Xilinx (XLNX) 25 Oct 172018 Q2 Earnings call transcript

Company Profile

Participants

Rick Muscha	IR
Moshe Gavrielov	CEO
Lorenzo Flores	CFO
William Stein	SunTrust
Ambrish Srivastava	BMO Capital Markets
Blayne Curtis	Barclays
Tristan Gerra	Robert W. Baird
Ross Seymore	Deutsche Bank
C.J. Muse	Evercore
David Wong	Wells Fargo Securities
Joseph Moore	Morgan Stanley
Vivek Arya	Bank of America
Toshiya Hari	Goldman Sachs
John Pitzer	Credit Suisse
Chris Danely	Citigroup
Srini Pajjuri	Macquarie Research
Chris Caso	Raymond James
Ruben Roy	MKM Partners
Vijay Rakesh	Mizuho

Call transcript

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Operator

Good afternoon. My name is Skinner, and I will be your conference operator. I would like to welcome everyone to the Xilinx Second Quarter Fiscal Year 2018 Earnings Release Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. now turn would to call I Muscha. Rick Instructions] like the to over [Operator you. Thank Mr. begin may you conference. Muscha, your

Rick Muscha

Thank you, financial and CEO; good for and afternoon. With me the open Flores, of September call We’ll then review we’ll and are CFO. provide business a and questions. the quarter, Lorenzo Moshe Gavrielov,

important you financial to our including the wish Relations Let forward-looking Company XX-Ks, live. These the events future differ statements during is risk today, such It to performance can statements. the you materially may We and differ is conference that Investor future Company. of SEC, that remind accessed documents caution predictions with We all files our call materially. conference webcast available, could me forward-looking those information that open projections actual make or are our we to to Xilinx our website. regarding cause and is from contained and or call the refer This that may everyone in and results based projections XX-Qs X-Ks. other statements factors the from or identify results documents actual on be currently contain being

call the me now to Let turn over Lorenzo.

Lorenzo Flores

a of fiscal of everybody. the versus the basis. you, to months the on also eighth and Sales period September $XXX sequentially six Sales consecutive for were first the million, and Thank year-over-year prior Rick, quarter up hello, X% same up quarter the the in increased for year up year. X% X%

product margin related $XXX than guidance. the line grew by the overall products including Operating was income XX.X%, quarter for quarter accounting discrete the item our by the treatment in XX% rate XX.X%. and $XXX guided came to supported to million compensation. expense portfolio. Operating continues X.X% Our to margin our a than be which driven advanced in R&D the was lower less increased XX% was sequentially of was Gross growth strength as stock-based million, of our expected. with year-over-year, operating Tax slightly for for standard our

income Our $X.XX or QX per was share. million, net for $XXX

$XX Some in to with million and dividend $XXX net balance and flow the debt. We cash the Operating per cash returned $X.X X.X during the billion repurchase average cash $X.X on $XX.XX of key was flows. sheet $XXX quarter shares gross in million after an ended of the of billion quarter for $XXX form share. the We points our shareholders million million, and cash million. approximately price in

to from The million of the as have program over of associated We debt. convertible million XXX.X note million shares our on the repurchase the quarter impact quarters. continue execute share with with the the itself X.X $XXX We completely shares, was several authorization next shares authorization. convertible included that in currently We impact mid ended on shares had quarter, intention exhausting settled note with June. diluted for no which remaining warrant the of the our on

on share expecting FYXX XXX be warrants please Relations to time convertible share since For we in XXX shares. Investor on a FAQ in count, we stock the our to higher our million of are our outstanding count share FYXX impact the With of to the complete guidance, refer of price the QX million now count established explanation our website. ending range

quarter, to are $XXX In we expecting Now, be and onto the guidance. between million. $XXX million December sales

expected again. flat expected growth we and be industrial heading decline. expect backlog advanced is and to From end Our quarter into and broadcast, increase Communications to is A&D automotive the continued an our products. consumer expect approximately significantly market perspective, in while up is we to

will XX% approximately be margin XX%. to gross Our

the increase. driving to expense increase operating We expect approximately with R&D to million, $XXX

both We customer and as markets. technology expand to we our invest continue our leadership in our relationships our and

be Finally, tax XX%. and rate to between XX% is expected our

and our third that analyst to to our performance the day. provided financial at we Our track guidance annual quarter we for year-to-date our indicate guidance are us on that

turn me Moshe. call over Let the to now

Moshe Gavrielov

I’m pleased with consistent Lorenzo. in with September consecutive demonstrated to eighth delivered results. as the We financial you, growth Thank our execution quarter increasing sequentially sales our million. quarter $XXX

and by Our XX%, profit than enabled operating approximately expected and better operating increased expenses. margin gross with managed tightly slightly

leadership most to eight end combination nodes. portfolio of Five our recent with of increased over continue clear benefit the markets in quarter. three from multi-market technology We coupled diversified our the the

with ago end quarter. record segment sales market new of consumer The set Our XX% the an primary from sequential industrial, and also million of significant and year-on-year broadcast delivered and $XXX quarterly increase growth. aerospace defense year the automotive

front, the which product products to category foreseeable driver category, advanced our will record delivered revenue. in our XX% represents of overall On be growth the already This continue our future. revenue,

