All right, welcome back to the Barclays Global Tech Conference. Pleased to have John Pitzer with us from Intel. I'm going to read some disclosures first, and then we'll hop in. But before we begin, please note that today's discussion may contain forward-looking statements that are subject to various risks and uncertainties, and may reference non-GAAP financial measures. Please refer to Intel's most recent earnings release and annual report on Form 10-K and other filings with the SEC for more information on the risk factors that could cause actual results to differ materially and additional information on our non-GAAP financial measures, including reconciliations where appropriate to the corresponding GAAP financial measures. That's harder to do than you make it seem. You did it well. All right. Appreciate the time this morning. Yeah. Thank you for joining us. W hy don't we start on 18A? I understand it's always a tough question because everyone asks, "Give us mark-to-market," and it's difficult because they're obviously very customer-specific. But how are things progressing there? And then any updates on yields, landmarks, etc., that you can offer? Yeah, happy to help and appreciate everyone joining today. On 18A, listen, our first product out on 18A is Panther Lake. It's a client product for PCs. We had committed to getting our first SKU out by end of year. The good news is we've done that. If you're in Vegas in January, stop by our booth. You'll hear a lot more on Panther Lake from us and probably from our OEM partners as well for the first time because while we're shipping, it's really CES, which is the launch event, and you're likely to hear a couple of things about Panther Lake. Our OEM partners love the part, and they want us to get them more volume, and I'm sure we'll talk about the supply constraints we're seeing in our business a bit later on. Now, relative to Panther Lake and 18A yields, it's been a journey this year with, I think, a positive trajectory. I think when Lip-Bu joined the company in March, he was clearly unhappy with where absolute yields were. I think he was even more unhappy that the progress on 18A yields was kind of haphazard. I think as you fast forward to today with a lot of work that Naga, Lip-Bu, and the teams have done, I'd say we've gone from unhappy to unsatisfied because we'll never be satisfied with where our yields are on 18A. But I think that Lip-Bu and the team are pleased that we're now kind of seeing a consistent cadence of yield improvement on Intel 18A month on month on month. And as Dave talked about on the earnings call, we will continue to see yields improve as we go throughout next year. And by the end of next year, into 2027, we'll be at what we think are kind of industry standard yields. We never talk about absolute yield numbers. We had obviously a POR, Plan of Record, as we exited this year that we're on track to hit. So I think the progress has been good. Sounds great. Yeah. I was curious, and people ask this often, is under new leadership, what are specific changes that have kind of, what are specific changes that new leadership has brought in? Is it equipment? Is it process? Is it culture? Where are those changes? Because you would imagine you had a lot of smart engineers in the room before. What's changed? I think a bit of all three of those things that you hit upon. I think, again, when Lip-Bu did his deep dive on 18A yields and was not happy, I mean, the first thing he told the teams to do is, "Why are we engaging external customers with a product that's not good? Let's take those resources and kind of refocus on getting yields where they need to be for Panther Lake," which we did. And once we have an acceptable yield curve for Panther Lake, we can reengage with the external world on Intel 18A, which we're doing now on Intel 18A, AP. W e're pleased with the maturity of the PDKs on AP. I think in general, it was really incentivizing the teams and, quite frankly, leaning more heavily on suppliers. I think Lip-Bu, one of the reasons why the board hired Lip-Bu is because he has a tremendous network within the semiconductor ecosystem, and on day one, he did something that we've never done, which is share our yield data with external suppliers. I won't mention names, but they've been extremely helpful. I think Naga's put a huge focus on this as well. I think that the improvements we've seen as we've gone throughout 2025 are a reflection of those efforts. You're leaning on some outside IP today. I think most recently, last week, you talked about 70/30, which you reiterated from kind of the earnings call. As you move forward, where is that headed with Nova? Can you talk about splits there? Yeah. So when you say IP, it's really externally sourced wafers from external foundry suppliers? Yeah. Yeah. So roughly speaking, about 30% of the wafers that we get today are externally sourced. We've talked about Panther Lake starting the process of bringing more wafers internally. A s you think about kind of our external strategy on the client side, it really started with Meteor Lake a couple of years ago where one of the four tiles was outsourced. That was accelerated both with Arrow Lake and Lunar Lake, which is today our leading-edge parts on notebook desktop for Arrow Lake and notebook for Lunar Lake. T hose are, at least on the compute tiles, or sorry, the logic tiles, are 100% outsourced. We still do a lot of the base die and advanced packaging internally, but most of the active tiles are externally sourced. What we've said with Panther Lake is to the extent that Arrow Lake and Lunar Lake are 100% outsourced, about 70% of the tiles that we need for Panther Lake will be coming back in-house, which is a positive relative to filling fabs and driving better profitability. I will remind people, Panther Lake is only a notebook