Thank you for standing by, and welcome to the Intel Capital Allocation Update. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star one one on your telephone. If you wish to remove yourself from the queue, simply press star one one again. As a reminder, today's program is being recorded. Now I'd like to introduce your host for today's program, Mr. John Pitzer, Corporate Vice President of Investor Relations. Please go ahead, sir. Yeah. Thank you, Jonathan. By now you should have received a copy of today's announcement updating our capital allocation priorities and reaffirming our Q1 '23 guidance. This press release is also available on our investor website, intc.com. I'm joined today by our CEO, Pat Gelsinger, and our CFO, David Zinsner. In a moment, we will hear brief comments from Pat, followed by a Q&A session with both Pat and Dave. Before we begin, please note that today's discussion does contain forward-looking statements based on the environment as we currently see it. As such, it does involve risk and uncertainties. Our press release today provides more information on the specific risks and uncertainties that could cause actual results to differ materially. With that, let me turn it over to Pat. Thank you, John. I would like to thank everyone for joining us this morning on such short notice. We wanted to host a brief call to discuss today's announced decision by the board of directors to reset our dividend policy and reduce our quarterly dividend to $0.125 or $0.50 annually. Importantly, we wanted to be able to discuss today's actions in the context of our broader capital allocation and operational priorities. To be clear, the board and I did not make this decision lightly. We take very seriously our commitment to all our stakeholders, but we must also balance the priorities of each stakeholder, our owners, our employees, our customers, and our communities, against our short-term and long-term strategic, operational, and financial goals. We have a very deliberate capital allocation strategy to be good stewards of your capital by investing in areas that generate the highest returns. We prioritize direct investments in the core business through cost of sale, OpEx and CapEx to support manufacturing, technology and capacity, and new product development and execution. We then look to augment our organic efforts with strategic M&A before returning excess cash to our shareholders. We have always described our turnaround as a multiyear journey. Last year, as macroeconomic conditions worsened well beyond what anyone had anticipated, we took early and aggressive actions to protect near-term financial results while still aggressively investing in critical areas to drive our transformation. Excluding the change in depreciable life, we have already committed to $3 billion in cost savings in 2023, which we look to exceed as a down payment on the $8 billion-$10 billion of structural savings we expect exiting 2025. We undertook the difficult decision to rightsize our organization and sharpen our focus, including exiting seven businesses over the last two years and last quarter, deciding to integrate AXG into our data center and client groups, respectively. Relative to capital spending, we have made meaningful adjustment to our capacity CapEx in calendar year 2022 and 2023, even as we kept intact the strategic CapEx necessary for five nodes in four years in our foundry business. Based on the hard work of all our teams, we now expect to manage net CapEx intensity in the low thirties of revenue in calendar year 2023 versus our original target model of 35%. More recently, we asked many of our employees, including myself and the leadership team, to take a temporary reduction in compensation and benefits to help as we navigate the next few quarters of macro uncertainty. At our meeting last week, the board also decided to temporarily reduce the compensation paid to all directors. We are greatly appreciative of the shared sacrifice the Intel family is making. Execution follows culture and our transformation is only accelerated by the daily dedication and passion of our employees, I would be remiss not to thank them publicly here today. Finally, in Q3, we announced that we established an internal foundry model and are providing incremental transparency to our owners by reporting our manufacturing group as a separate operating segment in 2024, giving them a P&L for the first time in the company's history, and by so doing, creating what we believe will be a superior incentive structure and clarity of benchmarking to external peers. It is against this backdrop that we have decided to reduce and reset the dividend while still maintaining a very competitive and attractive yield, at the same time, increasing our operational flexibility to execute on our strategy and drive even higher total returns for our owners. Intel first established a dividend in 1992, and since inception, we have returned an aggregate over $80 billion of cash to our owners through our dividend policy. We have a long history and understand the long-term benefit and value that a dividend provides. I want to be very clear on this point. The board and I continue to view the dividend as a critical component to the overall attractiveness of Intel to many of our shareholders. As we emerge from this period of transformation and accelerated investments, we intend to again resume growing the dividend over time as an important tool to return excess cash to our shareholders. The improved operational flexibility resulting from today's announcement will continue to be supplemented by our smart capital strategy, including what we expect to be a second semiconductor co-investment program announcement in calendar year 2023. Both are critically important