XX-nanometer of and Our setting sales RFSoC again our the growing XX% increased numerous our overall continued now by very is SoC its in delivered XX-nanometer record, also and XG backhaul portfolio from new another targeted XX% ramp, customers. record applications theme, Zynq cable Zynq significantly a element sales strength family The attained sales quarter. the driven record. at wireless year Expanding already accelerated SoC to comprises of effort, multiple our critical end disrupting platform, new industry ago revenue. sales platform this shipping markets. multimarket of on expansion

significant long momentum recent leadership the computing. highlighting the based This increase shipping This unique very and of as our more XXX by to sequential customer demonstrate of a expansion market devices, success customers. number substantial products in market one now in XX% of our is our key term is XX% both medium in XX the We’re of unique to of broad strong announcements cloud significant noted. technology I’m number than are harbinger customers, opportunities. gratified future

their As FPGA SDAccel to expanding Services also as made has development release, deployment Web environment region. uniquely users service previous our earnings FX to FX a projected in while a available Amazon multiple differentiated

on as FPGA. based instance FPGA UltraScale+ announced a our service Huawei Virtex addition, In their

largest the on significant FX based customer Xilinx Alibaba, generation announced service in of is cloud The combination scale software provider improving we’ve Finally, the application much China leadership of This coupled both of benefit ease enable by a FX next adoption made instances, larger technology. use. community as acceleration. of with their service to a derive with enabled developers recently will FPGA momentum and and type FPGA silicon advancements of full

is to advanced very and of be end the all for Xilinx. Consequently, quarter, sales guidance deliver we we’ll of confident of Achieving guidance record a to we $X.X markets products significant of to new will components. across expected remain on Finally, technology by December XXXX XXX our the its the billion. numerous year of driven XXX midpoint accelerated as three our target this approximately growth look delivered forward portfolio our revenue establish that fiscal

share expansion In year, delivering technology committed efforts cash growth, revenue shareholders. for and this commitment to plus addition, to as preserving while XX% to market our well in invest sustained we operating we leadership, gains our fiscal as returning continue to remain exiting margin

Now turn I’ll the operator the to for call back Q&A.

Operator

our from first SunTrust. question Instructions] [Operator from William comes Stein And

William Stein

you on hand of about learning coming lower how beyond. end scale that the end help some effervescent one of in hear market market? the end next the these if us that can optimism you and think trend I’m expect few should market in perhaps hoping as quarter, can projects us stages deep Moshe, sort versus quarters providers very early a than of sales wondering in that for the to traction we align I’m we the little expected good sort what by help web about over bit and

Moshe Gavrielov

they than they expected. less come Actually, sales were came didn’t expected; where

whole, early potential of you at when starts takes technology. If typically from stages But, of when deployment the to but realized. is was the this And communications look business it very wireless up. data of on deployment was down at very, are series we the time, a years center

a been happen we but rate, And do things to directing expect in to plan had As that time. It’s just it a enablers. on $XXX $XXX million length And we $XXX to with the programmable we And But will deliver the that as until -- time, we million regards is deployed. continue right we by with are should capability [ph] number. viral to calendar the see year will logic this XXXX at million. this past far in translate that patience beyond The million audience, revenue to being plan on thing at That this the everyone expanding such, only biggest stone the was because at to towards stepping is as has over customer million are in that’s has faster project that. us potential the still and make of broader XXXX, And very $XXX we the timeframe. acceptance a been now we to by, takes when the broad to have just the hardware impediment and traditional developed that we this are that is And adopters that the $XXX huge is biggest setting $XXX the and It and the SDAccel impact. SDAccel directed million confidence in that time technology base. -- plan to designers. enable what this to available to achieving important expectations have the point. our in of it clear existing into gives order think together takes to potential of users the it

William Stein

how GPU can, give that the One on some relative want and AI could outstanding for sort providers in NVIDIA topic. that Maybe applications, GPU pitch more, engineers related for growth a develop today? very technology FPGA are of seeing I and from the similar web-scale what’s applications. summarized you same version if among you all Investors compete us to the to companies to with the

