博通 (AVGO) 2019 Q1 法說會逐字稿

Good day, ladies and gentlemen. Welcome to Broadcom Inc.'s First Quarter Fiscal Year 2019 Financial Results Conference Call.

美好的一天，女士們先生們。歡迎參加 Broadcom Inc. 2019 財年第一季財務業績電話會議。

At this time, for opening remarks and introductions, I would like to turn the call over to Beatrice Russotto, Director of Investor Relations of Broadcom Inc. Please go ahead, ma'am.

現在，我想將電話轉給博通公司投資者關係總監 Beatrice Russotto 進行開場演講和介紹。請繼續，女士。

Thank you, operator, and good afternoon, everyone. Joining me today are Hock Tan, President and CEO; and Tom Krause, Chief Financial Officer of Broadcom.

謝謝接線員，大家下午好。今天與我一起出席的還有總裁兼執行長 Hock Tan；以及博通財務長湯姆·克勞斯 (Tom Krause)。

After the market closed today, Broadcom distributed a press release and financial table describing our financial performance for the first quarter of fiscal year 2019. If you did not receive a copy, you may obtain the information from the Investor section of Broadcom's website at broadcom.com.

今天收盤後，博通發布了一份新聞稿和財務表格，描述了我們 2019 財年第一季的財務表現。如果您沒有收到副本，您可以從 Broadcom 網站（broadcom.com）的投資者部分獲取資訊。

This conference call is being webcast live, and a recording will be available via telephone playback for 1 week. It will also be archived in the Investors section of our website at broadcom.com.

本次電話會議正在進行網路直播，錄音將透過電話播放 1 週。它還將存檔在我們網站 Broadcom.com 的投資者部分。

During the prepared comments section of this call, Hock and Tom will be providing details of our first quarter fiscal year 2019 results, guidance for fiscal year 2019, and commentary regarding the business environment. We will take questions after the end of our prepared comments.

在本次電話會議的準備評論部分，Hock 和 Tom 將提供 2019 財年第一季業績的詳細資訊、2019 財年的指導以及有關商業環境的評論。我們將在準備好的意見結束後回答問題。

Please refer to our press release today and our recent filings with the SEC for information on the specific risk factors that could cause our actual results to differ materially from the forward-looking statements made on this call.

請參閱我們今天的新聞稿以及我們最近向美國證券交易委員會提交的文件，以了解可能導致我們的實際結果與本次電話會議中所做的前瞻性聲明存在重大差異的具體風險因素的資訊。

In addition to U.S. GAAP reporting, Broadcom reports certain financial measures on a non-GAAP basis. A reconciliation between GAAP and non-GAAP measures is included in the tables attached to today's press release. Comments made during today's call will primarily refer to our non-GAAP financial results.

除了美國公認會計原則報告外，博通還根據非公認會計原則報告某些財務指標。今天新聞稿所附的表格中包含了公認會計原則和非公認會計原則措施之間的調節。今天電話會議期間發表的評論將主要涉及我們的非公認會計準則財務表現。

So with that, I'll turn the call over to Hock.

因此，我會將電話轉給霍克。

Thank you, Bea, and thank you, everyone, for joining us today.

謝謝 Bea，也謝謝大家今天加入我們。

So we had a good start to fiscal 2019, growing 9% in our first fiscal quarter compared to the same period a year ago. The strength of our business model delivered another quarter of sustained revenues, strong earnings and an extremely strong free cash flow.

因此，我們 2019 財年有了一個良好的開端，第一個財季與去年同期相比成長了 9%。我們業務模式的優勢使我們又一個季度實現了持續的收入、強勁的盈利和極其強勁的自由現金流。

Our semiconductor business held up relatively well. Not surprisingly, our wireless business was down sharply, and our storage business underperformed somewhat. However, these challenges were mitigated, more than mitigated by our networking business, which grew double digits year-over-year. In addition, we were very pleased to see that the broadband business has started to recover and stabilize in the quarter. In fact, putting it all together, the semiconductor segment was actually up year-over-year in the first quarter if you exclude the expected sharp decline in wireless.

我們的半導體業務表現相對較好。毫不奇怪，我們的無線業務大幅下滑，儲存業務也表現不佳。然而，這些挑戰得到了緩解，而且我們的網路業務比去年同期成長了兩位數。此外，我們非常高興地看到寬頻業務在本季開始復甦並趨於穩定。事實上，綜上所述，如果排除無線領域預期的大幅下滑，半導體領域在第一季實際上比去年同期成長。

Turning to infrastructure. This business, which includes SAN switching, mainframe and enterprise software, delivered solid top line results, benefiting from a very robust enterprise spending environment. The integration of CA onto the Broadcom platform is very well underway, and we are confident that we can meet, if not exceed, in the long term -- exceed the long-term revenue and profitability target that we laid out for CA to you last year. In fact, renewals in our CA business have been strong this past quarter, and we believe we are -- and the dollar commitments from our core customers will continue to grow.

轉向基礎設施。該業務包括 SAN 交換、大型主機和企業軟體，受益於非常強勁的企業支出環境，並取得了穩健的營收成果。CA 與 Broadcom 平台的整合進展順利，我們有信心，從長遠來看，我們能夠實現（如果不能超過的話）——超過我們最後為 CA 制定的長期收入和盈利目標年。事實上，上個季度我們的 CA 業務更新強勁，我們相信我們的核心客戶的美元承諾將繼續成長。

Many of our peers have commented that they are seeing a softening demand environment, especially out of China. While we're experiencing the same demand dynamics, we have factored in much of this macroeconomic backdrop when we provided fiscal 2019 guidance last quarter. As a result, after a solid start to the year, we are reaffirming our fiscal 2019 revenue guidance of $24.5 billion.

我們的許多同行都表示，他們看到需求環境正在疲軟，尤其是來自中國的需求環境。雖然我們正經歷著同樣的需求動態，但我們在上個季度提供 2019 財年指引時已考慮到了這個宏觀經濟背景。因此，在今年開局良好之後，我們重申 2019 財年的營收指引為 245 億美元。

Having said that, we expect our semiconductor business to bottom in the second fiscal quarter, driven almost entirely by the seasonal drop in wireless. But looking to the second half, we are confident the semiconductor business will resume very meaningful growth. This will be driven by strong product cycles in both wireless and networking, coupled with a recovery in broadband. Infrastructure software, on the other hand, is expected to sustain throughout the year.

話雖如此，我們預計我們的半導體業務將在第二財季觸底，幾乎完全是由無線業務的季節性下降所推動的。但展望下半年，我們有信心半導體業務將恢復非常有意義的成長。這將受到無線和網路領域強勁的產品週期以及寬頻復甦的推動。另一方面，基礎設施軟體預計將持續全年。

So in summary, our diversification strategy is working, and we are effectively managing the decline in wireless as well as the broader semiconductor industry headwinds.

