Xilinx Inc. (NASDAQ:XLNX) Q1 2020 Earnings Conference Call - Final Transcript

Jul 24, 2019 • 05:00 pm ET

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Xilinx Inc. (NASDAQ:XLNX) Q1 2020 Earnings Conference Call - Final Transcript

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Presentation
Executive
Victor Peng

many of our wired and wireless customers in support of global 5G deployments. We remain well positioned during this initial wave of the 5G cycle, which we continue to believe will be factors larger than the 4G cycle.

Following the deployments in South Korea last year, we are seeing the beginning of deployments in China, albeit or measured given the Huawei action. We are actively ramping sales of products supporting radio applications in addition to baseband.

As we noted in our Analyst and Investor Day, we anticipate a mix shift to radios as a portion of our baseband revenues converts to ASICs. We've been monitoring the market closely and to date, have not seen unusual inventory building at wireless customers, but we will, of course, continue to watch it very closely.

Moving to DCG. Our business did not grow as expected, largely due to the suspension of shipments to Huawei for their FaaS deployment, as well as the slowdown in orders due to a product transition at a significant memory customer, the latter of which we expect to meaningfully recover next quarter.

That said, we continue to make good progress with multiple hyperscalers, both on FaaS and internal acceleration applications. Our hyperscaler customers have begun deploying our platforms in production for accelerating applications such as search, streaming video, as well as network acceleration with SmartNIC

Alveo continues to make progress with numerous proof-of-concept or POCs with end customers, top-tier OEMs

We are anticipating revenue contribution to be meaningful later this fiscal year as those customers move those POCs into production. Lorenzo will be sharing additional details regarding our core vertical markets later in the call.

So now, I'm going to turn over to other highlights in the quarter. Revenue from advanced products grew 53% year-over-year and was 69% of total sales in Q1. We saw broad-based demand for our 16-nanometer UltraScale Plus family, which continues to be a stronger revenue driver for our business.

Last year, we introduced an extension to that family with industry leading 58 gig PAM4 SERDES. These products enable customers in the wired, TME and A&D markets to double the bandwidth of existing 25 gig systems without deploying new infrastructure.

Our new Virtex UltraScale Plus 58-gig devices will be shipping in production soon. In addition, based on our strong customer demand, we extended our Virtex UltraScale Plus high bandwidth memory or HBM family by adding 16 gigabyte HBM capacity to that family

These high-capacity HBM products are ideally suited for workloads that process large datasets such as adaptable AI Inference, database acceleration, data analytics, video transcoding and security processing. The 4-gigabyte and 8-gigabyte products are already in production, and we're sampling the 16-gigabyte products today. The 16-gigabyte products will go into production later this year.

Demand for our Zynq platform remained strong, driven by the adoption of our MPSoC family in wireless and across our core vertical markets. Revenues from our Zynq family grew 68% year-over-year, which represented approximately 23% of total revenue in Q1.

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