Moshe Gavrielov

Sure.

of that it predictions, growth biggest years recognized two it and advantages, fast itself very as And now result the and similarly significant our until seeing ago. they’re is to one advantage, revenue. market took it early is had pursued this NVIDIA in that So, what but several the manifested a several historic they years

advantage point. same they a technology have that applications, significantly it’s broad a largely The be the The had set we’ve to And way. power in performance our that the applications. technology can in program -- in at a we gotten be inherently typically over of now we software point providing addressed advantages a lower, other lower the and software is in time, to important where of broad of expect area superior set overtime

can in not at significant limiter. that’s is And So, proposition companies why provide very deployments the or at are now up, some we which higher compute the we issues these basis we’re on similar these the prevalent lower are the that executing a and much obviously the of opportunity power combination software likely when big few two provide big which scale difference either the on that’s and look you delivering we the front biggest too. -- performance the hyper that performance them with over broad growth one a with and in can us. to for biggest all them applications, for of firms that’s points. definitely these value the years also seeing of those But accessibility, have next are is you’re And is catching vigor power provide

Operator

from next from Srivastava our Capital And BMO comes Markets. Ambrish question

Ambrish Srivastava

accounts and fellow ones, Lorenzo, receivables. ask but question. be may one, I’ll my certainly It one to not be analysts favorite one my of your courteous favorite only

they brought than Going them comparison. going up then Q-over-Q receivables I’m you that’s think and in higher last went case? sales, Q-over-Q looking a why Y-over-Y just on or Could row, three at understand But, are up ago up Y-over-Y, two please down. you and us both quarters help the quarters four and I

Lorenzo Flores

Sure.

numbers general, the the same that couple quarter. timing had of think that’s shipments the happened quarters happening just is the high past, when over and the in I in of in we past phenomena relatively

-- that about is quarter low the the rate; general, a As we we ago. in you these recall, the next thing answer receivables. a to the are quarter, very we the And and underneath credits is pay? receivables, a may And of customers reported quality that’s that, monitor very, our very receivables have going high; where very, key year write-offs negligible had minimal, we it’s high on on got very

month during all see will timing maybe confident, the we’ll And highly based this quarter. show shipments next in collectible be happens. really in tend we’re is or what cash in up But and first future Shipments the that’s flow. different all the on collected the patterns so, of the months the last month quarter. next of to And

Operator

from Curtis Blayne of line the from Barclays. comes question next Our

Blayne Curtis

I Moshe, wondering go com was business. if you back to the just could

wireless You mentioned in the September down. was

back? trends people, curious I And your kind you in low seeing to for come perspective Just when then, are of visibility know as wireline. been wireline what has curious just can

Moshe Gavrielov

continue a June this huge of one, should will it there. has in a Well, trend likely down, it downward as it’s if bit a quarter. tends of and on not back any go not downward downturn, previous had surge; at go to high a the our and past slow this see to look Wired, that indeed it surge, the wireless at huge September somewhat we up And one, generally is this huge not volatile. you speaking are -- sideways maybe as trended December downward trend quarter, growth flattish And we very coming expectation the sort it with maybe actually. been was is a in down quite again, but predicting but quarter, that June, trend, wireless point or trending

look the the overall industrial; communications it and and and growth flattish to very the be to slightly market, down. you Lorenzo If be net third should broker on is significant upside And and into consumer overall categories, our significant auto our broadcast, overall. the down for expectation that results then, at three

Operator

Gerra question next Robert Baird. our from from And Tristan comes W.

Tristan Gerra

become interest big of for center, basically in a And data Looking the in the you are a as the medium to more opportunity from application FPGA point seeing integral? FPGA delegating CPU central the data for a in data second Xilinx the first at term? point some how access [Ph] is center anybody becoming center,

Moshe Gavrielov

number. first $XXX any If the soon, low it million million time $XXX my become one, then be to would ridiculously

performance or transition, is accelerating happening to transition a very is in ability so, which ability minimal where provide have exhausted parallel industry now their basically a these only And to have higher what CPUs and the applications. is it’s

have a CPUs have business a that to a as for very significant away other that’s -- pursuing and it But, acceleration. programmable there which will CPU other this GPU And alternative. but need have significant that less but there’ll As expect is provide heterogeneous totally. be architectures, now of will supplant we it a modes and result, has in computing of don’t and very some now been particular years third this over enhancement of transition GPUs a to logic the forms for will several alternative And emerged for an vendors. acceleration will by not provide CPUs and go heterogeneous CPUs they it’s and applications programmable that be replaced logic for these time. it’s