as we see this year as the turning point to reestablishing our execution engine and regaining our performance and cost leadership, as evidenced by the many green shoots we are beginning to see across our business. We are at or ahead of schedule on five nodes in four years, with very strong confirmation last quarter as we signed up our first Intel 3 foundry customer. Intel 4 and Intel 3 are first nodes with EUV help to close the power, performance, and density gap with peers. We have growing confidence that Intel 20A and 18A with the advent of RibbonFET and PowerVia place us on a path to regain transistor performance and power performance leadership by 2025. We look forward to third-party confirmation as we expect to announce 18A foundry customers later this year. Relative to our product roadmap, our client position has recovered nicely with strong products and multiple quarters of market share gains. Sapphire Rapids has begun to stabilize our market share position for servers with clear CPU, AI, networking, and security leadership, and a strong ramp is well underway. Emerald Rapids is on track for second half of this year and will drive even better performance. Sierra Forest and Granite Rapids will build on that momentum in 2024 and are already showing good early process and product health. The severity of the macroeconomic headwinds and the adverse impact on our financials obscures many of the operational successes the team has had over the last 12 months. While there is still significant near-term uncertainty, we are pleased to be able to reaffirm our Q1 guidance this morning. As the macro improves, our customers move from unprecedented levels of inventory burn to a more stable environment as we see meaningful growth as the world normalizes and additional growth and returns as we execute to our multiyear strategy. We remain committed to the strategy and as always, continue to be grateful for our owner support, insights, and feedback. With that, let me turn it back to John to start the Q&A session. Thank you, Pat. We'll now move to the Q&A portion of the call. As a reminder, we ask each caller to ask one question and a brief follow-up question where applicable. With that, Jonathan, can we have the first caller, please? Certainly. One moment for our first question. Our first question comes from the line of Ross Seymore from Deutsche Bank. Your question, please. Hi, guys. Thanks for letting me ask a couple questions here. I guess my first one, Pat, in the bigger sense, I obviously it's a tough step to cut the dividend. I'm not sure how much of a surprise it is to people, but you guys have gone from committing to a strong and growing dividend a year ago to now a strong dividend, and then well, recently a strong dividend and now a competitive dividend and cutting it by 2/3. I know the macro conditions have been difficult for everybody over the last year, but strategically, I wonder what sort of adjustments are you making to your execution as a company to adjust to this? Any changes in the strategy going forward, a sense of urgency or anything along those lines to reflect that? Yeah. Thank you, Ross. Clearly, you know, the dividend discussion and our capital allocation policies are reviewed regularly by the board, you know, and the board was deliberately cautious to adjust the dividend policy of prior leadership, even as we were focused on aligning to the new IDM 2.0 strategy, you know, investing in our recovery, leadership, and foundry. Clearly, as the macro conditions continued to deteriorate in Q4, you know, our free cash flow fell below our guard bands. In this environment, you know, we just came to the conclusion that the highest dividend payer shouldn't also be the highest capital investor in this period of time. Obviously, this is against the backdrop of continuing to, I'll say, refine the business. As we said, you know, we've exited seven businesses and continue to look at other business areas so that our, you know, investment priorities are firmly aligned with where our investments go. We've been aggressively pursuing our cost savings initiatives to both save cash as well as to refine the business. I've asked the company to take temporary pay and compensation reductions, so many steps that Dave and I are taking in that regard. As I also said in the prepared remarks, our green shoots of execution are emerging. You know, we've seen the growing momentum of Sapphire Rapids, the multiple quarters of consistent strength in our client business, execution, and we're gonna keep those execution efforts underway. As I also indicated, good health on the next phases of the data center products, Emerald Rapids, Granite Rapids, Sierra Forest, all of these are showing very good early health. We do feel like the green shoots are starting to emerge, even as we're still journeying through this desert or saddle period of our transformation, as I've described. Ross, do you have a follow-up question? Yeah, I do. A quicker one on the CapEx side. You went from the mid-30s to now the low 30s. Is that because the nets are higher or because you guys are spending less? I guess related to the dividend cut, was that necessary to obtain some of those offsets? As we've heard numbers of articles from different political bodies, expressing some concern about companies having buybacks, and/or dividends, at the same time they're getting money from taxpayers. Yeah. Thanks, Ross. You know, we've been being aggressive to pursue capital offsets, as you know. At the same time, we are trimming what I like to describe as our capacity CapEx, you know, to align the business environment, even as we keep strategic long-term CapEx on track for our restoration and position of leadership for the long term. The net CapEx is