Operator: And the next question comes from the line of Blayne Curtis with Barclays. Please proceed with your question.
Blayne Curtis: Thanks for taking the question. I want to ask on the Embedded side. I think last quarter, you kind of talked about the headwinds being mostly in the communications end market. You’re guiding it down in December. I was curious if that weakness is spread. And then your competitor talked about kind of a reset getting back to pre-pandemic levels. Just kind of curious how you framed that reset? You said it’d be weak to the first half.
Lisa Su: Yeah. Absolutely, Blayne. So I think when we look at end markets, I think communications was weak in sort of last quarter and it certainly continues to be weak. We see 5G sort of CapEx just down overall. On the other market where we see a little bit of, let’s call it, soft end market demand would be industrial and that’s a little bit more geographic, so a little bit worse in Europe than in other geographies. The other end markets are actually relatively good. And what we just see is that inventory is high, just given where we were with lead times coming into the sort of through the pandemic and with the high demand that was out there. As the lead times have normalized, people are drawing down their inventories and they have an opportunity to do that, given the normalization.
So from an overall standpoint, we think demand is solid. And what we view is that we have a very strong portfolio in Embedded. We like sort of the combination of the, let’s call it, the classic Xilinx portfolio together with the Embedded processing capabilities that we add. Customers have seen sort of that portfolio come together, and we’ve gotten some nice design win traction as a result of that. So we have to get through sort of the next couple of quarters of inventory correction, and then we believe we’ll return to growth in the second half of the year.
Blayne Curtis: Thanks. And then, I just wanted to ask on the PC market. I think you and Intel have seen — you were under-shipping in the first half. Maybe you’re kind of over-shipping a little bit now, restocking. I’m just kind of curious to your perspective of what that normalized run rate is in terms of the size of the PC market and kind of any perspective if inventory levels are starting to move back up.
Lisa Su: Yeah. I would say, again, Blayne, when we looked at sort of the third quarter and sort of the environment that we’re in now, I think inventory levels are relatively normalized, and so the selling and consumption are fairly close. We were building up for a holiday season that is a strong season for us overall. When I think about the size of the market, I think from a consumption standpoint this year is probably somewhere like 250 million to 255 million units or so. We expect some growth going into 2024 as we think about sort of the AI PC cycle and some of the Windows refresh cycles that are out there. And I think the PC market returns to, let’s call it, a typical seasonality, in which underneath that, we have a strong product portfolio. And we are very much focused on growing in places like high-end gaming, ultrathins, premium consumer as well as commercial. So those are — that’s how sort of we see the PC market.
Operator: And the next question comes from the line of Matt Ramsay with TD Cowen. Please proceed with your question.
Matthew Ramsay: Thank you very much. Good afternoon. Lisa, I wanted to maybe ask the AI question a little bit differently, not just focused on your GPU portfolio, but more broadly. I think one of the big surprises to a lot of us is, how quickly the AI market changed from accelerator cards to selling full servers or full systems for your primary competitor. And they’ve done a lot of innovation not just on GPU, but on CPU on their own custom interconnect, et cetera. So what I’d like to hear a little bit of an update on is just how you think about your road map going forward across CPU, GPU and networking and particularly the networking part as you look to continue to advance your AI portfolio. Thanks.
Lisa Su: Yeah. Thanks, Matt. I think it’s an important point. What we’re seeing with these AI systems is they are truly complicated when you think about putting all of these components together. We are certainly working very closely with our partners in putting together sort of the full system, CPU, GPUs as well as the networking capability. Our Pensando acquisition has actually been really helpful in this area. I think we have a world-class team of experts in this area, and we’re also partnered with some of the networking ecosystem overall. So going forward, I don’t think we’re going to sell full systems, let’s call it, AMD-branded systems. We believe that there are others who are more set up for that. But I think from a definition standpoint and when we’re doing development, we are certainly doing development with the notion of what that full system will look like.
And we’ll work very closely with our partners to ensure that, that’s well defined so that it’s easy for customers to adopt our solutions.
Matthew Ramsay: Got it. Thank you for that perspective. As my second question, Jean, I wanted to dig into gross margin a little bit and just, I guess, complement you and the team on being able to guide up for the fourth quarter. Sequentially, gross margin if we, I guess, rewound the clock back to the beginning of the year and the Embedded segment would be down from the peak to where you’re guiding the fourth quarter, maybe down by a third. I wouldn’t have thought gross margin would have hung in as well and grown sequentially each quarter through the year. Obviously, Client margins got better. But maybe you could walk us through some of the puts and takes on gross margin, and inside of each segment, where you’re making progress because I imagine some of that progress is pretty positive underneath. Thanks.