Operator

And next Bank. Seymore from Deutsche Ross from question comes our

Ross Seymore

could a consumer a into nice automotive I sequentially. broadcast Moshe, go pop the you had and wondered if bit little segment. That just

us the bit the little on behind what’s a So, that that? know is well, automotive to could driving give about what driver that. I you sexiest describe as decline was detail you But, with please? that just then, down the And guidance be a that sequential could the for part quarter, in more

Moshe Gavrielov

automotive some is doing technology of transition quite our for from broadcast different of cloud have to change extent, current a plethora continuing time-to-time a to automotive that us it’s of which growing And that markets past it’s reported. call a expect prediction growing the these actually flattish overall, this them there. And through with our sort and deployment a where small markets these believe benefitted that’s growth the numerous I generations but of we I quarter. shrink quarter surges the to the it’s surges broadcast to is them, the market to there’s some market is of to markets mean, -- down other and automotive we a consumer, from one actually In applications. we well the sub which market but way that’s of big three other structural generally, what drive with driver and it’ll can slightly biggest applications, dynamics, And you continued a two assistance of are in has somewhat. going as desperate, not and the just driving in And grew whole technology driver of continue and Well, been be which that’s grow. actually all they’ve

its inhibitors can one I point. much as that’s color growth. So, share That’s of you the as to at this about with

Operator

And our next from question comes Evercore. from C.J. Muse

C.J. Muse

then, you guess you guys this this percent I business impacting on to fiscal to over customers as the to two X% and specific if on as is how business a years. [Ph] transitioning provide XXXX, next roughly follow-up be XX-nanometer unit curious question well update the Ross’s XX to can believe a for ADAS. I could was an today, demand ASPs? you your And think three in both plus this

Moshe Gavrielov

question question, So, last the asked. or let the start that last from me sub you

autonomous solution. second likely technology to few versions of And the that -- role to just lot control auxiliary the next new the will or in XX-nanometer we the going required deploying that’s with original our expect big seeing which which and implement a that do expect continuing significant very powerful, be of a MPSoC, deployment our is a the for in generation, then generation, growth pickup centralized the And ADAS, the second this continue potential us third the now for double-digit the automated year and will years. Zynq are have per quite We are And of generation We with lot have which for growth customers part. quite will forward. play of been driver XX-nanometer ADAS is unit, for and of substantial. has transition driving, but additional ADAS -- in then to market early to we there provide from product to

of performance portion first We processing differing not the are it. ultra-high

the if to sort of to could so, you get And it but deliver it XX%? a look years has few Yes, that potential. moving I it’s direction ahead at it that of arithmetic, think on

Lorenzo Flores

Just adoption was your just question to ADAS? the broader on C.J., XX-nanometer or in clarify, to related

C.J. Muse

just ADAS. within was It

Lorenzo Flores

Okay.

Operator

Securities. next Wells Fargo question Wong And then from comes from David

David Wong

you Further ADAS types circuitry thoughts driving on specific other types to applications? In the incorporate offerings products or future, be ADAS. your specialized want the course for any that autonomous of of hard for or there in will might

Moshe Gavrielov

for can go Lorenzo, let than much I that Lorenzo I’ll you and one drives first car bank. because fancier that take do the

So, more I of color then, might add true a I And of he later. think consumer advocate this. be will

Lorenzo Flores

the in XX in SoC form of today, My car is question, embedded is answer mirrors. particularly Zynq-based years the old and your to is assistance the driver we the the have But products David, well-targeted serious needs in the are of ADAS enable hard that not features the safety are level. device least IPs products of our to customers that are applications, security the who our and at developing which

-- So, evolve that provide really in greater drives that our yes, overall, again, capabilities I platform we with and that think longevity it to continue area design a integration customers. our for platforms of the

view that add So want Moshe, products going anything? our be what’s for that’s to overall will in suited of ADAS. you do the

Moshe Gavrielov

look is there And there at a MPSoC you then there that XX-nanometer hardened previous safety, that’s of Yes. the hardened at you [ph] lot hardened if a security, graphics, this cords. question, is specifically, and hardened look if is I’m tying to product,

will You to that. look automotive segment, trend the just those on that going added be A forward. request our there continue and can based of from lot were at

Operator

Our next Moore Morgan question comes from from Joseph Stanley.

