Intel Corp at Goldman Sachs Semiconductor Conference Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Toshiya Hari - Goldman Sachs - Analyst : <_ALACRA_META_ABSTRACT>Yeah, it is. So we do have 40 minutes-plus, John, which I think is a little longer than typical. So I wanted to start off with the high level, kind of softball question. I think you join Intel roughly two years ago from the sell side. What's the experience been like? Any surprises in terms of what you see internally, how you think about the markets?

Question: Toshiya Hari - Goldman Sachs - Analyst : That makes sense, thank you for that. On the foundry ecosystem that you talked about, investing in a -- building out the ecosystem, you made a significant progress. Is it fair to say that you have the necessary pieces to be effective and competitive in foundry? Or do you feel like you still have a little bit more work to do? And if you do, what are those pieces?

Question: Toshiya Hari - Goldman Sachs - Analyst : Got it. In terms of customer engagements in the foundry business, you've publicly announced many customers. I think Mediatech, Amazon, most recently Microsoft. What characteristics of IFS drove success with those engagements and those customers? And to the extent you've had instances where customers had, no, thank you, we'll continue to work with foundry A, B, and C, what were some of the concerns that they had?

Question: Toshiya Hari - Goldman Sachs - Analyst : Got it. Conflict of interest is something that still comes up in my conversations with investors. I know you guys segmented the two businesses, if you will. Is that something that still comes up with customers or potential customers? And I guess part two is, the Intel product team, are they truly free to work with IFS or TSM or what have you?

Question: Toshiya Hari - Goldman Sachs - Analyst : Got it. I think you sort of answered my next question. But IFS profitability, you've talked about losses peaking this year and reaching breakeven sometime between now and 2030. And I think you mentioned a couple of things there, but the key drivers that get you there?

Question: Toshiya Hari - Goldman Sachs - Analyst : Got it. And the tiles coming back in, is that a '26 dynamic? When does that start to kind of go in motion?

Question: Toshiya Hari - Goldman Sachs - Analyst : Got it. Makes sense. I'm shifting gears a little bit, in the world of AI, obviously a lot going on. I think there's the CPU and GPU trend a currently. And there's one company with a very loud megaphone. We did have Renee James here at the conference yesterday, and she you talked about the important role CPUs play. I think you guys have talked about that, too, particularly within the context of inference. Maybe you can talk a little bit about that and then more importantly, your target, your goals, and acceleration as it relates to Gaudi and Falcon Shores.

Question: Toshiya Hari - Goldman Sachs - Analyst : Got it. And just going back to the accelerator side of the portfolio, Gaudi and Falcon Shores, how do you compete with incumbent? How do you differentiate versus the incumbent?

Question: Toshiya Hari - Goldman Sachs - Analyst : Got it. On the server CPU side, I have a couple of questions on the roadmap. I guess before we go there, maybe on the demand environment, '23 was a very challenging year for the industry. I think Mercury had units down more than 30%. And with AI, CPUs kind of got boxed out, if you will. Both you, your nearest competitor, others have sort of suggested that the environment's bottoming and hopefully improving. What is your outlook into the back half? And as you think about your overall business growing year over year for the full year, what's embedded from a server CPU perspective? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 30, 2024 / 2:50PM, INTC.OQ - Intel Corp at Goldman Sachs Semiconductor Conference

Question: Toshiya Hari - Goldman Sachs - Analyst : Okay, understood. In terms of the roadmap and how to think about competition, to your prior point, you're launching here for us. You've got Granite coming in, I believe, in the second half. I guess, first of all, what's been the early feedback from your important customers on both platforms? And how should we think about your server share stabilizing going forward?

Question: Toshiya Hari - Goldman Sachs - Analyst : Okay. And most of those gains would probably come on the cloud side because enterprise, you never lost?

Question: Toshiya Hari - Goldman Sachs - Analyst : Got it. ARM-based custom CPUs, I think Graviton has been pretty successful obviously within the context of their own infrastructure. Microsoft, Google have recently come out with announcements. How do you think about that? Again, to your prior point, there's a bit of a competition dynamic there on the foundry side, you could certainly be service them. So how do you think about that balance?

