Greetings, and welcome to the AMD first quarter financial results conference call. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to introduce Ruth Cotter, Senior Vice President, Worldwide Market, Human Resources and Investor Relations. Ruth, please go ahead.

Thank you, and welcome to AMD's First Quarter 2020 Financial Results Conference Call. By now, you should have had the opportunity to review a copy of our earnings release and slides. If you have not reviewed these documents, they can be found on the Investor Relations page of AMD's website amd.com. Participants on today's call are Dr. Lisa Su, our President and Chief Executive Officer; and Devinder Kumar, our Senior Vice President, Chief Financial Officer and Treasurer. This is a live call and will be replayed via webcast on our website. Before we begin today, please note that our annual shareholder meeting will be held on Thursday, the 7th of May, as a virtual event accessible from amd.com. We will also be attending several virtual Wall Street events during the second quarter, including the Bernstein Strategic Decisions Conference on Thursday, May 28. And our second quarter 2020 quiet time is expected to begin at the close of business on Friday, the 12th of June. Today's discussions contain forward-looking statements based on the environment as we currently see it. Those statements are based on current beliefs, assumptions and expectations, speak only as of the current date and as such involve risks and uncertainties that could cause actual results to differ materially from our current expectations. We will refer primarily to non-GAAP financial metrics during this call, except for revenue and segment operational results, which are on a GAAP basis. The non-GAAP financial measures referenced are reconciled to their most directly comparable GAAP financial measures in today's press release posted on amd.com. Please refer to the cautionary statement in our press release for more information on risks related to any forward-looking statements that we may make. You will also find detailed discussions about our risk factors in our filings with the SEC, and in particular, AMD's annual report on Form 10-K for the year ended December 28, 2019. Now with that, I'd like to hand the call over to Lisa. Lisa?

Thank you, Ruth, and good afternoon to all those listening in today. Before covering our quarterly results, I wanted to provide some comments addressing our response to COVID-19. First, I want to recognize the toll the pandemic has taken on the world. The breadth and speed at which COVID-19 has changed the world since our last earnings call has been staggering. I want to thank the countless healthcare professionals and essential workers serving on the front lines every day. At AMD, our first priority has been to protect the health and safety of our employees. We have transitioned the vast majority of our more than 12,000 employees worldwide to working from home, while ensuring we maintain focus on reliably supplying our customers with the products and services their businesses depend on. We are also supporting the communities we call home through financial and personal protective equipment donations and providing our technology to accelerate medical research. More than ever, the pandemic has placed technology at the forefront of how we work, learn, shop and connect. And we are proud to be providing many of the components powering these essential technologies. Against that backdrop, we performed well in the first quarter. Revenue increased 40% year-over-year to $1.79 billion as demand for 7-nanometer Ryzen, Radeon and EPYC processors drove record first quarter revenue and our highest gross margin in 8 years. I'm pleased with our execution in the quarter, as we quickly adopted our global operations to navigate pockets of supply chain disruption and addressed geographic and market demand shifts caused by COVID-19. Turning to our Computing and Graphics segment. First quarter segment revenue increased 73% year-over-year to $1.44 billion, driven by increased Ryzen and Radeon processor adoption. We saw some softness based on the COVID-19 situation in China that impacted PC related…

Thank you, Lisa, and good afternoon, everyone. We performed well in the first quarter as we navigated a challenging environment as a result of the ongoing impact of COVID-19. First quarter revenue was $1.79 billion, up 40% from a year ago and down 16% from the prior quarter. Year-over-year growth was driven by strong sales of Ryzen and EPYC processors and Radeon products, partially offset by lower semi-custom sales. Gross margin was 46%, up 490 basis points from a year ago, driven by Ryzen and EPYC processor sales. Operating expenses were $584 million compared to $545 million a year ago, primarily due to increased investments in R&D and go-to-market activities. Operating income was $236 million, up $152 million from a year ago, driven by revenue growth and a greater percentage of Ryzen and EPYC processor sales, while operating margin increased to 13% as compared to 7% a year ago. Net income was $222 million, up from $62 million a year ago, and diluted earnings per share was $0.18 per share compared to $0.06 per share a year ago. Now turning to the business segment results. Computing and Graphics segment revenue was $1.44 billion, up 73% year-over-year, driven by Ryzen processor and Radeon product channel sales growth. Computing and Graphics segment operating income was $262 million or 18% of revenue compared to $16 million a year ago, driven by significantly higher revenue. Enterprise, Embedded and Semi-Custom segment revenue was $348 million, down 21% from $441 million in the prior year due to the expected decline in semi-custom sales, partially offset by strong data center growth. EESC segment had a loss of $26 million compared to operating income of $68 million a year ago, which included the benefit of a $60 million licensing gain. Turning to the balance sheet. Cash, cash equivalents…

Thank you, Devinder. And operator, if you could poll the audience for questions, please?