Joseph Moore

was guidance are what’s that driving Lorenzo, times, so, this seeing that? said, up flattish extend you think lead sort I and how about And backlog talk up can of longer you clarification, significantly. slightly that one quarter-on-quarter? just guess guidance, you or Is backlog then I does if

Lorenzo Flores

our significantly We same actually obviously question me requirements the in if of any at backlog when back customers customers time. schedules quarter. ship. in the business their Ambrish’s quarter will, let what have the to Yes, you talk. goes this to relates AR. do their in to we pattern And, And the book, unpredictable, want and with work on and hit drive up an given our So, is

end the and forward that’s we’ll that into are there fill the the seeing. So, toward quarter, of carries the we’re book quarter occasions next the up of and when have kind phenomenon

function it’s structural anything So, thing. or no, not a a lead timing that; of time like it’s

Joseph Moore

how growing related, it’s And of or the you can then, lot talking a mean, guys about, much process stronger versus of industrial is I been there. industrial, you sort have obviously the related a sustainability that? And for environment? whether you’re little of node just share Zynq bit a talk that gains

Moshe Gavrielov

fewer extremely very and a happening just news the environment strong we’ve a long had it’s very, very that we it’s combination and this for lot which broad to It’s now, happen. been which built is waiting a believe, wins very now, traditional And And to a very, I time of niches a this have with difficult also taking based. were come design but of fewer the and stronger are ASSP which in revenue. the we up to an happening a ASSPs believe But small position two. very was that they time we’re we were competition addresses antsy has seeing industrial, a of where vis-à-vis into up Good translate little all. dedicated it’s set is Zynq market. getting broadly, that a and long fragmented them very because is we market targeted

is And production. move so, the now Zynq believe design to what there And strong. wins, very is our we position we’re XX-nanometer seeing

generation, Zynq, relatively was now is defense a second assistance first the into If you then look now, the and expansion also, also different those aerospace starting and revenue see Then to markets we’re translate generation industrial there continuing was we’re in of wireless is lot to which now. driver and automotive. And lot early. that seeing -- is a that’s oriented the of in at primarily happened the and

these doing as that fragmented competitive believe there’s be of very it long in actually small very off time. been been and ASSPs position the to than well or stronger they both we niche targeted applications. better is our can markets And pick period reasonably has So, less, market have this are than continues

Lorenzo Flores

go in you question to your actually is up, address which to guide. want back that picked I I flattish said, something didn’t I a Joe,

that of our is from want think which I out is that. so midpoint we today, guide I is strong are where consistent backlog meaningfully would point up million, to the with $XXX

Operator

from America. next Arya question of comes Bank Our from Vivek

Vivek Arya

wanted out XXXX. you entire for underlying have the Moshe, revisit is Is calendar Xilinx set FPGA number? does market? that’s opportunity makes, the they competition $XXX I you to of competitive just for can to that all the today, just $XXX if market. that then, landscape And incumbency million assumptions it FPGA use there even the opportunity way to that or do in think the add may it years, million impact if for Because surely how next not be three the all the more their in that

any there helpful. very would So, color

Moshe Gavrielov

Sure.

So, XXX XXX the observation. our million, we to with we at million is your agree When -- look this number. I

information. with well number programmable Microsoft ones two vigor, there least where being expect wind are this relationship. very in, this for seven companies which to overall and we’re the additional scale IBM major who and that’s area is two public a in win pursuing significant this have just Intel we is there be in where is very very the higher, logic at Huawei is have We design with significantly then And that involved design at hyper a much. type documented domain the have And twice as starting. does its least

XXX we but its time twice larger of its at XXX the do Intel big. announced significantly already obviously least of can have what that in that. So, if you Market bit on engaging others. in that all of significant it the based we has we’re frame. side. forms various The we product that. a believe the on is superior should data with overall will believe is position and market than a the in incumbency acceleration And market true look more that, than we’ve the be overall we quite And center at to be ones in as we get share with itself And to our expect together

Vivek Arya

at do quick OpEx follow-up, providing a I very to on Thank Lorenzo OpEx maybe sales than know yet. we as year and growth? for what should growth you’re And for you. the growth your start point But, next see guidance not better

Lorenzo Flores

right. So, you’re

We course have we the that not provided time. and any of will FYXX in yet do guidance

I quarter I’ve will in the of -- something said to previous this with year. on fourth we to decline repeat expecting to flow this in Just it respect OpEx, want are the year; calls

We this due have to here expenses current local take in out primarily. highs some

to in So, fourth it we decline quarter. expect the

Operator

And our Sachs. next from Goldman comes question from Toshiya Hari

Toshiya Hari

I had think the cloud customer have AWS month, the commentary on business. offerings forum, going developer diversification expand a keynote, question and very on constructive Last a how forward? would business computing your announced gentleman you gave couple positive perspective, And the from follow-up at from in that I of your your and obviously, they a partnerships.

