Intel Corporation (INTC) Earnings Call Transcript & Summary

As a reminder, today's presentations include forward-looking statements subject to a number of risks and uncertainties. More information can be found on this slide and in Intel's filings with the SEC. [Presentation]

Please welcome the CEO of Intel, Pat Gelsinger.

Hey, welcome. Welcome to Direct Connect 2024. And I am just thrilled, excited to have all of you here with us today. Last week marked my 3-year anniversary as the CEO of Intel. And when I came back to the job, I said we have 3 goals. We're going to rebuild this iconic company, the company that grow more and noise built. Second, we're going to restore the critical role it has and plays in the technology industry writ large. And third, we're going to rebuild Western manufacturing at scale, resilient, sustainable, trusted supply chains. And I think of today as a day 3 years in the making as we open the doors on delivering on that mission. When I came back to Intel in 2021, we presented this event just a couple of months in my return called Intel Unleashed. And we shared a perspective on the tremendous opportunities ahead, the plans that we had in motion for this fundamental rebuilding of Intel, setting a course for a new era of technology and innovation. We announced plans at that point to become a world-class foundry. And we said we're going to be a major provider of U.S. and European-based capacity. And when we rolled that strategy out, some were like, yes. Others were like, yes, right? And others were just, no way. How are they going to be able to pull this off, right? They have fallen behind, they stumbled. Could they possibly get back to leadership? And our employees, right, as we spoke to them, they said, "Yes, we can do this. We're going to reestablish that leadership position." And our pessimist, we're challenging, No. Some of them I called perma bears, right? They were so far in hibernation. They ain't ever coming out. But here we are today, 3 years later, and today, this vision of Unleashed becomes real. Today, the best of foundry, the silicon ecosystem, what could be today is what is. And with that, I'm thrilled today to announce simply put Intel Foundry. This is a renaming, a reorganization, a new organizational model for Intel that includes our 3 major elements: technology development, right, leading bending physics, our global manufacturing and supply chain and our Intel Foundry Services and ecosystem operation, all 3 together Intel Foundry, a rebuilding of Intel. And for that, as I said, we're not fixing one company. We're establishing 2 vibrant new organizations. Intel Foundry to serve internal and external customers at scale to manage supply chains, to assure capacity corridors; and Intel products, our client, data center and networking products, 2 distinct and separate organizations. And as I think about that, they're dependent, the wafers, the factories, that leadership technology thrust. I need the product group and the foundry group working intimately together. Who's going to drive the wafers to run those fabs? Intel products. But they're also independent because you, the foundry ecosystem, need to have an independent, your designs, your a fab, your intellectual property, your capacity corridors in a word, independent; in a word, dependent; or simply put, interdependent Intel products, Intel Foundry, all under the Intel banner. That begins today. And when we think about this, this era of AI, making it more accessible, at scale and delivering AI end to end. And as we say, from the data center to the cloud, to the networking to the edge and to the client, this AI continuum. And as I came back to Intel, I was sort of thinking about computing. And I'm young and vibrant yet, but it's been over 40 years since I've been to the computing industry. And with that, I sort of -- when I showed up, it was like sort of this is boring. Let's add a few more cores on the chip. Let's make PCIe a little bit faster. Let's increment the DDR, boring. And then AI happened, end of boring. This is transforming everything about computing, the explosion and systems and thermal envelopes and interconnect capabilities. Everything that we do is coming to bear in this AI period. And as I think about Intel, we're engaging in 100% of the AI TAM, clearly through our products and the edge and the PC and clients and then the data centers. But through our foundry, I want to manufacture every AI chip in the industry, those internal, right, that are being done by the cloud service providers, those merchant providers, the technology providers. We are engaging in 100% of the AI TAM. And with that, we need a new model of what the foundry requirements are for that industry. And that's simply put what we call the systems foundry for the AI era, where semis are essential, this lowest layer, this world-class foundry. And as you'll hear from us today, Moore's Law, alive and well. Until the periodic table is exhausted, we are not done with Moore's Law. You get that? Yes. That's a -- come on, get excited. We bend physics, we create molecules, we do amazing things. And Moore's Law is alive and well. And we're doing it through new transistors with RibbonFET, new power delivery with PowerVia, new advanced lithography with EUV and high NA. But it's even better than that because now we're doing it not just in X and Y, right, a monolithic silicon. We're doing it in Z as well with advanced packaging, X, Y and Z. And new systems of networking and glass and optics and package capabilities and thermals. But we have to do it a different way. We have to enable globally resilient, sustainable and trusted supply chains. And at the end of our conference today, I'm joined by Sam Altman, he's made a little news of late, you might have heard, right, for it. And I'm a pretty aggressive guy. Man, am I conservative. And he's going to challenge the capacity needs of the industry. And Keyvan is going to spend some time talking today about our capacity strategy. And this next generation of world-class silicon process packaging is all at your disposal. And this idea of this coming together in advanced packaging, it's not because we said, hey, let's put it all into a package. Physics is driving us that way, where thermal envelopes interconnect. Speed of light is driving us to put these together. [ Iraq ] is becoming a system, a system is becoming a system on a chip or a package. And the system of chips needs new capabilities, new test advanced and packaging capabilities. And that's what a systems foundry does. And Stu is going to derive -- describe today how we're making all of this real and available to you, every aspect of Intel to enable your innovation, bringing all of this together, right, and the people, the systems, the processes that we're standing up with Intel Foundry to ensure your supply chains, the confidentiality of your information, do it with your EDA and IP partners. And throughout the day, you're going to see this vision come to life. And a year ago, as we began this next phase of our journey, we says, we need people who are advising us on that journey. And it was a true pleasure of mine to go to some of the Intel Board members but also some of the leaders of the industry to help us set this up, to assure, right, the establishment of the Intel Foundry, to assure that we've established the business processes, to change the DNA of Intel to become maniacally customer-focused as we look forward, to assure that we have efficient operations. And my Advisory Board is here with us today, and I'd like them to stand up and acknowledge that these are the people that are helping guide us. So over here, Joe Kaeser, former CEO of Siemens; Chi-Foon Chan, former Synopsys Co-CEO; my many decades-long friend, Lip-Bu Tan, brother and friend; and over here, let's get a light over here to [ Sujay ] King, one of the most honored members of the semiconductor research and academic community. So these are the people that are helping advise us and guide us on the journey to set up and become what I've called the world's #2 system foundry. So thank you for joining us on this great journey. And as we describe this vision to become the #2 foundry of the world, we realize there's only a few companies that can do this, right, that have the capital capacity, they have the R&D, the longevity to go do this. And we announced this vision in the middle of COVID. Boy, did we realize how much we needed resilience at that time -- at that period of time. And now as we're in an economic downturn, welcome to semiconductors, right? This is a tough business. And then the AI explosion and the cyclicality of the industry, and we've seen the geo instability and active wars in Israel and Ukraine and the tensions in Taiwan's straits, this is anything but a resilient supply chain today. And even as we seek to be peacemakers, right, to seek global prosperity, we know that the best way to do that is through resilient, sustainable supply chains. And for that, we said, yes, get to be a large, meaningful, the second largest foundry become the world's most sustainable foundry, the world's most resilient foundry because that's exactly what the world requires. And this exponential explosion of AI demands a new way of delivering silicon with the lowest possible environmental footprint. And as part of Intel's climate transition action plan, we're approaching 99% global renewable energy, 100% renewable in the U.S. for over a decade, driving conservation in our energy, the water management processes, responsible use of chemicals; reducing, abating and replacing greenhouse gas chemicals. As I like to say, Gordon was an environmentalist before it was cool. He built it deep into the DNA of Intel. We don't do this because it's driven by some expectation in the industry. We do it because it's the right thing for humanity and for the planet. One time my daughter-in-law was giving me a bad time and, "Hey, you're sort of proud of all the great advancements that you drove." And then she said, "But did you have to bankrupt my planet to do so?" I think all of us are left with that same question. Are we going to be responsibly turning over our planet to the next generation? And in the face of things like this, explosion of AI capabilities, it isn't just doing good things. It's doing the right things for tomorrow as well. So sustainable foundry, but also resilience. And we're seeing global politics has been dominated for the last 50 years by where the oil reserves are. COVID was a big wake-up call for us all. An auto factory building a $50,000 car being stopped for a $1 semiconductor. How did that happen? Semis, advanced computing is to the world's geopolitic what oil has been for the last 50 years. And silicon, fortunately, isn't restricted to where it's found. It's the second most abundant element on earth. I call it God's gift to humanity. This 4-by-4 crystal in structure that we can bend and shape and shove different elements into, it's just a magic that these tiny chips are enabling the modern economic cycle that we are in today. But stunningly, in 1990, 80% of the semiconductors are built in U.S. and Europe. Today, 80% in a small concentrated area in Asia. We've seen this long, steady decline, right, in terms of our supply chains for the world. Nothing should be reliant on a single port to a single country, a single place in the world. We need resilient access to supply chains and capacity in the right regions at the right time, and thus the choice, the opportunity to drive systemic change in where and how we drive the most important aspect of our future where the technology supply chains are. And as I'd like to say, the moonshot is 80 to 20, 20 to 50-50 in a decade, rebalancing the supply chains of the world. It was a proud day when I got to stand on the White House lawn when we signed into law the U.S. CHIPS Act, a moment to rebuild the supply chains of the world. And with that, it was a thrill to do so with the President. But the tireless championing that we saw through Secretary of Commerce, Gina Raimondo. And it's my pleasure to have her join us now here at Intel Direct Connect. Secretary Raimondo?