總而言之，我們的多元化策略正在發揮作用，我們正在有效地應對無線業務的衰退以及更廣泛的半導體產業的不利因素。

Now let me turn over to Tom to provide you with more color on Q1.

現在讓我請 Tom 為您提供有關 Q1 的更多資訊。

Thank you, Hock. Consolidated net revenue for the first quarter was $5.8 billion, a 9% increase from a year ago. And EPS came in at $5.55, an 8% increase from a year ago, off of a 441 million weighted average fully diluted share count.

謝謝你，霍克。第一季綜合淨收入為 58 億美元，比去年同期成長 9%。每股收益為 5.55 美元，較去年同期成長 8%，加權平均完全稀釋股數為 4.41 億股。

In addition, free cash flow is $2.03 billion or 35% of revenue. I would highlight free cash flow grew 39% year-over-year.

此外，自由現金流為 20.3 億美元，佔收入的 35%。我要強調的是，自由現金流年增了 39%。

The semiconductor solutions segment revenue was $4.4 billion and represented 76% of our total revenue this quarter. This was down 12% year-on-year on a comparable basis. But as Hock explained, the semiconductor segment was actually up slightly year-over-year in the first quarter, excluding wireless.

半導體解決方案部門營收為 44 億美元，佔本季總營收的 76%。以可比較口徑計算，較去年同期下降 12%。但正如霍克解釋的那樣，半導體領域第一季實際上比去年同期略有成長，不包括無線業務。

Let me now turn to our infrastructure software segment. Revenue was $1.4 billion and represented 24% of revenue. SAN switching continues to perform extremely well. And as Hock mentioned, mainframe enterprise software is off to a good start.

現在讓我談談我們的基礎設施軟體部分。收入為 14 億美元，佔總收入的 24%。SAN 交換繼續表現出色。正如霍克所提到的，大型主機企業軟體已經有了一個好的開始。

Let me now provide additional detail on our financial performance. Operating expenses were $1.08 billion. Operating income from continuing operations was $3.05 billion and represented 52.7% of net revenue.

現在讓我提供有關我們財務業績的更多詳細資訊。營運費用為 10.8 億美元。持續經營業務的營業收入為 30.5 億美元，佔淨收入的 52.7%。

Adjusted EBITDA was $3.24 billion and represented 55.9% of net revenue. This figure excludes $143 million of depreciation.

調整後 EBITDA 為 32.4 億美元，佔淨收入的 55.9%。這一數字不包括 1.43 億美元的折舊。

Inventory decreased $50 million from the prior quarter. Similarly, semiconductor receivables were actually down, which is typical for Q1 even though receivables increased $352 million overall due to the CA acquisition. Total current liabilities, excluding debt, increased $2.5 billion due to CA. However, excluding CA, total current liabilities excluding debt decreased meaningfully more than receivables, primarily due to the payment of our annual performance bonus in Q1.

庫存較上一季減少 5000 萬美元。同樣，半導體應收帳款實際上有所下降，這是第一季的典型情況，儘管由於收購 CA，應收帳款總體增加了 3.52 億美元。由於 CA，流動負債總額（不包括債務）增加了 25 億美元。然而，不包括CA，不包括債務的流動負債總額的下降幅度大於應收帳款，這主要是由於我們在第一季度支付了年度績效獎金。

In addition, we spent $99 million on capital expenditures. As a result, we had record Q1 free cash flow from operations at $2.03 billion or 35% of revenue. This represents 39% growth in free cash flow from operations compared to Q1 of 2018.

此外，我們還花費了 9,900 萬美元的資本支出。結果，我們第一季營運自由現金流達到創紀錄的 20.3 億美元，佔營收的 35%。與 2018 年第一季相比，營運自由現金流成長了 39%。

I would note a couple of things. One, fiscal Q1 is typically our seasonally weakest cash flow quarter due to the annual performance bonus payment we make to our employees in the quarter that we accrue all throughout the prior fiscal year. In Q1, we paid approximately $530 million in APV cash bonuses to our employees.

我要注意幾件事。首先，第一財季通常是我們季節性現金流最弱的季度，因為我們在整個上一財年的整個季度中向員工支付了年度績效獎金。第一季度，我們向員工支付了約 5.3 億美元的 APV 現金獎金。

And second, I would also note that we accrued $723 million of restructuring integration expenses, of which that includes $363 million of cash payments in the quarter.

其次，我還要指出的是，我們應計了 7.23 億美元的重組整合費用，其中包括本季 3.63 億美元的現金支付。

In Q1, we returned $4.6 billion to stockholders consisting of $1.1 billion in the form of cash dividends and $3.5 billion for the repurchase and elimination of 14.2 million AVGO shares. We ended the quarter with $5.1 billion of cash, $37.6 billion of total debt, 396 million outstanding shares and 451 million fully diluted shares outstanding.

第一季度，我們向股東返還 46 億美元，其中 11 億美元以現金股利形式，35 億美元用於回購和消除 1,420 萬股 A​​VGO 股票。本季末，我們擁有 51 億美元現金、376 億美元總債務、3.96 億股流通股和 4.51 億股完全稀釋流通股。

Turning to our fiscal year 2019 guidance. As Hock discussed, we are reaffirming our full year revenue guidance of approximately $24.5 billion, including approximately $19.5 billion from semiconductor solutions and approximately $5 billion from infrastructure software. IP licensing is not expected to generate a material amount of revenue.

轉向我們的 2019 財年指導。正如 Hock 所討論的，我們重申全年收入指引約為 245 億美元，其中包括來自半導體解決方案的約 195 億美元和來自基礎設施軟體的約 50 億美元。知識產權許可預計不會產生大量收入。

On a non-GAAP basis, operating margins are expected to be approximately 51%. Net interest expense and others is expected to be approximately $1.25 billion. We do not contemplate any debt paydown in fiscal year 2019.

以非公認會計原則計算，營業利潤率預計約 51%。淨利息支出和其他支出預計約為 12.5 億美元。我們不考慮在 2019 財政年度償還任何債務。

The tax rate is forecasted to be approximately 11%. Depreciation is expected to be approximately $600 million. CapEx is expected to be approximately $550 million. And as a result, free cash flow from continuing operations is expected to be approximately $10 billion.

預計稅率約為11%。折舊預計約 6 億美元。資本支出預計約 5.5 億美元。因此，來自持續經營業務的自由現金流預計約為 100 億美元。

And finally, stock-based compensation expense is expected to be approximately $2 billion. As we outlined last quarter, we granted approximately 31 million of restricted and performance stock units as part of the multiyear grant that will vest over the next 7 years. As a result, for modeling purposes, we would expect the fully diluted share count in the second quarter to be approximately 450 million. This excludes any stock repurchases.