part. As we move to Nova Lake, Nova Lake will cover the full PC stack of notebook and desktop and bring even more wafers back. W e've kind of got a trajectory now today where we're going to be bringing more internally. Having said that, I'll also remind you, as we navigate this tight supply situation, we are shifting more of our internal capacity away from client towards server to serve that market. We are leaning a bit more heavily on some of our external suppliers on the foundry side around Arrow Lake and Lunar Lake to augment some of the volume that we're shifting internally towards servers. Yeah. I want to keep going down the technology roadmap, but that's a perfect time to kind of interject on what's going on with supply shortages right now. So obviously, you're moving product around because there's a strong market need on the server side. What are you seeing there that's driving that? I s that a limiting factor for you guys in the near term, or do you think that that's actually beneficial because when things are tight, you have a little more flexibility on price that can help you grow? Yeah. Let me take a step back and talk a little bit about how this year kind of unfolded because we've been in what we consider a strong PC market all year long. We came into the year thinking PC unit volumes at the industry level being about 270 million. We're now sitting at about 290, but we consistently saw upside in Q1 and in Q2. In a way, we didn't see that upside in the server business. Now, we were worried back then that a lot of that was tariff dynamic pull forward. I think as we went into Q3, two things happened on each side of the business. On the PC side, we got more comfortable about sustainability, and on the server side, we just had meaningfully different conversations with our customers. They were significantly upsiding their forecasts as we went throughout Q3 in a way that they weren't in the first half of the year. T hat has created us a situation where we're in tight supply. We're undershipping demand today in both markets. I would say despite the fact that we're moving wafers actively away from client towards server internally, we're still likely going to undership server demand next year by a wider margin than we will undership PC demand, which gives you a sense of how strong the server demand market is today. I'll reiterate what we said at earnings. Q1 is probably the peak of our supply tightness. We'll continue to undership demand after Q1, but I think Q1 is the roughest point of next year, and things will get gradually better as we go throughout Q2, Q3, and the second half. What's driving that server dynamic? Obviously, you're seeing a lot more spend that's related to AI. I think that there was a misconception historically that an increased spend on GPUs would eradicate spend on CPUs. It seems like that attach rate is only increasing, or it's kind of pulling along CPU with it. Are you seeing that? I s that just like in head nodes? Where is that application? Yeah. We're still trying to get our arms fully around what's driving this. I don't want to beat ourselves up too much for missing this because, quite frankly, it feels like our customers missed it. But there's probably three dynamics at play. One is, as you mentioned earlier, over the last couple of years, most of our customers, especially in the hyperscale space, were rightfully focusing on AI infrastructure, and they just delayed some refresh of their installed base of servers. The second dynamic, which I think relates to the first, is all of those customers are now severely power constrained. One of the easiest ways to improve your power budget is to take a five-year-old chip that's sitting in your installed base and replacing it with a brand new chip because those brand new chips are about 80% more power efficient than what's sitting in the installed base today. The third dynamic, which is the one that's, I think, hardest for us to try to get our arms around, is whether or not agentic AI is just putting additional demand on traditional hardware infrastructure. It sort of makes sense because to date, AI has really been focused on frontier models in the LLMs, and that's a GPU spend. But that's the brain of AI, and that brain is being trained on data, which is somewhat agnostic to what you do every day. To make that brain valuable to you as an individual, you've got to move your data onto that brain, which is really a RAG sort of architecture, which looks a lot more like traditional compute. Y ou've seen other areas in traditional hardware infrastructure that have benefited well. T he one I always point to is Nearline HDD demand is also very, very strong. If you look at what our customers are telling us, many of them are now asking for longer-term supply agreements on the server side. Many of those agreements they're asking for stretch beyond next year. So there does feel to be some sustainability in this. When you talk about the supply in server being more strained next year than it is in clients, or at least undershipping the market more than in client, should we think about the ability for you guys to impact pricing in a similar way, or would there be other variables that would? I mean, potentially. I want to be clear. We feel a lot better competitively where we sit on our roadmap for client than we do for servers. S o we still have a lot of work to do on the server roadmap front to get to where we want to be competitively. So c learly, as we think about these longer-term supply agreements with some of the CSPs, we're probably focused a little bit more on market share than necessarily on the pricing side of things. But obviously, in a tight market, economics are economics. Yep. Perfect. Lead into 14A next generation. H ow are you progressing there? Customer engagements on 14A. J ust remind us, I