reduced a bit in that respect. As Dave will describe in a moment, you know, the ratios are improving as well, as we indicated. You know, none of these decisions were in response to any political or any of the offset questions. We've been working those aggressively and, you know, working closely with the various government officials both in the U.S. and Europe in that respect. These decisions were entirely independent. Yeah, maybe I'll just add that, you know, as we looked at, you know, the dividend and what made sense, we were fairly focused on the balance sheet. We wanted to make sure we maintained a healthy balance sheet, make sure that we can sustain an A rating category in terms of our, you know, leverage position. So that was really, you know, one of the key drivers of the decision that the board took into account as they made this change. Thanks, Rob. Jonathan, can we have the next question, please? Certainly. One moment for our next question. Our next question comes from the line of Timothy Arcuri from UBS. Your question please. Thanks a lot. As you kind of thought about the cut in the dividend, I mean, you know, obviously the yield is pretty much in line with the S&P, but Dave, is there sort of a minimum cash level that you're sort of managing to as you think about the dividend and as you think about some of the, you know, other allocations around CapEx and whatnot? I mean, we've traditionally tried to maintain above $20 billion of cash and about $30 billion of liquidity. I wouldn't say that's a bright line, but, you know, that's a level that I think the rating agencies are comfortable with in order for us to, you know, kind of maintain this A rating category that is important for our capital structure. Tim, do you have a follow-up question? I do. I do, yes. Pat, there was some speculation during the past couple of days that there had been some recent delays in some of the three nanometer orders to foundries around Arrow Lake. Can you talk about that at all? Yeah. The simple answer is no. No delays. Arrow Lake's on track. You know, the three nanometer programs are on track, both that with TSMC as well as our internal three nanometers, the Intel 3 programs, Granite Rapids and Sierra Forest in particular. I'm somewhat amazed by some of these rumor mill discussions that come out. You might notice there were similar ones on Intel 4 a few months ago and also with some of our other TSMC programs, which were patently false at the time as well. No changes in the programs. As I've indicated, you know, good solid execution on both the client, the server, NEX and AXG side, and we are gaining momentum with foundry customers as well. I feel good that we've turned the corner on many of the execution challenges and, you know, these rumors, like many others, will be proven by our execution to be firmly false. Thank you, Tim. Jonathan, can we have the next question, please? Certainly. One moment for our next question. Our next question comes in the line of Aaron Rakers from Wells Fargo. Your question please. Yeah, thanks for letting me ask the questions. I wanna ask kinda just on the strategic perspective as we think about the IFS and the investments there. You know, I think last quarter you talked about like a $4 billion lifetime deal value, and I think the quarter before you talked about $7 billion. Can you just remind us of how we should be thinking about the goalposts or the points you're putting on the board for the IFS strategy, what we should be thinking about through the course of this year and maybe in the next year? You know, context behind that $4 billion versus the prior $7 billion number. Yeah. Yeah, thanks. The $7 billion, and we'll start there, was the pipeline value that we had. You know, that's a qualified pipeline, but typically, there's a ratio of conversion of pipeline into actual orders. What we said when we gave the $4 billion is we're now gonna be speaking very specifically, not about the total value of the pipeline, but about the firm lifetime contract value that we've been able to secure. The $4 billion, I'll say, is a better number than the prior number, and that's how we'll be speaking to our foundry business, will be lifetime value of the revenue. We won't be speaking about pipeline numbers. We think the lifetime value of revenue is a better indicator of the, of the real merits of the business. You know, furthermore, we do expect to be updating on that as we go through the year, obviously expanding Intel 16, Intel 3, our first customer last quarter on last quarter's call in that regard. Intel 18A, as I said, we expect to start landing some of those customers this year. That's super important because that'll affirm not only the strategy, but also our customer's view of the health of our 18A process technology, which I think will be quite reaffirming to the markets, both in terms of strategy as well as technology development. Then, of course, we continue to gain momentum for our advanced packaging technologies as well as another element of our foundry business. We'd also point out that, as we said, we wanna be the leading systems foundry. And with that, it's also driving key new standards like UCIe for chiplets as well as our software assets. The full capabilities of wafer foundry, industry chiplet standardization, packaging technologies, and software technology, the four elements of our systems foundry strategy, all of those continuing to execute smoothly, and we expect that we'll have more customer announcements as we go through the year. Aaron, do you have a follow-up question? Yeah, I do. Thanks, John. You know, quick follow-up and kinda just again sticking with the strategy thoughts. You know, the discussion around generative AI and, you know, obviously having the