最後，股票補償費用預計約 20 億美元。正如我們上季度概述的那樣，我們授予了約 3,100 萬股限制性股票和績效股票單位，作為將在未來 7 年內歸屬的多年期授予的一部分。因此，出於建模目的，我們預計第二季完全稀釋後的股票數量約為 4.5 億股。這不包括任何股票回購。

Similarly, for modeling purposes, we would expect stock-based compensation expense to be approximately $530 million in Q2. Looking forward beyond Q2, we would expect the share count, excluding any stock repurchases and eliminations, to remain relatively unchanged, and the quarterly stock-based compensation in the second half of 2019 to start to decrease slightly each quarter. We would expect stock-based compensation to level out at approximately $1.5 billion in 2021.

同樣，出於建模目的，我們預計第二季度的股票薪酬費用約為 5.3 億美元。展望第二季度之後，我們預計，不包括任何股票回購和淘汰的股份數量將保持相對不變，並且 2019 年下半年的季度股票薪酬將開始每個季度略有下降。我們預計 2021 年股票薪酬將穩定在約 15 億美元。

Now onto capital allocation. Our capital allocation strategy remains the same. We plan to maintain the current quarterly dividend payout of $2.65 per share throughout the year, subject to quarterly board approval, which means we plan to pay out over $4 billion in cash dividends in fiscal 2019. In addition, we remain committed to buying back and eliminating a total of $8 billion of stock in fiscal 2019.

現在進行資本配置。我們的資本配置策略維持不變。我們計劃全年維持目前每股 2.65 美元的季度股息支付，但須經董事會季度批准，這意味著我們計劃在 2019 財年支付超過 40 億美元的現金股息。此外，我們仍致力於在 2019 財年回購併銷毀總計 80 億美元的股票。

That concludes my prepared remarks. (Operator Instructions) Operator, please open up the call for questions.

我準備好的發言就到此結束。（接線生說明）接線員，請撥打電話詢問問題。

(Operator Instructions) Our first question comes from Harlan Sur with JPMorgan.

（操作員指示）我們的第一個問題來自摩根大通的 Harlan Sur。

Hock, on the strong double-digits year-over-year momentum in your data center networking and compute acceleration segment. You've been shipping your new Tomahawk 3 switching platform now since the second half of last year. I think Google is using it for 200 gig. We hear Amazon is going to transition to 400. We're hearing good things from Baidu, Tencent and all of the cloud guys. Additionally, you're ramping compute acceleration ASICs into some of the big cloud guys as well. The question is, do you anticipate continued double-digits year-over-year growth for the full year here? For the networking business as the pipeline here appears fairly strong?

Hock，資料中心網路和運算加速領域的強勁兩位數較去年同期成長動能。自去年下半年以來，您一直在出貨新的 Tomahawk 3 交換平台。我認為 Google 將其用於 200 gig。我們聽說亞馬遜將過渡到 400。我們從百度、騰訊和所有雲端公司聽到了好消息。此外，您還將運算加速 ASIC 引入一些大型雲端公司。問題是，您預計全年將繼續實現兩位數的年增長嗎？對於網路業務來說，這裡的管道看起來相當強大？

Very good question, Harlan. And now that listening to you, you really got me going, yes, in networking. And it's broader than just data centers. But let's start with data centers. Tomahawk 3, which is the 12.8 terabit top of the rack switch, has just barely started production shipments. In fact, we do expect -- we are fully expecting the ramp of Tomahawk 3 as part of the broader data center scale-out with 400 gig pipes interconnect, so to speak, to really start just about right now. In fact, our Q2, fiscal Q2 and progressing up to the rest of the end of the year as more and more of the names you mentioned in hyper cloud jumping and expand -- and -- and upgrade, I would say, in their data centers, and simply because, as you know, expanding the capacity of data centers and pipes is the simplest way to decongest, to minimize or mitigate congestion control in these huge data centers, in this large cloud tech. So there's a broad refreshing and upgrading of data centers among these cloud guys. One area, as mentioned, Tomahawk 3, shipping, which is just starting this quarter in significant volumes. What's also not so perhaps obvious, but is very real for us, is the fact that in order to run 400 gigabit per second throughput pipes, you need interconnect, fiber optic interconnect that are built and dedicated in that area. That's very high-tech products, which we are very deeply engaged in. And that brings the content to -- on via multiple factors in this data center realm. And then as you expand the top of the right switch, I can't resist saying, you have to -- when you need to connect data center to data center, what is called DCI interconnectivity. And the approach that has been taken, which we are also very engaged in, with -- been multiple OEMs, who are supporting the cloud guys, is obviously coherent, coherent fiber optic connection at 400 gig. And we believe we are very much in the lead on that area as well. So these are product lives or product cycles we are seeing that are continuing their impetus of double-digit growth in networking. And it extends more than that. In routing, we are going to be launching and ramping our new generation router, Jericho 2, probably in Q3 of our fiscal year. And that's going into Edge routing, call routing, among the service providers, especially the telecom guys. And we're starting to see the preparation in that happening. So yes, we feel very good about networking and the ability to sustain the level of growth we have been seeing.

很好的問題，哈倫。現在聽了你的演講，你確實讓我在網路領域繼續前進。它的範圍不僅限於資料中心。但讓我們從數據中心開始。Tomahawk 3 是 12.8 太比特機架式交換機，剛開始生產出貨。事實上，我們確實期望——可以說，作為具有 400 個千兆管道互連的更廣泛的數據中心橫向擴展的一部分，我們完全期待 Tomahawk 3 的升級即將真正開始。事實上，我們的第二季、第二財季以及一直到今年年底的剩餘時間，隨著你在超級雲中提到的越來越多的名字在他們的數據中跳躍和擴展——以及— —升級，原因很簡單，如您所知，在大型雲端技術中，擴展資料中心和管道的容量是緩解擁塞、最小化或減輕這些大型資料中心擁塞控制的最簡單方法。因此，這些雲端專家對資料中心進行了廣泛的更新和升級。如同前面所提到的，Tomahawk 3 的出貨量在本季剛開始大量出貨。也許不太明顯，但對我們來說非常真實的是，為了運行每秒 400 吉比特的吞吐量管道，您需要在該領域構建和專用的互連、光纖互連。這是非常高科技的產品，我們非常深入地參與其中。這透過資料中心領域的多個因素帶來了內容。然後，當您擴展右側交換器的頂部時，我忍不住要說，當您需要將資料中心連接到資料中心時，這就是所謂的 DCI 互連。我們也非常參與的多個 OEM 廠商已經採取的方法，他們為雲端人員提供支持，顯然是 400 gig 的連貫光纖連接。我們相信我們在該領域也處於領先地位。因此，我們看到這些產品壽命或產品週期正在繼續推動網路領域兩位數的成長。而且它的範圍還不止於此。在路線方面，我們可能會在本財年的第三季推出並升級新一代路由器 Jericho 2。這涉及服務供應商（尤其是電信公司）之間的邊緣路由、呼叫路由。我們開始看到這一切的準備。所以，是的，我們對網路和維持我們所看到的成長水準的能力感到非常滿意。

Our next question comes from Ross Seymore with Deutsche Bank.