How are you?

Thank you, Gina. Thank you, Secretary. It is such a pleasure and you and I agree how important the CHIPS Act has been. And I'd love for the audience to hear directly from you your perspective and your passion for this piece of industrial policy.

Hello, everybody. Pat, I love the energy. I love listening to your presentation, and it's exciting. We've never quite done anything like this before or at least not for a long time. If you want to find a precedent of when the United States government has acted this strategically in terms of industrial strategy, I think you'd have to go back 60 years to the space race. I think that's the closest parallel, a time when the federal government came together with the private sector and academia at every level to spur innovation and ensure America's technological leadership in the face of fierce competition. Of course, then it was Russia, now it's other countries. That's what this is about. I mean you just said a couple of minutes ago, after COVID, the vulnerabilities in our semiconductor supply chain, were on full display for the world, full display for the world. The fact that we are so overly dependent to a couple of countries in Asia to access semiconductor chips that we need for life-saving medical equipment, cars, every piece of technology showed us, we got to get to work. We need to get back to work, making more chips in America. And so this is a moment. Our generation, this is our moment. And -- but it's making more chips in America, bringing back the silicon to Silicon Valley, if you will. But it isn't just that. It's then getting a massive flywheel going in the United States of America from research and development all the way through to advanced packaging and everything in between. So -- and I hope in the process, we will create hundreds of thousands of high-paying jobs for America. But also if we do our job right, Pat, and I guess I'm talking to myself here, but I have to do it in partnership with you and the folks in your audience, 10 years from now, engineering degrees all over this country will be taught in a different way, will be tailored for the chip industry. It will be exciting. The top graduates at our schools will say, "I want to go work in a chip factory, in a chip design operation in the United States." And so I'm psyched about it, and you've been a fantastic partner.

So say a little bit more about building those -- yes, yes. So say a little bit more about building those chips in the U.S., why so important and a little bit about the AI surge and how you see that affecting the CHIPS Act and affecting the AI future.

So look, I want to be clear, we can't and do not want to make everything in America. We don't want to make every chip in America. That isn't a reasonable goal. But we do need to diversify our semiconductor supply chain, have much more manufacturing in the United States, particularly of leading-edge chips, which will be essential for AI, as you well know. And we need to just have more resiliency and more diversification. So the goal isn't to be self-sufficient to produce and package everything we consume in this country. But we do need a self-propelling engine of innovation and production. And that fell out of balance. We maintained our leadership in the design and in the software, et cetera. But we sacrificed our manufacturing capacity and with that, our capacity to conduct advanced research and development that we need to maintain our global leadership. Now people ask me all the time, how do we compete with China? We went faster in America. We out-innovate the world. We manufacture in the United States. We expand and modernize our manufacturing capacity, and that's what this is all about. With respect to AI, I think that's unbelievable. Like, first of all, as an American and as a U.S. Secretary of Commerce, it kind of gives me the chills to realize how the United States of America leads in AI because of our great entrepreneurs. In the whole stack, up and down the stack, that's a source of competitive advantage, and we need to continue to invest in that. But for you, frankly, it's a source of great upside and opportunity in customers. When I -- you mentioned Sam Altman, when I talk to him or other customers in the industry, the volume of chips that they project they need is mind-boggling. Even if you take their projections and cut them in half, it's still mind-boggling. So it's exciting. It's exciting what AI can do to advance technology and medical care and such. Of course, we have to keep a lid on the risks, which I'm hard at work on. But I think it's really a perfect convergence for you at the time you have IFS that the demand for 2- and 3-nanometer and 18A is just going to explode.

Well, thank you. And maybe say the CHIPS Act, are we done? Do we have the -- all the R&D underway? Do we need a CHIPS 2, Secretary?

I'm out of breath running as fast as I can to implement CHIPS 1. But it's amazing. We were at GlobalFoundries yesterday, $1.5 billion investment. That's the 1/3 of our investments. And I think there'll be a steady drumbeat of those announcements to come in the coming weeks and months. We announced a week ago that we've launched Natcast, which is a purpose-built nonprofit. It will be a public-private partnership. We announced Deirdre Hanford, who many of you know, she was at Synopsys for live. She's going to run this. And that's going to be our hub for research and development and workforce training. We'll be putting billions of dollars into that. All of that being said, I suspect there will have to be, whether you call it CHIPS 2 or something else, continued investment. If we want to lead the world. Look, we felt pretty far. We took our eye off the ball. We used to manufacture 40% of the world's chips in this country. We used to manufacture, you know the number better than I, but I don't know what, 12%, 15% of leading-edge chips, and now we're down to almost none in this country. So if we want to really compete globally, yes, we're going to have to continue to invest.

Yes. Thank you. And maybe just as we finish up here, obviously, we haven't announced our CHIPS grant yet, very soon, right? We're making that happen. But maybe just a final message for this audience. And here, the Intel Foundry Day, what's your message to them?