Ponte Vecchio product in the market, for a little time now, I'm just curious of how you think about, you know, the company's competitive positioning, for, you know, particularly generative AI training, and how we should think about the evolution of the product portfolio from that perspective? Yeah. Thanks, Aaron. I'd love to talk about this for about the next two hours. You know, a few specifics. One is, you know, we do view that there's a range of requirements for AI. If you could think about, this, you know, there are these big monster training environments where all these machines do is train for, you know, days or weeks on these, you know, 100 billion parameter models. For that, you know, we have very high-end offerings, and we have, our Habana Labs Gaudi offerings as are dedicated for those monster training environments. When you view to broader GPU, right, as your question indicates, we're being, you know, gaining momentum with Ponte Vecchio in the marketplace now for HPC and AI use cases, and you'll see us putting more emphasis on our GPU offerings over time. Finally, you know, we'd also emphasize that Sapphire Rapids with our AMX capabilities is a very merited AI core by itself. There's gonna be a broad infusion of AI into workloads everywhere, right? Those workloads could be some data preparation, could be some AI inferencing, could be some, I'll say, more medium-sized model training workloads, not 100 billion parameters, but 10 billion parameters where you just run them on the fleet of Sapphire. And in this capabilities, the performance of Sapphire Rapids is quite spectacular. That performance we expect will become much more of the mainstream of computing as AI gets infused into every application going forward. Specifically in this regard, you know, as I commented on the last earnings call, you know, we'll be having a webinar on the data center overall with specific focus on the AI large model training, generative AI will be all included as part of that webinar that we'll have later in March. Perfect. Aaron, thank you for the question. Jonathan, can we have the next question, please? Certainly. One moment for our next question. Our next question comes from the line of Vivek Arya from Bank of America. Your question, please. Thank you. Pat, I'm curious, at what point should Intel reconsider whether the IDM strategy makes sense, or is it better to independently focus on manufacturing and design like most of your peers? You know, is there any discussion at the board level to consider this kind of breakup? What if, you know, the PC TAM doesn't grow, and if the server share shifts continue, would that be the catalyst to revisit the right structure? I'm just curious whether you think that the headwinds Intel are seeing, are they more cyclical or more structural? If they are structural, you know, should a different structure be considered for the company? Yeah. Thanks, Vivek. You know, to some degree, we're already considering a different structure, and that is the nature of the internal foundry strategy that we spoke about over the last two quarters, where we said we have to treat the internal foundry business as we treat our external foundry customers as well. This idea of the two different operational models of the company is something that we're well underway with. We've called it the IDM 2.0 Acceleration Office. This is a regular process now that we are essentially teasing apart the company into internal foundry, which is truly measuring ourselves as a foundry, benchmarking ourselves as a foundry, and standing up all of the business operations to support both our internal business units. At the same time, we support our external foundry customers. As we've been progressing down that, you know, we've gotten good resonance from our potential external customers, even as we begin to restructure how we do business internally. To some degree, you know, my answer to your question is, Vivek, is absolutely right, and we're well on that pathway already, and that's exactly what we mean when we talk about the internal foundry model. Now against that, of course, you know, that's a lot of work, right? You can't make such a shift overnight. That's why we said the key next milestone that you will start seeing from us is Q1 of next year when we'll start publishing the specific P&L associated with the internal foundry model and really treating it as an internal business unit. With that, giving you the visibility, as well as the accountability that comes with that P&L assessment. That's part of the reason that we've made that commitment to our shareholders. I would say one other thing, Vivek, is just on your notion that things are, you know, perhaps not working as planned. I would say our transformation is underway, and we're making good progress on it. Most of what we're seeing in terms of headwinds is macro, and the areas where we're seeing headwinds from share and so forth were expected. We knew those would be the case as we, you know, kind of improve our, you know, process technology leadership and get our products back to a good place. As Pat has said in the prepared remarks and answers to other questions, you know, we are feeling like we're now really seeing that transformation unfold in front of us. We feel, if anything, more confident about our position. We do recognize, as Pat said, that, you know, an internal foundry model makes more sense for us in terms of how to manage, the manufacturing and technology part of our business versus the product part of our business. Yeah. Maybe just one more point to add to this. You know, we just finished the board of directors meeting this last week, and the two topics of greatest discussion were the dividend and our capital allocation policy, you