[Operator Instructions] Our first question today is coming from Matt Ramsey from Cowen.

And I hope everyone at AMD is doing well considering the interesting times there have been. Lisa, I wanted to start with a couple of questions on the server business. I guess, one of which is, how do you -- the EESC results in the quarter that you just printed were a bit below, at least where I had modeled them. So maybe you could talk a bit about how you feel the EPYC business is tracking toward that sort of 10% target you guys had set for the second quarter. And I notice in Devinder's comments on the June quarter guidance, most -- some of the upside is going to be driven -- I guess, upside sequentially is going to be driven by EPYC. So how are you tracking against that? And then the last little piece is, I keep getting more and more questions still about the timing of Milan. And I know you guys reiterated that would be this year at the Analyst Day. And if that's still the case, just let us know.

Yes. Absolutely, Matt. Thank you, and I appreciate the question. So look, we are very pleased with the progress in our server business. I think if you look at sort of the progress we've made, there were a number of key things that we wanted to see happen. What we saw in the quarter that we just finished, in the first quarter, we actually saw a very nice acceleration of the cloud business as we went through the quarter. I think as we go into the second quarter, there's an additional significant ramp of the server business. And so we expect to continue to gain share as we go through these next couple of quarters. I think what we're seeing from the current COVID-19 environment, obviously, there's a lot of puts and takes. But as it relates to data center, it's positive for the data center market. Certainly, we've seen some of our largest customers ask us to accelerate some of our deployments. And we look forward to continuing to ramp our server business. I think you asked about Milan, and yes, we are expecting to be launching that at the end of this year.

Got it. Just wanted to switch quickly into the PC business. One of the things that stood out to me from your commentary in the prepared script was the contrast between strength in the PC business globally versus the weakness in China. I imagine that weakness in China was both on the PC side and on the AIB graphics business. If there's any way that you help quantify that? And we've heard some commentary about the economy restarting in China. Have you seen some of those trends start to improve into the second quarter?

Sure. So the PC business has actually held up pretty well. So if we look at the PC business in the first quarter, we saw the rest of the world PC business actually get some benefit from some of the acceleration in demand sort of towards the end of the quarter. We did see some weakness in China as China was shut down in the months of February and early March. We saw that primarily in the channel business, so in offline channels. Now we have seen that pick up as we've gone through the month of April. And what we're seeing in general in the PC business is the first quarter and the second quarter is actually relatively strong with accelerated notebook demand and desktops sequentially lower just based on sort of the preference around notebook versus desktop in this framework. So those are the key dynamics for the PC business.

[Operator Instructions] Our next question is coming from Joe Moore from Morgan Stanley.

You guys are one of the few companies kind of giving a full year guidance. And I just wonder if you could talk us through how you're thinking about the second half? Obviously, you guys have OEM visibility into a bunch of new sockets and new designs, but your customers don't seem to have visibility. So just a little bit more color maybe on how you are thinking about forecasting beyond the visibility that you have in Q2?

