2024 TMT conference. My name is Asiya Merchant. I cover the tech hardware and tech supply chain companies here at Citi Research. Very pleased to have Mike Staiger here from Supermicro. We also have Krishna Shankar, who's VP of Finance and Investor Relations. Mike here is VP of Corporate Development. Very pleased to have them here with us. This session is for Citi clients only, and I'm first gonna turn it over to Mike for some opening remarks before we jump into Q&A.
Hey, hoping you can hear me. Hey, thanks for having us, Asiya. First thing, I hate to go to the safe harbor, but investors should refer to our cautionary safe harbor statement regarding risk factors and forward-looking statements that's on our website. Also, you'll recall last week we disclosed that we needed additional time to file our 10-K, and we said in our filing that the board has assigned a committee to diligently conduct a review. We also said, based on what we know, we don't expect any material changes to our fourth quarter and full year 2024 results. So I appreciate everyone's understanding that there's nothing more that I can say about the topic at this time, and we remain focused on customers and executing on our ambitious business plan.
With that, we can talk about the business.
Okay. I'll be leading most of the Q&A, and, towards the end, you know, we can have it open for investor Q&A. Please do raise your hand so we can bring the mic to you at that point. So Mike, thanks again. You know, first question we're pretty much asking all the companies here is just about end demand. You kind of alluded to that right now in your opening remarks as well, about the ambitious demand outlook that you guys have. Maybe just given, you know, you guys recently reported, how would you characterize the demand environment and how Supermicro is positioned relative to that demand?
I think from that perspective, the numbers speak for themselves, 110% year-over-year growth kind of gives you an idea that what we're providing to our customers is paramount and high demand. You know, it's mostly AI-related products. We said a majority of our demand has been in that category, so I think it's been pretty robust.
Okay. And then just given your market positioning, clearly, you know, AI is the one that's driving the bulk of your demand, the majority of your demand outlook above the industry. How do you think about your market share positioning relative to your peers?
So I think that one's pretty obvious. Relative to our peers, we're clearly leading. We're well out in the forefront. We're doing it with innovative products, new products, new technology. So we think our market position is quite healthy.
Okay, and just the conversations that you guys are having with your end customers, you know, what are they focused on? Maybe just relative to where you, when you reported, how confident are you in those conversations?
I think in general, the customers that we're dealing with, the majority of the customers are worried about total cost per watt per compute cycle. From that perspective, the conversations are revolving around: How can we get more out of the products? How can we get more density? How can we get more power efficient, thermal efficient? The conversation is just really about liquid cooling and data center architecture. Those conversations are right in our wheelhouse from an innovation perspective.
If you think about what we've been doing, you know, with the Hopper or the DGX reference architecture that NVIDIA first rolled out with the Hopper, we've been able to double the density, liquid cool it, so the customers can basically get the most performance out of it by throttling those the performance on those GPUs. And so from a technical perspective, we've been able to do quite an excellent job, and that's one of the reasons why we're gaining share.
And again, as it relates to end demand, I think there's just a lot of concern, you know, is this sustainable, not sustainable? Just based on your conversations with your customers, what gives you the confidence that this, you know, outlook that you guys provided for your next fiscal year remains well on track?
So from a demand perspective, I mean, it's kind of interesting, it's kind of missing from the general public. You know, the larger CSPs, the GenAI-focused CSPs are getting a lot of workloads, not only from the hyperscalers themselves for various different reasons, but from the enterprise. And if you think about an enterprise setup and they usually have test and dev on an x86 platform, so they're all built out on x86 platforms. And they usually reserve 10%, maybe 15%, you know, to test applications, et cetera, in that footprint.
An interesting thing here is that few, if any, of the large enterprises actually have a GenAI footprint built out, and all of them are now testing large language models, industry vertical models, or anything that's, like, specific to their particular business to drive revenue or to save on costs. But from that perspective, our customers, the enterprises are using the CSPs, and so the demand cycles at the CSP level are pretty accelerated. And so as they develop their applications within their footprint and they wanna roll them out to their user base, they'll either have to build out a GenAI internally for their own regulatory reasons, or they'll continue to use the CSPs.