think prior regimes had talked around a very specific moment where you would be at parity with the rest of the market. I think part of when Lip-Bu took over and some of the comfort that investors got was, "Hey, let's just wait until we get there, and then we'll talk about it a little bit more." Maybe give us a mark to market there. Definitely a bit different style in communications with Lip-Bu. A s the guy who needs to interface with investors, I appreciate that style. I would say the early engagements on 14A are going well. We still obviously have work to do. But I do think it's a little bit of a different sort of mindset and engagement model at 14A than we had at 18A. I f I could point to kind of three things that are meaningfully different and probably helping us, the three I would point to is during 18A, in the definitional phase of the node, we weren't really engaging with the external world. We were really only engaging with Intel products as the internal customer. A ll of the decisions we made on the transistor level was really to optimize for them. It wasn't really until the development phase that we started to get some true feedback from external customers. In 14A, in the definitional phase, we are engaged with external customers. What that really means is we're getting earlier, more, and better feedback, and feedback that can actually influence how we develop the node a lot quicker. That's absolutely helping us. The second thing that's helping us is I tend to tongue-in-cheek say that we didn't learn how to spell PDK until about halfway through the 18A node. We had a lot of growing pains in making sure that our PDKs were industry standard-like. We continued to miss the mark on 18A. We were late with our 1.0 PDK. When we finally got it out, if you did channel checks, some customers would say it really wasn't a 1.0 PDK. The good news is we took all of those sort of lessons and we forward-fed them, quite frankly, both into the 18AP PDK, which is maturing nicely, but also on the 14A PDK. The third thing I'd point out is 18A. We were trying to bend physics for the first time in two new ways. We were moving from FinFET to Gate-All-Around, and we were introducing backside power for the first time, and that created a lot of complexity. The good news on 14A, there are clearly technical challenges on 14A, but this is a second-generation version of FinFET, and it is a second generation of backside power, and so again, we can forward-feed all the learnings on 18A. What we have said and what the data shows is if you look at yield and performance today on 14A and you compare it to a similar point of development on 18A, we are meaningfully further ahead on 14A than 18A. Now, having said all of that, we are still setting the expectation that as you think about our ability to land external customers, that opportunity really starts to open up in the second half of next year into the first half of 2027. Gotcha. At earnings, you talked about a more flexible CapEx plan for calendar year 2026, which sounded to me at least like it would move a bit higher. So as we're approaching the turn of the year, how should we be thinking about capital commitments and spend into next year? Is this really dependent on customer breadth of 18A, or what other factors should we be thinking about? Yeah. O ur CapEx guidance for this year on a gross basis is $18 billion. I would say at the end of Q2, we were emphatically saying it was going to be down next year. I think given some of the tight supply we have today, I think directionally down is still right. I'm not sure we're as emphatic as we were, and there's a couple of things to keep in mind, especially as we start to get into early next year. Given the lead time of actual from spend to ramp, most of next year's CapEx is really about 2027 capacity, not about 2026 capacity. The other point that I think is important is I do believe we fundamentally feel like we can still run our fabs more efficiently. We like having that tension in the business because, again, we should be able to get more output on the same footprint. I think Naga and Lip-Bu are driving the teams to absolutely do that. Offsetting that is it's not a great place to be when you're undershipping your customers. It's a bad position to put them in, and we want to be mindful of that. I still think down is probably directionally right, but quite frankly, if we were plus or minus $1 billion around that $18 billion in either direction, it wouldn't surprise me. Helpful. On the packaging side, you hear a lot more rumors around Intel Foundry and the packaging capabilities, which seem to be quite strong. I know that it is a smaller dollar value that you can bring to the market than some of the other large customers, but maybe focus on where you bring value and why people should be paying a little bit more attention. Yeah. Before I answer that, one last point I want to make on CapEx for next year. We are not pre-building for external foundry, and so when we win an external customer, we will need to come back to the market and increase our capital spending plans. Now, there's probably two phases to that. I think the initial tranche of 14A customers we should be able to support out of Arizona, which will be an increase in CapEx, but not a meaningful increase in CapEx. The more meaningful increase will come when we have to start accelerating Ohio, so just think through that. On the packaging side, yeah, we're pretty excited about our technology with EMIB and EMIB-T. We think EMIB allows you to do things around reticle size and sort of density that you perhaps can't do with CoWoS. We're being a little bit cautious about being overly optimistic about this because if you remember a year ago when we were here, we were pretty bullish about advanced packaging revenue for this year. That was much