Get excited, get ready, get ready to lead the world. America is a great country because we are competitive, we out-innovate, we outcompete. And what CHIPS is about is a much bigger vision than just incentivizing 10 new fabs all around the country. If that's all we do, then shame on us. What this is about is getting flywheel going, developing a deep and sustainable ecosystem again in this country. Intel is this country's champion chip company. It's an American champion company, have a very huge role to play in this revitalization. And I just -- I'm excited. I'm ready to go. We did a big announcement yesterday. There's more to come, and I believe we will be very, very successful.

Well, thank you so much for joining us today.

Happy to be here.

Thank you, Gina, my friend, my partner, in this great incredible journey. Thank you again. We've described this as this critical underlayment. I'd just ask you, what aspect of your life is not becoming more digital? Well, everything is, your health care, your financial, your social. And with that, we simply call it Siliconomy, silicon and the economy becoming fused together in an inexplicable way. Today, 15% of every economic endeavor is expected to be 25%, and that's before we account for the implications of AI driving that more rapidly. And as stewards of Moore's Law, we see this relentless pursuit of more efficient, more capable, more scalable computing. And for that, we've been on this journey. And when we announced our Intel Unleashed, we also announced that we're going to get 5 nodes in 4 years. We're going to do something unheard of in the industry to return Intel to process technology leadership. And while we're not finished today, we see the end soon in front of us on that journey. And Intel 7, shipping and ramping in volume; Intel 4 with our Core Ultra launch, shipping and ramping in volume; Intel 3 is production-certified and will be with our server products launching in the first half of the year going into volume production. So with this, we've gone on an incredible journey. But then it continues into what we call the angstrom era. And for this, Intel 20A and Intel 18A; the adoption of RibbonFET, a new transistor structure of PowerVia, power delivery technology; the embrace of EUV for this, the first major new transistor we are protecting since 2012. And I'll tell you, I've been studying some diagrams for over 40 years, this is a MonaLisa, no, no. This is a Rembrandt, no, no, no. I think it's a Michelangelo, right, sculpted in silicon, right, for -- these truly are works of art. And I am thrilled for the progress our T-beams -- TV teams are playing to bring us back to technology leadership. And with that, the finish is 18A. And with that, we've already sent in to fab our first 18A products. And this is a test chip for Clearwater Forest. And Clearwater Forest, the Intel 18A top die, but then we're putting it on Intel 3 base die, a construction that you saw in the cartoon there that's being broken out that takes advantage of EMIB. It also takes advantage of Foveros Direct, the first copper-on-copper without solder ball bonding that will allow us to go to below 10-micron pitches between the interface of top and bottom die, the first-ever time. You're going to hear Chan talk today about our assembly and test technology, singulated die testing, advanced packaging capabilities, but the testing to go with it as well, how we're working with our partners in EDA ecosystem that are represented here, Synopsys, Cadence, ANSYS, Siemens, to enable these capabilities, delivering these advancements in technology. But also not just in our products, but for the first time ever, making them available to the entire industry. So I'm thrilled. This is what we call a family photo modem. So kids come to Papa. Here we go, 5 nodes in 4 years. And I do want to announce, describe and give a moment to our latest, newest 18A customer, my decades-long friend, Satya Nadella, speaking for Microsoft as the newest 18A customer. So let's hear from Satya now.

Thank you so much, Pat. It's great to join you at your launch event. It's clear that we are in the midst of a very exciting platform shift that will fundamentally transform productivity for every individual organization in the entire industry. To achieve this vision, we will need a reliable supply of the most advanced high-performance and high-quality semiconductors. And all of us at Microsoft are committed to supporting Intel's efforts to build a strong supply chain right here in the United States. That's why we are so excited to work with Intel Foundry Services and why we have chosen a chip design that we plan to produce on Intel's 18A process. We look forward to sharing more details in the future, and I can't wait to see all that we will be delivering together for our customers in the years ahead. Thank you so very much.

Thank you, Satya. And now that we see the light at the end of the tunnel and finishing 5 nodes in 4 years, are refinished now that we've gotten back to leadership? No. Having gone in this grueling track to 5 nodes in 4 years, Moore's Law, alive and well. And you're going to hear more about that today. So can I tell you more about what comes after 18A? Yes. And today, we're announcing that we're extending these nodes. We're adding major and minor nodes to it, a combination of older and leading-edge nodes to ensure our customers have access to the process technology they need. Today, we are announcing Intel 14A for the first time. You can think about this like 4 -- 1.4-nanometer technology, but Intel 14A venturing deeply into the angstrom era, 14A, first processing. But we're also announcing that we're extending our nodes, as you see on here, adding P nodes, enhancements to those existing adding performance capabilities, adding T nodes through SiliconVia, new feature enhancements with E nodes on the road map, filling out that road map of capability. Today, we're announcing for the first time Intel 16E, enhancements to our Intel 16 technology as well. So we're filling out that full set of nodes in the road map that we have to go beyond it. And for that, we're continuing to see a broader set of portfolio of interest from the industry. And we're thrilled to have Jason Wang here, the UMC President. We just announced a partner, where are you, Jason? You're supposed to be right there, so -- right. So Jason Wang from UMC joining us as well, a partnership to add a 12-nanometer node, building out a real foundry road map and working with our customers to continuously evolve our offerings on Intel's leading and mature node technologies. But as we've seen, as we've gone through this period of time, this AI era explosion, wafers are cool packaging, something that we sort of kept in the corner of Intel in private has gotten to be really cool. So Intel Foundry offers a broad set now of advanced assembly and test technologies. And we're under volume ramp. We're seeing more and more customers taking advantage of the capacity and the technology that we offer to optimize power to innovate an X, Y and Z as well, being able to take these technologies of EMIB and Foveros and Foveros Direct, bringing higher-density pitch and working on next-generation. Intel 25 years ago drove the standardization of organic packages. Now we're driving the next generation of glass-based packages and with that, the ability to directly interface with optics and waveguides directly into the package construct for the most advanced system capabilities as well. [indiscernible] this afternoon will give a full road map of these capabilities now available to the industry. And we've seen extraordinary interest from customers and the momentum that they have. And Intel Foundry has added a number of additional AI customers to our portfolio of packaging offerings as well. AI era needs advanced wafers, but it even needs more systems and packaging capabilities, an area that Intel is the clear leader in. And this now includes as customers some of the largest AI leaders in the world. And I'm happy to share that we now have expected lifetime deal value of over $15 billion of customer in our foundry customer business into the future, including the Microsoft announcement today, the advanced packaging customers that we described on leading-edge nodes as well as mature nodes. We're continuing to see great response from our customers for Intel Foundry. As I conclude my time on stage, today is a day 3 years in the making. And I couldn't be prouder of the team at Intel that has rallied behind this rebuilding of this iconic company. And you're going to hear from a number of those leaders today, bringing together the world's first system foundry capabilities for the AI era. And with that, it's my pleasure to introduce to the stage a friend for decades now and the zealous leader of our foundry services, none other than Stu Pann. Please welcome Stu to the stage.