So under the covers, the demand from an AI perspective is really broad-based, and that's a really good underpinning of our business because, one, we can serve the CSPs. There's more of them coming, there's new ones forming to deliver industry-specific models as well. And then you have the enterprises that, from a regulatory perspective, and I'm thinking, you know, financial services might be one of those, will ultimately build out. And so that's a pretty big backdrop from a demand perspective. And even if they just continue to stay in the CSP envelope, that'll get bigger.
And what will likely happen in that space is that you'll continue to need, you know, low cost per watt per compute, and from that perspective, that's where we shine, where we're able to take whatever our partners are able to deliver from the compute element. We can package that in a total system, total rack, total data center elements, and provide that to the customer so that they can drive the cost of service down to the end customer. Now, if things continue to travel in the distance, in the way that we see right now, the next phase will be on the inferencing side, inferencing point.
And the enterprises and end users will likely need devices from that perspective that probably look a little bit more like a general purpose server, so to speak. And from that perspective, there'll be a mass unit requirement. So we'll potentially have a customer that has an AI footprint on the generative side, and we'll have customers that will need the units to do the inferencing. So they'll kind of go hand in hand from a demand perspective. So that's... I think that's how the market will likely unfold. There's just a lot of noise right now with respect to, you know, is it gonna be sustainable?
Mm-hmm.
And, you know, the benefits of the technology are pretty clear, and we think that there's a lot of runway ahead.
Okay. How do you think about drivers between pricing and volume? You know, as we go through these chip transitions from your major chip suppliers, do you view that as a pricing opportunity or as a volume opportunity?
It's kind of an-
Yeah
... it's kind of an interesting question because you would have to think that the market that we're serving is stays static, right? And so if it's just one particular platform that serves the entire market, you get into that, like the old commodity off-the-shelf, you know, COTS x86 kind of platform. And what we're seeing now is a large amount of variance, of different form factors, of different setups to address different workloads. And you can just take a look at some of our partners', product roadmaps. You can take a look at what the hyperscalers are doing, and there's a massive forking away from just a standard, you know, one, you know, unit serves all.
So the pricing and volume element there becomes a little bit, a little bit different, or it becomes more, more, more spread out. And what we hit on a little bit earlier was, you know, the inference will probably be more of a volume, kind of a game, potentially. But we'll see. But so, like, like I said, I don't think you can look at it from a very static pricing and volume perspective. The products that we're delivering continue to change, I mean, very, very quickly. And, you know, our ability to keep ahead of the market by being able to put our partners' products on the floor in volume at scale so that customers can, you know, run their applications, is a pretty unparalleled position right now in the marketplace.
Yeah, the first to market is generally what Supermicro is known for. That's fair enough. With talking about which, I mean, I think you guys talked about it a little bit on your last earnings call, is about the Blackwell delays and-
Yeah
... how we should think about that as it relates to your business and the revenue ramp ahead with the Blackwell?
Well, let me just say one thing about, you know, first to market, right? Like, I think the characterization is that we're able to put technology into the marketplace sooner than anyone else, and the ability for the rest of the market to actually keep up is becoming more and more of a challenge than we've ever seen before. So it's an underestimated thing. So we're referring to the Blackwell element, that kind of goes back to our DNA with what we've done with Hopper. So, you know, I think it's pretty common from an industry perspective that if you want to call it a delay, I'm not really sure, you know, because it's a moving target on when availability and shipments. And I think the...
It's very widely known in the industry that a select few customers would be getting those in volume at the, in the initial phases. Our customer behavior has been to build out or, and put as much compute on the floor, do it with cooling, so they can get the most performance out of what they have available today, which is the H100, H200. And so, our you know, our forecasts you know, kind of reflect that. Our thought processes reflect that, and over time, all of our customers that are concentrated on these types of footprints are going to be ultimately migrating to whatever Blackwell variant is available. And the key there is that you know, our understanding that there's several.
