−Removed: We are a Silicon Valley-based provider of accelerated compute platforms that are application-optimized high-performance and high-efficiency server and storage systems for various markets, including enterprise data centers, cloud computing, artificial intelligence, 5G and edge computing.
−Removed: Our solutions, which we refer to as Total IT Solutions, include complete servers, storage systems, modular blade servers, blades, workstations, complete rack scale plug and play solutions delivering pre-defined and pre-tested full rack scale solutions, networking devices, server sub-systems, system management and security software.
+Added: We are a Silicon Valley-based provider of accelerated compute platforms that are application-optimized high performance and high-efficiency server and storage systems for a variety of markets, including enterprise data centers, cloud computing, artificial intelligence (“AI”), 5G and edge computing.
+Added: Our Total IT Solutions include complete servers, storage systems, modular blade servers, blades, workstations, full rack scale solutions, networking devices, server sub-systems, server management and security software.
We also provide global support and services to help our customers install, upgrade and maintain their computing infrastructure.
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This allows us to offer customers a broad choice of products to match their target application requirements.
−Removed: In November 2021, we announced the Universal GPU server;
−Removed: which enables customers to choose the most suitable CPUs and GPUs, and switch configurations for their specific applications and workloads.
−Removed: In February 2022, we introduced the SuperEdge multi-node Server for 5G, IoT, and edge applications.
−Removed: This 2U, 3-node, short-depth design increases node density by 50% for high-density computing at the intelligent edge.
+Added: In fiscal year 2023, we announced more than 50 products supporting Intel’s new Sapphire Rapids data center CPU.
+Added: During the second half of fiscal year 2023, our product portfolio was enhanced to support AMD’s Genoa data center CPU.
+Added: In March 2023, we released a high-density petascale class all-flash NVMe server family supporting next-generation EDSFF form factor, including the E3.S and E1.S devices.
+Added: Also in March 2023, we unveiled comprehensive portfolio of GPU systems including servers in 8U, 6U, 5U, 4U, 2U, and 1U form factors, as well as workstations that support the full range of new NVIDIA H100 GPUs.
Capitalizing on New Applications and Technologies
−Removed: In addition to serving traditional needs for server and storage systems, we have devoted, and will continue to devote, substantial resources to developing systems that support emerging and growing applications including cloud computing, artificial intelligence, 5G/edge computing, storage and others.
+Added: In addition to serving traditional needs for server and storage systems, we have devoted, and will continue to devote, substantial resources to developing systems that support emerging and growing applications including AI, cloud computing, 5G/edge computing, storage and others.
We believe there are significant opportunities for us in each of these rapidly developing markets due to stringent design requirements for these applications that often require the use of the latest technologies, allowing us to leverage our capabilities in product innovation, superior time-to-market, and portfolio breadth.
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We offer a broad range of accelerated compute platforms that are application-optimized server solutions, rackmount and blade servers, storage, and subsystems and accessories, which can be used to build complete server and storage systems.
−Removed: These Total IT Solutions and products are designed to serve a variety of markets, such as enterprise data centers, cloud computing, artificial intelligence (“AI”) and 5G/edge computing.
+Added: These Total IT Solutions and products are designed to serve a variety of markets, such as enterprise data centers, cloud computing, AI and 5G/edge computing.
The percentage of our net sales represented by sales of server and storage systems increased to 92.2% in fiscal year 2023 compared to 85.9% in fiscal year 2022 and 78.4% in fiscal year 2021, and the percentage of our net sales represented by sales of subsystems and accessories was 7.8% in fiscal year 2023, 14.1% in fiscal year 2022 and 21.6% in fiscal year 2021.
During fiscal year 2023, we experienced increased revenue from server and storage systems, particularly from our large enterprise and datacenter customers.
−Removed: The year-over-year decrease in net sales of subsystems and accessories was primarily due to the emphasis of selling full systems and servers which require utilization of the subcomponents.
+Added: The year-over-year increase in net sales of server and storage systems and corresponding decrease in net sales of subsystems and accessories was primarily due to our emphasis on selling full systems and servers which require utilization of the subcomponents.
We complement our accelerated compute platforms inclusive of server and storage system offerings with software management/security solutions, global services and support, the revenue for which is included in our server and storage systems revenue.
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Similarly, we work very closely with our customers to identify their needs and develop our new product plans accordingly.
−Removed: During each of fiscal year 2022 and fiscal year 2021, we sold to over 1,000 direct customers in over 100 countries.
−Removed: During fiscal year 2020, we sold to over 820 direct customers.
+Added: During each of fiscal years 2023, 2022 and 2021, we sold to over 1,000 direct customers in over 100 countries.
In addition, over the three years ended June 30, 2023, we have sold to thousands of end users through our indirect sales channel.
−Removed: These customers represent a diverse set of market verticals including enterprise data centers, cloud computing, artificial intelligence, 5G and edge computing markets.
+Added: These customers represent a diverse set of market verticals including enterprise data centers, cloud computing, AI, 5G and edge computing markets.
In each of fiscal years 2023, 2022 and 2021, no customer represented greater than 10% of our total net sales.
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We are committed to complying with applicable laws, including those associated with labor and employment, across all areas of our operations.
−Removed: In addition, we abide by global standards, irrespective of legal requirements, regarding the treatment of workers such as those detailed by the Responsible Business Alliance (“RBA”).
+Added: In addition, we abide by global standards, irrespective of legal requirements, regarding the treatment of workers such as those detailed by the Responsible Business Alliance.
These include prevention of excessive working hours and unfair wages, controls to prohibit child labor and human trafficking and bolstering workplace health and safety measures.
−Removed: From the start of the COVID-19 pandemic, we proactively implemented preventative protocols, which we continuously assess and update for changes in conditions and applicable regulations.
−Removed: These preventative protocols are intended to safeguard our employees, contractors, suppliers, customers, and communities, and to ensure business continuity.
−Removed: We are following government policies and recommendations designed to slow the spread of COVID-19 and are committed to the health and safety of anyone in our facilities.
−Removed: To respond to the COVID-19 pandemic, we implemented the following precautions:
−Removed: • We require that on-site employees and visitors complete a daily health questionnaire, provide thermometers in all buildings, and adhere to social distance requirements, mask protocols and our internal vaccination mandate;
−Removed: • We exclude employees who test positive for COVID-19 from the workplace, conduct contact tracing, provide self-tests for employee surveillance, disinfect common areas daily and carry out weekly fogging of each building, minimize non-priority business travel, and provide personal HEPA air purifiers for each employee;
−Removed: • To respond to changing COVID-19 updates, we work closely with our Environmental Health and Safety team to monitor and periodically update our policies.
−Removed: We believe these actions are appropriate and essential to safeguard our employees, contractors, suppliers, customers, and communities while allowing us to safely continue operations.
Board Oversight of Human Capital Management
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We generally maintain substantial inventories of our products because the computer server industry is characterized by short lead-time orders and quick delivery schedules.
−Removed: SMCI | 2022 Form 10-K | 8
Additionally, during the fiscal year 2023, the computer server industry experienced global supply chain shortage, which requires us to carry more inventories to fulfill our customers and partners’ demands and backlogs.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.