我們的下一個問題來自德意志銀行的羅斯·西莫爾。

Sticking on the formally called wired category, Hock, you mentioned that the -- I think you said the broadband space had stabilized and recovered. Can you talk a little bit about the product cycles that will be driving demand in that segment? And any geographic color, product cycle color would be helpful.

堅持正式稱為有線類別，霍克，您提到——我想您說過寬頻空間已經穩定並恢復。您能否談談將推動該細分市場需求的產品週期？任何地理顏色、產品週期顏色都會有幫助。

Sure. Sure. Ross. Yes. In broadband, happy to say, finally, the thing recovered. And a big part of driving the recovery is cable modem, video delivery. DOCSIS, as they call it, 3.1. We've seen implementations across multiple carriers, service providers of DOCSIS 3.1 so that's very good. One we're also seeing, of course, is in gateway access, which is a big part of broadband. Among many carriers, too, is the new generation of DSL, digital subscriber line, as they need to expand capacity and throughput and go to -- what they're calling the next-generation G.fast or 35B and we're seeing a lot of that in Europe, some in North American carriers too. But what's also equally interesting is as they go to the last mile into households, what we're also seeing is adoption of wireless connectivity or what we all call Wi-Fi. And what we're seeing now is as we see these wired gateways, whether it's cable modem, DOCSIS 3.1, or digital subscriber line, we are seeing -- especially in the back half of the year, enterprises and more and more service providers, telecoms, start to attach the next-generation Wi-Fi, Wi-Fi 6 onto those gateways. And in Wi-Fi 6, I'm very, very pleased to note that we are very much in the lead in having developed and productized a whole suite of products that perfectly address towards those enterprise and service providers. And that -- but most of that will be only shipping, we believe, in the second half of the year, but fiscal and both calendar. And we're looking forward to seeing that happen, but it's a very nice product cycle that will continue -- that will basically push the recovery of our broadband business.

當然。當然。羅斯.是的。在寬頻上，高興地說，終於，事情恢復了。推動復甦的一個重要因素是電纜調變解調器和視訊傳輸。DOCSIS，正如他們所說的，3.1。我們已經看到多個營運商、服務提供者實施了 DOCSIS 3.1，所以這非常好。當然，我們也看到了網關接入，這是寬頻的重要組成部分。許多營運商也採用了新一代 DSL、數位用戶線路，因為他們需要擴大容量和吞吐量，並轉向他們所謂的下一代 G.fast 或 35B，我們看到了其中許多是在歐洲，也有一些是在北美的航空公司。但同樣有趣的是，當它們進入家庭的最後一英里時，我們也看到無線連接或我們所說的 Wi-Fi 的採用。我們現在看到的是，正如我們所看到的這些有線網關，無論是電纜調變解調器、DOCSIS 3.1，還是數位用戶線路，我們都看到——特別是在今年下半年，企業和越來越多的服務供應商，電信公司開始將下一代 Wi-Fi、Wi-Fi 6 連接到這些網關上。在 Wi-Fi 6 方面，我非常非常高興地註意到，我們在開發和產品化一整套產品方面處於領先地位，這些產品完美地針對這些企業和服務提供者。我們認為，其中大部分將僅在今年下半年進行，但包括財政和日曆。我們期待看到這種情況發生，但這是一個非常好的產品週期，並將持續下去——這基本上將推動我們寬頻業務的復甦。

Our next question comes from Timothy Arcuri with UBS.

我們的下一個問題來自瑞銀集團的提摩西·阿庫裡。

Hock, I'm wondering how you handicap Huawei and I believe that they're kind of a mid-single-digit customer right now. And we're hearing a lot of evidence that they may be double ordering ahead of some possible sanctions. So I'm kind of wondering how you think about that and how you handicap that for the full year guidance.

霍克，我想知道你如何阻礙華為，我相信他們現在是一個中等個位數的客戶。我們聽到大量證據表明，他們可能會在可能實施的製裁之前進行雙重訂購。所以我有點想知道你是如何看待這一點的，以及你如何在全年指導中限制這一點。

I probably know as much as you do, seriously, in terms of what's available, publicly available, and what's -- and the concerns and the issues overhanging, broadly, Chinese exporter, China, and -- but the specific high-tech companies like Huawei from China, they are good customers, and they buy products, which obviously, helps their products be competitive in the global export market. And I hope they continue to do so. But certainly, the overhang of that is something that we are closely monitoring and are very concerned about. But as far as specific things you're mentioning, I'm not able to basically comment on it simply because I don't know.

說實話，我可能和你一樣了解什麼是可用的、公開的，以及廣泛而言，中國出口商、中國以及懸而未決的擔憂和問題，但是具體的高科技公司，例如來自中國的華為，他們是好客戶，他們購買產品，這顯然有助於他們的產品在全球出口市場上具有競爭力。我希望他們繼續這樣做。但當然，我們正在密切關注並非常關注這個問題。但就你提到的具體事情而言，我基本上無法發表評論，因為我不知道。

Our next question comes from Vivek Arya with Bank of America.

我們的下一個問題來自美國銀行的 Vivek Arya。

Actually, a quick clarification and a question. I believe, Hock, you mentioned software could sustain throughout the year. That suggests annualized closer to $6 billion rather than the $5 billion I think you had before. And if that is the case, shouldn't profit margins be higher than what you had? And then, the question, Hock, there has been some more consolidation in semis, NVIDIA acquiring Mellanox. I was just curious how you think if at all there's an impact on Broadcom? And even if there isn't, how you just think about the M&A environment in semis.

實際上，是一個快速的澄清和一個問題。我相信，霍克，你提到軟體可以全年維持。這顯示年化收益接近 60 億美元，而不是我認為之前的 50 億美元。如果是這樣的話，利潤率不應該比你的更高嗎？然後，問題是，Hock，半決賽出現了更多整合，NVIDIA 收購了 Mellanox。我只是好奇你認為這是否會對博通產生影響？即使沒有，你也可以想想準決賽的併購環境。