Interesting thing is it's not even on the market that I know of, and we're already talking about, you know, what it's gonna be and how it's gonna be, and we haven't got to that point. But whatever it is, we will be able to take that platform and enhance it for our customers so that they continue to come to us for, you know, the low cost per watt, per compute, the most efficient systems, et cetera, the most performance, and the densest. So we'll be well in that discussion point.
Okay. How would you characterize the current supply environment then for these GPUs?
The supply affects a lot of different arenas from our perspective. You know, we kind of mentioned on our call that we had some supply challenges with the liquid cooling element because we were scaling up some pretty large builds using, you know, basically a new supply chain, a new manufacturing setup, new manufacturing line, so supply is ramping on the liquid cooling side to support our forecast. Most people think of supply in the forms of, you know, what GPUs are available, and from that perspective, I think it's pretty well known that it's looser than it was a while back, but, you know, I don't have any exact numbers for you today.
And we've been able to supply our customers and sustain growth rates that are well above the industry average, well above, you know, our peers and competitors.
Mm-hmm. Now-
So I think supply is a challenge, and it changes all the time, depending on what we're going to be delivering to the customer, so it's an ever-moving target.
Okay, and on the DLC specific, I think you just talked about it. So supply on DLC is still pretty tight, or it's improved?
I think it's improving. You know, I don't know specifically if there's anything, you know, in particular, if we do a product change into the next variant, what that would need. But everything changes from a standpoint of a new product that we're delivering across any of our partners. And so, you know, aligning our suppliers to match our forecast or customer forecast is somewhat of an art, underappreciated art.
Mm-hmm.
We've been doing a phenomenal job. If you just look at the, you know, the track record of the growth of the company, and it-
Right
... kind of supports that.
Yeah. Maybe if you can dive a little bit into your competitor- your competitive advantage, and you talk about the modular approach. Some of your other competitors, peers also talk about something similar. So maybe if you can just, you know, how you guys think about Supermicro's moat as it relates to... You talked about speed to market, you talk about this modular building, how you guys differentiate yourself from some of your peers on that one?
I think it's clear the differentiation is pretty pronounced at this point in time. I don't think we're the only ones that are doing the double density, if you wanna call it, or plus on the Hopper itself. We're the first to roll out a large volume of liquid-cooled racks. So from that perspective, our time to market, our ability to take our partners' products and make them better is pretty significant advantage. We control our own engineering. We control our own manufacturing. I'm sure we have partners that help, but we design everything that we do, and we integrate that from our perspective to put the best products on the floor for the customer. There's a lot of art to this.
It's very difficult, you know, challenge anyone here to build the liquid-cooled rack at the densities that we're doing. I think they'd find it pretty difficult to integrate all those, to get the right elements in place to satisfy customers. So I think the competitive advantage is our ability to flex and use our modular design to extend our advantage. We're also moving in a direction where we'll be able to deliver the entire data center stack, so to speak, our data center building block. And there'll be more color, more comments as we develop those products for our customers downstream.
Okay, so by that you mean storage and other-
I think there's, you know, we're talking about going from the setup of the data center to from the tower liquid cooling to the compute platform. We do already supply storage to switches, software, and service, and wrap that complete package around for customers.
Okay. Maybe on DLC, just, you know, remind investors where you are from a capacity standpoint, and as it relates to, like you mentioned, these Blackwell variants, that might be there. There's some chatter that maybe the NVL36 might be preferred, which tends to be more air-cooled versus liquid-cooled. How does that kind of factor into your outlook for DLC?
I think there's, you know-
Oh, direct liquid cooling.