know, which we covered. You know, we had multiple sessions, deep conversations at the board on that topic. The second was exactly this, right? Our alignment on the IDM 2.0 strategy, the progression of our process technology development, and the migration to our internal foundry model. Those were, you know, substantially discussed, reviewed, and concluding the board meeting with very strong affirmation of that strategic direction, you know, by the board and the support for it, as seen by the policy changes that we're announcing today on the dividend, but the strong affirmation of the path that we're on with the internal foundry model. Vivek, do you have a quick follow-up? Yes. Thanks very much. Just on the near term, you did reaffirm Q1. I was wondering if there is any other color, you know, better or worse than what you thought, you know, when you provide the outlook. David, would be helpful if you could give us kind of the updated free cash flow view for the year, given all these changes in CapEx and OpEx. Thank you. Yeah. No, no real change on the guidance that we gave. You know, we simply wanted to reaffirm that. You know, I think we still have the same puts and takes that we described on the earnings call, you know, considerable anxiousness, you know, with respect to China. Clearly we're expecting, you know, that to begin to be restored as the COVID policy in China and People's Congress takes effect, worldwide inflation, European. All of those effects are exactly the same. The dominant theme of Q1 was inventory burn. As we continue to work with our customers to get through that, we, you know, fully expect that that will continue as we outlined in the earnings call, and simply wanted to reaffirm that as we're just a couple of weeks since that conversation. Dave? On the free cash flow, no change to our outlook on free cash flow. We didn't give a specific annual target, but what we did say was that we thought we would be below the model. Generally, we're thinking 2023 and 2024 would be kind of breakeven for us, in terms of free cash flow. We're obviously gonna be below that model in the first half of the year, but we do expect things to approach the model as we progress through the rest of the year. Thank you, Vivek. Jonathan, can we have the next question, please? Certainly. One moment for our next question. Our next question comes from the line of Joe Moore from Morgan Stanley. Your question, please. Great. Thank you. I wonder if you could talk about the gross CapEx level. Still seems like with the capital benefits you're getting, you're still well north of $20 billion. I know your utilization is probably not where you'd like it to be, but there's also a pretty heavy investment in the node transition. Can you give us a little color on, you know, how you're thinking about allocation of that capital, how much is going to shelves, how much of it's going to process technology that will ramp a couple of years from now? Yeah. I would say, you know, 40%-50% is probably shelves investments. As Pat said, you know, we're gonna be pretty flexible in terms of the capacity investment, which is, you know, kind of equipping these shelves, and less flexible in terms of what we think we need to do in terms of shell investment to position ourselves for the five years, five nodes in four years in that involvement. You know, obviously that does require some reasonably reasonable CapEx this year. I think if anything, relative to where we were last year, we're well ahead on the, on the offset side of the equation. That should enable us to come in at a level that's lower than the mid-30s percent CapEx intensity that we had modeled for this year. Yeah. Obviously, you know, we're making sure that we have the equipment in place for our Intel 4 three ramp, meeting our, you know, 2024 product line, requirements. You know, that's starting to come into view right now. Then as we get to Intel 20A and 18A for late 2024, 2025, product ramps, that starts to affect our capital view. Clearly making sure that we have enough capital in place to support our TD, development, which is the ultimate priority, that we would have. Finally, we're also starting to see some of the earliest capital for what's beyond 18A, as well, and starting to line up, some of those. Examples of that would be the commitment to be the leader in High NA, the second generation of, EUV. It's a combination of capacity, requirements, I'll say strategic, investments in shell that we can scale up when we see clear market demands, long-term technology, leadership. Those all, you know, come together in that, you know, $20+ billion gross and the net, CapEx as David outlined. Joe, do you have a quick follow-up? I do. thank you for that. In terms of the foundry opportunity, how are you thinking about capital spending relative to that? Is it you wanna have shelves in place and then you'll equip them when you have clear line of sight to foundry revenue? Or do you put wafer fab equipment into place anticipating that demand will come? Yeah, it's, mostly, the former. But we also are, I'll say, pre-committing some capacity corridors, Joe, you know, that we're guaranteeing that we have at least some level of capacity. Now, obviously, some of the whale customers, we're building shell capacity that we can scale up into, you know, but we're not gonna make those incremental, you know, multiple billion or $10+ billion capital investments until we have firmer customer commitments. I think it's a very prudent and balanced strategy. A baseline corridor that gives us plenty of ability to say, "Yes," you know, for opportunities, and those opportunities might either be smaller in capacity, or test chips or, you know, small early learning vehicles for our customers. It's also