Good morning. Thank you all for coming this morning. What I'd like to do is break down that top sentence: A Systems Foundry for the AI Era. First off, I want to show you why we believe we are a foundry. We have the table stakes, we have the ability to deliver what you need when you need it. I want to establish what is the system's foundry? A lot of questions we talk [ prestige ] systems of foundry, foundry of systems. What does it mean? And then I'm going to talk about why the AI era is driving significant upside demand for all of us and it's an incredible tailwind for us. But first, I want to offer a personal perspective on Intel, the company. The thing that the IBM PC and I have in common is that we both came to Intel in 1981. So a long time, 43 years. And so I have a sense of history about this place. And one of the things I'd like to talk about first is the people because it's the people that make this company. Our people can sense and feel this momentum. You can hear it in their voices. You can see it in their actions. You even get the occasional high five in the factory. They know that you don't need to be in Taiwan to build the world's most advanced semiconductors. They realized this 5 nodes in 4 years, this audacious goal that Pat laid out, you can see the checkmarks across all the boxes here. So it's an honor to represent the 52,000 scientists, engineers, factory people, logistics people or to manage, all this organization. We're ready to earn the right to be your foundry supplier. Nobody is going to give us that. We want to earn it. So that's one perspective. I want to offer up a second perspective. And this comes from Chris Miller, the author of the book, Chip War. This is a New York Times Bestseller, Financial Times Book of the Year. It took Chris 10 years to write it, and it's incredibly timely considering what Secretary Raimondo just talked about. He talks about the development of transistor on up to like the last few years. Now Chris in a speech in October said this quote to the employees, he said, "Intel is the most important company over the last 50 years." So I called Chris and I said, "Are you okay if I say this publicly?" "Yes, okay. Go ahead. Good publicity for the book." I've been associated with Intel, like I said for 43 years, 37 years as an employee, 6 years as the Chief Supply Chain Officer of HP. I came back to Intel 3 months after Pat did because I believe this quote to be true. And I believed it long before Chris said it. And what you're going to hear in the next 40 minutes or so is all the reasons why Chip War season 2 is about to begin. So let's start from the beginning. Gordon's original paper was called Cramming More Components Onto Integrated Circuits. It was published in 1965. Every time I read it, I'm stunned by how present he was. But if you read all through the paper -- and by the way, I know Pat talks about physics and Moore's Law and periodic tables, read the paper, it's also about economics. In fact, it's the foundation for Moore's Law. It's about driving strong economics. In the last section of the paper, Gordon remarks, "We've come to a day of reckoning." It may prove to be more economical to build large systems or functions which are separately packaged and interconnected. And this is why I believe we're in the era of the system's foundry. You can longer do just monolithic devices. You have to break it up. You have to address for thermal profiles. You have to address costs. You have to have flexibility. And this is all driving a new level of systems thinking into the foundry business. At Intel, we're no strangers to systems thinking. We started in 1980 with multi-bus, 1990 with PCI Express, the idea that you could put a common bus architecture inside of a PC and create whole new markets. We moved on to Centrino, where wireless created an explosion of notebook demand. And today, we're at the AI systems foundry, this idea that you have to do open architectures, reference platforms, open standards in order to foster all the innovation you need to go meet the demand of what AI requires. In this systems era, you not only have to have open standards between devices, you have to have standards on the device. Think about the fact of -- to do a trading model day requires 100,000 CPUs all running in concert, all on the same data set. The next round of training models will require 1 million CPUs. That's something that requires standards everywhere from chips inside to chips outside. This is what's necessary for our customers to succeed, and this is the fundamental reason why Intel is a systems company turning into a foundry, not the other way around. And that's what makes our entry in this market so powerful. So now that we've described system thinking, let's look at how the original foundry model was created. Now since [ CCA ] has been kind enough to mention us in his last few earnings calls, I thought I'd return the favor and talk about TSMC in my presentation. Now this was a presentation that Morris Chang gave at MIT last October. In it, he described the foundry model. He said it's research and development, it's wafer fabrication, it's advanced packaging. And he says, in the red line, "That's what TSMC does." And I said on the blue line, "Intel, everybody else does everything else." You might even call that an IBM 1.0 kind of manufacturer. Now TSMC has been incredibly successful with this model, disciplined execution, disciplined strategy, consistent innovation. But to quote Bob Dylan, "The times, they are changing." Let me tell you why. There's an idea of systems technology co-optimization where you look at application workloads, software, system architecture, memory interconnect, advanced packing packaging technology, core all these different things. What happens today is people focus on their layer and maybe to layer up on top of it. And in fact, this is really what a classic foundry does today. But we're now in the realm of the exponential. Sam Altman is going to come out later on this afternoon and talk about he doesn't have enough capacity to do what he wants to do. And as we talk to our customers around the world, we're now realizing that it's not just enough to do Moore's Law, it's not just enough to do a systems kind of implementation. You have to look at all of these combinations. You can get a couple of things right, but to do a system that coordinates the activities of solving a training model across 100,000 CPUs requires you to get all the gear ratios right. If you're mismatched in memory, if you're mismatched in networking, you wind up throwing away valuable cycles and valuable resources. So we've got to get 100x more out of what we're doing. So we described the evolution. Now let's build out the strategy and talk about what's the revolution in all of this. We'd like to think about this in 3 basic layers. First off, we have to be a world-class foundry, right? Roawan Chen, the CEO of Qualcomm, talks about the fact that silicon speaks. And silicon speaks in 4 different ways: performance, power, area and cost. Without that, you're not in the business. And so we're absolutely focused on making sure we are world-class across all 4 of those dimensions. On top of that, you have to have an ecosystem. We're going to talk about the ecosystem at length throughout the day. That ecosystem allows you -- is what allows you to take advantage of PPAC. The next layer of the triangle -- of the pyramid is all about resilient, sustainable supply. And that's what Pat just talked about earlier and that's what Secretary Raimondo talked about, this need to have capability around the world to build this and to build it in a sustainable fashion. The top layer of the pyramid is this idea of systems of chips. We're putting system inside a chip, and we're working with our foundry partners to create systems of chips. So let's walk you through what that means. Now Pat, obviously, was very proud of his children, his grandchildren and relatives, I'm not quite sure. So I won't go into a lot of detail on this, but I will point out to you, and you'll hear from Anne a little bit later on this afternoon, that what we do with 18A has been incredibly well received by the hyperscaler community. Why? Because 18A has 2 key attributes: one, it has, we think, the world's best transistor structure; but it also has this idea of power via this idea that you supply power at the bottom of the device. Why is that important? Because these AI devices are 1,000-watt devices. They take hundreds of amps of current. To do this the right way means you have to come up with a totally different way of developing backside power. And I will talk to you how we've developed that and why we think it's so robust. As Pat mentioned, we're extending out our node families. The thing I want to just spend a little bit of time on since you're going to hear a lot more about the road map is the