraordinary volume and the ecosystem advantages it brings. Regarding alternative architectures like ARM, we see a fantastic opportunity for our foundry business. Given the results I mentioned earlier, we view this as a unique chance to contribute to the success of the ARM ecosystem or any other market segments that may emerge as an accelerant for our foundry offerings, particularly with our foundry packaging and 18A wafer capabilities. John Pitzer (Head of Investor Relations): Ross, do you have a quick follow-up?

Yes, I do. One for Dave. The OpEx side of things, you guys did great in the third quarter. You talked about it going up in the fourth quarter, but I still think the full-year is ahead of what you originally had targeted. How do we think about next year's OpEx just conceptually? I know you said you're going to have $3 billion in total cost savings this year, $8 billion to $10 billion longer term. What are the puts and takes on OpEx as we look into 2024? David Zinsner (CFO): I am very proud of our achievements in the third quarter and our overall execution on spending reduction for the year. This involved significant effort and a focus on driving efficiency. As Pat mentioned, we divested or closed ten programs or product areas to enhance our spending. Additionally, we identified businesses where we could unlock significant value, which we believe we have successfully done in three key areas. From this standpoint, we feel that our spending-related activities are largely complete. Moving forward, we anticipate benefits from our internal foundry model, impacting both costs and operating expenses. Our long-term focus will be on managing spending, aiming for 60% gross margins and 40% operating margins, which requires driving efficiency in operating expenses. We believe there is considerable opportunity in this area, just as there is for gross margins. We will provide visibility for the fourth quarter and 2024 once we close out 2023. John Pitzer (Head of Investor Relations): Perfect. Thank you, Ross. Jonathan, can we have the next question, please? null (Operator): Certainly. One moment for our next question. And our next question comes from the line of Joe Moore from Morgan Stanley. Your question, please.

Great. Thank you. I think you talked about the Gaudi pipeline doubling in the last 90-days, so I guess you're nearing kind of $2 billion of visibility there. Can you talk to that a little bit, how much of that is training versus inference? Pat Gelsinger (CEO): Thank you. Overall, there's been a significant increase in interest in this category. Our Gaudi business is small but growing quickly. We see opportunities in both training and inferencing. On the inferencing side, we anticipate that workload will expand significantly; while few people create models, many utilize them. It's similar to weather modeling—few develop the models but many use them. The real market potential lies in inferencing deployments, which will utilize both accelerators and a substantial amount on Xeons, particularly as we integrate AI into various applications. Our Gen 4 performance for AI applications is already strong, and it improves with Gen 5. With the launch of Granite Rapids, performance is projected to improve two to three times, and this will continue as we progress further down our roadmap. We believe our capability to perform inferencing at scale with our Xeon line is critical moving forward. The combination of Gaudi and Xeons reflects what Dell announced in their roadmap, and we're witnessing normal buying behavior indicating growth. Our OEMs have seen a solid uptick in Xeon sales this quarter, and more customers are embracing our DevCloud for AI purposes on both Xeon and Gaudi. Key partnerships, like the one with Deloitte, focus on application optimization and AI development using our Xeon platform. We are confident in a growth cycle for CPUs driven by Xeon and accelerators, and Intel will play a significant role in both areas. Our strategy encompasses AI across various domains, including the edge, clients, data centers, and the cloud, making inferencing a major discussion point for the industry in 2024, primarily executed on Xeon processors. I want to express my appreciation for our resilient Intel team in Israel and everyone impacted by recent events. Thank you for joining the call today and showing interest in Intel. We value this opportunity to update you, answer your queries, and reflect on the positive momentum we’re experiencing. Our financial and operational results this quarter have been exceptional, affirming our foundry strategy and our commitment to AI integration. We hope to see you at our Emerald Rapids Gen 5 and Meteor Lake launch event in New York in December, as well as at our Q1 Intel Foundry Day. Thank you, and good afternoon or good night, wherever you may be. Stay safe. null (Operator): Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.