Okay. You have 2 questions here. Very clever. Let me try to answer -- let me start with the second one. It's easy. I mean, as I say, we have done quite a bit of acquisitions in very strong assets -- there's an echo -- in the semiconductor space. And it's obviously in here -- it's something we continue to look at because, obviously, semiconductor is a core area for us and -- but you also know we're not necessarily limiting ourselves to that. We look towards a broader area of technology, software and appliances as Brocade would be considered. And but we continue to be interest in the semiconductor space and there are still targets, and we'll be -- continue to be very thoughtful and timely in terms of the time -- in terms of how we approach those acquisitions. And we have observed our behavior over the last several years. We tend to do it in a very -- on a measured pace simply because it's important. In fact, it's critical on any acquisition we make that we can integrate it very, very well. And that's what we're doing with CA right now, and we're right in the thick of it, as you noticed in the numbers we are going through as we drive down to generate the kind of business model we expect to get out of CA. Turning on to the next question you asked, which is -- which leads to software. Yes, it's turning out to be a very, very nice deal for us. We actually are seeing for our core customers, as you recall, we have differentiated customers associated between very core large customers which -- who consumes both mainframes and enterprise distributed software as opposed to much smaller long tail of non-core customers. If we look at those core customers we are focusing on, after about at least one quarter now today more than one quarter of going through selling, renewals and adoption of our software, we feel that the business model has been extremely -- our business model has been extremely successful. I mean, the growth as we see it of dollars that we get through renewals and expansion of use footprint in those core customers are -- it's pretty -- it's surpassing our expectations. It's gone double digits. But that's only 3 months, so we're still early stage, and we'll continue to push that. But as we have also made certain announcements on at least 1 or maybe 2 deals we have done on our new PLA model of both mainframe and enterprise breed software, this has been very well received in the marketplace by our core customers, and we are hopeful it's something that makes so much sense that we'll expand -- we expect to see more and more of these significant transactions occurring as we move forward through the rest of the year.

好的。您這裡有 2 個問題。非常聰明。讓我試著回答一下——讓我從第二個開始。這很容易。我的意思是，正如我所說，我們在半導體領域對非常強大的資產進行了大量收購——這是一個迴聲。顯然，它就在這裡——這是我們繼續關注的事情，因為顯然，半導體是我們的核心領域——但你也知道我們不一定局限於此。我們將目光投向更廣泛的技術、軟體和設備領域，博科將予以考慮。但我們仍然對半導體領域感興趣，並且仍然有目標，而且我們將在時間上繼續非常深思熟慮和及時地處理這些收購。我們觀察了過去幾年我們的行為。我們傾向於以非常有節奏的速度來做這件事，只是因為它很重要。事實上，對於我們進行的任何收購來說，至關重要的是我們能夠非常非常好地整合它。這就是我們現在對 CA 所做的事情，我們正處於最激烈的階段，正如您在我們正在經歷的數字中所注意到的那樣，我們正在努力產生我們期望擺脫的那種商業模式加利福尼亞州。轉向你問的下一個問題，即——這會導致軟體。是的，事實證明這對我們來說是一筆非常非常好的交易。正如您所記得的那樣，我們實際上看到了我們的核心客戶，我們在非常核心的大型客戶之間建立了差異化的客戶，這些客戶同時使用大型主機和企業分散式軟體，而不是規模小得多的非核心客戶。如果我們看看我們關注的那些核心客戶，經過至少四分之一的銷售、更新和採用我們的軟體，我們覺得我們的商業模式非常好。我的意思是，我們透過更新和擴大這些核心客戶的使用足跡所獲得的美元成長是相當不錯的，它超出了我們的預期。已經兩位數了但這只有 3 個月的時間，所以我們仍處於早期階段，我們將繼續推動這項進程。但由於我們也就我們在大型主機和企業品種軟體的新 PLA 模型上完成的至少 1 或 2 筆交易發布了某些公告，這在市場上受到了我們核心客戶的好評，我們對此充滿希望這是一件非常有意義的事情，我們將進行擴展——我們預計隨著今年剩餘時間的推進，將會看到越來越多的此類重大交易發生。

Our next question comes from John Pitzer with Crédit Suisse.

我們的下一個問題來自瑞士信貸銀行的約翰‧皮策 (John Pitzer)。

Hock, relative to the full year guide, it does imply like many of your semi peers -- some pretty meaningfully above seasonal growth half on half on the semi solutions business. And I think you did a good job on some of the prior questions specific to data center and broadband access of some of the bottoms-up product cycle that are driving that. I'd be curious or it would be helpful if I could get your sort of views on wireless and how that progresses throughout the year and how you should -- how you're thinking or how we should be thinking about your content this year versus dependency on units this year within the wireless.

霍克，相對於全年指南，它確實意味著像許多半成品同行一樣 - 一些半成品解決方案業務的季節性增長明顯高於半成品半成品業務。我認為您在一些特定於資料中心和寬頻存取的一些先前問題上做得很好，這些問題正在推動一些自下而上的產品週期。我很好奇，或者如果我能了解您對無線的看法以及全年的進展情況以及您應該如何考慮，或者我們今年應該如何考慮您的內容，這將會有所幫助。 。

Somehow I knew this was going to come up somehow, some way, some place. And sure enough, you did it. Yes, I know. It's actually not that because that product cycle in wireless is, in all our views, as is mine, very predictable. And we will see that happen in our Q3 -- fiscal Q3, Q4 of this -- of this fiscal '19. It will. We're already starting production in our wafer sets, which has longer product cycle on FBARs -- and some of our products. And we will see, for want of better word, because it's so seasonal and it's very significant, a sharp bounce back, which adds to my -- our confidence that our full year guidance is something that's going to happen. Very simple. And that in the second half, we'd see that meaningful, you correctly pointed out, somewhat double-digit growth in the semiconductor segment of the business. It's -- as I mentioned in answer to earlier questions, data center, especially networking, we have a whole slew of new product cycles. We'll generate a big part of that double-digit growth. So will, in our view, wireless -- actually, that's happened in the past. And in this particular year, so perhaps the difference between this coming year '19 versus '18 is simply 2 things. One is we're probably going to get better share, as mentioned before. And secondly, content increase. It always happens, year after year, as I mentioned. As example, in Wi-Fi, you'll see Wi-Fi 6. Wi-Fi 6 is not just in enterprise and access gateways in service providers. We are seeing Wi-Fi 6, the new generation in 802.11ax in handsets, and that drives -- I call it strong content increase, as they increase the amount of bands in the FBAR that we constantly see as basically wireless continue to proliferate though in various areas in -- of the world, continues to expand in amount of bands, content in this next-generation phone. So all that is going to drive a bounce back with perhaps increased content for -- for our products. As far as volume is concerned, yes, like you, I will probably be as uncertain as you are, how much the volume would be. But regardless, it's -- there's a lot of mitigating factors, and the biggest part of it is pure content increase.