bottom where it talks about tower, the partnership we signed with them just recently for our New Mexico factory and what we're doing with UMC. What's so important about those partnerships, those collaboration agreements is that they give us a way to load balance our factories to give us the best possible cost structure, take advantage of the investments we've made in tools, in people, in buildings and rounds out our cost structure dramatically. And in fact, we just are now in conversations with Tower about ways we can develop the next extension with them, possibly even 40-nanometer. It just started just recently. These abilities to take advantage of this world-class factory network and extend it in multiple ways is the thing that helps us get the C part of PPAC, the cost part of PPAC. By building at scale, we'll absolutely be able to hit that. The next part of the ecosystem is around all the folks you saw walking into this hallway, the 30-plus suppliers, the EDA vendors, the IP vendors, the people who're bringing complex IP so that when you get our process, you have the capability to design all sorts of things because we have a rich assortment of IP and EDA solutions. We're not asking you to pick a certain path. We're making sure we cover as many paths as possible so the way you do your business now is the way that you can do it with us. We round that out with design services and cloud providers. We just announced a partnership with Verity in order to help our customers build out complex ASICs. Our cloud providers run all these EDA systems at a cost-effective way. And lastly, we're creating a separate ecosystem for the military and aerospace customers. It's important that their needs are taken care of. So with folks -- with Cadence, Synopsys with Siemens, FlexLogic, Draper, Trust, these are the folks who help us develop specific things for military applications. And it's a very powerful thing for us as a country when they do that. So this is how we make it easy for our customers. And I would encourage you as you're walking out through the showcase -- and by the way, we sort of made it so you had to walk past them. So really duty-free same kind of thing. Talk to them. They have made an incredible investment with us, and we're going to talk a lot more about this a little bit later. Now the next layer of the pyramid, this idea of resilient sustainable supply. Pat touched on this. And later on in the afternoon, Keyvan will lay out targets for what that means because sustainable supply is not about PowerPoint slides. It's about a culture that works at this for decades. And I would strongly invite all of our competitors to match the targets that Keyvan is going to lay out. They are tough, they are demanding, they are essential in this world where we all want sustainable, resilient supply. Now there's another box in here on security. Why is security so important? In a speech given by Matt Kay at one of our federal conferences a few months ago, Dr. Kay talked about the need to give our troops asymmetric advantage in the battlefield. What does that mean? It means we give them today's technology today, not technology that was done 10 years ago. And in our discussions with the defense community, they've always wanted this, but we haven't found a way to take the things that they regard that give us that asymmetric advantage, the things that are highly confidential. How do you build it cost effectively? How do you get it out on time? By working closely with our DoD partners, we have solved that problem. And that's one of the reasons the U.S. government gave us a $1 billion contract a few months ago is to go take that to the next step to go be able to create this trusted secure environment. So the things that our colleagues in DoD know about, the things they want to embed in our silicon, but the things they want to protect will be done so in a secure fashion. And it's super powerful because we all want to give our troops asymmetric advantage. Now I talked earlier about this day of reckoning, what that means. It's happening now. We can no longer do designs at a monolithic level. We are now at reticle-limited designs, design sizes that are 800 square millimeters of silicon. The vast majority of customers we talk to are absolutely moving this idea of disaggregated design because we have to move beyond reticle limits and thermal constraints and by the way, even cost constraints because when you're building these really big die sizes, they're really expensive. Isn't there a better way to take advantage, as Pat talked about with Clearwater Forest, to take smaller tiles on the more advanced nodes, get better yields out then package them together, have more flexibility? To do all that really requires, if you will, a system on a chip. So you can see in the animation here how we build it out, and this is literally how we're going to build out in the factory, the idea of a substrate, the idea of base dies, the idea of logic tiles, the idea of IO tiles on the side. Why do this? It gives our customers the ability to optimally trade for what they need for their design. The things that you do for a training engine will be different than what you do for an inference engine. And only by having all these levers to go pull can you get this done. Now we learned a lot through a device called Ponte Vecchio or as the branding people call Intel Data Center GPU MAX Series. I call it Ponte Vecchio. It's an SoC. It's 1 billion transistor -- 100 billion transistor SoC. It's dozens of chiplet tiles, 47 of them. It's multiple suppliers. By the way, we coexist with TSMC in the same package, right? We develop testing techniques to go off and do that. We do this idea of singulated die test. What does that mean? It means every single die that goes into the package is a known good die. Why is that important? Because you want every one of them to be good. The assembly test yield on this device is 95%-plus. It is the Super Bowl of integrated design. Now what do you do with it? Well, if you're Argonne National Labs and our partner HPE, you build a really big supercomputer. And they built a computer that was 66,000 Ponte Vecchios, 20,000 Sapphire Rapids. And it looks like this. Okay. What do you do with something like that? Well, you solve some really hard science problems. If you want to model the airflow across the wing, you can do that on a workstation. If you want to model the airflow across a plane, you do it on this. If you want to model fusion reactions, which are pretty tricky things to model, you do it on a device like this. If you want to model cancer curing drugs at the molecular level, you do it like this. It's 600 tons of compute. It's 4 tennis courts. It is the weight of an Airbus. It has 300 miles of optical cable. It takes 34,000 gallons a minute to cool. By the way, you're faucet at home, a gallon a minute. 34,000 gallons a minute. So when we talk about how to design this stuff, we have to find ways to make this more power-efficient, to make this more cost-effective. This today is the second fastest supercar in the world. By the way, at 100,000 CPUs roughly, to handle the demands of AI, we're going to go far beyond that. And that's why this idea of scalability is so important. Now let's go through the top of the pyramid, this idea of systems of chip. Systems of chip require, as Pat mentioned, great packaging technology, and we're making that packaging technology available to all of our customers. It requires this idea of standard. We've created a standard called UCIA, which allows chip-to-chip connectivity. Think of it as the PCI Express of what we did back in the mid-'90s, this idea that you can add, mix and match. By the way, you can mix and match different foundry suppliers. We like that because we're sort of an underdog in all this. Some of our competitors, not so much. But our customers want this kind of flexibility. And we're going to talk extensively about this later in the afternoon. June is going to talk about optical interconnects, as an example. But there's one thing I really want to point out at the bottom, and that's at little IEEE signal for Ethernet. So as you can see from the rendering, what we're doing is taking systems on a chip. And with new Ethernet standards they're working closely with a number of partners, you were going to be building systems of chips. Why do you need systems of chips? Because it's the same problem I mentioned earlier. You need to train models with 100,000 CPUs now and 1 million potentially down the road and then maybe up to 10 million. When you're moving and coordinating data across all of these devices, you need to have standards in activity, and that's what we provide. And really, when you think about it, what is -- what's it going to take to bring AI everywhere? How do you make it cost-effective? How do you make it capital-efficient. Yes, yes, I know Sam is asking