Yes. Sure, Joe. So look, we understand that there's a lot of questions about visibility as we go into the second half of the year. The way we look at our business is, we have sort of a lot of positives in terms of just market drivers that we do have good visibility too. I think our progress in the data center market is a positive. We see that with a number of platforms ramping and the number of customers that we have coming on board. So we see that as a positive for us as we go through this year. Console gaming is a positive for us. There's lots of anticipation around the consoles. It's one of the largest launches, I think, of the year. And from that standpoint, there's no change in our view as it relates to COVID-19, just given what we see today. Now as you look at the range, we have increased the range of our guide. And sort of the biggest sort of question mark in my mind is kind of the shape of the PC market this year. As I mentioned earlier, the first half actually looks a little bit stronger than expected, particularly on the notebook side. We are potentially expecting some weakness in the second half due to consumer spending. You sort of have the 2 -- the 2 forces are there. I mean, one is, there is a pull with the strong work-from-home trends, but then there's also the view that, from a macro standpoint, will be weaker in the second half of the year. So that's -- the primary variance in our model is what happens to the PC market. I will say, though, that underneath the market trends, we're very pleased with our portfolio. I mean the notebook portfolio that we have in PCs is the strongest we've ever had. And we believe we have a good opportunity to gain share throughout the year, even as the market may be a little bit weaker than originally expected. So that's the reason for the guidance to try to give the puts and takes. And of course, we'll see how the year plays out.

That's helpful. And then in terms of data center GPU, I know you talked a lot about the Analyst Day about the newer products and penetration of new workloads in the second half. Can you talk about the workloads that you've been addressing so far, cloud gaming and whatnot? And how is that business progressing before we get to the CDNA launch?

Yes. So the data center GPU business is an important strategic business. In terms of size, it's still relatively small compared to the data center CPU business. We are making progress, good overall progress in a number of workloads. Cloud gaming is one that has been a good one for us, and we continue to see opportunity in that as we go through this year, with the current product set. We also just launched the VDI instance with Microsoft Azure, which we feel will be a good workload for us. And then we have a number of the HPC wins that we've talked about that are going to be based on the CDNA architecture, which is an important strategic area for us as well as continued focus on improving our machine learning and overall machine learning frameworks and capabilities. So those are the key workloads that we're going after. And I do think it's an important business for us as we go forward.

The next question is coming from Vivek Arya from Bank of America Securities.

Lisa, for my first one, I just wanted to go back to your EPYC server business. So very strong units in Q1, but it appears that the mix was very kind of cloud-heavy. So perhaps ASPs were lower than we are used to seeing. I was wondering if you could just give us some sense of how we should think about server ASPs going forward. And importantly, if you think of server sales for you for this year versus what you thought 90 days ago, how is that looking like? Because I think your competitors said that they expected some kind of digestion of cloud capacity in the back half. So I was just hoping to get some more color around ASP and just what you thought of your overall server business for this year?

Sure, Vivek. Yes. So that is correct. There was a mix shift towards cloud in the first quarter, and that did have an impact with ASPs lower. That being the case, the ASPs are very healthy. So I think from the standpoint of how our business evolves, it's within the plus or minus of the business model. In terms of where we believe demand will be versus 90 days ago, it's pretty similar. And the way I would say it is, we see cloud being strong. What we see is not just putting on more capacity, but really the ramping of new platforms. And so we view that as a positive. We have strong enterprise adoption as well. When we look at our pipeline in enterprise, it's continued to grow, and continued to grow in the first quarter and continued to grow in sort of the first month here of the second quarter. We do expect, perhaps at the transactional business, sort of the SMB type of business may be more impacted by COVID-19, but that was never a large piece of our business to begin with. So we feel good about the server business. And it continues to be a very strategic focus for us. I think the relationships with our partners and our customers are getting closer as we go through sort of the process of ramping volumes. And so we continue to view it as a strong growth driver for us on a year-over-year basis.

Very helpful. And then maybe a follow-up for Devinder on gross margins. So first half, kind of tracking towards your 45-ish percent target for the year, but Q2 is 44%. And I recall, I think either Lisa or Devinder, you said that second half will be more semi-custom weighted, but that suggests some more pressure on gross margins. So I was just hoping you could walk us through how we should think about gross margins in the back half, given all the puts and takes of mix that you are expecting?

Yes. Thanks, Vivek. I think the key puts and takes, as you said, continued ramp for the semi-custom, which has margins, as you observed lower than corporate average, but they are offset by the strength in the data center revenue. So semi-custom ramped the back half, and that does impact the gross margin being lower than corporate average. But data center strength, as Lisa just referenced, that we are pleased with the ramp in the data center business. In data center business, the margins are significantly higher than corporate average, and has the offset to help us deliver as we guided for 2020, the 45% gross margin for 2020.

