Christopher Muse

C.J. Muse from Cantor Fitzgerald inquired about Intel's AI strategy, specifically whether it involves reinventing x86 or using a broader portfolio including ARM, and asked if the new OpEx targets fully account for planned headcount reductions.

Answer

CEO Lip-Bu Tan described a workload-first AI strategy focused on edge and inference, which involves exploring new, low-power architectures beyond just x86. CFO David Zinsner confirmed the 2025 and 2026 OpEx targets of $17B and $16B respectively are driven by organizational streamlining, with specific headcount impacts still being determined, and noted some savings might be reinvested.

C.J. Muse of Cantor Fitzgerald inquired about how the strategy for Intel Foundry has evolved under the new co-leadership. He also asked for an update on the path to achieving positive free cash flow, given the weak Q1 outlook.

Answer

CFO and Interim Co-CEO David Zinsner explained the evolved Intel Foundry strategy involves more conservative capital deployment and a focus on execution to build trust, while maintaining the core goal of becoming a world-class foundry. Regarding free cash flow, he pointed to disciplined working capital management, lower CapEx, and monetization of non-core assets like Altera as key levers for improvement.

Christopher Muse asked about Intel's optionality to secure leading-edge capacity if 18A is delayed or, conversely, to accelerate capacity additions if it's more successful. He also requested an early read on Q1 seasonality.

Answer

CEO Pat Gelsinger highlighted that Intel's 'shell ahead' strategy provides significant flexibility to scale capacity up or down based on market demand for both its own products and foundry customers. CFO David Zinsner declined to provide specific Q1 guidance but noted that typical seasonality is a decline in the 8% to 10% range, while CEO Pat Gelsinger added that the company is positioned to handle market uncertainty.

Christopher Muse of Evercore asked for details on the drivers behind the sequential gross margin improvement despite lower utilization, seeking clarity on the specific headwinds. He also questioned how Sandisk is balancing its investment in BiCS 8 for enterprise SSDs with the need to manage overall bit growth.

Answer

CFO Luis Visoso identified underutilization charges of $55-$65 million and $50 million in fab start-up costs as the primary gross margin headwinds, which are offset by higher ASPs. CEO David V. Goeckeler explained that the company carefully manages the transition to BiCS 8 to avoid oversupplying the market, structurally removing some wafer start capacity to maintain balance.

Christopher Muse asked for details on gross margin drivers, specifically the headwinds from fab underutilization, and how Sandisk is balancing investment in advanced QLC for AI-driven enterprise SSDs with the need to limit overall bit growth.

Answer

Executive Luis Visoso explained that gross margin is improving due to higher ASPs, which are offsetting headwinds from $55-$65 million in underutilization charges and approximately $50 million in fab start-up costs. Executive David V. Goeckeler added that the company carefully manages the transition to higher-density nodes like BiCS 8 QLC, structurally removing wafer start capacity to prevent oversupplying the market.

C.J. Muse asked for an update on gross margins, referencing a prior floor of 48.2% and inquiring about the impact of trade tensions. He also asked about the long-term margin trajectory considering factors like value-based pricing, cost reductions, and manufacturing strategy.

Answer

CFO Brice Hill affirmed that a low-48s percentage (48.2-48.3%) is the current operational level, with the company effectively managing modest tariff impacts through its flexible global supply chain. CEO Gary Dickerson added that he expects sustainable margin improvement going forward, driven by ongoing cost-reduction initiatives and better value capture for the company's critical technology innovations.

Christopher Muse (C.J. Muse) asked about the outlook for gross margins, specifically how value-based pricing initiatives would impact results through 2025 and how evolving product mix should be modeled.

Answer

CFO Brice Hill noted that Q1 and the Q2 guide reflect a very strong mix, but reiterated that the company's underlying, normalized gross margin rate is approximately 48%. He stated that the company is still in the "third inning" of its disciplined value-based pricing initiatives, which aim to capture the increasing value of its solutions for customers.

C.J. Muse inquired about the directional outlook for Wafer Fab Equipment (WFE) spending in 2025 and the potential risks associated with the change in the U.S. administration. He also asked for more detail on how the company achieved its improved 48% gross margin baseline.

