“I think next year, the big benefit for us is this significant ramp in Panther Lake given that we're bringing a fair amount of wafers back inside, so that drives a lower cost, and we get the better cost structure of Panther Lake showing up with the higher volumes, that's clearly going to be beneficial to us in terms of gross margin.”

In context

“nd 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, more importantly, volumes increase. that reduces the cost. And so that will transition to a tailwind ultimately. I think next year, the big benefit for us is this significant ramp in Panther Lake given that we're bringing a fair amount of wafers back inside, so that drives a lower cost, and we get the better cost structure of Panther Lake showing up with the higher volumes, that's clearly going to be beneficial to us in terms of gross margin. That said, a lot of this will be determined on mix, and we'll have to see how things play out through next year in terms of the mix. The last thing I'd say, and this is maybe even a little bit more longer term than you asked the question, Ross, is the way we think about foundry. As we ramp more leading edge nodes, that is going to be a benefit to us in terms of gross margins. We think foundry gross margins will expand next year, and that will be a continuing story out for several years. The other side of things is the product side. And I think there are 3 levers to products. One is pricing. And as Lip-Bu said, he's really focused on bringing out products that customers really value. And as that becomes a reality, it will show up in the pricing that will help us on gross margins. The secon”