Yes. Maybe, Vivek, I can just add to that. So in addition to the data center mix that Devinder mentioned, we also expect to see the console gross margins improve as we go through the year. And that's the reason for the full year guide at 45%. So usually, what happens is in the very -- second quarter is our very first quarter of ramp for the consoles, and so the margin starts a little bit lower and continues to ramp as we go through the year.

The next question today is coming from Mark Lipacis from Jefferies.

On the -- first question on the client side. I guess, AMD has historically had a good presence on the consumer side, but it sounds like you're making great progress on the commercial side with the HP and ThinkPad design wins. Can you give us a sense roughly like what is the split between consumer and commercial on the notebook side? And like how does that play going forward? Does commercial just continue to grow faster than the consumer side? And is there an impact on the gross margin between -- if commercial does grow faster? That's the first question.

Yes, Mark. So our PC business does tend to be much more consumer weighted. I mean, we've made progress in commercial. Commercial has grown nicely, but it's still consumer weighted. We expect to continue to gain commercial share as we go through this year. As that happens, I think there's 2 things in the PC margins that affect PC gross margins. Heavier weight of commercial is certainly positive for the overall gross margins. I think the other pieces, we should expect that education will be strong and that tends to be lower in the mix. And so there are lots of mix dynamics. But overall, I think our confidence level in notebooks being a strong growth driver for us as we go through this year is good. And we continue to work on the commercial versus consumer mix.

Great. That's helpful. And then on the server side, if you look at cloud instances versus cloud internal versus enterprise versus HPC, can you give us a sense of the split today, if not by percentage and like a rank order? And what you would expect to drive going forward? Our own field work had indicated that your instances were growing nicely on EPYC 2. I wondered to what extent is that being deployed internally on the cloud guys also?

Sure, Mark. So when you look at our cloud instances, I would say that our cloud -- some of the cloud acceleration I referred to was acceleration of internal workloads at some of our top cloud customers. So I think that's an area actually where we get more visibility. Cloud instances in terms of numbers for external usage has grown. We announced the GCP platform. We announced the IBM platform as well as additional Microsoft platforms. You will see more cloud instances rollout over the next quarter or so. But much of the growth that we've seen has been around internal deployment of the cloud companies. And then as it relates to enterprise, it is more heavily weighted towards HPC. We've done very, very well in HPC. We're pretty excited about our new high-frequency SKUs that were just launched here in April. They're actually very well suited for large enterprise applications and financial sector as well as some of the technology sectors, and so that's a key focus for us in terms of growing those other pieces of the enterprise business.

Our next question today is coming from Stacy Rasgon from Bernstein Research.

First, harp a little bit again on the server business. I guess I don't quite understand why a big shift toward cloud mix will drive ASPs down sequentially. I mean, your mix has been mostly cloud all along. So why all of a sudden is that driving ASPs down? And I know you said units were up double digits. I guess, in that context, what did revenues do sequentially? And maybe what were data center revenues, CPU plus GPU, as a percentage of total in the quarter? Like, if you could give any color on any of that, that would be really helpful.

Sure. So we did have a positive cloud mix, but I would say that the Q4 to Q1 mix had significant improvement in cloud or significant growth in cloud. So that was the ASP sort of shift that we talked about. As it relates to data center overall, we were in the high teens this quarter. And you had one other question, Stacy?

I said, what did revenues do sequentially? Units were up, like, double digits.

Yes. The revenues were also up sequentially. Not as much as units, but revenues were sequentially -- yes.

Got it. So my follow-up. Again, I want to talk a little bit about the share target. So I know you'd said 10% share, give or take, by the middle of this year. If I even just take your entire EESC revenue and I take Intel's data center revenue this quarter, you'd be about 5% revenue share. And I know you're guiding for growth next quarter, but I mean, just given the magnitude, it doesn't feel like that's going to double in the quarter. So just how are you feeling about that 10% guide for the middle of this year? Is that getting pushed out? Are we defining it wrong? Like how should we be thinking about that?

Yes. So the way we define the share target, and it very much is sort of the view of -- we expect about 20 million units a year in terms of single-socket and dual-socket servers. That's about 5 million units a quarter. So 10% share is about 0.5 million units. From where we look today, we look to be on track to that. Q2 is actually...

That's about Q2?

Yes. Yes. Q2 is actually our strongest backlog quarter that we've seen. So I think that's our current visibility today.