more about being CoWoS overflow with Foveros. Q uite frankly, we probably under-executed a bit. The market probably brought up CoWoS capacity better than people thought, and that revenue opportunity didn't materialize. EMIB is a little bit different because we've got capabilities that we don't think you can get with CoWoS. We're starting to see indications from customer bases, our customer base that agrees with that. The hope is as we get into the second half of next year, we can give you tangible proof by actually generating revenue through the P&L. A couple more I want to hit on the data center side. NVIDIA investment, that obviously frees you up from a capital perspective in the near term. I get a lot of questions about your priorities in the data center. Obviously, you're continuing to march down the path of having the best server product that's available. But when you're interacting with NVIDIA, there's a view that you're going to want head nodes compliant with NVL. W hen you look at your priorities for the next year, how do you balance resources that are dedicated to a server roadmap that's Intel first versus Intel doing an NVIDIA product is still Intel first and that you had a great capital commitment associated with that? But how do you balance those two? We're going to walk and chew gum at the same time. I think we can do both. I'll remind you, it wasn't just the NVIDIA investment, which, by the way, hasn't closed yet. We're hoping to get that done either later this year or early next, depending upon the government shutdown backlog being removed, but we had SoftBank, and we also had the United States government, and so I think we did a lot in Q3 to kind of put the balance sheet in a much better place. Relative to that NVIDIA relationship, it's extremely important. I think that last time I heard, I think Lip-Bu and Jensen are meeting with the teams every other week, in the off-week, Lip-Bu is are meeting with the internal team, so there's a lot of focus on getting this right. The advantage for us on the data center side is it does give us a lock-in with NVLink and puts us sort of on a level playing field with Grace and Vera. We need to go off and prove that, but we think as a head node with NVLink, we are the best head node out there. Time will tell. I also think that what was important about NVIDIA was a nice endorsement of the x86 ecosystem, and it's also a multi-generational agreement, and so their engineers had to get comfortable not just with our current product roadmap, but what's coming next and what's coming next after that, and they liked what they saw, and so we're going to work, I think, aggressively to get product out of the market, but we haven't set a timeline for that, and we're looking forward to that relationship only getting better over time. Another one on the data center. You described the dynamic in which both across client and in server, shortages is one word, constraints another word. You also talked in the last earnings call about N-1 and N-2 and how you're seeing kind of an increased flurry of demand there as well. Is that a structure just of not being able to get the leading-edge product because you're tight, or is that because people are finding value in that kind of? Yeah, I'm glad you asked the question because I just want to clarify. One of the things we said on the earnings call is that we're tight, and it's most pronounced on 10/7, and because we said that there's sort of this narrative that people are only looking to buy our older parts and not our newer parts, that's not true. The constraints are most pronounced on 10/7 because that's still where the vast majority of our volume is. I'll take data center as an example. Remember, our first non-10/7 data center part is Granite, and that's on Intel 3. That's still very early in its ramp phase, and Granite's going well. It's just very early. Most of our volume is still on 10/7, which is why most of the supply constraints are on 10/7, and the demand surge we're seeing is not just for Granite. It's for Emerald Rapids and Sapphire Rapids as well. They are really good parts. I think if we had more Granite wafers, we'd be able to sell more Granite product. And so constraints are across the board, but most pronounced where we have most of our volume. How does the dynamic in the data center and also AI line impact gross margins the next year? Because as you are more mature, I would imagine things can be beneficial, but then you also have the client dynamic as well. Maybe walk through gross margin trajectory. Yeah, I'm looking forward to a point in time where there's not 16 different things that influence gross margin because there's a lot of complexity in the gross margin dynamic right now. Let me level set by just reminding you what we said at earnings is that roughly speaking, incremental gross margin rule of thumb for next year is in that 40%-60% range, and that's the right way to think about it. Now, when you kind of drill down into that, there are some dynamics that are going on that are gross margin positive. There are some dynamics going on that are creating some gross margin headwinds. On the positive side, we're de-emphasizing the low end of the PC market next year, which should be gross margin positive. When you look at Raptor Lake, there are SKUs where we are absolutely raising pricing, which should be gross margin positive. To offset that, though, we also are doing some demand shaping on Arrow Lake and Lunar Lake. T he reason for that is we know we're undershoring our PC customers by a certain amount next year. We don't want to undershort them by too much. And so as we move internal capacity from client to server, we're trying to augment that with more external wafers on Arrow Lake and Lunar Lake. And that is creating some gross margin headwinds as we do demand shaping. Probably