including like RAMP and RAMP-C, you know, the government supported programs, and some of the long-term efforts on our customers. You know, some of these foundry decisions, they're, you know, doing tapeouts now for, you know, product decisions that are in 2027, and they simply need enough capacity to do extended validation or early development work. It really is all of those. You think about it as good, you know, good near-term capacity, but nothing too extreme until we have firm customer guidance to fill into those shells. Thank you, Joe. Jonathan, can we have the next question, please? Certainly. One moment for our next question. Our next question comes from the line of Christopher Caso from Credit Suisse. Your question please. Yeah, thank you. Good morning. The question is on CapEx. Obviously you've been reducing CapEx in response to business conditions. To what extent can we expect CapEx to ramp up or down as the business conditions change? Is there still more flex if conditions weaken that it could be reduced? You know, if as the macro normalizes, you know, what's the right way to think about CapEx? Is it as a percentage of revenue? Let me talk about the flex, and then I'll let Dave talk about the way to think about it. You know, in terms of flex, obviously we've been flexing down what I call the capacity capital, you know, and obviously we can continue to make that trade-off. I don't think there's a lot more flex down available to us from where we are, but of course, we'll continue to make those adjustments, modest pushouts, et cetera, as business conditions require. We are continuing, as the earlier parts of the call have emphasized, you know, the shell investments and the strategic investments that enable us to scale up quickly if required. I think we have, you know, built ourselves a good position, so that we can scale down a bit, but scale up a lot, as business conditions would require. We're also, as we've said in the smart CapEx strategy, we're, you know, making good progress on capital offsets, US, Europe, ITC, and CHIPS programs. All of those are proceeding quite well to, I'll say, give us good capital leverage as well. Dave? Yeah. The only other thing I would say is, you know, over the, you know, now more medium term, you know, we would expect next year to be kinda mid- 30s percent CapEx intensity. Then beyond that, the expectation is that we would kind of operate in the mid 20s as a percent of sales in terms of CapEx intensity, and that's kinda how we're managing the business. I think Pat said it right. You know, in reality, we think we're able to even beat that target for 2023, despite the fact that we've, you know, obviously seen a lower revenue level than we had originally anticipated a year ago when we set the model. Chris, do you have a quick follow-up? Very helpful. Thank you. Just a question of the magnitude of offsets that are contemplated in what you expect for CapEx for both this year and next year. And given an additional partner in the co-investment program and, you know, progress on CHIPS Act and ITC, should we expect those offsets to increase next year Yeah. We said that, you know, we expected offsets in the call, earnings call. We said it would be in the 20%-30% range, and we still are confident that's where the offsets will land for this year and for next year. You know, it'll be a combination of, you know, grants as incentives, investment tax credits, and, you know, the CHIPS program. You know, obviously, you know, there's, you know, some error bars around the timing of all of those things, but we feel pretty confident that, you know, since we're chasing after several of those things that, you know, several of them will land this year in a way that makes us comfortable that we'll be within the 20%-30% level. Yeah. We're excited about the progress we made there. I think if we were sitting here two years ago, and we would've described the capital offset to you know, program, many of you would have said, "Well, that's pretty crazy." You get the most significant pieces of industrial policy legislation since World War II accomplished in both U.S. and in Europe, innovates an entirely new capital partnership model, and get a fundamental piece of tax legislation completed. Obviously, you know, those mechanisms now in place, we of course, need to apply and see them granted against our business, but again, we're making good progress. You know, the final point of that is the longer term capital returns that we're able to, or return on invested capital, right? The best way to get high return on invested capital is to have, you know, low capital investments with high return models, and that's what we're developing with this capital offset strategy. We think it very much sets us up very nicely for the second half of this decade as we start to see cash being generated, you know, from those capital offset benefited investments. Chris, thanks for the question. Jonathan, I think we have time for one more question, please. Certainly. One moment for our final question. Our final question for today comes from the line of Matt Ramsay from Cowen. Your question please. Yes, thank you very much. Good morning. I guess my first question, Pat, there's been a lot of questions on this call here about your foundry strategy and particularly focused on capital spent for 20A, 18A future nodes. I guess my question is more about as you're looking to be efficient with the capacity you have and the utilization is not really what you guys want, then the company makes the full transition onto EUV-based nodes. Are there opportunities to monetize your installed base of 14 nanometer capacity that's basically fully depreciated at this point? Could you maybe update us on plans for trailing node stuff