Intel Corporation (INTC) Earnings Call Transcript & Summary

Wow. Wasn't that exciting? Welcome, and thank you for joining us as we reintroduce our company to you today. I'm Sandra Rivera, and it's my honor to lead this new chapter in Altera's history. For those that don't know me, I've spent the past 2 decades leading several Intel business groups, including Intel's networking business and most recently, the Data Center and AI business, which included the Programmable Solutions Group. I'm an engineer by trade and an entrepreneur and business leader at heart, and I'm excited to have the opportunity to continue Altera's proud history. Over the past 40 years, Altera has been at the forefront of delivering leadership FPGA innovations. We brought to market the first programmable logic device in the early '80s, introduced the first FPGA with 116 gig transceivers and we're the first to demonstrate devices with integrated optical interconnects. Today, we're delivering leadership through chiplet-based design where we shipped more than 10 million chiplets in our products. As we move forward and operate as a stand-alone company, we're committed to remaining your trusted partner. Our customers and partners are at the center of everything we do, and your success remains our primary focus. Altera's mission is to bring to market leadership, programmable solutions that are easy to design and deploy, and our vision for the future is lofty. We will deliver the innovations that unleashes extraordinary possibilities for everyone on the planet. Accomplishing this means more than being your FPGA supplier. It requires partnering closely with you to gain a deeper understanding of your biggest challenges and delivering the solutions that will accelerate your business by unlocking greater opportunities in this rapidly evolving world. Today, businesses are dealing with many demands as technology shapes our lives and transforms nearly every industry. The rise of artificial intelligence is adding even more complexity while representing a massive opportunity. As organizations look to adopt the latest innovations, they're choosing programmable technologies like FPGAs in their solutions. FPGAs provide users with the flexibility to adapt to rapidly evolving trends and industry standards while giving businesses the agility to customize their hardware and differentiate themselves from their competitors. Altera's solutions are optimized to target a broad range of markets and use cases ranging from networking and communications infrastructure to low-cost embedded applications, and we provided best-in-class developer experience to accelerate deployments. As technology continues to shape the world around us and businesses look to incorporate AI and other advanced features into their organizations, we believe FPGA adoption will continue to grow. For the FPGA market, we estimate a cumulative TAM greater than $55 billion over the next 5 years, driven by growth in all key market segments. And as AI becomes more pervasive, FPGA adoption will continue to grow, primarily centered on AI inferencing and embedded applications where most data is expected to be generated. The AI opportunity for FPGAs alone will be over $3 billion by 2028 based on third-party estimates. And since we're just at the beginning of the AI era, we believe this is a conservative estimate with lots of headroom for growth. Over 75% of our customers have told us that they plan to deploy FPGAs in their AI solutions over the next 3 to 5 years. We believe AI will unlock even greater opportunities for programmable silicon as the industry develops new solutions that combine the flexibility of an FPGA with the need for greater intelligence. While the AI opportunity is large, it's not the only area driving our growth. FPGAs' key value proposition remains flexibility and programmability, which enable customers to adapt to changing market demands while extracting greater value from data. Our devices tend to be at the leading edge of innovation and provide customers some of the earliest access to the latest advancements in process, packaging and interconnect technologies. FPGAs are an ideal solution for intercepting evolving standards like PCI Express, Compute Express Link or CXL, Ethernet and 6G wireless. This is why FPGAs have been a vital innovation engine for the past 40 years and why the future for growth remains strong. To hear more about how our customers are using our products to drive their latest innovations. I'd like to now welcome Dan Feldstein, the CEO of Crestron, to share his experiences. Hi, Dan. Thank you for being with us today.

Hi, Sandra. Great to be here.

So Altera and Crestron have been working together for over 15 years, and I wanted to ask if you could share a bit more about how you're using FPGAs in your innovative solutions.