Is that 20 million an appropriate number, though, given you're now playing in comm whereas maybe when you gave that target before you weren't playing in comm? Isn't the total target at -- total market is more like 30 million or even more, right?

Well, again, I think not to go back on how we define the target. I think I've given you how we define the target. And I think that's an appropriate way to define the target. I think our comms exposure is very, very early. And I would say, is not a significant part of the revenue at this point.

The next question is coming from Toshiya Hari from Goldman Sachs.

Lisa, I wanted to go back to your full year guide. I appreciate there's a wide range of outcomes here, and you did put up an updated number. But if we take the midpoint of your updated guidance and we compare and contrast that with your old guidance, you are lowering the midpoint of your revenue outlook by about $250 million, maybe a little bit more. In response to Joe's question, I think you focused very much on the notebook business. Is that sort of the primary part of your business where you're lowering numbers? Or is it a little bit more broad-based across GPU and perhaps the game console business as well?

Yes. So I would say from the full year standpoint, the biggest variable is the PC business in its entirety. So that's notebook and desktop. And like I said, it's a variable, if I -- you can model various scenarios as to what it can be. And I think from our standpoint, when we started the year, we had the expectation of a pretty normal PC environment. I think we would all say that the environment is different than when we started. And given the size of that market, we have given ourselves a wide range. As it relates to what we thought before, it's priority PCs. And when you look at the other markets, game consoles, data center were about what we expected, and the signals continued to be positive in those areas. And by the way, I should -- I'm sorry, if I can just finish off. On PCs , I would say though that, I think we're all waiting to see some of the data as we go through the second half of the year. So I want to say that, like I said, there's those 2 competing forces. One is, there's a strong pull for work-from-home trends and the other is just what is the impact on macro going to be for discretionary consumer spend. And so I think that's a place where we lack full visibility. And we continue to talk to customers. And I think we're all trying to make sure that we are well prepared for any of the scenarios as they come about.

Appreciate that. And then as a quick follow-up, Lisa, I wanted to ask about the competitive landscape. Your nearest competitor continues to grow wafer capacity, as you know, and they talked quite a bit about accelerating the RAM for 10 last week on their call. Are you seeing any changes in how they compete in the marketplace, either from a pricing perspective or from a marketing dollar perspective relative to how you saw the market 90 days ago?

No. It's -- the PC market is always a competitive market. And from that standpoint, I don't think the environment has changed substantially from a -- either a capacity standpoint or a marketing dollar standpoint. From our view, it's all about ensuring that the platforms that we launch actually ramp into production smoothly. And so we've been working on that. And we feel very good about that. I think we mentioned that we have a significant number of platforms, over 135 mobile platforms that are coming to market here in 2020. And they're very, very competitive. They are some of our best platforms from just overall performance and capability standpoint. So we're bullish on our ability to turn that into revenue growth.

The next question today is coming from Ross Seymore from Deutsche Bank.

So let me ask you a question. Lisa, not to kind of go back to the same well as everybody else, but I wanted to hit on the EPYC side of things. I guess the good news is you guys are growing very rapidly and taking share, and you reiterated that 10% market share goal for the June quarter. But overall, it seems like the number has not really upsided anybody's expectations over the last few quarters, despite the market accelerating from a demand perspective, your primary competitor upsiding their data center group or even their cloud segment within that for 3 to 4 quarters in a row. So I just wanted to get your feeling on, is there something that is capping the growth there? Is it the ASP is going down because of who the customers are? I'm just wondering why if the market is as strong as it seemed to be for the last 3 or 4 quarters, you're doing really well, but not actually upsiding our expectation?

Yes. Ross, the way I look at it, and I mean, this was very, very similar to the ramp that we saw in PC business. The ramp in server is something like steady as she goes. And each quarter, we add platforms; each quarter, more platforms are qualified; each quarter, they ramp. It's a little bit different from a pure market phenomenon. And again, I mean, I understand that there are market phenomena, and then there are growth expectations based on platform launches as well as software being qualified and so on and so forth. So as it relates to our expectations, it's actually going quite well. As it relates to the acceleration of cloud, and we're pleased with it. We're not ready to upside numbers at this point. I think we want -- we already had very aggressive growth assumptions in what we went through. I think you'll see us a little bit less market-specific and a little bit more AMD specific as it relates to our customers and their qualification plans. So I think we are confident that our data center business is doing well, and we need to continue to demonstrate that over a number of quarters.