in your foundry business? Thanks. Yeah. A great question because in a foundry business, you know, that is the heart of where you generate great cash returns is taking depreciated or, you know, well depreciated capital and being able to apply them in long-term manners. If I remind you of the MediaTek announcement that we did last year. That was an Intel 16 customer. With that was a great example of exactly what your question is being able to leverage some of that longer-term capital that we have. We're definitely gonna continue to pursue that and we have quite a number of deals in the pipeline now for those type of customers. We're also looking to, I'll say, you know, build more capabilities in our manufacturing to be able to customize some of those nodes to better meet specific foundry customer requirements, different metal layer compensation, compositions, different transistor type modifications, high voltage, analog circuits. So there's a very healthy pipeline of those type of activities emerging to get good utilization of that, you know, large base of 14 nanometer technology. So there's a new zeal inside of Intel to fill those old nodes. And obviously we have a good amount of that that will start to come available as we start moving to the EUV capacity for the core of our product line going forward. So great question, Matt. One of the things that, you saw us do is change the depreciation, the life of the equipment. That was largely in anticipation that we will be, you know, stretching the lives of this equipment out, certainly eight years, if not more. Matt, do you have a quick follow-up? Yeah, I do, John. Thank you very much, guys. Pat, I wanted to ask a question about sort of the, you mentioned in your prepared script, not just the reduction of the dividend, but you guys are making some tough choices with respect to headcount and to compensation and benefits for the employee base. The team added a ton of staffing over the last couple of years, and now we're kind of going in the other direction given what's happened in the macro and the business conditions. I just, maybe you could address a little bit about what the plan is there going forward around recruitment, retention, incentives, comp, et cetera, for the employee base. There's a long road ahead here, and some really critical work that needs to be done, and I just wondered if you could address that? Thanks. Yeah. Yeah. Thank you. It's a super important question because this is a talent business. You know, with that, I'll, you know, maybe three different comments. You know, one is, you know, we certainly believe when we were adding some of that headcounts and cost of headcount that we could grow into some of the transformational requirements that we had. You know, in a number of the areas in the business, such as G&A functions, you know, that we knew we had transformation work to do. The near-term economic cycle has forced those more rapidly upon us. The G&A functions, as an example, were those that we took the most aggressive near-term steps around. I'd say exactly what you would expect from a company in transformation. You know, where we have to look at ourselves and say, "How do we operate more efficiently? How do we drive higher automation, greater standardization?" Benchmark every function of the company against the best in class in the industry and say, "If we're not best in class, why not?" That process is now well underway internally. You know, at the same time, you know, we will always be biased toward our R&D investments and our capital investments. You know, we're a technology company. We have to reward our engineers. We have to attract the best talent. You know, attrition has been low and stayed low given the changes that we made. You know, some of this is, you know, the macro isn't affecting Intel alone. It's affecting the industry. You know, I have asked the organization for a different, additional sacrifice in near-term comp and benefit reductions. You know, we said we expect that to be temporary and to restore to more normal levels to be competitive in our compensation programs. People are part of this team because they believe in the vision, the mission, the journey that we are on to reestablish this as the critical technology company to rebuild not only the iconic brand but also the Western manufacturing base for the world. That's, you know, to produce technologies that truly touch the lives of every person on the planet. You know, we are building a mission, vision-aligned company and culture and thus the near-term sacrifices. You know, people are hurt by those but also realize the criticality of the path that we're on and our commitment to restore, those, in the future. Finally, you know, as we are looking to that future, you know, we believe that it is a bright future. You know, we believe that, you know, the green shoots that we're seeing in many places are beginning to have results. As I've indicated, a number of our programs, you know, for, our next generation products are showing, very market health. Ones that we're anxious to be updating you on, in the near future because they are showing good health of competitiveness, of leadership, and of breakthrough capability. Thank you for that, Matt. Maybe then just wrapping up now, you know, thanks for joining us today. Thanks for the good questions. We continue to deeply appreciate the open and frank dialogue that we can have with you, our investors, our shareholders, our owners. We look forward to updating you on our Q1 results in April. Hope to see you on the webinar for our data center business later in March, and we'll continue to have a honest and vibrant dialogue with all of you. Thank you so much. Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.