Yes, absolutely. Crestron's success has always come from our ability to recognize the needs of our customers and our industry and to quickly develop technologies to meet those needs. After the invention and adoption of HDMI, we recognize that to transition to digital video would require solutions to move that content around large homes and facilities. Originally, digital video was primarily used as a point-to-point solution like connecting a DVD player to a TV that was located very close by. In very large homes where you might have multiple DVD changers in an equipment room connected to multiple TVs all around the house or in a large auditorium with multiple displays that are spread all over the room, different solutions were needed. We developed complex digital matrix switchers to accomplish this. Our DigitalMedia line, Crestron DM for short, required us to process a tremendous amount of data very quickly. We couldn't use a processor running software because it would be too slow and designing the circuits around discrete components would be too inflexible when working with rapidly changing cutting-edge technology. We turned to FPGAs as an ideal solution to provide hardware-like speed with software-like flexibility. We chose Altera then PSG as a partner because we felt they had the best product, best support and intellectual property that would allow us to jump start our development process. We estimate that we were able to get to market 40% faster because of this partnership. Our DM matrix switchers could handle systems up to 128 inputs and 128 outputs. When our customers require solutions that were even more scalable and can work over existing network infrastructure, we added audio/video over Internet protocol solutions known as Crestron DM NVX to our portfolio. These AV-over-IP solutions are also built around FPGA technology. They provide zero latency, visually lossless high-definition video, audio, control and USB distribution from an unlimited number of sources to an unlimited number of destinations. And since we built these technologies around FPGAs, our products have evolved over time and now incorporate features and functionality that didn't even exist when we designed the hardware. In fact, someone who purchased a device from us 13 years ago has a better product today than the day they bought it, and that's an important part of our sustainability story. For these reasons, our DM NVX line has become the dominant AV-over-IP solution on the market today, and I'm proud to announce that we have just surpassed 1 million units shipped and still going strong. Our combined portfolio has consumed over 2 million FPGAs to date.

Wow, congratulations on that fantastic company milestone, Dan, Video processing is a great use case for programmable logic. Can you share a bit more about what you see as a feature of our partnership?

Sure. One of the many things that we've appreciated about the partnership is the continual engagement in solving our challenges together. This was the case before the Intel acquisition and well after, and we're confident that we'll continue to receive the same attention and care going forward. Having a company focused on FPGA development with the backing and support of Intel seems like the best of all possible worlds to us. I know our engineers are currently evaluating the capabilities of the new Agilex 5 products and are very excited about the possibilities, so thank you for your continued commitment to this technology.

Well, you're welcome, Dan. And on behalf of our entire team, I just want to thank you and look forward to all the innovations we'll drive together in the years to come.