From that perspective, one, those products aren't necessarily in the mass market. You know, there are some customers that may not be set up for liquid. We could help some of those customers, for sure, depending on who, how, where, why they are. So the air definitely is an option, and the liquid, like you said, the more discerning customers that have a big concern over power consumption, and they want to direct the power away from a traditional air-cooled data center to a direct-to-chip liquid cooling environment. There's plenty of customers that want that. There's some discussion that that's the forward motion for almost all systems in the future, which is, you know, right around the corner.
And so we've spent a considerable amount of time and effort and investment in developing our liquid cooling technology, and there'll be many, many different variants as we move forward. We'll be able to put the, you know, anything on the floor, liquid-cooled. We have x86 liquid-cooled offerings as we speak. So over time, when you wanna compress the x86 footprint and get denser and run hotter, we'll be able to liquid-cool those alongside of a GenAI platform. So we're not just thinking about AI, you know, systems, so to speak, we're thinking about the total data center. So we'll be able to offer the customer their serial compute, their parallel compute, basically x86 platforms or AI platforms. And whether it's generative or inferencing, it won't matter.
We'll be able to wrap all those around and integrate those for end customers.
... How do you measure where you are relative to your competitors on the liquid cooling and direct liquid cooling formats? Is there, like, some industry standard that you compare yourself to what your peer offerings are, and therefore you say, okay, you're the leader when it comes to-
I like the way you're thinking about it, but I don't think we think about it that way. I think what we think about is we look at a system, or at least Charles does, and figures out how can he get the most out of it, and the format, what it would look like, you know, whether it's, you know, bladed or racked or however, and where he'd get the most performance out of that system, and then be able to deliver it so that the customer can use it, and plug it in, turn it on, and not have to worry about architecture of it, not have to worry about the design of it, right?
So it's become way too complicated at the data center level for the average operator to figure out how to get the most benefit out of the systems that they're running. And you know it's efficient to get some time to market, to get some time to online to serve the customer. So if you think about it, if the service provider is not running like the highest most performant systems you know they're potentially gonna get their lunch eaten by their other competitors. So if we can help accelerate that and accelerate them then that becomes a standard and then we'll build to that standard in volume and when the platform shifts or changes we will take that and he will look at that and develop another platform. So the good news is it's
is, there's so many different versions out there right now that it benefits our business model, and so that we can really do wonderful things for the customer and, you know, they can have a pretty solid experience.
Okay, great. One of the concerns generally, you know, as it relates to OEMs in this market is AI. Maybe a lot of the primary growth of AI hyperscalers is being supported by ODMs in Taiwan. When you compare yourself to perhaps the ODMs, where Supermicro's competitive advantage specifically? And, you know, as you talk about gaining share in this AI TAM, how do you Supermicro is positioned in terms of gaining share there?
You know, one, we don't compare ourselves to ODMs, right? We don't, we don't do what they're doing. Like I said, what we're doing is we're designing and developing systems, the most performative systems, for our customers, whereas an OEM is essentially getting a recipe from a couple of select few that are designing their own systems. And so all the R&D that goes into those systems is borne by, you know, let's say, the hyperscalers, the Microsofts, the Googles, et cetera. And so what we're doing is designing our systems and not taking a recipe from someone else and just, you know, and building those for those customers. So I think the comparison there is clear that that's not what we're doing, and I think it's showing up in our customer results.
There's a significant amount of customers that are scale customers that require, you know, a certain set of parameters or design, and we do that work for them, and that's kind of leads us into, you know, the differentiation between, excuse me, us and them, as well as the OEMs. Because it's. You know, the OEM model is a little bit different than what we're doing as well.
Mm-hmm. Okay. Speaking of customer concentration, can you maybe help us understand, you know, what your current customer composition is? What does customer concentration look like today? And as you're talking about inferencing, how do you see that customer concentration - customer composition, rather, evolving?
