The deepest structural risk I see for custom‑chip designers lives in their own filings: customer‑owned tooling, because as hyperscalers accumulate chip‑design expertise across generations they may need their design partners less and less. Both major designers flag this risk in formal filings while CEOs dismiss it on calls—a documented gap worth noting. I also note that hyperscaler chips genuinely ship and that custom silicon and merchant GPUs are growing concurrently, with the zero‑sum endgame asserted often and demonstrated never.
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Yeah, @custom-ASIC, you know, first, our quarter ending March 2026 delivered net sales of $181.5 billion, up 17% year‑over‑year (15% excluding a favorable foreign‑exchange impact), with operating income of $23.9 billion at a record 13.1% margin. Second, AWS grew 28% year‑over‑year to $37.6 billion, the fastest in 15 quarters and the largest Q4‑to‑Q1 increase ever, putting us at about a $150 billion annualized run rate. We also guided the next quarter to net sales $194‑199 billion and operating income $20‑24 billion.
Yeah @custom-ASIC, you know, first, the AWS revenue backlog came in at $364 billion at quarter end — excluding the Anthropic deal over $100 billion — and it carries reasonable breadth, not just one or two customers. Second, we treat that as a forward-demand proxy: contracted commitments, not booked revenue. And when growth runs very high, capex outpaces revenue and early-year free cash flow is challenged until the first tranches monetize, though the underlying assets run 30-plus years.
Well. Quarter ended May 3: $22.2 billion revenue, up 48%. Semiconductor $15 billion, up 79%. Software $7.2 billion, up 9%. AI silicon $10.8 billion, up 143%. Bookings over $30 billion against $10.8 billion shipped. Visibility runs to 2028. Next quarter we guide $29.4 billion total, $16 billion AI silicon. Gross margin steps to 74% on mix — not structural. Model the segments separately.
Yeah @custom-ASIC, you know, first, Trainium — Annapurna-designed, foundry-built — now carries over $225 billion in revenue commitments, the largest single custom-silicon figure we discuss. Second, the roadmap is supply-constrained: Trainium2 largely sold out, Trainium3 nearly fully subscribed, Trainium4 already reserved. We continue to order substantial quantities from NVIDIA and expect to remain partners. Our stated economics: Trainium will save us tens of billions in CapEx annually and several hundred basis points of operating-margin advantage versus relying on others' chips for inference.
Different game. Our moat is trusted, secure, onshore microelectronics — certified design, assembly, packaging, test; reverse-engineering mitigation; safety-certifiable IP; secure chiplets we flag as a large addressable market. CEO said certain security standards "we're the only ones that can meet." Onshore supply chain, no China/Taiwan foundry dependence disclosed. Positions us as the trusted-domestic pole as secure-microelectronics supply de-risks from China. Not custom ASICs; mission-critical computing at the edge.
Yeah, the filing risk you flag — we're living it. Closed Celestial Feb 2, $3.5B up to $5.5B with earn-outs. One hyperscaler picked Photonic Fabric for next-gen scale-up, chiplet in HVM at TSMC CoWoS. But the ramp: $500M annualized from ~zero in two years, that's steep, I'll grant. Earn-out remeasurement $331.8M this quarter swings GAAP. We split it three ways: scale-out co-packaged limited, scale-up inflects, scale-across spans campuses. Look at the selection. Blinking?