Crestron's work with Altera is just one of many examples of great innovations we're driving in the industry. Operating as a stand-alone company enables us to create more value for our customers and partners. We gain agility, much like a disruptive startup, while leveraging our 40 years of experience and our well-established portfolio of programmable solutions to drive innovations in the market. As part of Intel, we learned, innovated and succeeded together. We brought to market the first FPGA-based SmartNICs and IPUs that integrated FPGAs alongside Xeon processors, and we combined FPGAs with Intel IoT devices to enable end-to-end smart factories. We also leverage Intel's manufacturing and packaging technology to deliver several innovations across our road map, including advanced chiplet designs and high-speed I/O integration. This focused speed and agility will drive greater value for both Altera and our customers. The foundational pillars of our strategy are built around exceptional customer experience, our leadership portfolio and our talent. Our leadership programmable solutions are supported by a best-in-class developer experience and a resilient supply chain to meet customers' product needs. We deliver these solutions to market through a robust partner ecosystem that includes design support, tools and an extensive portfolio of IP built to accelerate design. This strong foundation built around our ecosystem partners and a world-class engineering team helps to ignite innovation within our customers, enabling them to rapidly deploy programmable solutions across the cloud, network and the edge. And I'm happy to say we're executing on this strategy today. We have a complete portfolio of high-performance, midrange and cost-optimized silicon and board products all shipping today, including our industry-leading Agilex products. And we're executing on a comprehensive road map of end-to-end programmable solutions. We recently announced Agilex 3 FPGAs, which will enable us to penetrate a larger share of the embedded and low-end segment of the market, and the significant investments we have made in software and IP help customers take full advantage of differentiated capabilities in our hardware. Between our Quartus software, our AI Suite, P4 and Open FPGA Stack, we're enabling a faster, broader and simpler developer experience. Today, Quartus delivers best-in-class compile times and helps customers accelerate timing closure on their toughest designs. On average, our software with Agilex 7 FPGAs delivers a one-speed grade advantage over competitive 7-nanometer devices. This comprehensive portfolio and our expansive partner ecosystem allows us to scale across thousands of applications in every key market. Underpinning our strategy is a relentless focus on execution and delivering solutions to market on time. We recently hit several key milestones across our Agilex portfolio. Our Agilex 9 RF FPGAs are now in volume production. These solutions serve the highest end of the application spectrum and feature the industry's fastest data converters. They are ideal for use in the highest bandwidth mixed-signal applications. Our high-performance Agilex 7 FPGAs have completed the production rollout with all F and I-Series devices now released to production. These families feature the industry's highest data rate transceivers and address a wide range of applications. They also offer 2x better average performance per watt versus competing FPGAs. Our flagship midrange Agilex 5 FPGAs are optimized for power and performance and are available today and now supported by 8 new board partners. These Agilex 5 FPGAs are the industry's only FPGAs infused with AI and are designed to deliver high-performance with lower power consumption and small form factor applications. They offer best-in-class performance and 1.6x better performance per watt than competing products. Our value line of FPGAs is Agilex 3, which target power-constrained applications that require cost-optimized devices in small footprint packages. All these products enable us to broadly serve our customers with solutions that are optimized for their unique application requirements. This includes the broader use of artificial intelligence. Today, nearly every conversation we have with customers includes the topic of AI. Altera FPGAs are used today in AI applications across a wide range of customers. Eight of the top 10 cloud service providers use Altera FPGAs to improve data and network management. Companies like Positron AI are using Altera FPGAs to lower the total cost of operations for large language model deployments, and Lewis Rhodes Labs and EXOR International are using Altera FPGAs to solve data bottlenecks and increase real-time defect detection at the edge. We're taking a significant step forward in advancing the use of our products in AI use cases with Agilex 5, which features tensor capabilities distributed throughout the entire compute fabric. Customers can leverage these enhanced capabilities using the same FPGA's design flow with Quartus Pro and our FPGA AI Suite. We simplified development by delivering deterministic latency and immediate access to higher [indiscernible] capabilities and floating point accuracy. Our hardware, software tools and IP enable customers to rapidly deploy FPGAs as a flexible AI accelerator. To talk more about their vision for AI and the role FPGAs will play, it's my pleasure to welcome Kara Sprague, Chief Product Officer for F5. Hi, Kara.

Hi, Sandra.

Welcome, and thank you for joining us.

Thanks for having me.

I wanted to ask you about how F5 is using FPGAs to bring innovative solutions to the market.

I'd love to talk about it. F5, as you know, is a leader in application security and application delivery solutions, and our customers use F5 to make sure that their applications and the digital experiences that those applications power are as performant, as reliable and secure as they need them to be, which we all know these days is really, really important. Well, the secret sauce to our hardware solutions, which is a big part of our portfolio, is FPGAs and the programmable logic that we use to make sure that those functions for application delivery and security are running really, really fast. So for example, our networking cards are absorbing huge amounts of networking traffic at the full line rate, right, because we're in the data flow for applications, and so we use these FPGAs for deep packet inspection, and we can therefore use it to detect and prevent vulnerabilities. It's very, very cool.

Well, it's great to see the value that F5 is getting out of Agilex FPGAs. What's your view on AI? Everyone's talking about AI. How are you integrating AI into your future products?