Just for my follow-up, one that switch gears over to the computing and graphics side. Could you just give a little bit of color on what you expect for that in the second quarter? And then as you look into the second half, I know you mentioned that's the area of greatest uncertainty for many logical reasons. But any sort of difference between the computing and the graphics side, both in your second quarter expectations and then the puts and takes in the back half of the year?

Yes. So we are expecting that the computing and graphics business will be down sequentially. So it's offsetting some of the growth on the EPYC and semi-custom side. Within the computing and graphics business, we see notebooks up strongly, as a result of the launch of our new Ryzen 4000 platforms and some of the other trends that we've talked about. We see desktop down sequentially, and we see graphics down sequentially. Q2 is normally a sequentially down quarter for the channel business for us. So that's not unusual. And we -- that's -- those are the dynamics in the second quarter. And as we go through the second half of the year, as I mentioned, we'll have to see how consumer spending holds up against the other demand environments.

Our next question today is coming from John Pitzer from Crédit Suisse.

Lisa, just my first question. I wonder if you could just help me kind of better understand in this current environment of shelter-in-place, how does that impact sort of new customer, new workload engagements? And I guess, to better kind of underscore that, just given that you're expecting pretty good share gains in the back half of the year, given your second half guidance, notwithstanding the gaming cycle. Are most of those wins already in your back pocket, and so you've got high visibility? Or how do I think about that dynamic?

Yes. So I think there are many that are already in progress. And that would be our -- sort of our typical view of how long it takes to ramp a customer from beginning of engagement to actual ramp, can it be anywhere from 6 to 9 months if that's a good number. As it relates to what we see with the, as you call it, shelter-in-place, look, we see pretty strong activity. I mean, the activity level continues to be high on both the cloud as well as the enterprise side. The only place where perhaps we see a little bit of a slowdown is, as I said, on some of the transactional business, which we had plan to grow as we go through this year, and that might grow more slowly just as people aren't focused on new infrastructure right now. But in terms of cloud and large enterprise, there continues to be good activity on both current already one design platforms as well as new pipeline engagements.

That's helpful, Lisa. And as my follow-up, as you guys are painfully aware, one of the metrics that we probably focus probably too much on is just gross margin and gross margin progression. And given the gaming sort of ramp coming, it sort of convoluted the issue. So I was kind of hoping maybe you would quantify both in your Q2 guide and your full year guide, what impact the gaming console business is having on gross margins, i.e., what would gross margins be trending to right now ex gaming for both June and the full year?

I think, John -- go ahead. Go ahead, Devinder.

So if you look at Q2, if you're asking the specific Q1 to Q2. Q2, we came in at the 46%, Q2 is down, and fundamentally primarily is due to the ramp in the game console revenue. As Lisa said earlier, we mentioned that the margins in the initial ramp of semi-custom revenue are typically lower and they do improve over time for semi-custom. But also from a company standpoint, when you look at the corporate average gross margin, it's lower. And therefore, it is having an impact in terms of sequentially the margin is going down from Q1 to Q2.

But I guess, Devinder, my question is, is the non-gaming gross margins continuing to move higher sequentially every quarter this year, i.e., is it more than 100 basis point impact from gaming in the June quarter?

I think...

Go ahead. Go ahead, Lisa.

Sorry, we're -- Devinder and I are not in the same room. So the answer is yes, John. The impact of the sequential decline of 2 points is semi-custom. If you take semi-custom out, the rest of the portfolio would be -- what you would see in the rest of the portfolio is you would see server up and you would see desktop offset some of that. But the sequential decline is all semi-custom.

Your next question is coming from Timothy Arcuri from UBS.

I had two. I guess the first question, Devinder, I think you said that data center was high teens of revenue, so that would put it sort of in the low to mid 3s for March. Can you break out how much was CPU versus GPU? And I guess on the GPU side, that can be pretty lumpy. So anything to call out that's assumed for June?

Yes. It's weighted towards the CPUs. If you take the data center CPUs and GPUs together, the revenue in Q1 is high teens of revenue in Q1, but primarily weighted towards the CPUs because that's the area of growth from a server CPU business standpoint.