Question: Toshiya Hari - Goldman Sachs - Analyst : Got it. I'm going to pause here. I've got a bunch more on the client side. But if there are any questions, go ahead. Unidentified Participant Thanks for taking the question. John, one of the things that has been interesting watching you tell us, you've been very willing to sort of go to the cutting edge, so for instance, using high NA. I think you probably have insertion before most of the other big players. And as you talked earlier, it seems like you're on track to that, which is great. Any other technologies that you think about the next three, five years that you may be contemplating or be interest in to sort of further that technological gap, if you will. I'm thinking things like solid-state micro-bunching in the factories and that sort of thing. Are you considering things like that that may be something we need to think about in a positive way for you guys over the next five years? Thanks.

Question: Toshiya Hari - Goldman Sachs - Analyst : Any other questions? Pivoting to the PC side, I'm sure we'll get updates from Pat next week at Computex. But curious how you're thinking about the AI PC opportunity. I mean to your prior comment, I think you'll start to see some models at the market back half of the year, but it's really 2025 and beyond when the market takes off, if you will. But in your mind, what are the top maybe one or two or three killer applications that you think could catalyse growth in the market? I think you guys have a really strong intelligence team internally that tracks installed base of replacement cycles. And if you can share some of that with us and how you're thinking about the PC TAM growth going forward, that would be really helpful.

Question: Toshiya Hari - Goldman Sachs - Analyst : That makes a ton of sense. My next question, maybe your response is stay tuned and wait for Pat to say something. But Windows on ARM and what that means for you guys from a competitive standpoint is a question that we've been getting a lot of headlines around Qualcomm and others. What are some of the sources of differentiation or competitive advantage that you can deliver?

Question: Toshiya Hari - Goldman Sachs - Analyst : Got it. You talked a little bit about the 8-K that you put out recently. I think you said it wasn't so much a DCI dynamic, but can you kind of walk us through what drove that?

Question: Toshiya Hari - Goldman Sachs - Analyst : Okay. Got it. The incremental change, though, was purely driven by the government?

Question: Toshiya Hari - Goldman Sachs - Analyst : Got it. Okay, perfect. I guess some financial questions. Gross margins, you guided full-year gross margins to improved 200 basis points year over year, puts and takes. And if you can provide the bridge to 60%, which is your 2030 target, that would be helpful.

Question: Toshiya Hari - Goldman Sachs - Analyst : Got it. From an OpEx perspective, I think Pat and Dave have introduced many measures. You've made a lot of progress. As you look to reduce OpEx intensity to 20% by 2030, is that primarily revenue growth that gets you there? Is there still more to do on an absolute basis?

Question: Toshiya Hari - Goldman Sachs - Analyst : Capital spending near term and long term, I know you guys don't give guidance per se. But how are you thinking about that internally? Obviously, you've been very aggressive from a five nodes in four years perspective and even successful. You talked about the smart capital strategy working really well for you guys. So both in terms of gross CapEx and net CapEx, how should we be thinking about that going forward?

Question: Toshiya Hari - Goldman Sachs - Analyst : Got it. John, you just talked about book value. I think both Pat and Dave, you guys have been pretty vocal about obviously carrying about shareholder return creating value. I think, can you remind us of what your plans are for Altera going forward? And how should investors think about your long-term intentions around Mobileye?

Question: Toshiya Hari - Goldman Sachs - Analyst : Got it. That's really helpful. I'll pause here again and see if we have any questions. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 30, 2024 / 2:50PM, INTC.OQ - Intel Corp at Goldman Sachs Semiconductor Conference Unidentified Participant Hi. So speaking on the export restrictions on the supply side, is there anything the company's worried about having travelled procuring specifically materials subject to a Chinese export restrictions like gallium germanium?

Question: Toshiya Hari - Goldman Sachs - Analyst : Any other questions? John, maybe in the last three minutes, anything we didn't touch that we should have, or anything you'd like to highlight on behalf of Intel team?

Question: Toshiya Hari - Goldman Sachs - Analyst : Thank you for coming. Really appreciate the time.