Answer

CFO Brice Hill avoided a specific 2025 WFE forecast but highlighted the company's recent growth and strong Q1 outlook, driven by leading-edge logic investments. He stated it was too early to speculate on potential impacts from the new administration. Regarding gross margins, Hill confirmed the 48.0% baseline reflects sustainable improvements and that the company expects to make further progress through ongoing cost projects and enhanced value pricing.

Christopher Muse questioned the outlook for the Client business, asking how to think about second-half seasonality given the strong first-half performance. He also inquired about the go-to-market strategy for the 2026 MI400 series rack-level solutions and how AMD is managing the associated learning curve with partners.

Answer

CEO Lisa Su explained that AMD is planning for 'subseasonal' growth in the Client segment for the second half, given the strong start to the year. She emphasized that Q1 performance was driven by strong sell-out and consumption, not pull-ins, particularly in the desktop channel. For the MI400, Su stated they are getting a 'very early start' by working closely with hyperscale and OEM partners to define solutions and accelerate the learning cycle, leveraging the fact that the MI350 series is not a large lift from a systems perspective.

Christopher Muse inquired about the growth trajectory for the Communications Infrastructure & Data Center business for 2025 and beyond, focusing on silicon photonics, transceivers, and SatCom. He also asked for an outlook on the recovery in Automotive and growth prospects for other end markets.

Answer

CEO Timothy Breen projected high-teens growth for the Communications Infrastructure and Data Center segment in 2025, driven by data center investments. President and COO Niels Anderskouv highlighted strong design momentum in satellite communications and co-packaged optics, noting multiple major players are in deep execution with tape-outs imminent. For other markets, management expects a flattish year for Smart Mobile and IoT but remains bullish on Automotive due to continued market share gains.

C.J. Muse asked about the drivers behind the stable half-on-half revenue outlook and sought more detail on KLA's work and opportunity size in High Bandwidth Memory (HBM) within the advanced packaging segment.

Answer

CFO Bren Higgins characterized the half-on-half outlook as fairly stable, with a consistent overall business mix. He noted that while advanced packaging gains have been led by logic, momentum in HBM is increasing as higher chip stacks demand more inspection. He identified technology transitions like higher stacks and future hybrid bonding as key opportunities to gain further traction with memory customers.

Christopher Muse of Cantor Fitzgerald sought to understand the drivers of KLA's WFE outperformance beyond 2-nanometer and HBM intensity, especially with the China headwind. He also asked for the 2025 growth outlook for the Services business.

Answer

CEO Rick Wallace and CFO Bren Higgins identified rising process control intensity at the leading edge and HBM as the principal drivers. Wallace added that product momentum in optical pattern inspection and reticle verification also contributes. For Services, Wallace projected high single-digit growth for 2025, below the long-term model due to the immediate impact of China export controls.

Christopher Muse asked about the breadth of foundry logic demand expected in early 2025 and whether it would offset a China slowdown. He also questioned the drivers behind a sequential drop in semi process control gross margins and the expected run rate for 2025.

Answer

CFO Bren Higgins confirmed that volume shipments for the next-generation node are expected to begin in the first part of the year, per typical customer ramp schedules. On margins, he attributed the recent dip to product mix, including lower-end systems for advanced packaging, but stated he expects margins to be 'north of' the current 61.5% level in 2025.

C.J. Muse asked about the improvement in demand visibility, the sense of urgency from customers extending lead times, and the resulting impact on pricing dynamics over time.

Answer

CEO Dave Mosley explained that the build-to-order model provides demand visibility through the rest of the current calendar year and into the next, as customers require supply predictability for data center build-outs. He stated that as Seagate transitions to higher-capacity products, new agreements are negotiated to ensure the company is compensated for the increased value and technology investment.

C.J. Muse of Cantor Fitzgerald sought clarification on whether the $200 million March revenue impact was lost or deferred, and also asked about the potential size of incremental demand from Generative AI's use of imagery and video.

Answer

CEO Dave Mosley reiterated that the $200 million impact is a supply issue, not a demand issue, and that build-to-order commitments are secure. Regarding GenAI, he highlighted growing demand from video and imaging applications at both the edge (smart cities) and in the cloud (media properties, AI creation tools), noting these were among the first movers in the recent demand recovery.

C.J. Muse from Cantor Fitzgerald sought more detail on the visibility for growth in fiscal 2025, asking how far out the nearline visibility extends (3, 6, or 9 months) and what seasonality should be expected for mass capacity in the March quarter.