不知何故，我知道這件事會以某種方式、某種方式、某個地方出現。果然，你做到了。是的，我知道。實際上並不是這樣，因為在我們和我的所有觀點中，無線產品週期是非常可預測的。我們將在 19 財年的第三季（第三財季、第四季）看到這種情況發生。它會。我們已經開始生產晶圓組以及我們的一些產品，其中 FBAR 的產品週期較長。我們將看到，由於缺乏更好的詞，因為它是如此季節性，而且非常重要，急劇反彈，這增加了我的信心，我們的全年指導將會發生。很簡單。您正確地指出，在下半年，我們會看到半導體業務領域出現有意義的兩位數成長。正如我在回答之前的問題時提到的，資料中心，尤其是網絡，我們有大量的新產品週期。我們將創造兩位數成長的很大一部分。我們認為，無線技術也會如此——實際上，這種情況過去就發生過。在這個特定的年份，也許來年的「19」和「18」之間的差異只是兩件事。一是我們可能會獲得更好的份額，如前所述。其次，內容增加。正如我所提到的，這種情況總是會發生，年復一年。例如，在 Wi-Fi 中，您會看到 Wi-Fi 6。我們看到Wi-Fi 6，即手機中的新一代802.11ax，這推動了——我稱之為強勁的內容增長，因為它們增加了FBAR 中的頻段數量，我們不斷看到，基本無線技術仍在持續激增。因此，所有這些都將推動我們產品的反彈，或許會增加我們產品的內容。就成交量而言，是的，像您一樣，我可能會像您一樣不確定成交量是多少。但無論如何，有許多緩解因素，其中最大的部分是純粹的內容增加。

Our next question comes from Stacy Rasgon with Bernstein Research.

我們的下一個問題來自伯恩斯坦研究中心的史黛西·拉斯貢（Stacy Rasgon）。

So understanding the confidence on the semi ramp, your guidance also implies the infrastructure software business has to decelerate pretty materially as we go through the year. I mean it seems like right now in Q1, the CA business must have already been hitting pretty close to the $3.5 billion kind of annualized run rate that you were talking about that was a few years out. So I guess, like, what drove the strength of CA in Q1? And why does that business decelerate, have to decelerate so markedly as we go through the rest of the year in order to fit into the guidance that you've provided?

因此，在了解半坡道的信心後，您的指導也意味著基礎設施軟體業務在我們這一年中必須大幅減速。我的意思是，現在在第一季度，CA 業務肯定已經非常接近幾年後您所說的 35 億美元的年化運行率。所以我想，是什麼推動了第一季 CA 的實力？為什麼該業務會減速，而且必須在今年剩餘的時間裡顯著減速才能適應您提供的指導？

Stacy, it's Tom. I think one element is we don't want to get into the details between CA and SAN switching, but we're taking a conservative approach. It's just the first quarter out of the gate. We've got 3 quarters to go. As Hock mentioned, we are, actually, pretty pleasantly surprised with the number of ELA and PLA opportunities that we see in the pipeline. And a lot of our success in terms of growing the dollars of each of these accounts is going to be driven by our ability to convert those into wins. But so far so good. So I think we're going to take this one quarter at a time. But for now, given that we're only one quarter into the year, we feel very comfortable reaffirming guidance on the topline. And of course, we feel comfortable with the operating profit as well as the cash flow expectations going forward.

史黛西，是湯姆。我認為其中一個因素是我們不想深入了解 CA 和 SAN 交換之間的細節，但我們正在採取保守的方法。這只是第一季的大門。我們還有 3 個季度的時間。正如 Hock 所提到的，實際上，我們對即將推出的 ELA 和 PLA 機會數量感到非常驚訝。我們在增加每個帳戶的美元方面取得的成功很大程度上取決於我們將這些帳戶轉化為勝利的能力。但到目前為止還不錯。所以我認為我們將一次進行一個季度。但就目前而言，鑑於今年才剛過去一個季度，我們很樂意重申對營收的指導。當然，我們對未來的營業利潤和現金流預期感到滿意。

But you said CA would sustain through the rest of the year. So does that mean that Brocade has to, like, come down a lot? Or is it just like overall conservatism that's in the number.

但你說CA將維持到今年剩餘時間。那麼這是否意味著博科必須大幅下滑？或者說這就像數字中的整體保守主義。

No. Stacy, what we said is that the software, the infrastructure software segment would continue to sustain throughout the year. That's our expectation, but we are taking a conservative approach relative to the overall outlook for the business.

不。史黛西，我們所說的是軟體、基礎設施軟體部分將繼續維持全年。這是我們的預期，但相對於業務的整體前景，我們採取保守的態度。

But if it sustains, wouldn't you be at 5.6 for the year instead of 5?

但如果它持續下去，今年的分數不是會是 5.6 而不是 5 嗎？

I'll leave that to you, Stacy, to figure out.

我會把這個問題留給你來解決，史黛西。

Our next question comes from Toshiya Hari with Goldman Sachs.

我們的下一個問題來自高盛的 Toshiya Hari。

Hock, I had a question on 5G, as it relates to your wireless business. Based on preliminary discussions with your customers, what sort of content uplift are you expecting in your wireless business as 5G is inserted going forward? And from a timing perspective, do you think -- is it more of a 2020 dynamic when 5G starts to move the needle? Or is it 2020 and beyond?

Hock，我有一個關於 5G 的問題，因為它與您的無線業務有關。根據與客戶的初步討論，隨著 5G 的不斷插入，您預計您的無線業務會出現什麼樣的內容提升？從時機的角度來看，您是否認為 5G 開始發揮作用時，這更像是 2020 年的動態？還是 2020 年及以後？

It's very good interesting question, and you're asking areas of very vast uncertainty here. But my sense of it is, you start to see a little bit of it in 2020, but it will be only a small part. I think it's 5G actually that impacts content in components in handsets, high-end smartphones, I might add, will only really impact in a big way, I think, beyond 2020. 2020, we'll see some starts, but the attach rate, for want of a better word to use, is going to be not that high. But you're right. Beyond 2020, as 5G comes in, and you probably heard and seen that the amount of content, especially for -- announce or weigh the factors on RF, analog, FBAR, and here in this case, as those FBAR content attaches itself more and more to antenna and various other parts of the phone, will be quite significant, but not so in 2020.

這是一個非常有趣的問題，你在這裡問的是一個非常不確定的領域。但我的感覺是，2020 年你會開始看到一點，但只是一小部分。我認為 5G 實際上會影響手機、高階智慧型手機組件的內容，我想補充一下，我認為，只有 2020 年後才會真正產生重大影響。2020 年，我們會看到一些開始，但由於缺乏更好的詞彙來使用，附加率不會那麼高。但你是對的。2020 年以後，隨著5G 的到來，您可能聽說並看到了內容的數量，特別是宣布或權衡射頻、模擬、FBAR 的因素，在這種情況下，因為這些FBAR 內容越來越多地附著在天線和手機的其他各個部件的更多變化將非常重要，但 2020 年並非如此。

Our next question comes from Craig Hettenbach with Morgan Stanley.

我們的下一個問題來自摩根士丹利的 Craig Hettenbach。

Just a question for Tom, on the back of the strong gross margin upside in the quarter, can you talk about just trends you're seeing in gross margin for the core semiconductor business? And then software, and just how we think about expectations through the year?

