“With significant capital offsets expected to land in the second half of the year, we continue to expect approximately neutral 2024 adjusted free cash flow.”

In context

“leye, NEX and foundry services. As we look beyond Q2 guidance, we expect growth across all segments in the second half of the year, led by improved demand for general purpose servers from both cloud and enterprise customers and increased core ultra assembly capacity to support a growing PC TAM, driven by enterprise refresh and the AI PC. We should also see accelerating growth from our network and edge businesses, a return to growth for Altera and a meaningful Gaudi ramp in the second half. Despite 2024 representing the peak for 5 node and 4-year driven factory start-up costs, we expect roughly 200 basis points of FY '24 gross margin improvement compared to FY '23. Our net capital intensity forecast of mid-30s as a percent of revenue across 2023 and 2024 in aggregate remains unchanged. With significant capital offsets expected to land in the second half of the year, we continue to expect approximately neutral 2024 adjusted free cash flow. While first half demand signals have been a bit weaker, Q1 played out largely in line with our expectations. We achieved several important milestones towards our IDM 2.0 vision, and we're participating in a large and growing TAM with encouraging market signals for the second half of the year and into 2025. By capturing margin at both the foundry level and the fabless product level, we have margin stacking advantage unique in the industry. We are 3 years into our transformation, and 2024 represents the steepest part of the climb, with 5 node and 4-year start-up cost peaking and the majority of our volume on pre-EUV process nodes with uncompetitive economics. However, as we crest the hill and look toward the next few years, we have strong wins at our back and a clear path to achieving the m”