Answer

CEO Dave Mosley stated that mass capacity visibility is quite full and extends out to the 9-month period mentioned, a direct result of the build-to-order model. He feels confident through the first half and likely into the second half of the year. CFO Gianluca Romano clarified that March quarter seasonality primarily affects the legacy business but also impacts the VIA (surveillance) part of mass capacity, which is typically weaker in March.

Christopher Muse inquired about the company's outlook for full-year gross margin and operating expenses given the lack of second-half guidance, and asked for more color on recent System Level Test (SLT) wins in AI accelerators and mobility.

Answer

CFO Sanjay Mehta stated that due to revenue uncertainty, Teradyne is not providing a full-year gross margin guide, though the first half is tracking to expectations. CEO Greg Smith added that historically, margins move in a narrow range during downturns. On SLT, Smith clarified that the mobile win is separate from the 2-nanometer trend and detailed a key win for AI accelerators where SLT is critical for testing complex devices with actual training workloads.

Christopher Muse asked for details on the drivers behind the low single-digit share growth outlook in Semi Test and inquired about the confidence in the latest robotics restructuring plan.

Answer

CEO Greg Smith detailed that Semi Test share growth is driven by maintaining 50% share in the growing compute VIP market, incremental mobile improvements, and content growth in automotive. For memory, HBM share gains and strength in DRAM final test are key. Regarding robotics, Smith explained the restructuring focuses on the commercial side to help partners sell a broader product range and create a single service organization, aiming to sell more robots and lower the breakeven point in a weak but outperforming market.

Christopher Muse asked for help understanding the operating leverage in the 2025 model, given that Q1 OpEx is guided to new highs while revenues remain well below the prior peak. He also asked for the drivers behind the expected sequential growth in the Robotics business in Q4.

Answer

CFO Sanjay Mehta reiterated that the company expects to see operating leverage in 2025 despite low-teens OpEx growth. CEO Greg Smith explained the OpEx increase is a conscious investment to pivot towards new market growth areas like HBM and VIPs, where Teradyne's historic strength was lower. For Robotics, he attributed the strong Q4 outlook to typical seasonality and continued momentum in the OEM channel and heavy payload products, noting the new MiR Pallet Jack is more of a 2025 story.

CJ Muse of Cantor Fitzgerald asked about the extent of exabyte growth achievable through technology alone before needing to add physical capacity. He also sought to understand the primary drivers of gross margin improvement, questioning if it's fixed cost absorption or higher ASPs.

Answer

CEO Irving Tan expressed confidence in meeting demand through technology-driven capacity uplifts without near-term investments in new capacity. Interim CFO Don Bennett added that gross margin strength is primarily a result of delivering high-value product technology and TCO benefits to customers, rather than from increased production, as supply and demand are being tightly managed.

Christopher Muse asked for clarification on the projected sequential decline for the HDD business in the March quarter, questioning if it's a pause in cloud demand or weakness in client/consumer, and inquired about the confidence in the NAND market's 'midcycle pause' and any remaining hurdles for the business separation.

Answer

Incoming Western Digital CEO Tiang Yew Tan attributed the HDD softness to quarter-on-quarter variations in customer deployment timing and supply-demand management after five quarters of strong growth. CEO David Goeckeler explained the NAND 'pause' is due to temporary oversupply, which the company will counter by adjusting production to support price stabilization. CFO Wissam Jabre confirmed the spin-off is on track, providing specific record and distribution dates in February.

Christopher Muse asked about the drivers for the increased enterprise SSD mix forecast to 15%, particularly the impact of the NVIDIA GB200 qualification, and also inquired about the evolution of HDD pricing negotiations given longer customer visibility.

Answer

CEO David Goeckeler confirmed that strong demand and numerous qualifications, including with NVIDIA's reference architecture, are driving the enterprise SSD mix forecast up to a 15-20% range for the fiscal year. On the HDD side, he explained that better supply-demand balance and the adoption of UltraSMR technology are enabling more predictable, TCO-based pricing discussions with customers, supported by new products like the 32-terabyte drive.

Asked about visibility for 2026-2027 given the rise of HPC, and for an update on the timeline for replacing double-patterning with single-step EUV, which seems to be progressing faster than previously thought.