So, customer concentration, I think, in fiscal 2024, we only had one customer over 10%, which is pretty phenomenal relative to the growth rates of the company. So, we have a pretty broad base of customers. You know, so we have a few larger customers, let's just put it that way, that are doing some pretty amazing things with their technology that, you know, hopefully change the world. And those customers are demanding the most performative, the densest compute platforms, the liquid cooling, the lowest total cost per watt, per compute cycle. And so we serve those customers quite well, as well as a broad base of enterprise customers.
The composition would be, you know, the emerging CSPs, which I think have not just emerged, but are quite well-known on the stage now, and there's more of them coming. We have large enterprise customers. We have OEM customers. You know, everyone is familiar that we have Nutanix, which is one of our larger partners, and their systems, you know, their software is running on our systems and quite a few of the Fortune 500. So pretty pervasive. And if you think about the CSPs, if the large enterprises are using their models and they're running into CSPs, they're running Supermicro equipment, right? And so the user base or the community base, they're pretty technical.
The technical elements, they know that Supermicro that's powering some of these large, you know, language models. So from that perspective, it's been driving new logos for us. There's also been quite a bit of interest from sovereign nation type accounts looking to update or GenAI across their platforms, and we've made a few, you know, public announcements about that in the past that kind of give you an idea of flavor where we are with those types of customers. So it's pretty broad, and, you know, we, we'd like to get it broader. You know, we said on our last call that we were looking to double down on the enterprise. There's a lot of aged equipment out there.
And a lot of the enterprise customers are looking to do new things, and if we can densify the x86 platform, it'll help them get ready for the AI if they're gonna GenAI in-house. And you know, the inferencing units, we have plenty of SKUs, and we'll be addressing that in those end markets as those applications come up. And so there's quite a broad base of opportunity sets for us to continue to fuel our growth.
What is your current market share for these enterprises? Are you able to share that, or,
From an IDC perspective, I think we've rolled into number two at nine-ish%, and I don't think that accurately reflects it, because the IDC numbers don't categorize the OEM revenues that we have. So I think it would be, you know, I don't know if I can say it's larger, but I think if you factored that in, it would be a better number-
Okay
... from, you know, 2% or 3% share a while back. So we've clearly, let's just say from an OEM perspective, come into the number two position, so that's. And our goal, and we've said this publicly, many, many times, our goal is to be number one. So, you know, we're pushing ahead, and if we can use our, you know, innovation in this, this new era, which is very it's changing rapidly, I think that we have a really good shot at of owning a pretty big chunk of the compute. It's also important to understand there's a huge market. It's very fragmented. No one has, you know, majority share, and so I don't think that's happened in the past, I mean, since the days of IBM, maybe, if you wanna categorize it that way.
There's a lot of opportunity. You know, this whole notion of, like, share shifts and movements, and et cetera. You know, we steadily are increasing our position, and if you take a look at that cadence, I think that should give people a pretty good level of confidence for the direction we're heading.
Great. Just gonna ask if anybody here in the audience has any questions, please raise your hand. Okay, I have a few more that I'll be talking about then. Margins, top of mind for everybody.
Yeah.
You know, is AI... You know, how detrimental is it to corporate average margins? I know you guys talked about it at your last earnings call, so maybe you can just remind investors what happened there, and how you guys are thinking about as, you know, do your direct liquid cooling ramps, how you guys are thinking-
Yeah
... about margins there? Yeah.
So I think that we were pretty vocal about what our view was on our last call with respect to margins. There was a pretty considerable investment in the liquid cool technology jumping out ahead. There was a lot of investment in the supply chain, a lot of investment in the capacity element and getting the lines. They are probably a lot less efficient. We also talked about strategic customer wins and strategic customer pricing, and, you know, it was all about customer satisfaction. We wanted to get a few lighthouse accounts under our belt.