to for long long-term So, raise would you number? what I I then confidence guess you need that time, a the see incremental take to question gain is, appreciate to this going but is to

Moshe Gavrielov

and superior get generates and superior it, need application we And excitement, will start things in then when the once foundation seeing SDAccel more see expectation itself, developer. more and some are that would tends of for start you in and adoption, broad we see the designers it think, viral, developers. next It key seeing getting will to so we start application some these that be using the early is acceleration you additional feed the Realistically it now of because they We terms up upon the of to doing. will FPGA the provided And happen have that all to of adopters, start acceleration. I limited be results that. was We to couldn’t now them metric results. with

-- that of And is watch. players are this, that from in within going Amazon’s here, providing everyone others be this significant to available, will year a expansion that of benefit applications, thing and you from vigor, are to is year as service. obviously embedded in is Amazon too. still and the Huawei you of can but that a for as proof jumping you because will potential both which be very and this tell footsteps and the programmable three driver everyone, have the the lot way of a parallelism, is at their the the that the Alibaba will is And applications than announcement. and inherent and a expectation there pursue ahead now which started them And so ahead over with I following this in think from fact a logic time less in cloud point, seeing

Operator

retry will the next we Our Suisse. question, of from line Credit John Pitzer

John Pitzer

back guess, on of go new OpEx to thought correct going do Has the software acceleration. and new something that and OpEx what was work that how needed continue after One, offset for that that for of if I’m or peaked over the is we was [ph] I new wrong, software and wrong? that this reductions some be been the tape-outs me of grow year to next relatively about after opportunities. tan go around applications? that would think have you and to to out a that application was OpEx of second tailwind year development Lorenzo, a OpEx And expense couple two, the quarters will going side Quickly, sort these I to

Lorenzo Flores

OpEx general to between way think are the the Take full in we first we in for have gave quarters, to I which be and the of guidance of to of add and the of back year. those is, respect OpEx year, new the to OpEx. million around guidance is dollars to XXX couple $XXX about for I XXXX applications just with go best think millions right for provided and going it the year terms the

both and going We’ve The schedule. to the development go to going you go We be up range. why tape-out going our comment made we’re see investments talked with QX. about around accommodated respect our new then software I to tape-out -- back particular in was that to and in are down OpEx explaining quarter be this

Moshe Gavrielov

And plus faster sort tape was the products new. to happening than are we expansion production to and of like outs which current XX-nanometer RFSoC, a the few expected, due had going additional

tape-out so high the there. that that high never technology pristine so And it technology doing reason is the tape-out, be in And the is here the and so, tape-out unique doing we condition well was dollars it’s are is relatively multiple why or and out. each offering, to XX by such product we a Speakers] you well entire expected it’s now number have that already shipping. sort And million several That’s been an low of XX expensive rolling that’s tape out products -- for [Multiple the that’s occasion.

John Pitzer

as My after follow-up, being little TSMC bit out a meaningful just when was first a second week crypto time called Last currency reported, surprised they question ever of sort Moshe. ASICs is sitting the breakdown business I And finding driver to of an of start of FPJ times look at to their the quarter. some these a you crypto often hardware are ASICs. next you if the in currency devices, these

I and of guys are the is about market big market of I’m sizeable this sustainability? or the market category under kind putting think do this today of so, And what this we importantly think that curious, you how you guess about, size how end the sort

Lorenzo Flores

that. the question John framed in you’ve quite Actually, well,

So, We that our point We when business see maybe, at of meaningful we that of currency say are you said Zynq-based role obviously a in -- ASIC-based the some we it do is longevity in business our -- some too want and typically business we which these in little same will key a We that have with as the a the we controller, consumer breadth as our don’t before you if we the quarter. we product business. are acknowledge providers, time, strength for this is mining out crypto this platforms. driver. to talking do product like elliptical plays, meaningful see -- business about

want right across a words, get really for don’t potential in overheated that some happy and we some the but to customers for bit business talking about for this. it with said, to We as multiple back that little I’ll now in go us. same business do, longevity are We breadth I

Operator

And our next Citigroup. question comes from from Chris Danely

Chris Danely

comp is and And to business, On center? or days where do much that these data be versus expect then, in you data year say communications the two? center how

Lorenzo Flores

it wired. is the X%. older data majority the wireless transitioning piece data business and scale the about had as at in mean, that’s always opportunity. vast business, business data of center least communications and business. size Chris, center. we’ve from talk know, The from data around the data of to It’s again same and data been then the had following their hyper network-based continue the scale center And storage data center, the as about us, the ever And state center has we we center emerging true I that And As nascent businesses this you center into or was. hyper newer

Chris Danely

year Any projections for two?