Answer

Strong, committed AI investments provide confidence that 2025 and 2026 will be growth years; 2027 is too far out to call. The transition to single-exposure EUV is a gradual process that happens as tool productivity and maturity improvements lower its cost to match multi-patterning. This will occur over the next few years, with DRAM potentially showing the fastest progress.

Christopher Muse questioned the level of derisking in the 2025 outlook for weaker markets and asked if customers have sufficient cleanroom space for the upside AI scenario. He also inquired about trends in EUV layer counts for future nodes like A16 and HBM.

Answer

CEO Christophe Fouquet explained that the main risk is potential pushouts, which the guidance range accounts for, and confirmed that the upside scenario depends on customers successfully building additional cleanroom capacity. Regarding layer counts, he reiterated that AI-driven chips are accelerating Moore's Law and driving more demand for advanced lithography, consistent with views from the November Investor Day, but did not provide specifics on future nodes.

Christopher Muse questioned the level of derisking for non-AI markets embedded in the 2025 outlook and asked if customers have sufficient cleanroom space for the potential AI-driven upside. He also inquired about EUV layer count trends for future nodes.

Answer

CEO Christophe Fouquet explained that the guidance range accounts for the risk of customer pushouts and that discussions about building additional cleanroom capacity for the upside are underway with customers. He reiterated that AI is accelerating Moore's Law, which historically drives higher demand for advanced lithography, confirming the trend without giving specific layer counts.

Asked for details on the timing and impact of NAND underutilization charges and new fab construction costs on margins, and for a view on the H1 vs. H2 split of the updated HBM industry revenue outlook.

Answer

The company explained that NAND underutilization costs will weigh more on Q4 margins as they flush through inventory, while start-up costs will increase through 2026. The HBM industry TAM is expected to be weighted to the second half of calendar 2025, driven by the transition to premium 12-high products and an expanding customer base.

Christopher Muse (C.J. Muse) asked about the financial impact of NAND underutilization charges and period costs for the upcoming quarters, as well as the expected incremental construction costs. He also inquired about the first-half versus second-half revenue split for the newly revised, higher HBM industry TAM.

Answer

CFO Mark Murphy explained that due to structural capacity reductions, more underutilization costs will hit inventory rather than being expensed as period costs, weighing on margins in Q4 and into fiscal 2026. He noted start-up costs would increase through 2026. CEO Sanjay Mehrotra stated that the HBM industry TAM would be weighted toward the second half of calendar 2025, driven by the shift to premium 12-high products and an expanding customer base.

Christopher Muse of Evercore ISI asked about the blurring lines between training and inference compute, questioning the future of dedicated inference clusters and the overall impact on NVIDIA's strategy.

Answer

President and CEO Jensen Huang explained that AI is now driven by multiple scaling laws beyond pre-training, including post-training and reasoning, which can require orders of magnitude more compute. He emphasized that NVIDIA's unified architecture is fungible, allowing customers to dynamically allocate resources for any workload. Huang noted that the new Blackwell platform was specifically designed for reasoning AI models, offering up to 25x higher throughput, making a unified data center architecture more valuable than ever.

Christopher Muse of Cantor Fitzgerald asked about the debate on whether scaling for large language models has stalled and how this affects demand for NVIDIA's next-generation Blackwell platform.

Answer

CEO Jensen Huang stated that foundation model pretraining scaling is intact and continuing. He explained that two new scaling methods have emerged: post-training scaling (using AI feedback) and inference-time scaling (where models 'think' longer for better answers). Huang noted that all three scaling methods are driving significant infrastructure demand, with the next generation of models starting at 100,000 Blackwell GPUs, indicating a major step-up from the Hopper generation.

Christopher Muse asked how NVIDIA's rapid, complex annual product cadence might alter its strategy regarding vertical integration, supply chain partnerships, and its margin profile.

Answer

President and CEO Jensen Huang explained that NVIDIA's high velocity is enabled by designing the entire AI factory platform, from chips to software. However, he stressed that NVIDIA is a technology provider, not an integrator. The company relies on a vast, disaggregated ecosystem of ODM and OEM partners for final system integration and delivery, which is crucial for its scale and reach. This partnership model allows them to service the huge global market effectively.

Christopher Muse of Cantor Fitzgerald & Co. inquired about the expected rate of recovery following the Q1 2025 bottom, the potential for a return to normal seasonality, and the key drivers for gross margin improvement.

