“We expect a pretty significant ramp in Lunar Lake in the third quarter.”

In context

“see. It gives me a lot of more confidence. John William Pitzer: Ross, do you have a follow-up question, please? Ross Clark Seymore: I do. One potentially a little nearer term for Dave on the gross margin side. You mentioned that the gross margin was guided down a bit sequentially for a couple of different reasons. Can you dive a little more deeply into those? And perhaps more importantly, just what do you see as the tailwinds and headwinds to gross margin as we look, say, into next year? I know you're not going to guide it specifically, but just some of the puts and takes would be great. David A. Zinsner: Yes. Okay. Thanks, Ross. Yes, I'll just delve into the gross margins for the third quarter. I'd say the predominant driver of the lower gross margins in the third quarter is Lunar Lake. We expect a pretty significant ramp in Lunar Lake in the third quarter. And I've made this comment, I think, multiple times on calls, but it's got the memory in the package. And so we kind of pass it on at the same cost we bought it, and that really has a negative impact on the way the gross margins look optically. And so as we mix higher to Lunar Lake, that's obviously going to be a headwind to us in terms of gross margins, as expected, but perhaps having a little bit more of a significant transition from 2Q to 3Q. We thought we'd have probably more volume in 2Q. The second big driver of gross margins is the ramp that Lip-Bu just talked about of Panther Lake. Obviously, we're in the early stages of the maturity of Panther Lake. So the cost per wafer is going to be higher. And so that is going to drive some headwinds. Obviously, as Lip-Bu said, yields improve”