Hock E. Tan
President and Chief Executive Officer at Broadcom
Thank you, Ji, and thank you, everyone, for joining us today. In our fiscal Q3 2023 consolidated net revenue, we achieved $8.9 billion, up 5% year-on-year. Semiconductor solutions revenue increased 5% year-on-year to $6.9 billion and infrastructure software grew 5% year-on-year to $1.9 billion. Hyperscale continued to grow double-digits year-on-year, but enterprise and telcos spending moderated. Meanwhile, virtually defying gravity, our wireless business has remained stable.
Now, generative AI investments are driving the continued strength in hyperscale spending for us. As you know, we supply a major hyperscale customer with custom AI compute engines. We are also supplying several hyperscalers a portfolio of networking technologies as they scale up and scale out their AI clusters within their datacenters. Now, representing over $1 billion, this represented virtually all the growth in our infrastructure business in Q3 this year-on-year. So, without the benefit of generative AI revenue in Q3, our semiconductor business was approximately flat year-on-year. In fact, since the start of the year, the fiscal year, our quarterly semiconductor revenue, excluding AI, has stabilized at around $6 billion. And as we had indicated to you a year ago, we expected a soft landing during fiscal '23, and it appears this is exactly what is happening today.
Now, let me give you more color on our end markets. As we go through this soft landing, we see though that our broad portfolio of products influencing the puts and takes across revenues within all our end markets except one, and that is networking. And so, in my remarks today, we focus on networking, where generative AI has significant impact. Networking -- Q3 networking revenue was $2.8 billion and was up 20% year-on-year, in line with guidance, representing 40% of our semiconductor revenue. As we indicated above, our switches and routers, as well as our custom silicon AI engines, drove growth in this end market as they were deployed in scaling out AI clusters among the hyperscalers [Phonetic].
We've always believed, and more than ever now with AI networks, that Ethernet is the best networking protocol to scale out AI clusters. Ethernet today already offers the lowly latency attributes for machine learning and AI, and Broadcom has the best technology today and tomorrow. As a founding member of the Ultra Ethernet Consortium with other industry partners, we are driving Ethernet for scaling deployments in large language model networks. Importantly, we're doing this based on open standards and a broad ecosystem.
Over the past quarter, we have already received substantial orders for our next-generation Tomahawk 5 switch and Jericho3-AI routers and plan to begin shipping these products over the next six months to several hyperscale customers. This will replace the existing 400-gigabit networks with 800-gigabit connectivity. And beyond this, for the next-generation 1.6-terabit connectivity, we have already started development on the Tomahawk 6 switch, which has, among other things, 200G [Indecipherable] generating throughput capacity of over 100 terabit per second.
We are obviously excited that generative AI is pushing our engineers to develop cutting-edge technology in silicon, technology that has never been developed before. We know the 'n' [Phonetic] of Moore's Law has set limits on computing in silicon technology, but what we are developing today feels very much like a revival. We invest in fundamental technologies to enable our hyperscale customers with the best hardware capabilities to scale generative AI. We invest in industry-leading 200G [Indecipherable] that can drive optics and even copper cables. We have differentiating technology that breaks current bottlenecks in high-bandwidth memory access. We also have x high-speed and ultra-low power chip-to-chip connectivity to integrate multiple AI compute engines. We also have invested heavily in complex packaging technologies, migrating from today's 2.5D to 3D, which enables large memory to be integrated with AI compute engines and accelerators.
In sum, we have developed end-to-end platform of plug-and-play silicon IP that enables hyperscalers to develop and deploy their AI clusters in an extremely accelerated time-to-market. Not surprisingly, in Q4 -- moving on to Q4, continuing to be driven by generative AI deployments, we expect our networking revenue to accelerate in excess of 20% year-on-year. And this has been driven by the strength obviously in generative AI where we forecast to grow about 50% sequentially and almost two times year-on-year.
Moving to wireless, Q3 wireless revenue, $1.6 billion, represented 24% of semiconductor revenue, up 4% sequentially, flat year-on-year. The engagement with our North American customer continues to be deep and multi-year across WiFi, Bluetooth, touch, RF front-end and inductive power. So in Q4, consistent with the seasonal launch, we expect wireless revenue to grow over 20% sequentially and down low-single digit percent year-on year.
On our server storage connectivity revenue, it was $1.1 billion or 17% of semiconductor revenue and flat year-on-year. With a difficult year-on-year compare, we expect server storage connectivity revenue in Q4 to be down mid-teens percent year-on-year. And moving on to broadband, following nine consecutive quarters of double-digit growth, revenue moderated to 1% year-on-year growth to $1.1 billion or 16% of semiconductor revenue. In Q4, despite increasing penetration of deployment of 10G-PON among telcos, we expect broadband revenue to decline high-single digits year-on-year.
Finally, Q3 industrial resales of $236 million declined 3% year-on year, reflecting weak demand in China. And in Q4, though we expect an improvement with industrial resales up low-single digit percentage year-on-year, reflecting largely seasonality.
So, in summary, Q3 semiconductor solutions revenue was up 5% year-on-year. And in Q4, we expect semiconductor revenue growth of low-to-mid single-digit percentage year-on-year. Sequentially, if we exclude generated AI, our semiconductor revenue will be flat.
Now turning to software, in Q3, infrastructure software revenue of $1.9 billion grew 5% year-on-year and represented 22% of total revenue. For core software, consolidated renewal rates averaged 117% over expiring contracts, and in our strategic accounts, we averaged 127%. Within strategic accounts, annualized bookings of $408 million included $129 million or 32% of cross-selling of other portfolio products to these same core customers, and over 90% of the renewal value represented recurring subscription and maintenance. Over the last 12 months, I should add, consolidated renewal rates averaged 115% over expiring contract, and in our strategic accounts, we averaged 125%. Because of these, our ARR, the indicator of forward revenue, at the end of Q3 was $5.3 billion.
In Q4, we expect infrastructure software segment revenue to be our mid-single digit year-on-year. And on a consolidated basis for the Company, we are guiding Q4 revenue of $9.27 billion, up 4% year-on-year.
Before Kirsten tells you more about our financial performance for the quarter, let me provide a brief update on our pending acquisition of VMware. We have received legal merger clearance in Australia, Brazil, Canada, the European Union, Israel, South Africa, Taiwan and the United Kingdom, and foreign investment control clearance in all necessary jurisdictions. In the US, the Hart-Scott-Rodino pre-merger waiting periods have expired, and there is no legal impediment to closing under US merger regulations. We continue to work constructively with regulators in a few other jurisdiction and are in the advanced stages of the process towards obtaining the remaining required regulatory approvals, which we believe will be received before October 30. We continue to expect to close on October 30, 2023. Now, Broadcom is confident that the combination with VMware will enhance competition in the cloud and benefit enterprise customers by giving them more choice and control where they locate their workloads.
With that, let me turn the call over to Kirsten.