Answer

CEO Kurt Sievers noted that forward visibility is very poor but suggested a 'flat to slightly up' Q2 for modeling purposes, highlighting accelerated weakness in the comms infra segment. CFO Bill Betz explained that Q1 gross margins reflect annual price concessions and lower revenue fall-through but are expected to remain at these levels until revenue growth returns, at which point they should move back into the long-term 57% to 63% range.

Christopher Muse requested more detail on the Industrial slowdown and asked if NXP's cautious management of the cycle would limit its gearing to an eventual recovery.

Answer

CEO Kurt Sievers specified that the Industrial weakness is predominantly in Europe and the U.S., with factory automation being particularly weak, while China's strength is more in consumer IoT. He strongly refuted the idea of being less geared for a recovery, arguing that NXP's better performance is because they 'hit the brakes earlier' and that low channel inventory (8 weeks vs. an 11-week target) positions them well for an upturn.

C.J. Muse requested a rank-ordering of incremental revenue drivers for 2025, including gate-all-around, advanced packaging, and NAND upgrades, and asked if the strong March guidance implied a weaker second half or significant full-year outperformance.

Answer

CEO Timothy Archer identified the NAND recovery as the most impactful year-over-year driver, citing upgrades and new tools like carbon gap fill and molybdenum. He also noted continued growth in advanced packaging. EVP & CFO Douglas Bettinger declined to give a full-year revenue profile but reiterated confidence in outperforming WFE, cautioning that some lost China revenue was second-half weighted.

Christopher Muse inquired about the impact of a slowing China on the CSBG and Reliant businesses and asked about the outlook for operating leverage into calendar 2025 after a year of significant investment.

Answer

CFO Douglas Bettinger acknowledged that a slowdown in China's specialty node investment would be a headwind for the Reliant business. Regarding OpEx, he noted the company successfully delivered operating margin leverage in 2024 and hopes to continue this trend in 2025. CEO Timothy Archer added that CSBG has other growth drivers, including equipment intelligence services, that will support the business.

Christopher Muse requested a framework for gross margins beyond Q1, considering inventory and factory utilization, and asked if loadings would increase in Q2 with normal seasonality.

Answer

Executive Rafael Lizardi reiterated that revenue is the primary driver of gross margin, with a 75-85% fall-through rate, adjusted for depreciation changes. Factory loadings depend on future revenue. While declining to forecast Q2 specifically, he noted that the company would not want to drain its current healthy inventory levels, implying production would likely rise to meet any increase in demand.

C.J. Muse from Cantor Fitzgerald inquired about Texas Instruments' strategy for factory utilization and inventory levels heading into 2025 amidst cyclical uncertainty. He also asked if the observed strength in China's auto market could be linked to Chinese OEMs gaining market share in Europe.

Answer

CFO Rafael Lizardi stated that the objective is to grow inventory to support the eventual upturn, with a few hundred million in growth expected in Q4. He noted that factory loadings would be slightly down. CEO Haviv Ilan attributed the China auto strength primarily to domestic Chinese EV market momentum and competitive local Tier 1s, rather than commenting on European market share dynamics.

Christopher Muse requested details on the $60 billion to $90 billion AI opportunity for fiscal 2027, asking about the expected mix between custom accelerators (XPUs) and networking, and which customers are included in this forecast.

Answer

President and CEO Hock Tan clarified that the figure is a Serviceable Addressable Market (SAM), not a revenue forecast, and it specifically pertains to only three of Broadcom's current hyperscale customers. He estimated that at that scale, AI connectivity would represent approximately 15% to 20% of the total dollar content.

C.J. Muse asked about the gross margin trajectory for the overall software segment, noting the recent increase and questioning how it should be modeled as VMware revenue continues to grow.

Answer

President and CEO Hock Tan stated that software gross margin is not a highly relevant metric for their business model, as most products are subscription-based rather than SaaS. He affirmed, however, that the gross margin will remain high, at around 90% or more.

Christopher Muse asked about company-specific drivers for outperformance in calendar 2025 and the expected shape of the cyclical recovery across end markets.

Answer

CEO Vince Roche detailed his outlook for fiscal 2025, expecting a return to growth in Q2. He ranked the market recovery as follows: Industrial first, due to healthy inventories and green shoots in AI test; then Consumer, with a diversified portfolio and normalized inventory; followed by Communications, as inventory digestion ends; and finally Automotive, which faces a tougher year-over-year comparison.