Lorenzo Flores

No, not yet

Moshe Gavrielov

it’s yet. million and there XXX XXX to not Well, million,

that, So, it’s projection. that’s significantly than the less but

Operator

Macquarie Our comes Pajjuri next Srini question from Research. from

Srini Pajjuri

landscape. XX-nanometer a like just Moshe, Intel their shipping Hi, It finally on is looks question competitive part.

less if as to do any think out that market, they’ll curious more seeing you’re versus you be Just competitive? which end there competitive what and

Moshe Gavrielov

everything with to have makes their distinct customers, extent so and issues very there shipping we’re of it we lot relatively counting, substantially And and continue selectively from to XX largest software. close customers to that have to a very, to on performance, contrast, shifted Well, power already products a the shipping. which and sense. hearing, We, it’s X,XXX they now,

what believe we’ve in of or a more point that time is that probably have majority heard lower very we breadth of customers technology of significant, leadership we support, significant. quality, service the of And are in half lead in terms past. terms in the is that a and performance which very still power, from the we’ve So, have we the year than any we had is can it’s the the better applications the the more,

the in actually And are faster not results it’s they’re point and time. expected incredibly on it helping if but this fast us prevail. at much had it’s an So, we at you than look growing growing rate, at saying far not to the around breadth grow, XX-nanometer, our quality so

So, we we continue our rest huge but to have the And we’re a worthy to exploit do laurels as very competitor, raising this have. never we lead we well with technology. on

Srini Pajjuri

one then, Moshe. clarification, And just

quarter. just lumpy but know India business color growth a December, that you in or it’s December wireless will said something? whether I China it’s I be think in Any grow would driving helpful. curious as or what’s to

Moshe Gavrielov

-- again board of that should we’ll help across that shipping their now was we Well, -- particular reduction inventory a that before, too. in quarter quarter think seeing you’re we in We levels lower going think what saw which low they’re and substantial all think the the our is but substantially past to low of it’s the they at And benefit China India some and that based be above. inventory largest and from quarter. customers we had up and us built

Operator

And Caso our from question from comes James. next Raymond Chris

Chris Caso

My what is question and ADAS in is generally from content guess purpose. some seen general on automotive. presently And I there purpose-built we’ve system, silicon some PGA,

content and reason that we board that industry the reason that forward As what’s purpose? stays FPGA the into necessarily general with consumed and wouldn’t and FPGA the matures, that on what’s go ASIC stays or

Moshe Gavrielov

are is and Okay. sets What that faster has evolving new sensors And That’s very is of question. past very, to than rapidly. and very, in things there nature. those great quickly this very for and of content evolving is And provide the race the huge is much happening higher it address typically automotive. very, market to traditional

actually not Zynq with logic, product powerful embedded programmable accelerators it’s line actually line. with of where the think success lot you look if programmable actually logic. logic; this and Zynq as processor with very a programmable is we tightly seeing linked powerful we’re a traditional embedded is with our our just think And but very So, processing, are seeing product success don’t built it’s hardware at

learning and the that this value a very is platform-based is evolving very the address solution where then there And enables quickly some to have sensors market programmable and it, very, is logic which models and now the they address integrated the of can actually new there to to new changes. very customers being quickly numerous well-suited programmable there adapt the as algorithms it medium is is into those. numerous machine logic Now, platform and elements of

So, will with hardware, it as actually accelerators we a tuned that provide the there fine with programmable logic. the -- with that’s a why we and can of continues the believe solution lot embedded rapidly, control, evolve

different a logic of traditional programmable it’s just the but thinking ways it’s sort so, And from of used for prototyping. of

reality. it And to are there when huge customer of are product then portion -- becomes offering well that’s likely years attractive it it is actually stable I areas Zynq requires; But, the even with over time, dynamic. when driving, to is market that’s actually of becomes you XX of way and and Where if a all is have point. now though take covers for and is to to level which the of be flexibility the we’re the tremendous attuned the advantageous have other do it likely what programmable going market. between and now, it’s autonomous in change, that areas; years -- rapidly to less the tens is as and where it its take saying likely agree changing the hardware to embedded Here a addresses capabilities. there whole period years commoditized evolves from XXXX, form And long And transportation. this will these we of value proposition to continue before reaches of several doesn’t on it’s prevalent as logic move, excitement

at processing addressing central rest we lot sort the not performance Now, not to highlight, of when element, to auxiliary I’m and Intel pursuing pursue which a to autonomous is is looking just overselling, market very functions NVIDIA the ones we it are and likely even players, there’s ultra-high of evolves will of potentially so the adaptive. going which be we are additional well the driving; be other