Okay. And then I guess bigger picture question. So Lisa, I think there's some new regulations in China that come into effect on June 1 around additional cybersecurity review for critical information infrastructure. And I would think that maybe you could fall under that. So any thought on how that could impact demand for you? And maybe if you could sort of tell us how much of your revenue on a consumption basis, do you think right now is in China?

Yes. So we're looking at that new regulation. So I don't have any specifics at this point in time. We'll continue to look at that new regulation. As it relates overall, I would say, the majority of our business in China is consumer or, let's call it, consumer-related cloud.

Operator, we'll take two more questions, please.

Our next question is coming from Mitch Steves from RBC Capital Markets.

I've got one and a follow-up. But the first one just kind of on the bookings you guys are saying. So I'm less worried about kind of the near-term revenue number you guys put up for server. But if you're sitting here today and you compare that to a quarter ago, what do the bookings look like or backlog? Has that changed at all? Is that improving? Is it getting better or is it pretty much in line with what you guys expected in terms of the overall backlog?

Yes. I think it's -- I think I said earlier, but Mitch, it is certainly better. So we have better visibility a month into the quarter versus 90 days ago.

Okay. And then the second one I had is just more broad. It's on China, actually. So one thing we're picking up is that a lot of the Chinese companies supposedly buying a lot of semiconductor chips ahead just in case they get banned from the U.S. and China relationship deterioration. So since you guys are not really involved in that, you're more exposed to the hyperscale. Do you guys have any comments on what you guys think is actually happening there, if people are actually trying to build up -- I guess, build up an inventory level for semiconductor chips they think may get banned? Or do you think that's kind of just noise, and it's not really occurring right now in that geography?

Yes. Mitch, it's a little bit hard for me to generalize. I would say, from what we see and we track both selling and consumption pretty closely, it looks like it's normal patterns. But we don't have exposure to some of the markets you're talking about.

Your next question is coming from Blayne Curtis from Barclays.

Maybe, Lisa, just looking at the fiscal guide, I'm kind of curious, if you look at first half versus second half, it seems like you still would require growth in computer graphics. I want to just make sure that was right. And then I'm just kind of curious how you think of the server, obviously, your share gainer. I think cloud and enterprise get intermingled together, particularly with this work-from-home. So I'm just kind of curious as you look at that business, first half and second half, do you -- I think Intel was talking about some weakness in enterprise and government. It's not a big exposure for you, but just kind of curious how you're thinking about, is there any headwind as that work-from-home spend holds off with server as well?

Yes. So as it relates to first half, second half, I mean, as we said, there's -- the $8.4 billion plus or minus 5% is a wider than normal range for us. I think you can see outcomes within that range that would have computing and graphics up as well as you can see outcomes with it more flattish. So that being the case, so I think the trends that I talked about are likely the right trends, which is the consumer spending, perhaps a little softer, enterprise and commercial, a positive for us; notebook share gain, a positive for us; and we want to see how sort of the desktop channel behaves as we go into the second half of the year. And then your second question?

Just kind of -- as you look at the server business, first half, second half, you had seen some -- you saw some strength in cloud in March and June. I'm kind of curious, are you thinking about -- is there any work-from-home benefits within that that would then turn into a headwind in the second half?

Yes. Look, I think from what we see, we see mostly platforms ramping. And so that's how we're thinking about the data center business. Of course, we're in this COVID-19 environment and so we'll have to actually play out the next couple of quarters. But within the ranges that we see, we see an opportunity to continue growing in the second half of the year, given the visibility that we have with customers, the platforms that are ramping. And I still feel very much like we're in the early stages of our 2nd Gen EPYC ramp. And I know it's been a couple of quarters, but that's just the way servers ramp. So we're in the early stages of the ramp, lots of customer activity, significant pull from the customers to get up and running as soon as possible. And as you said, we don't have as much exposure to some of the other end markets, which may have more volatility in the second half of the year.

Thank you. We reached the end of our question-and-answer session. I'd like to turn the floor back over for any further closing comments.

Thank you, Kevin. That concludes today's call. We appreciate everybody participating, and stay safe, stay well. And we look forward to engaging with you throughout the quarter. Thank you.

Thank you. That does conclude today's teleconference. You may disconnect your lines at this time and have a wonderful day. We thank you for your participation today.