Matt Ramsay: Yes. Thanks, guys. Thanks, John. I guess, as my follow-up question, guys, I wanted to dig into the DCAI business a little bit. And that you guys talked about, I think, the PSG or Altera being up, I don’t know, 40-odd percent year-over-year, which, if you just kind of rough math, it means that the core cloud plus enterprise server business is down 40%, something like that. And so, maybe, Pat, could you walk us through what — is that roughly right in terms of math and just where your — how you see share loss versus ASP versus weakness in the markets in China and enterprise? Just how do you break that down for us, what operationally is happening in the server share space? Thank you.
Pat Gelsinger: Yes. So PSG did have a very good quarter, has a very strong backlog, continues to grow. But I’d say the math that you suggest is quite incorrect, given the relative size of those businesses. So we’ll happily offline talk a little bit more through that. That said, we did — we grew less than the market last year and saw some share loss. We see that stabilizing this year. The key factor is better products, right? And we’ve just released that with Sapphire Rapids and getting great response and our announcement event on January 10 was a customer-centric ramp this baby product line. We had strong participation from all the CSPs, all of the OEMs, all of the ISVs, end users. So it was seen as a very strong event. This year, we’ll be very much about ramping that and we’ll see the improvements in both market share position as well as ASPs as we ramp that product through the year, and the confidence in the road map.
And that will be the determinant, okay, you have a better product now, great. Customers are building it on an installed base. But do we have confidence in your long-term? So I’d say we’ve reestablished a very credible road map. You’ll see lots of news coming from us this year as we start delivering on samples, et cetera, of the next-generation products as well as the continued ramp of Sapphire Rapids with highly differentiated features and capabilities. So we feel like we’ve put the worst behind us, right? And we’re now coming back to the front foot in this business area. And I’ll say in a very customer-centric, ISV-centric way that delivers our customers the use cases that they need in their business.
John Pitzer: Thanks, Matt. Jonathan, can we have the next question, please.
Operator: Certainly. One moment for our next question. And our next question comes from the line of Toshiya Hari from Goldman Sachs. Your question, please.
Toshiya Hari: Hi, good afternoon. Thanks so much for taking the question. Pat, I was hoping you could talk a little bit about the demand environment in DCI across cloud, enterprise and perhaps your comms customers. I think in your prepared remarks, you talked about the inventory correction in enterprise being ahead of cloud. So do those comments kind of imply that going forward, cloud could — the demand there could moderate or decline as we progress through the year, or if you can expand on that, that would be helpful. Thank you.
Pat Gelsinger: Great. Great. Thank you, Toshi. The — what we said, clearly that we did see demand softening through the year in data center overall. That’s a market statement. Obviously, we have more exposure to enterprise in China, which we believe weakened our position a little bit more in the year, but we’re seeing those same characteristics now with the cloud providers as well. So we see all of them weaker in the first half of the year. We are, I’ll say, a touch optimistic that China will come back and enterprise will come back more rapidly than the cloud. And with our stronger exposure in those segments, we believe that is a potential good news for us as we go through the year relative to competition. The networking space is one where we have very sustained leadership and strength in areas like vRAN and O-RAN are ones that our platform is dramatically better than competitors.
And with that strong market share through the year, we also expect some level of softening there in those in the networking area, but not as much as some of the other segments that we would have. First half of the year, we expect to be down year-on-year in the second half of the year to returning to growth. So inventory adjustments, a weaker market in first half, recovery in the second half of the year is what we expect. Overall, and obviously, the relative position, we believe that we have is stabilizing and the markets that we’re stronger in, we’re optimistic that they’ll come back a little bit stronger as we go through the year.
John Pitzer: Toshiya, do you have a follow-up?
Toshiya Hari: I do. Thanks, John. Pat, you also talked about your focus and commitment toward value creation, you mentioned how you guys are pulling future investments from the switching business. As you look across your portfolio as of today. I think to your point, you’ve done quite a lot since coming back. Like where is the incremental opportunity as you think about improving the portfolio going forward and creating value? Thank you.
Pat Gelsinger: Yeah. And I’ll just say here without being too specific and some of these things are under evaluation, discussion with customers and the best way to handle it. We’re doing a thorough analysis across the portfolio. And I would say we are looking at every aspect of the portfolio, where we’re getting good returns, where we’re not. And we’re making decision after decision to optimize the portfolio. And as you say, we haven’t been hesitant to make those decisions inside the back. And we have a few more that we’re looking carefully at. But we’re also looking at every area of the business. Dave suggested in his comments, hey, can we do a better job with our line? Could we do a better job with our building assets? We’ve also discussed as part of the internal foundry model that we’re making major steps to improve our automation and ERP efficiency to run the company more.
Some of our people actions. We’ve been very scrutinizing and benchmarking ourselves against best-in-class in every aspect of how we run the business. So one-by-one, we’re saying we’re going to be world-class as measured by benchmarks in these areas and all the business areas that we’re in, we believe they’re strategically important and yielding good results with our shareholders’ investments.
John Pitzer: Thanks Toshiya. Jonathan, we have time for one last question please.
Operator: Certainly. Then our final question for today comes from the line of Joseph Moore from Morgan Stanley.