AI certainly is everywhere. And the way that we think about this at F5 is we are on the cusp of just this flood of enterprise AI-driven apps. We believe that enterprises everywhere are going to have AI embedded into more and more of those applications. What that means for F5 is that all of our solutions, including our hardware, software and our SaaS and managed services solutions has to be able to take advantage of our core capabilities in order to accelerate those workloads. And now we're really excited to explore how Agilex FPGAs can help us innovate more quickly with AI, especially here the reprogrammability will help us innovate even faster.

Well, we're very excited to see that as well. Thank you so much for being here.

I've shared a lot about Altera's vision and strategy and talked about our differentiated product portfolio. Now I'd like to bring on our COO, Shannon Poulin, to do a deeper click down on how our customers are innovating with our products today. Hey, Shannon.

How are you?

Exciting times.

Yes, they are. Certainly. What a momentous time for us. We -- what you said was spot on. We have a massive opportunity ahead of us to deliver products and solutions that will help our customers and partners innovate. I know you talked about the growing portfolio. I'd like to go a little deeper into those capabilities and show some demonstrations that we and our partners have worked on.

Absolutely. I'm sure everyone is eager to see our products in action. So let's take a look.

All right. Let's do it.

Now Shannon will show you the progress we're making in bringing our vision to reality.

Over the last couple of years, I found the chance to talk to many of our customers and partners about what they need from the FPGA industry. Many like F5 has said they not only need a seamless developer environment and products with leading performance, power and price, but they're also planning more and more products that will require AI capability. Within Intel, as PSG and now as Altera, we've been busy developing new FPGAs that are infused with the ability to accelerate intelligent workloads in a way that's familiar to FPGA developers. With our new Agilex 5 FPGAs and with other products that we'll launch in the future, customers and developers will be able to add AI capability to their products without the need for dedicated accelerators. Using Altera-enabled FPGAs for AI workloads will lower the cost, lower the power and simplify the design flow and enable industry-leading performance. But enabling AI is different than adding AI. When we enable AI in the silicon, it needs a way for developers and customers to bring designs to life. That's where our software tools come in. Our FPGA AI Suite is built to make adding AI capability to a design as simple as adding IP. This will lead to a quicker design debug and deployment of AI solutions. Let's use a real-life example of how we've enabled AI capabilities in wireless communication. So FPGAs are already good at managing network traffic. They're deployed in almost all mobile networks around the world. By using AI, FPGAs can be programmed to look for certain network traffic patterns or to prioritize certain network traffic. For example, during emergencies like natural disasters, where efficient coordination among early responders is needed to rapidly distribute information, there's often a desire to prioritize traffic at a specific cell site. The same could be true for a sporting event where there are large crowds gathering but only for a few specific hours. In both of these examples, there's a desire to give priority to certain network traffic. We've taken a deep learning autoencoder model which can provide the ability to enable data compression on demand and implemented it on our FPGAs to reduce the size of channel state information exchanges by an impressive 98%, allowing for demand network prioritization of traffic and bandwidth reduction. We've worked with MathWorks, the provider of MATLAB and Simulink, to simplify modeling, training and deploying machine learning models such as the autoencoder model in this demonstration. One of MathWorks communication products is the 5G Toolbox that can be used to generate a simulated channel state information exchange data set and AI products that can help with building and training machine learning models. MATLAB and Simulink are known for their visualization capabilities, which we've used to visualize the data and results that you can see on this screen here. We can take it one step further and refine the pre-trained model. Let me show you how using Intel OpenVINO and our FPGA AI Suite can allow developers to simply optimize pre-trained models such as the autoencoder model we simulated and built on MathWorks and deploy them on to our FPGAs. With a simple command and one click of a button, we've now optimized the pretrained autoencoder model with OpenVINO. With another command and another click, we've compiled the model through our FPGA AI Suite and the design is now ready to run on the FPGA. The FPGA AI Suite also provides the estimated throughput and memory requirements. Now the final step is to load and run the design, and with one more command, we're now running the deep learning autoencoder on our FPGA, receiving channel state information at a much faster rate. We truly made adding AI capabilities into our FPGAs as simple as 1, 2, 3. As you can see, our flow, along with frameworks like one provided by MathWorks, gives customers a plethora of powerful, easy-to-use options to easily develop impactful projects that are migratable across FPGA families. To discuss this further, I had the opportunity to talk with MathWorks Fellow Jim Tung.