for trillions, but we want to make sure he's spending all that money in the most cost-effective manner possible. So let's break that out. You have data center chips doubling year-on-year, but the efficiency needs are the things that are really eye-catching. New York Times ran an article that AI could soon need as much electricity as an entire country. So I'm sure you're curious like which countries? Sweden, the Netherlands, Argentina. If you were to run all of the AI servers that market estimates have on DGX to DX-100, those kind of devices, you would take 85 to 134 terawatt hours, terawatt hours. By the way, the great state of California, its entire power generation capability today is 30 terawatt hours for the entire state. So bringing AI everywhere is going to require us and our foundry partners to figure out how to do this cost effectively. And this is why the essential elements of an AI foundry are these things. Start up with us is stewards of Moore's Law, right? The idea that we're going to double the amount of transistors every couple of years and make them power-efficient. Add that with continuing systems innovation. One size won't fit all. And in this AI era, foundries are going to have to do a lot more. So what I'd like to do is sort of build that out, you -- Bob for you for the next 5 years because this is what this road map is going to take. And this, I think, is what makes us different than other foundry approaches. You have to start off across, first off, with table stakes. As I mentioned, you have to start off a great process. And with what you'll hear from Anne and June, Keyvan, we have a great process delivered at scale. Add to that, packaging, which is, we believe, a unique differentiator for us. Why? We build a lot of server parts. And we're taking everything that we learn from our server business and offering up to our foundry partners. These are table stakes, and this is what it takes to be a foundry player. And we'll innovate for the next 5 years, and I think this is what -- one of the conversations we have with customers that's so intriguing is we're not just won and done. We have this planned out literally across all these dimensions for the next 5 years. So in substrates, Intel is the world's largest consumer of substrates. So as such, we play a pretty influential role in how substrates get driven. Later on today, June is going to talk about this idea of glass substrates. Why do you care about blast substrates? You can put a lot of parts in a package on a glass substrate. It doesn't bend. And we're going to work closely with our partners to give the world a new way of looking at substrates through glass. Let's talk about cooling. I mentioned that Argonne needs 34,000 gallons a minute to cool it off. The next wave of devices are going to have to be immersion and cooled. And today, Intel's Xeon product line is the only product that offers an immersion cooling warranty. Immersion cooling allows us to deliver power much more effectively in a data center. We're going to take what we've learned there, and we're going to offer that up to our foundry customers so that when you start looking at 2,000-watt devices 5 years from now, we're going to have a way to cool those. Memory. Pat mentioned this idea of a base die technology. We're working with all the major memory manufacturers right now. How do we optimize that interface for HBM3e, for HBM4? How do -- perhaps do we put memory on the device itself so it's more computationally cost-effective? And over the next 5 years, you're going to hear us talk a lot about new technologies and new ways to increase memory bandwidth while decreasing need for energy consumption, 5-year kind of look. Interconnects. Interconnects between chips, the idea of having high-speed SerDes, high-speed interconnect, all the things that you expect from a foundry provider is what we're going to give you, and we're going to plan out for just what's out there today. Keep in mind, as a standards company, we do this across all different standards, and it's our job to make those standards available to all of you. And last -- but on that, networking. Think about a NIC card that's capable of handling demands of AI modeling. What you do with Ethernet today isn't good enough. So we're working closely with a number of Ethernet standards partners to figure out ways how do we make Ethernet more capable to develop the idea of systems of chips, and Ethernet provides that low-cost, high-bandwidth potential to go off and do that. Add to that photonics, add to that technologies beyond that. Here again, it's another 5-year road map. And then lastly, we have 18,000 software engineers at Intel. Why don't we harness those software engineers and help people figure out how to make these systems boot up, how to develop the firmware and software necessary to optimize and get those gear ratios absolutely correct? So for us, this is what true systems foundry means to us, and it's why we believe we have a differentiated approach in the marketplace. The only way we're going to get to this exponential scale is by taking all these elements and multiplying them together. And that's why we think we have a new way of looking at the foundry business for all of you. To do that, we can't do it alone. We have to have partners. And we're doing everything we can to give our customers choice to have a full stack of availability from a number of EDA partners, to do systems technology co-optimization, to have open standards and reference designs available to speed the innovation that these fundamental technologies provide. And we're not going to just do it with the folks of today. We're also going after partners to fuel the next wave of innovations. Intel Capital makes equity investments in start-ups. They make strategic investments in scale partnerships. They make ecosystem investments for foundry at scale. And there are a number of examples that Intel Capital has successfully invested in that people are bringing unique technology, Air Labs, a photonic start-up, doing some incredible work in photonics. That's how we're going to capture customers large and small. But we have to start back even further than that. We have to go to universities and talk to them about what do the students need to learn as Gina Raimondo said, how do we create an engineering population capable of taking what we're doing in these factories and making avail broad-based? So I'm proud to announce today that we -- our first 18A partners, the University of Michigan, my home school; and Berkeley, Sujay's home school, no connection whatsoever, 500 academics, 60 research group, [ 100 use ] test chips, what we're doing with UVM and with Berkeley is we're finding a way to bring 18A and make it available to students today's technology, not yesterday's or 3 years ago, but today's technology. And we're developing integral waves to provide little tiny shuttle seats that students can run their test chips through our factories. And it's going to be fascinating to watch this develop as we go out and embrace the university community with this new technology. So we have more things to talk about -- oops, I'm sorry, go back one slide. We're not only doing this with partners and universities with Intel Capital. This morning, we're announcing a new partnership with ARM, merging business initiative. How do we take advantage of all the programs that ARM has to offer to bring design capability, design education out to all of their customers? We're doing this with ARM. We will make co-investments. We'll do joint programs. We'll provide shuttles at scale. ARM will provide IP at scale. And this is how we're going to fuel this next wave of innovation. And it's truly exciting. Now I mentioned we have our 30 ecosystem partners out there in the hallway, but there are 5 of them coming on stage today that I'd like to talk to you about. ARM -- oops, there we go. ARM, ANSYS, Cadence, Siemens and Synopsys, the big 5, the folks that you turn to when you're doing their designs. So after the break, you'll hear from the EDA CEOs. And a research report that I read yesterday, one of the commentaries remark is the ecosystem really going to show up. If they're really going to be here, what are they going to say? What you're going to hear from these 4 companies is hard data, not marketing slides, so there are a couple of slides on AI. You'd expect that, hard engineering data. What does ATA performance look like? What does it take to design with it? What are they seeing from us? Why do they like what they're seeing from us? And why they view us as a great partner in this journey? But for the next few moments, I want to talk about our most important partner, and that partner is, believe it or not, wait for it, Rene Haas from ARM. So what I'd like to do now is invite Rene come up on stage with me and talk to you about what we're doing with them.