Our view is that if we can please those customers, as we iron out the costs, inefficiencies, you know, and the new technology, because typically it's a margin hit, you know, typically a margin hit on a new process, so to speak. As we roll forward and we stand alone, you know, the opportunity to recapture some of that margin, recapture potentially some of the pricing element and get back to... You know, we mentioned getting back to our corporate average range of 14%-17%. So I think we've been fairly clear about that, despite some questions from the investment community.
Yeah. And just, you know, as investors kinda think about your ramp there for direct liquid cooling, and just if you can expand a little bit on that, like, what is that scale that you're referring to, that direct liquid cooling needs to be as percentage of your business before perhaps you get back to corporate average? Yeah.
I don't think we have a lot to share with that.
Okay
... that number. What I can say is that we've been investing heavily in the capacity, and one of the keys to this is, you know, the AI product GenAI in particular, is a scale build. It's a scale use case. And when a customer's all in, you know, the systems tend to be quite large. And we have a few customers that have pretty large appetites, you know, coming from a lot of different directions, a lot of enterprise into the CSP, a couple of interesting applications from an innovative individual is just trying to change the world with AI, let's put it that way, with multiple different companies.
You know, we've been aligning ourselves to about 5,000 racks of production by the end of fiscal 2025. We said 3,000 of them would be liquid cooled.
Mm-hmm.
I think that's up from, you know, 1,500 or so. And we think that there would be a clear need for those. We wouldn't be moving in this direction if we didn't take the hint from our partners, who are all heading in that direction of needing liquid cooling for their GPUs or CPUs.
Mm-hmm.
And we wouldn't be heading that direction if we didn't hear it from our end customers, who are, you know, I wanna say demanding, but are very vocal about the direction they're going in. So I think we've aligned ourselves with the customer for customer success, and we're working with our partners to enable them. So if you think about what we've done with, from a NVIDIA perspective, you know, instead of having one unit to the end customer, like two, you know, so that's a pretty favorable position that we are able to leverage their platform and be able to sell more of their product into their, you know, into the customer base. So I think that's a pretty powerful thing as we move forward.
As it relates to penetration of liquid cooling, as we start to go down more and more of this path, what are some obstacles for data centers to get more liquid cooling? Is it space? Obviously, it seems like there's a lot of architecture that has to be-
Yeah
... redone within data centers to enable direct liquid cooling, and what we hear is there's not, you know, people aren't there yet. So what else needs to happen?
So I don't have the specific numbers of, like, who's ready, who's not, from a standpoint of what they can do. I know that we can help them get ready, the ones that are in need, depending on the facility. I know from our perspective, we put you know, chillers and towers in for our own particular use case in data centers fairly, fairly quickly. Of course, we were a little bit more motivated than others to do so. But I don't think it's a material you know. I think the plan is to do it. And new data center builds, I believe, are contemplating or aren't going in the ground without it. So that gives us a pretty good pathway in the future for filling those data centers.
So I think the industry is flexing pretty hard in that direction, and right now, as we speak, you know, our growth rates support a pretty ambitious ramp from our perspective, and we still have a lot more share to go. So you know, I can't really speak to the individual, you know, like which company in your financial services has the capacity to adopt liquid cooling. And there's the other different form factors of it, you know, outside of the direct-to-chip, but we believe the direct-to-chip is the best commercial available today, and over time, maybe we move to immersion. We've done it in the past. So there's all kinds of different flavors.
Once again, it's a differentiator for us. It's a differentiator for customers, and if we can get their cost per compute cycle down, that'll drive, you know, more customer satisfaction from our perspective, and the people will look to us for more systems to help them.
Okay. Any other questions here from the audience? Okay. Working capital, you know, free cash flow conversion, if you can talk a little bit about that. There's been some concerns around that.
Yeah.
Yeah.
So, as you can imagine, what the product cycle is with the supply issues, but the supply chain, et cetera, trying to align those into, you know, the turn cycle, the order cycle, the 90-day cycle, it's. We're working to try to lower those turns and kind of lessen the burden on the capital front. From that perspective, you know, the working capital, you know, we're very interested in increasing our efficiency there. I think that's how we're looking at it.