Hey, Jim. Thanks for hosting me. It's great to be here at MathWorks. Could you tell me a little bit about your role as a Fellow and maybe say a little bit about our collaboration together?

My role as MathWorks Fellow is to help us define our technology and business road maps across the company. Now I joined MathWorks in 1988, one of the first 10 people. We saw early on that FPGAs provide a really unique combination of performance, dependability and flexibility, and we saw an opportunity to combine your strengths with our strengths in algorithms, systems and embedded software. And through that collaboration, which is now more than 20 years, we see FPGAs being used in a broad range of applications and industrial systems I think a few of us would have foreseen at the time. And now as you've demonstrated, we have capabilities that work with the new Altera FPGAs, including our AI capabilities.

Yes, it was really straightforward to be able to use your AI capabilities, the toolboxes that you guys are building, everything that you're doing from a tool perspective to help enable things for the developers. Can you talk about your development of AI capabilities and your experience with implementing it?

Sure. We actually started with AI a long time ago with the neural network toolbox back in the 1990s. And that has dramatically expanded into the Deep Learning Toolbox that you used in the demo along with other AI capabilities. In addition to those capabilities, we also support interoperability with popular AI frameworks like TensorFlow, PyTorch, but the key objective is to enable our customers to add AI functionality into the systems and products that they design and develop using Simulink and model-based design.

Yes, that's great. I mean, obviously, we've done a number of things with this new Agilex 5 product. Can you talk about why the addition of AI is so important to the customers that you guys service?

Absolutely. Our customers want to add AI capabilities to their systems so those systems can be more resilient, adaptable and capable. So not just a matter of bolting on the AI. The combination of the AI and the system must work reliably and provide that additional value. Now there are 2 challenges for many of our customers. One is that there just aren't enough AI experts. The other is that it's rare for those AI experts to also have expertise in the application where the AI is going to be working, such as 5G, radar, image processing, controls and so on. So we enable the system engineers to do the AI work themselves, and we enable the AI experts to run simulations so that they can understand the impact in the overall system functionality. So both the AI experts and the system engineers can apply AI in real-world applications and situations. In addition, the trained AI model can be virtually integrated into the system model a shift left, and that saves time and money because engineers don't have to wait for a physical prototype. Then the integration of the MathWorks and the new Altera tools means that the AI could be quickly and officially deployed to the Altera FPGAs.

Yes, one of the things that we're doing with introducing a bunch of new products like this Agilex 5 product is we want to make sure that they apply to a broad set of customers. Can you talk about some of the things you're doing with AI and some of the different customers and industries? It sounds like you're saying this can be applied pretty [ uniformly ] across different customers and industries.

Absolutely. Telecom is just one example. We have medical device companies using deep learning to reduce radiation exposure risk in medical imaging, agriculture equipment developers improving safety and also crop yields and many more across industries. It's a really diverse and a growing set of applications. Now Shannon, I hear a lot of great things about the Agilex 5, the first AI-infused FPGA. Why was it so important for the new Altera to develop technology that infused AI capabilities into the FPGA?

Now our strategy is similar to yours, right? We're trying to enable a broad set of customers as they do both pre and post processing for some of the AI capability and functionality. We know that we need to deal with a lot of different developers who have their own flow. We want to add capabilities to the product, so they don't have to do a separate flow for one thing and then a separate flow for AI. So we took the DSP blocks that we had. We enhanced them with some capability around TensorFlow in tensor block acceleration, and that makes it really easy for a developer to be able to use just one product, keeping the design simple. Like you said, we're trying to reach a broad market, lots of different customers and lots of different industries. So that's why we're super excited about Agilex 5 and what we think it can do to change the world for the better.