Hello, sir.

So good to have you here. So Rene, first off, it's really unusual for an Intel business unit leader to make this statement: ARM is my most important business partner. And in what kind of universe would you've ever thought that you'd see ARM and Intel standing together. But this is a brave new world for us. And when we started talking with Rene and his team about a partnership, we rapidly came in the realization that 80% of the wafers TSMC runs has an ARM device in them. There is no way you can be in the foundry business without a partnership with ARM. And so we kicked out discussions months ago. They have been absolutely fascinating. And I think you'd like to probably tell us about a few of them, starting with perhaps the announcements you made this morning.

Yes. Well, thank you for having me. As you said, this is a bit of a strange bed fellows. I was trying to think of a parallel that I might give relative to the story. And the only thing I can kind of think of is for those who can harken back is when Walt Mossberg asked Steve Jobs what it was like to see iTunes run on Windows. And I think he said it was like an ice water in hell. But I won't go that far. I won't go that far. No, it's been fantastic. We started these conversations not long after I took over as CEO at ARM because we felt fundamentally that the technology that Intel was bringing to bear, as you've just shown earlier between you and Pat, is industry-leading, industry-changing. And we need to be a part of it. So thank you so much for having us.

Great to have you here.

So the announcements that we made earlier today was around our Neoverse product line, which is the product line that we use for the data center, which has just been exploding. It was in a very, very high-growth trajectory prior to the AI wave, and now it's become even stronger. The Neoverse V3 that we announced today, which is 50% faster than the Neoverse N2; and then our N3 Neoverse, which is 20% faster, but also much more efficient. And when you think about these AI data centers, which are pulling hundreds of megawatts and more, efficiency matters. So today, it was a big day for ARM. We just made that announcement earlier today.

Congratulations. We're super excited about it.

Thank you.

So let's talk -- I've been in many, many meetings. Our teams have been in many meetings. And yes, as we talked to, I remember, one of the senior staff members of ARM said, Lily, one of our lead engineers said, "You don't talk to us like a foundry, and that's good because we're doing so much in the way of systems innovation." Just maybe talk about the dynamic of how we're working together.

Yes. The transparency is required. We're working on cutting-edge technology. When you talk about 18A and system foundry in the packaging, this is the tip of the spear in terms of innovation. So when the engineering teams are working together, we need total transparency, seamless communication. We need to act like we're working with Intel Foundry and not the side of the house that we might be considered a competitor. And you guys have been terrific. It has been an absolute joy to work with your groups. The level of engineering engagement, the depth of the technical discussions, the information that we get, we would not be able to announce the partnership that we've forged without it.

Thank you. We appreciate that. So we've had a lot of discussions about process technology. And how do the engineers feel about what they're seeing?

It's great. I mean the results so far are terrific. I think later today, Ann is going to show some very specific detailed data about what we've seen from a performance standpoint, also in terms of area. And I think you'll see it's compelling. You guys have done a great job, and we are ready to take that next phase and have customers start using the product.

So one final question for you. We talked a little bit about Faraday. Talk a little bit about what the role Faraday plays in Neoverse and CSS. And what -- maybe define for the audience what is CSS and why is it so important for everybody here in the audience?

Yes. So we announced a new strategy some months ago around what we call compute subsystems. And the way to think about this is essentially rather than ARM delivering blocks of IP a mesh network, a memory controller, the CPUs themselves, we deliver a full subsystem, fully verified, completed. That is if you want 64 cores, 96 cores, 128 cores for a CPU, we deliver everything in terms of that system, validated, verified, and it will work. Now one of the benefits of this is simply the fact that time waits for no one, the classic quote. The amount of time it takes to design these SoCs is really, really hard and it's really, really long. If we're delivering final IP to a customer, they still need to put all those pieces together. If we can put all of that together for them prior at the same date they would have got the block of IP, that's a huge, huge benefit. And then when you add on to it, the processing cycle times that are getting longer and longer, I know you guys are doing your best, but more EUV steps means more complex time through the fab. And that just means that, ultimately, the processing times are long. You have complex packaging, that adds a lot of time. So anything you can do on the front end to benefit the design time is really beneficial. So we announced this program called ARM Total Design, of which Intel is a partner. And in that model, customers can come to their partners and work with those folks to get their design out. And that's what Faraday is. So Faraday is basically doing that. They'll be able to put their IP together with our blocks and something that just "works." And everyone wins. The products out faster, it's compliant, and you know it's going to work.

Outstanding. Rene, thank you for coming and joining us on stage.

My pleasure.

Totally appreciate the partnership and everything we're doing together, everything we're going to do to together. Thanks again.

Thanks all.

Okay. So we're now moving to our fireside chat. It's my pleasure to bring on stage Eric Fisher, President of MediaTek North America; and Dr. Zhang Ling Lee, Vice President, Central Engineering for Broadcom. Folks come on out. So before we get started, Eric, tell us a little bit about MediaTek and what they're driving for and maybe some words on what their AI strategy is, but mostly what is MediaTek doing today? What's their big focus?

Sure. It's an interesting company. It's an exciting company. We are -- we've had a nice little spurt of growth here in the last 4 years. We've doubled the size of the company since 2019 or pretty close to that. And it's really been driven around 4 key areas of focus and investment. First is our investment and our capability and our modem technology, trying to make sure that we stay differentiated in a leadership role in modem. Second is our WiFi connectivity technology. And the third area for us is really making sure that we keep a focus on high-performance, low-power design methodology around our ARM-based SoCs. And the fourth pillar for us is our investment capability in AI, particularly at the edge, given the number of devices that we service across the edge and really staying focused and investing in our capabilities there. And what that's done for us is created the breadth of products we have today. We're in everything from mobile handsets, where we have a #1 market share position in Android-based handsets. We are in TVs with our SoCs, we're in tablets with our SoCs, we're in OTT with our SoCs. And then in addition to our traditional markets, it's allowed us to pivot into new markets where we're gaining momentum in automotive, gaining momentum in data center and carrier infrastructure and then, of course, industrial and IoT.

Outstanding. Yuan Xing?

Well, thank you, Stu. It's truly an honor to share the stage with you and Eric today. Broadcom, as you know, we offer a broad range of semiconductor enterprise software and security solutions. We provide connectivity from the edge to the cloud. As an example, at the edge, we have WiFi and broadband products, connecting consumers enterprises to Internet. And you move to the service providers, where we have routing switching products, powering the core and metro networks. On the cloud and the data center space, we have server storage connectivity, optics and networking products. So we take pride the fact that 99% of the world's Internet traffic passes through at least one Broadcom chip. So as a technology company, we look to continue to invest in key areas like AI and the HPC workloads. So AI, as we all know, has reshaped the industry landscape completely. We have gone from CPUs to GPUs to now the clusters of tens, maybe you said hundreds of thousands of GPUs interconnected together. As large language models are getting larger, so are the clusters. And the online workloads are running on these clusters also have started evolving the Ultra Ethernet Consortium, which promotes the open hardware ecosystem has been formed. And Intel and Broadcom are the 2 proud steering members of the UEC. So UEC provides the connectivity technology, mainly Internet technology, which acts both the front-end and also the back-end network of the clusters. So I also like to mention about the optics. Optics are used to interconnect clusters and within clusters, coppers are used for interconnecting, thanks to Broadcom's industry-leading, long-reach service technology. And as you are trying to build larger systems, the line rates going from 100 gigabit per second to 200 gigabit per second plan, it becomes apparent that the co-packaged optics that you mentioned as well, silicon photonics-based technology becomes necessary to allow economy of scale and also to provide additional about 40% power reduction in the year of AI. So that's the market we are going after.

Yes, and that's outstanding because yes, we know today from published papers that only 30% of the flops in these big systems are effectively used. And a lot of it goes to waste. So having that kind of net is so important to get this right. So I'd like to maybe perhaps just move on to a couple of questions for you. Eric, we started with MediaTek a few years ago, back in this really disruptive supply chain area. And as you first started working with us, what were your considerations? But how do you feel about the journey? And what do we do together? And how do we address issues together?

