Lisa Su: Yes. Joe, we view that the opportunity – so first of all, I would say that in general, the PC market share numbers are probably a bit noisy right now, just given all of the sell-in, sell-through and the inventory dynamics that are being worked through. Actually, in the fourth quarter, we believe we gained a little bit of share in the PC market. As we go forward into 2023, we think our product portfolio is very strong. As we look at Ryzen 7000 and where it goes and where we are positioned in the commercial as well as the high-end consumer segments, we’re not changing our strategy on PCs. Quite – a few years ago, we really focused on sort of the more premium segments. We have less penetration in the low end, which I think is helpful.
And as we go forward, we’re continuing to focus on commercial PCs and getting a larger footprint in there. I will say the enterprise work that we’re doing on the server side, I think, links very well to the commercial PC work, and we’re continuing to invest in sort of the sales and marketing resources to ramp that side of the business.
Joe Moore: Great. And then going back to the Genoa question that was asked a second ago, as you are in this kind of budget conscious environment, you’re introducing a chip in a system that has pretty high platform cost. Does that slow the adoption at all? It seems like people – and your competitors dealing with some of the same issues. Just how does the current environment affect the rate at which Genoa will ramp?
Lisa Su: Yes. I would say, Joe, the total cost of ownership benefit of Genoa, particularly in some of the larger cloud workloads, is very, very significant. So I wouldn’t say that, that’s necessarily slowing the pace of adoption. It is a new platform though. So if you think about when we went from Rome to Milan, it was basically similar platforms. So I would say that, that ramp was a bit faster. But as it relates to Genoa, we had always expected that Milan and Genoa would coexist through 2023. And that we would have – we still have Milan instances that are just ramping now, and we expect that will continue through 2023. And so I really view this as the natural thing when we introduce Genoa at sort of the higher core count, that both will coexist. And as some of the platform costs come down, you’ll see the Genoa cutover, and that’s what I mentioned towards the fourth quarter of 2023.
Operator: Thank you. Next question is coming from Ross Seymore from Deutsche Bank. Your line is now live.
Ross Seymore: Thanks for letting me ask a question. And Jean, congrats on the new job. Lisa, I was hoping you could give a little bit of sequential color to just size the magnitude of the three segments that are going down in the first quarter and then Embedded going up. And really what I’m getting at there is, in an answer to a prior question, you talked about the mix being a headwind to gross margin. And I think, Jean, you cited Data Center dropping as a percent of the mix. So just trying to get the magnitude of just how much Data Center has to drop to make that outcome on the mix side be true.
Lisa Su: Sure, Ross. So let’s see. We said the Client and Gaming segments would be seasonal. So you would expect that the Data Center would be more than seasonal. So maybe to help you size that, think about the Data Center sequential drop as double digit, whereas the Client and the Gaming segments are more like single digit, if that helps.
Ross Seymore: Yes, it does. And anything similarly on Embedded? Is that kind of up single digits?
Jean Hu: Yes. Yes. Embedded will grow sequentially single digit. Yes.
Ross Seymore: Got it. Sorry for the nitpicky question. A bigger picture one for you then, Lisa, on competitive intensity. On one hand, I could see that the total cost of ownership benefits of these products, multicore, better performance, et cetera, could lead to higher ASPs, whether you’re talking about the Data Center side or your Client business. On the other side, competitive intensity and overall demand is weaker. And at some point, you might even get deflationary costs on the foundry side of things. Can you talk a little bit about the pricing environment given those somewhat contradictory pressures?
Lisa Su: Sure. So maybe let me separate Data Center and Client because they’re a little bit different. I think on the Data Center side, we would – we do see that, in general, the performance, the power performance, the total cost of ownership, selling the solution is the most important piece of it because the solutions are actually quite different in terms of what you can do between sort of fourth gen EPYC and sort of other solutions. The environment is always competitive, but we feel very good about the overall value proposition that we bring to both cloud and enterprise customers. I think on the client side, we’ve said for the last couple of quarters that the pricing environment is more aggressive. I think that normally happens when the industry is working on rebalancing.
I think we’re working on rebalancing our OEM partners are working on rebalancing. The retailers are working on rebalancing. And so, there are more incentives and more – a more aggressive pricing environment. I view that, that’s primarily on, let’s call it, older products let’s call it previous generation products. And as we work through that, there will be some normalization as we think about our newer generation products where there’s more capability added. So hopefully, that gives you a little bit of the puts and takes. And in terms of the cost environment, I think all of us in the industry have seen some elevated costs, but I think we also see – expect that to normalize too as everyone is sort of optimizing their CapEx spending.
Ross Seymore: Thank you.
Operator: Thank you. Your next question today is coming from Mark Lipacis from Jefferies. Your line is now live.
Mark Lipacis: Hi, thanks for taking my question and congrats to Jean on the new seat. Two questions, if I may. First, on the PC side, can you give us a sense about roughly how far under consumption, you believe, you’re shipping on the PC side, either in Q4 and Q1? And Lisa, correct me if I am wrong, I thought I heard you say in an answer to an earlier question that you expect the PC client, but just to grow into second quarter. So is that suggest that 1Q, you think is the bottom on the PC? And then I had a follow-up? Thank you.