Yes, me too, Shannon. Our goal all along at MathWorks has been to accelerate the pace of engineering and science to enable our customers to deliver innovative capabilities that will positively impact our day-to-day life in many ways. And in MathWorks, we look forward to continuing to work with the new Altera to do that.

Thanks, Jim. It's great to actually work with you. It's great. Thank you for hosting me here at the facility. I think we have a ton of opportunity. This is the first of many products that we're going to be introducing here in the midrange and low end. We believe it's going to give us access both to a number of different customers and bring more options out there for them. Some of these AI capabilities, we know that customers are using them more and more in their FPGAs. We're excited to be able to work with you. I look forward to coming back and doing this again sometime soon.

Same here. You're always welcome. Great opportunities for each of us, but probably more importantly, for the customers in the market.

Absolutely.

As you just heard from Jim, new FPGAs like Agilex 5 open up a number of opportunities. Agilex 5 is sampling to customers now for early access. In fact, the Agilex 5 early access program is the largest in the history of PSG and Altera. Hundreds of customers already have access to our software, hardware or both. We'll open that up even more broadly to all customers in about a month. As I said to Jim, we're excited about bringing Agilex 5 to market to reinvent the midrange and to bring all the goodness you see here from the AI tensor blocks that we've discussed to the highest performing hard processors in an FPGA, advanced security, transceivers, memory, MIPI IP capabilities in multiple device form factors that all offer balanced power and performance to address the needs of customers that we have for this product. We build Agilex 5 with a focus on what customers told us they felt was missing in the FPGA industry: a low-power midrange FPGA. While performance and features are important, there's special attention placed on power consumption. For the majority of embedded industrial and video customers, power is a critical decision factor. Batteries are one of the heaviest elements in portable devices and charging is a challenge. So they want to get the most out of every milliwatt. Our industrial customers too, they care about power consumption. They may have a hard limit from a source like Power over Ethernet or a few watts that could be the difference between a reliable, passive heat sink or the maintenance pains of a fan. Because power is so important, our engineers have worked incredibly hard to reduce power consumption in the new Agilex 5 devices. We've done things like optimizing the process for power and adding power-gaining methodologies to the fabric and the IP to deliver the most energy-efficient, midrange FPGA on the planet. Let me show you a side-by-side comparison of Agilex 5 with a competitive device. So for comparison, we have here our Agilex 5 E-Series development board as well as an AMD Zynq UltraScale+ board, both with devices with over 600,000 logic elements. Video is one of the applications that Agilex 5 is well suited for and we took some omnitech video IP and configured it to run on our Agilex 5 E-Series device and the competitive device. This design has 4 blocks of video IP with 8 channels each. For this demonstration, each block can be individually enabled. This knob controls which blocks are enabled and the display will show which blocks are grayed out. This display also shows how much power is consumed by the FPGA fabric. Now you can see with one block enabled where we are power-wise. The Agilex 5 has a little bit of a lead. The more we do with the product, the more you're going to see Agilex 5 outperforming the competition. So as we turn it up, we start to enable more and more blocks and you can start to see more and more of a difference with the Agilex 5 device versus what you see from competition. Over a 20% power savings versus the competitive device at room temperature when you're running all 4 blocks with all 8 channels. The power savings increases as you run the designs at higher frequency, and the more devices in the Agilex 5 family that are coming that are run at much higher frequencies means we deliver a more competitive midrange family of FPGAs. We also ran benchmarks against other competitive devices and Agilex 5 delivers performance per watt advantages against all of them. Aside from power, our customers also care about full-stack solutions that combine not only our leadership hardware, but also our software, our IP and our tools to put together complete solutions that they can deploy. I'm going to invite Adam Titley from our U.K. engineering office to share some exciting developments with his early work with Agilex 5.