So the things we looked at as we look for new partners, our capability and credibility for sure, diversification, resiliency in the supply chain and making sure there's a global footprint. And then kind of the partnership, how are we going to work together and the capabilities that partner brings. So when you look at where we started with Intel Foundry, the credibility and capability was there, right? Intel has been investing in silicon manufacturing for well north of 50 years, and I think that provided a lot of confidence to the team that clearly implements what they're doing in that space. And then you've got other factors to consider as well is you've got this massive dependency on the silicon from a global application perspective across all industries. So it's crucial to have diversification across your supply chain. It's crucial to have resiliency across your supply chain as well. So those were factors we took into consideration. Also having a really strong partner. One kind of interesting fact is MediaTek ships north of 2 billion chipsets every year. And we need somebody that can scale, and we can get a steady, competitive and innovative supply of technology and components. As you know, we've got a long history of having a diverse supply base. And we push really hard on our partners, and we have high expectations. And we felt that Intel could step up and meet and exceed those expectations. The final thing that we looked at was what else other than foundry could we get, and you showed it earlier on your screen, right? So you talked about packaging and substrate interconnect capabilities. All those are really important to having -- when you look at a partner, not just foundry but having access to all those other technologies and capabilities as well. And we think that with this partnership with Intel Foundry that we can accomplish our strategic goals really around diversification of our supply chain and keeping that resiliency high.

Thank you for the vote of confidence. Yuan Xing, your thoughts?

Yes, sure. As an industry, we are used to the doubling of bandwidth, throughput and performance from every new generation of products, those developments. And as we look at the content growth, essentially, despite all the innovations on the design side that we do, the chip already almost approaching the full reticle size of the [ ezographic steppers ]. So we would have to restructure the chip architecture and the system solutions because content grows faster or much faster than the process can scale. So you would have to disaggregate the main compute jobs into multiple dies across multiple dies. When you do that, you essentially try to mitigate the area scaling challenge. And then scalable content like analog, IO stuff, they could be left done less advanced nodes. Furthermore, the on die ramps, for instance, could also spill from the main dies to maximize the real estate -- silicon real estate for the main dies. All those sort of things are done through chiplet technology. Chiplet technology has gained traction -- significant traction as an industry trend. We want to thank you, Intel Foundry, for driving the chiplet technologies forward. And then in the chiplet technology, essentially, at the end of the day, product is no longer just one chip. It is a collection of mainly heterogeneous tiles or die. They're interconnected laterally or vertically through some very fine interconnect technology, as we point today, to accomplish the one complete product function. So in my perspective, that is really the trend we're going after.

And I think in the conversations we're having now, we're really exploring how far can we push this technology, some of the switches you do with Tomahawk switch, for example, thousands of connections. I mean these require huge packages. And I think we've had some fascinating engineering discussions on what that might look like in the future.

Absolutely. We have been looking at your technology for a while. And so chiplet technology addresses area scaling challenge. The power challenge must be also addressed. The backside power, as you asked through in the morning, does provide -- is promised to provide significant savings on both area and the power, mainly for power reason. Those are the much needed additional area and power benefits that customers are looking for. So again, I want to, again, thank your team for a very strong support and excellent collaboration. And we've been looking at your technology and working together to evaluate your technology. And we're going to look through all those offerings that you have, and we've been actually going through the process. And then we'll assess the suitability of applying the offering from your foundry -- Intel Foundry to the needs of our products.

Yes. So Eric, we've got some interesting things that we've have learned over the years with you. We first started out, right? Things -- we learned a lot. I wonder if you talked about the experience you heard from your factory people, how we did, what we learned, where we're at?

Sure. I think I can kind of put it into 3 kind of buckets, if you will. One was the experience around the engagement on the enablement side. And in that particular bucket, as I'll call it, I guess, is the team really looked to align with your teams to figure out how do we optimize, right? How do we refine the designs? How do we work best together to maximize power, performance and area. And I think what we found -- the team was very pleased with we got to a point where, Intel Foundry really leaned in, in many cases, put people on site from an engagement perspective, working side by side to help us with those things to help us make sure that we understood how your process worked and it was optimized with the tools and then your team understanding what our design priorities were. And so that design engagement was really critical in that enablement side. And there's multiple instances where the team was really pleased with the engagement and the reaction that Intel took to support us. The second part of this is just the overall interaction around fab and -- fab operations and manufacturing readiness. The team really felt that Intel listens to feedback and that they were open to that feedback that they would take the time to thoroughly understand the issue and then respond in a way that address the issue. And it might have taken a little bit of time to understand it, but once we figured it out and there were commitments in place, the -- Intel quickly executed to it. So I would say that the comment was made that there is exceptional capability from a fab operations perspective from our team. The one challenge we had early on was in the test chip yields, as you're well aware. And the team was really pleased with how quickly the Intel team reacted and worked with our team. And in less than 9 months, we went from really challenging yields to very, very competitive yields. And the team, the word that they used was remarkable progress on that. So the yield ramp was exceptional. Once we got it, the challenge is fixed. And then the third part that I would comment on is just the overall mindset and in the culture of Intel Foundry focused on our success. We believe that Intel truly understands what it's required to be a foundry partner, what our -- what we need as a customer. We think that they've made significant adjustments along the way, both organizationally and in their process and workflows, over the last couple of years. We found them, like I said earlier, to be very open-minded in their approach, very customer-oriented and making us successful. And so overall, the team is very confident that with the level of collaboration and teamwork we have with the Intel Foundry team and the commitment just to continuous improvement that the partnership is going to allow us to really effectively service our customers going forward.

Well, we truly appreciate your feedback in talking to our customers this morning. Yes, I think what you've heard from our 2 customers up here on stage today is we are committed, we are listening, we are providing what I hope to always be exceptional service and support. And we have the table stakes necessary to make both Broadcom and MediaTek successful. So with that, thank you for joining me up on today. Really appreciate it.

Thank you.

Thank you. Thank you. Appreciate it.

Okay. So I hope the last 90 minutes of discussion this morning has helped illustrate the progress that we've made as a company. I think you'd see what we've established is a strong foundation of technology and innovation across multiple dimensions. I hope you see that we have a resilient, secure, sustainable supply chain. I hope you see that we have this idea of a systems foundry that allows us to create not just systems on a chip, but systems of chips. So to finish out my talk, I'd like to go back to where I started, which was our people because our people, as you heard from Eric so eloquently speak about, our people is what makes the difference, their commitment to be in this business. They're the ones that make the everyday miracles of physics happen at scale. So our factory teams are also the teams that inspired the iconic Boney man. This is an ad rolled at the Super Bowl, 1997, the year the Green Bay Packers beat The Patriots. The halftime show was the Blues Brothers and James Brown, and it was 8 years after Taylor Swift was born. I had to. I can't associate Super Bowl without Taylor Swift. And this commercial was iconic. But things have changed a lot over the last several years. And that change is only going to accelerate as AI impacts your work, your business, your life. AI is a key theme today for our next session, when you return, our EDA partners are going to talk to you about how AI has impacted the design cycle. AI improves the capability for your engineers to do so much more with so much less effort. So what we decided to do with this commercial was take a generative AI view of it. So this commercial, nobody people were harmed. We did 100% AI-rendered. It was done by a very creative director, Dave Clark, out of Los Angeles. And he's a big advocate of using AI tools, not to take away creativity but to amplify creativity. So as you leave our session today, remember this, that the only limitation to what we can do with AI is your imagination. Thank you.