the biggest being Lunar Lake because remember, at the end of Q2, I would have been fairly emphatically telling you that Lunar Lake volumes probably peak in Q3, are flattish sequentially into Q4, and then start coming down after that. Given the way we're trying to manage this tight supply situation, that's no longer true. Lunar Lake's going to grow sequentially in Q4, and it's going to be up again next year on a year-over-year basis, more so in the first half than in the second half of the year. But especially with the embedded memory, that does create some margin challenges. Now, it still puts us in that 40%-60% range, but those are sort of the pluses and minuses that are going on with gross margin. Last point I'll make, we are still in the early ramp of Intel 18A, and clearly in the early ramp of any nodes, yield is not where you want, cost structure is not where you want. That starts to get better every quarter, but I would say on balance, it's probably more of a headwind than a tailwind in the first half of next year, and then it reverses to a tailwind as we go into the second half of next year into 2027. Another minor thematic we're hearing about here and over the last couple of weeks is just memory shortages in general. You still have a large amount of exposure to consumer end markets, which require memory as well. So maybe not your problem, but your customer's problem. Are you hearing any kind of conversations from customers that you may see some muted demand trends when it comes to memory? Yeah. I mean, we're watching it closely, and that is part of the current customer conversation, albeit it is very secondary to the fact that we're not getting them the unit volume that they need. And so I know that there is concern out there that rising DRAM ASPs are going to have an impact on units. That's not the primary concern that customers have today, but it is a dynamic that we're watching. Quite frankly, given how tight we are, if the PC market were a little bit less robust next year, probably wouldn't hurt us all that much, and it would be a little bit of a relief. Now, having said that, I've gone back and looked at other periods of time where DRAM as the percent of the bill of material has started to get to uncomfortable levels. If you look at historical times, the data's kind of inconclusive. There doesn't seem to be a high correlation to units backing off or, quite frankly, even mix changing all that much. I think we want to be respectful of the fact that it could be different this time, given how price inelastic the AI market is. Perhaps this lasts longer and goes higher, but historically, the data would suggest it hasn't been a huge influence on the overall PC market, but we're watching it as it unfolds. Rotating to AI, I want to be respectful about you guys saying that things are on the come. Obviously, you've had a couple of products internally, stops and starts, but you said, "Hey, we're reassessing where we're going with this, and we'll have a very formal kind of view in the next couple of quarters." There's also news out around a potentially signed memorandum with SambaNova. Anything around your AI strategy, whether inorganic or organic, that you can give us an update on at this time? Yeah. W hen you say AI, I'm assuming you're saying AI accelerator because one of the things I keep trying to remind people. You use it there too. AI is an umbrella dynamic that's helping all of our businesses. We've got an AI PC strategy. Quite frankly, AI is helping us in advanced packaging. It's helping us in the wafer business. It's helping us in the traditional server. So let's talk a little bit about the accelerator market and how we're thinking about that. Lip-Bu has been fairly clear that as we think about the GPU portion of the accelerator market, we're not going after the LLM training hyperscale accelerated data center. We're really looking to be focused on a power-optimized GPU for inference as AI moves from the center out to the edge. We've got a lot of work to do there, so stay tuned. It's going to take some time. I think the other dynamic that Lip-Bu has introduced that's worth talking about is the ASICs portion of this business. He, under his leadership, set up a structure called the Central Engineering Group run by Srinivas, which is one of the individuals he recruited over from Cadence. P art of Srinivas's mandate is not just Central Engineering Group, which is making sure that the teams are using IP blocks as efficiently as possible. He's also been put in charge of a real ASIC business. I think a lot of investors don't realize we've got a pretty vibrant ASIC business today. It's all in networking. We've got multiple customers there for doing SmartNIC ASICs. T hat business is actually showing great upside, similar to a lot of other networking companies helping to be driven by AI. I think the mandate that Lip-Bu has given Srinivas is to expand that business into an XPU attached-like business, much like Broadcom and Marvell. I think the other interesting dynamic that we have in this ASIC business is we can pursue it in a Broadcom, Marvell-type model, but given also Intel Foundry, there are a lot of hyperscalers that are looking to go directly to the Foundry and to try to do that, to circumvent kind of the traditional model. We've got that opportunity as well. O ne of the advantages we have is we just have a ton of system integration knowledge, which I think is very helpful as we go off and prosecute that. I want to set the right expectation. Both the GPU and the ASIC sort of businesses are going to take time to develop, but we're pretty optimistic about what they could do longer term. Very helpful, John. Thank you for joining. We're running out of time here. Appreciate it. I t sounds like some good things ahead. Thank you. Thanks a lot. Appreciate it.