Thanks, Shannon. I'm going to walk you through how SoC FPGAs are being used in intelligent embedded control systems. Embedded control systems are everywhere from electric vehicles to smart appliances in your home. Today, we'll look at robotics and see how the combination of FPGA fabric built-in on processes and other silicon features combine with our design tools, solution stacks and soft IP to tackle the demanding needs of this application space. [Presentation]

So that was a very quick demonstration of how Agilex 5 devices enable robotics applications. The broad range of SoC and FPGA products we provide allows us to scale into different parts of this market, on the high end using Agilex 7, all the way through to the midrange with Agilex 5 and its embedded focus features.

Thanks, Adam. Great video. It's exciting to see Agilex 5 running full solutions with hardware, software, IP all coming together. The robotics demonstration is just one of the solutions we're working on for Agilex 5. Together with our partners, we're working on many more across different industries and applications. To expand everywhere, we work very closely with our partners to build the largest ecosystem for Agilex 5. Sandra, would you like to show what we've been working on together with our partners for Agilex 5?

Thank you for showing us all those great demos and applications, Shannon. Developers today increasingly rely on FPGA-based boards for a hands-on evaluation experience, especially with new device families. Development kits and System-on-Modules or SOMs help accelerate the design process by extracting the hardware and allowing developers to work at the board level. Together with our global ecosystem of partners, we have scaled the availability of development kits and SOMs to customers worldwide across a diverse range of applications. This gives our customers easy and affordable access to development kits plus a faster path to full volume production. Working with our ecosystem partners, we built an extensive collection of Agilex 5-based development kits that enable you to test drive our latest solutions. These are the first Agilex 5-based boards to hit the market, and they are available for order today, targeting a broad range of markets, and it's only the beginning. We plan to increase the number of boards as we roll out more Agilex 5 variants. To get these boards in developers' hands requires an extensive group of distribution partners. One of those partners is Macnica, whose collaboration with Altera goes back decades. Today, Altera and Macnica are working closely to get Agilex 5 boards in the hands of customers. I'd like to now welcome Aki Miyoshi, Co-CEO of Macnica to talk about our partnership and our future work together. Welcome, Aki.

Thank you, Sandra and the entire Altera team for the invitation to participate in the webcast. Macnica has enjoyed a long and strong history with Altera, Intel and now the new Altera. We have been technology solution partners of your devices for over 30 years with a focus on Japan, the PRC, Taiwan, North and South America and other key Asian countries. Macnica holds a leadership position in delivering solutions for the embedded market.

Well, we appreciate your strong support and your tireless effort to help our customers get to market with their innovations. How have you seen their journeys evolve over time?

FPGA devices are now at the heart of embedded system designs. This opens more options for markets and applications, but also comes with the customers' demand for early access to hardware, software to assist our customers in getting to the market quickly. Customers use development kit and SOMs to make their initial device selection, but developers increasingly want application examples or even complete solutions to run on the boards.

So how has the shift influenced Macnica's approach with our Agilex 5 devices?

Macnica is using a modular approach to [indiscernible] the broadest set of applications. Compared with the carrier board, the combination with the SOMs provides the ideal starting point for a set of application targets. This Agilex 5 SOM and the carrier board, the Mpression development kit provides many sensor interfaces such as MIPI, HDMI and SLVS. The SOM and the carrier boards combination is intended for the industrial and emerging robotics applications. Our upcoming second carrier boards supports 25G Ethernet, which is ideal for medical and broadcast applications when used with the same Agilex 5 SOM. You can find more technical details about the Mpression development kit on the RocketBoards website.

Well, we're grateful to have such a strong partnership with Macnica. [Foreign Language] Thank you so much for being with us today and sharing your insights.

Earlier, I spoke about our customers being at the center of everything we do. Every day, across thousands of customers and in nearly every imaginable market, we work with our distribution partners to put Altera innovations in the hands of our customers. One of our key distribution partners is Arrow. I recently sat down with Sean Kerins, the CEO of Arrow, to get his perspective on our new company, strategy and products. Let's look at that conversation. It's so great to see you again, Sean, and thank you for taking time to meet with us today. Altera and Arrow have a long rich history of working together, and it's great to have you part of this company launch and our brand launch today.