問湯姆一個問題，在本季毛利率強勁上漲的背景下，您能談談您在核心半導體業務毛利率方面看到的趨勢嗎？然後是軟體，我們如何看待全年的預期？

Sure, Craig. Well, you can see the gross margins are exceptional. They're all over 70% in the quarter. A lot of that is driven by including CA in the business. But you're right, the standard business continues to increase from a gross margin perspective. Mix helps. As wireless comes down, we benefit, as I think you know, from the rest of the portfolio and semis being at or above the corporate average. But I think looking out longer term, we've talked about this a lot. We continue to see the opportunity to improve gross margins, which directly translates, of course, into our operating margins and our free cash flow conversion. So we can -- we see that continuing.

當然，克雷格。嗯，你可以看到毛利率非常高。本季他們的利用率都超過了 70%。這在很大程度上是由 CA 參與業務所推動的。但你是對的，從毛利率的角度來看，標準業務持續成長。混合有幫助。正如我想你知道的那樣，隨著無線業務的下降，我們受益於其他產品組合和半成品達到或高於公司平均水平。但我認為從長遠來看，我們已經對此進行了許多討論。我們繼續看到提高毛利率的機會，這當然會直接轉化為我們的營業利潤率和自由現金流轉換。所以我們可以——我們看到這種情況仍在繼續。

Our next question comes from Harsh Kumar with Piper Jaffray.

我們的下一個問題來自 Harsh Kumar 和 Piper Jaffray。

I wanted to follow up on the gross margin question. Maybe for Tom. They stepped up quite dramatically. On one of the field trips, I think you had mentioned that it really takes an acquisition about a year to hum and really produce results. So question is, did you capture the vast majority of CA benefits very quickly in 1Q? Or is the best from CA sort of reserved for the back half and later on?

我想跟進毛利率問題。也許是為了湯姆。他們的進步非常顯著。在一次實地考察中，我想您曾經提到過，一項收購確實需要大約一年的時間才能產生效果。所以問題是，您是否在第一季很快就獲得了絕大多數 CA 收益？還是說CA的最佳球員是為後半場以及之後的比賽保留的？

No. I mean, I think as you might be able to sort of look through the numbers, we're still not fully optimized around CA. We're only one quarter in. So you've seen some meaningful improvement in profitability for the company that it includes CA. But when you look specifically at gross margins, it's a number of elements within the CA business tied to gross margins, primarily services as well as support. So we've taken some actions to improve gross margins and improve the P&L, in general, one in particular is we announced a deal with HCL and have outsourced a lot of our service activity to HCL going forward, for the CA business. But as we continue to work through our model, which is really driving these PLAs we talked about, we see the opportunity to continue to get better returns on our investment, which includes improving our gross margins going forward. So we would expect them to continue to improve, not just this year, but really over the long term.

不。我的意思是，我認為您可能能夠查看這些數字，但我們仍然沒有圍繞 CA 進行完全優化。我們只進行了四分之一。因此，您已經看到包括 CA 在內的公司盈利能力有了一些有意義的提高。但當你具體觀察毛利率時，你會發現 CA 業務中的許多要素都與毛利率有關，主要是服務和支援。因此，我們採取了一些行動來提高毛利率並改善損益表，特別是我們宣布與 HCL 達成協議，並將未來的 CA 業務的大量服務活動外包給 HCL。但隨著我們繼續研究我們的模型（這確實推動了我們談論的這些 PLA），我們看到了繼續獲得更好投資回報的機會，其中包括提高我們未來的毛利率。因此，我們希望他們能夠繼續改進，不僅是今年，而且是長期的。

If I could add to that, on CA, we continue to go through transitions. And you're right. It takes at least a year for us to, so call, hum. In the case of software companies, I believe it will take longer because these are contractual commitments, probably closer to 2 years, but it will get there. But the biggest -- I think a big part other than, frankly, we're combining software and hardware now and CA in the software -- infrastructure software side still transitioning its improvement. And as Tom said, just one quarter. We expect to see more reductions. And these are not just cost of goods sold, but down below the line, operating expenses as we go through it better. What -- for Q1 is very critical to is the fact that it's product mix. Wireless is down, and the other products are humming along, our semiconductor products. And remember, year by year nature of a product life cycles in those semiconductor products, we always have an opportunity to expand by delivering more value to our customers, expand our gross margin around 50 to 100 basis points on just its natural cadence. That and mix, I think, is adding a lot of tailwind to our improvement in gross margin.

如果我可以補充一點的話，在 CA 上，我們將繼續經歷過渡。你是對的。我們至少需要一年的時間才能，如此稱呼，哼。就軟體公司而言，我相信這需要更長的時間，因為這些是合約承諾，可能接近兩年，但它會實現的。但坦白說，最大的——我認為除了我們現在正在將軟體和硬體結合起來以及軟體中的CA——基礎設施軟體方面仍在轉變其改進之外，還有很大一部分。正如湯姆所說，只有四分之一。我們預計會看到更多的削減。這些不僅僅是銷售商品的成本，還包括我們更好地處理的營運費用。對於第一季來說，非常關鍵的是它的產品組合。無線系統癱瘓了，而其他產品（我們的半導體產品）卻在蓬勃發展。請記住，在這些半導體產品的產品生命週期中，我們始終有機會透過為客戶提供更多價值來實現擴張，以自然節奏將我們的毛利率擴大約 50 至 100 個基點。我認為，這一點和組合為我們毛利率的提高帶來了很大的推動力。

Our next question comes from Edward Snyder with Charter Equity Research.

我們的下一個問題來自特許股票研究公司的愛德華·斯奈德。

Hock, I'd like to, if we could, maybe touch back on wireless. This rebound you're going to see in the second half of the year, I understand you've got a year-over-year issue here because we were kind of weak last year, but this is flattening out units. This sounds like it's going to be a much stronger rebound than normal just on content alone. I mean, correct me if I'm wrong, but you've got 3 big areas that you're playing with, just handsets alone. Of course your standard ball business, which covers everything above 2.4 gig. You're doing more products in the antenna congestion area now because I know you're doing antenna flexors and that problem is getting much more acute over the next year, especially as 5G comes on. But the Wi-Fi, 802.11ax, like you mentioned, not only in enterprise, but we're seeing that in handsets, and isn't it the case that you've got a big lead over your closest competitor, maybe Qualcomm here. So shouldn't we expect, one, to see a bigger rebound just on content; two, for maybe this to have more legs than we'd otherwise expect at the beginning next year? I know units are an issue, but given Wi-Fi itself is being deployed, just -- and you play strong into that, it should last longer, shouldn't it?