Operator

comes Roy MKM Partners. And our from from Ruben next question

Ruben Roy

increased from working just perspective just you competitive point. your this Intel, having in data with and seems scale that some and minutes seems any around to how you and Are you own XX, of out? on roadmap acceleration potentially the a XX various little But I is now your hyper hearing product wondering or surprising from customers at have customers applications. new center shifted feedback that you issues issues, are all they’re were given focus their of competitor, XX-nanometer, well-known couple It has a having like Moshe, has recently discussion a it had the on follow-up ago. the conversation the

Moshe Gavrielov

we we at we significant this nodes. accelerated the production. believe That’s year that very all to have into leadership tape-outs and broad number XX-nanometer Well, the the move significantly, it where were have current

our front, as on in And we’re agreement so, violent I customers. with think you that

on feverously with TSMC. our working are X-nanometer solution We

expect year. made. are TSMC just XX-year pleased progress anniversary the with We their ahead. I and out And they’re to was tape very steam at And that has that next we full

immediately volume will very, there be and all are through targeting next learning the generation and run benefiting sort We -- system. big from huge X-nanometer them, line, in customers and are that the they of mobile that will we of our after very out they are devices very, standing taping their

in have ever stand still, to likely hare business, if the tortoise So, and you scenarios. are you this

running that make quickly are as we leadership prolong into to next as it So, sure the we and continue to can generation. exploit we our

us going For be it is technology. phenomenally that of to year and attractive out generation taping next a is

Ruben Roy

at are traditional revenue Just state you business commentary into whether think or digit et is really of stuff fast When products that stuff that? of starting think growth a as low and following storage comes very growth on sort And of the Is cetera. point a off out steady sort and type clarification the on quick the the small single grow to the about new follow-up, going of cetera. maturing stuff just rates? very from up? in percentage for of about a new numbers you How of it’s center percentage just data traditional et today, while that’s selling with that type do obviously we expectations networking,

Moshe Gavrielov

cloudified. is as on the side. the opportunities cloudified, of a they it is getting as transition acceleration when through are and entire storage that Well, there significant industry networking well and get going portions And

somewhat center to the And we technology data we called communications, what what used business portions regards wired is for of still similar requirement. see be and as our they to expect of but storage with will it’s reemerge sort So, networking.

So, transition is it the growth the that’s CPU traditional provides to computing. without away. growth be really acceleration us. alternative area other acceleration tremendous likely each significant because an offset either and to But, is will probably it The impact a for area having the

more at point correct read a your that wired change classification to extent, is the data is going and to and the center think I to is happening it is and business the business. might difficult and and other, what the become the transitioning the some technology adjacent what look and them out on requirements figure So, transition that’s is little networking side, acceleration storage And as point, and opportunity. to one different but from And on similar at side. this at unique we they the are are growth some

to color your question. So, provides hopefully some that

Operator

Our last question comes from Vijay Rakesh from Mizuho.

Vijay Rakesh

how was well? but performing look down the incenting coming market I you market at, are probably as see do in And that GPUs competitor just being wondering road. and [ph] when see too? you Intel incenting viable about talked NVIDIA into today tied Have bit you the you seen a you them

Moshe Gavrielov

a provide new than the some actually their starting will you to for in over sense. technology we architectures a think like we have, required. And But of the and broad flexibility of and And a influencing, have from your out are for we advantage, much inherent too than the different [ph] departure direction. quite their time. coming them good focused as definitely or that technology, eyes, are advantage that blur if with are you in point. GPU actually And we have solutions, versions they as are GPUs. can architectures. They actually believe they doing moving traditional better ahead what I which GPUs they the and are traditional applications of they look good derivatives They continue lot new we traditional And makes at GPU their influence are position more match on are look

Rick Muscha

joining Okay. today. for today. playback p.m. us Eastern of X X at Time, p.m. a Pacific beginning have call Time We’ll Thanks this

our visit our of copy a For earnings Investor please release, Relations website.

Wednesday, be third next Suisse of following San your XXth release our Xth. participation. Scottsdale; earnings NASDAQ in the close. The XXth the be Thank Barclays after completes and much in Technology for this Credit also Francisco Xth; on December on This date We’ll The Conference in Conference attending call. for the The will Technology market year fiscal you Conference November London Our on very conferences quarter quarter: December January XXXX

Operator

does this call. today’s again, conclude Once

You Thank for you may now your disconnect. participation.

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