Thank you, Sandra. It's great to see you again, by the way. As you might guess, we're really excited to be part of this major launch. Essentially, the rebirth of Altera as I like to think about it. And as you pointed out, Arrow and Altera do have a long history together. It's been really successful for both of us. We've been able to serve our joint customers, help them solve problems, address opportunities I think now for nearly 30 years. Arrow sits in the heart of this great big technology ecosystem and our job is to help connect our suppliers and their solutions with the great many customers in the world, and we do that through a whole variety of our engineering and supply chain services. And as we look to the future, we think this is a great opportunity to refresh and revitalize the successful journey we've already enjoyed together to reach even greater heights. So it's a real privilege, and I have no doubt that we'll find new frontiers and new customers and new wins together and enjoy even greater success in the future.

Well, it is an exciting time for both of us and also for our customers. How do you think that they're perceiving this stand up of a separate company of Altera again? And what do you think that they are expecting from both of us working together?

No. Altera has a solid reputation for FPGA innovation. It's well known, well understood in the market, and when I think about that alongside Intel's continued support in a variety of ways, wow, that's a pretty good best of both world scenarios for all of our joint customers. And I think that, alongside Arrow's go-to-market reach and related services, that's going to make for a pretty powerful combination in the market, which is one of the reasons I'm pretty enthusiastic about essentially the restart of our partnership toward this end.

Arrow has always been closely involved in our go-to-market activities, so can you share a little bit more about your services and initiatives that are helping scale new products Agilex 5 into the market?

Sure, Sandra. So for context, the first thing I would want people to know about Arrow is that we've got tremendous reach. If you think about the collection of our physical assets, our off-line resources and selling motions, our online properties and other assets, we've really got a compelling presence throughout the world. In fact, today, we serve over 200,000 customers across the globe. So as I think about your move to now include not just the high end but also the mid-market and the low end of the market, that reach is going to be really important for us both, and it's a great part of our sweet spot as a function of our strategy, too. So I think that's going to complement each other quite well.

200,000 customers. That's a lot of customers, Sean. So what are some of the things that you do that are really differentiated in terms of how you allow those customers to evaluate quickly so they can design and deploy their solutions with FPGA products?

I think now we're in an era of a really early and hands-on FPGA evaluation. And that's been the result of the advent of high-speed connectivity, highly integrated circuits, the System on a Chip boom, if you will, I think all of those things have served to create an expectation for early access to both hardware and software. In fact, the early-on hands-on evaluation is no longer nice to have. It's kind of an expectation or table stakes, if you will, in the eyes of most of our customers today, especially in the mass market, which is why we're really excited to be able to provide the first worldwide available Agilex 5 E FPGA dev kit. This was basically -- and I've got one, surprise, surprise, right here in front of me. The Arrow AXE5-Eagle board dev kit was really developed in close collaboration with your team, Sandra, alongside early access to the right silicon and software. And it's a development kit that enables our customers, in fact, simplifies our customers' ability to do early-stage design work with your latest FPGA technology. Our Engineering Services business, which works under the eInfochips brand, is there to design, to develop and support the hardware, the embedded software, and in fact, the full enterprise stack that customers need to get to market in the right way on time. And oh, by the way, it's the very same team that developed the Agilex 5 E FPGA dev kit is available to support specific customers and their specific use cases as well. So there's a real practical connection between what we've done together from a reference design perspective to what it could mean for us at scale in the market.

Well, that's amazing, Sean. Thank you for sharing all of that. And it's a beauty. We could not be more excited about both Agilex 5 and the AXE5-Eagle dev kit and getting this to scale out in the market and helping our customers grow and accelerate their success as well. Thank you so much for being here today.

Thank you, Sandra. Thank you so much.

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