Okay. All right, and maybe if I can just double-click again on liquid cooling, 'cause I still do get this question: aside from obviously the GPU side of things, what other things have to happen in order to maybe, like, increase the penetration and kind of go more your way of more liquid cooling systems versus, you know, going back to maybe air cooling or-
Yeah, the-
Is it a GPU thing? Is it-
No, I don't necessarily think that.
Other components.
I don't think it's necessarily that. I think from a standpoint, like, so we've been on a few customer, you know, calls and discussions where they're planning out their, the future data center footprint, and there's many that are like, "I don't wanna talk about air. We're preparing for liquid." So I think it's, it's kind of a matter of time. So it depends. I mean, obviously, if you have a, an existing data center that's, you know, all set up for, you know, an air kind of environment, to convert that, you know, might be a little bit more of an effort. I'm not saying it's necessarily all greenfield. You know, there is an ability to, you know, I wouldn't say miniaturize, but, you know, like, there's different ways to, to accomplish all within rack.
You know, and if we can bring the rest of the componentry in, the chillers, the towers, et cetera, to a specific site, we can do that. And there's some folks that are using sites that were never contemplated to be data centers, that they could put the plumbing in and get them liquid-cooled. So I think there's a lot of effort to go that way. And the difference here is, if you're going air, you know, you really, you're kind of limited by the heat envelope of that system, and you can't really get the most performance out of the GPU, at least in the current versions. And, you know, the new next gen, I'm sure those parameters will still exist.
You know, so physics kind of wins here from a standpoint of, you know, liquid being a cooling element versus air.
Mm-hmm.
And the amount of energy to cool air relative to the amount of energy and the heat dissipation from a liquid perspective. So I think it's a pretty obvious, and we've aligned ourselves to meet in the particular core product categories, the liquid-cooled environment. So I think we're all in on helping our customers, bringing innovation and getting that to them as soon as they need it. Right now, the demand for compute has been... It's always been strong. It just feels like it's getting even stronger.
Okay. All right, any other questions here? Oh, we have one. If you don't mind waiting for the mic. Right around there.
Hey, Michael, thanks for doing this. I guess one question that I had is, a lot of the, at least, ODMs in Taiwan are talking about the Blackwell series being slightly lower margin, even though it's significantly higher ASP. And I guess I know you guys aren't exactly, well, ODMs, and your value add is much higher just given the design. But can you talk about just, do you, to the extent you guys, like, have furthermore had conversations around that and have been able to sort of map out what you think your ASPs are versus your costs are, where you think you see margin for just the Blackwell series going?
I guess on top of that, how much more sort of design and I guess thought has gone into the NVL36s and the NVL72s from NVIDIA versus, I guess, like the DGX, Hopper series?
I think, it's a great question. There's a lot of unknowns in that element, with respect to, you know, the product set themselves and what we're actually doing with it from a design element. I can assure you that we are looking at all angles to make that particular product, I don't want to say better, I mean, you know, it's not even necessarily out. And so, our goal is to innovate with that, and to bring it to our customers and at the margin levels that we like to operate in. So it's a TBD with respect to what that all is gonna look like, you know, when it starts showing up in volumes.
As you well know, the ODMs are busy for whatever format that they're getting from their partners. We're gonna be busy making ours the best unique. So I think it's the best I can do from a standpoint of answering that question.
All right. Maybe as we wrap it up here, Mike, you know, what do you think is underappreciated by the investment community about Supermicro?
Well, I think the pace of innovation is widely underestimated. I think the ability to put that together for customers, you know, the capabilities, the engineering skills are really underestimated. And I think I'm probably gonna butcher this, but I think Charlie Munger paraphrased someone who said it, "Never, never underestimate someone that overestimates themselves." And I know we have pretty big ambitions, so I think I'll leave it at that.
Okay, appreciate it. Thank you. Good luck with the rest of your meeting.