霍克，如果可以的話，我想談談無線。你將在今年下半年看到這種反彈，我知道你在這裡遇到了同比問題，因為我們去年有點疲軟，但現在單位正在趨於平緩。聽起來，僅就內容而言，這將比正常情況下更強勁的反彈。我的意思是，如果我錯了，請糾正我，但你有 3 個大的領域可以玩，只是手機而已。當然是您的標準球業務，涵蓋 2.4 gig 以上的所有內容。你們現在正在天線擁塞領域生產更多產品，因為我知道你們正在生產天線屈曲器，而這個問題在明年會變得更加嚴重，尤其是隨著 5G 的到來。但是 Wi-Fi、802.11ax，就像您提到的，不僅在企業中，而且我們在手機中也看到了這一點，您是否已經遠遠領先於最接近的競爭對手（也許是高通） 。因此，我們難道不該期望，第一，內容會出現更大的反彈；第二，內容會出現更大的反彈。第二，也許這比我們明年初預期的還要多？我知道設備是一個問題，但考慮到 Wi-Fi 本身正在部署，而且你在這方面發揮了很大作用，它應該持續更長時間，不是嗎？

Ed, we love all your comments, but I want to be -- play down very straight down the center simply. We'd see a rebound. My view is a normal rebound, and it's a normal rebound. And while content increases, it's not really over the top that -- by that much either. But don't forget, comparing it against last year, it's relatively an easier compare. So we do see -- we definitely see a rebound, and this will be a good rebound, but it's not -- and it will not be an extraordinary rebound. Just want to emphasize that. Just your normal rebound. It's not hard to compare year-on-year against last year versus second half fiscal '19. The fact that, that will be a main improvement.

艾德，我們喜歡你所有的評論，但我想——簡單地直接從中心淡化。我們會看到反彈。我的看法是正常的反彈，就是正常的反彈。雖然內容有所增加，但也並沒有真正超出這個範圍。但別忘了，與去年相比，這是相對容易比較的。所以我們確實看到了——我們肯定會看到反彈，這將是一個很好的反彈，但事實並非如此——而且不會是非凡的反彈。只是想強調這一點。只是你正常的反彈。與去年和 19 財年下半年進行年比比較並不難。事實上，這將是一個主要的改進。

Our next question comes from Aaron Rakers with Wells Fargo.

我們的下一個問題來自富國銀行的 Aaron Rakers。

A lot of questions on wired and wireless have been asked, but I wanted to ask about the storage business. The storage business, I think you mentioned, was up. I don't know if you've framed how much in this quarter, but I'm curious on -- kind of similar questions as prior, what kind of things are we to be focused on in that piece of the business over the next couple of quarters? And how do you assume that, that can grow through the course of this year?

問了很多關於有線和無線的問題，但我想問一下儲存業務。我想你提到過，儲存業務有所成長。我不知道你是否已經制定了本季的預算，但我很好奇——與之前類似的問題，我們在接下來的業務中將重點關注哪些事情幾季？您如何看待這一數字在今年會持續成長？

Okay. Well, very good interesting question. In storage, we have a mixed bag here. A bag -- most -- a lot of it, not all of it, but a lot of it relates to hard disk drive. And as you know, hard disk drive is nothing to yell over these days, and we see that no different from the others. Our mitigating factor here is that most of our hard disk drives, in fact, all our hard disk drive component sales goes to nearline or basically data centers. We don't do -- we do relatively less in PC, desktops or mobile. So we do see the impact of it being weak, but not as extreme as obviously the industry is saying. So that helps mitigate it, but that's not a growth area. Where we see a hopefully better new product cycle coming in is the fact that type 2 storage is -- especially on Flash, SSDs, is PCI Express. Second half of the year, we see pushing -- a strong push in the marketplace on PCI Express Gen 4. We're in the lead of it and we see a lot of interesting opportunities related to that, be it in storage or even be it in [resulting the amounts are] in offload computing and from viewpoint of machine learning, GPU to GPU connectivity. But it's also related to storage, and that push, [something you said, where is] Gen 4, is what's quite interesting in storage over the next -- over the next -- well, actually over the rest of this year, especially the second half. All right?

好的。嗯，非常有趣的問題。在倉庫裡，我們這裡有一個混合包。一個包——大部分——很多，不是全部，但很多都與硬碟有關。如你所知，硬碟現在已經沒什麼值得大喊大叫的了，我們看到它與其他驅動器沒有什麼不同。我們的緩解因素是，我們的大多數硬碟，事實上，我們所有的硬碟元件銷售都流向近線或基本上資料中心。我們不這樣做——我們在個人電腦、桌上型電腦或行動裝置上做得相對較少。因此，我們確實看到它的影響很弱，但並不像產業所說的那麼極端。因此這有助於緩解這種情況，但這不是一個成長領域。我們希望看到更好的新產品週期即將到來，事實是，2 類儲存空間——尤其是在快閃記憶體、SSD 上，是 PCI Express。今年下半年，我們看到了 PCI Express Gen 4 市場的強勁推動。計算以及從機器學習、GPU 到GPU 連接的角度來看。但這也與存儲有關，並且推動，[你所說的，在哪裡]第四代，是接下來的存儲中非常有趣的事情 - 嗯，實際上是在今年剩下的時間裡，尤其是下半場。好的？

Our next question comes from William Stein with SunTrust.

我們的下一個問題來自 SunTrust 的 William Stein。

Hock, if you cut through the end markets and look instead at the business on a geographic basis, I'm well aware that when you ship to one region, there may not be consumption in that region that -- China's a big export economy certainly, but can you talk to the pace of demand that you're seeing in China as best you can tell it, in particular relative to inventories there?

霍克，如果你切入終端市場，而是從地理角度來看待業務，我很清楚，當你向一個地區發貨時，該地區可能沒有消費——中國當然是一個出口大國，但是您能否盡可能地談談您所看到的中國需求的成長速度，特別是相對於那裡的庫存而言？

Good question. No surprise. Across the regions, as far as I can sense, China is the weakest. We all see that. We all know that. And I'm talking domestic demand products in a -- view our product shipped to the -- shipped to those regions, used in that region indigenously. And it's the weakest region. It also had collateral impact we see to some extent on certain sectors in Japan and certain sectors in Europe, less so in the U.S. But broadly -- so China has an impact beyond just the region in South China. It also impacts to a couple of other regions, but North America continues to be quite decent, and that's what helps us mitigate this overall macroeconomic situation.

好問題。沒有驚喜。從各個地區來看，據我感覺，中國是最弱的。我們都看到了。我們都知道。我說的是國內需求產品——查看我們的產品運往——運往這些地區，在該地區本土使用。而且是最薄弱的區域。我們看到，它在某種程度上也對日本的某些產業和歐洲的某些產業產生了附帶影響，對美國的影響較小，但總體而言，中國的影響不僅限於華南地區。它也對其他幾個地區產生影響，但北美仍然相當不錯，這有助於我們緩解整體宏觀經濟狀況。

Thank you. Ladies and gentlemen, thank you for participating in today's question-and-answer session as well as today's call. This does conclude the program. You may all disconnect and have a wonderful day.

謝謝。女士們、先生們，感謝你們參加今天的問答環節以及今天的電話會議。這確實結束了該程式。你們可能會斷開連接並度過美好的一天。