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Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News.

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Speaker 2: Welcome to the Daybreak Asia podcast. I'm Doug Prisoner. In

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Speaker 2: the US session, we had a powerful rally in semiconductor stocks.

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Speaker 2: This really reflected the view that the recent selling that

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Speaker 2: we have seen in this group was simply overdone. The

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Speaker 2: Philadelphia Semiconductor Index jump by more than eight percent, and

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Speaker 2: on top of that, other areas in the AI trade

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Speaker 2: rallied as well. Take for example, Microsoft up fifteen percent

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Speaker 2: on strong cloud growth, and Oracle shares were hire by

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Speaker 2: eight percent. That was after the company expanded its Gemini

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Speaker 2: AI partnership with Google and some more tech earnings. After

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Speaker 2: the closing bell, we heard from Amazon and Apple, and

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Speaker 2: we're going to take a closer look now at the

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Speaker 2: market action with Daniel Newman. He is the CEO of

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Speaker 2: Futurum Group. Daniel joining from here in New York City.

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Speaker 2: Thank you so much for being here. Give me your

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Speaker 2: sense of what you've seen play out over the last

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Speaker 2: twenty four hours.

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Speaker 3: Well, Doug, I think we were seeing a few different

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Speaker 3: things at the same time. Structurally, we believe that the

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Speaker 3: AI trade data build out is very much intact. We've

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Speaker 3: had a very good set of earnings through this cycle

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Speaker 3: so far.

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Speaker 4: More very strong.

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Speaker 3: Earnings delivered this week from the leaders in AI, the

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Speaker 3: leading hyperscalers as well as.

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Speaker 4: The semiconductor companies.

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Speaker 3: But at the same time, you saw a market go

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Speaker 3: from you know, all time highs or near all time

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Speaker 3: highs to year lows in less than thirty days. We

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Speaker 3: saw the costp in Korea almost on the daily, you know,

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Speaker 3: setting off you know, setting off trip wires and having

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Speaker 3: to stop the market on a day to day. And

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Speaker 3: then of course here in the US, you know, we

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Speaker 3: had that hard fall and people were kind of wondering

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Speaker 3: what's going on, and obviously, you know, there was a

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Speaker 3: lot of de leveraging going on. There was there's been

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Speaker 3: a lot of leverage into the market. Of course in

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Speaker 3: Korea that was a thing, but it was also it's

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Speaker 3: also a very significant thing here in the United States.

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Speaker 3: I think what we saw yesterday was a lot of

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Speaker 3: the capitulation that the market wanted to see, and then

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Speaker 3: you got some short covering and you now saw a huge,

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Speaker 3: powerful rally that was based on getting some good results

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Speaker 3: from Microsoft, getting some good results from today from Amazon,

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Speaker 3: seeing these companies that are committing these big dollars in Capex,

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Speaker 3: feeling confident that they are spending wisely and building an.

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Speaker 4: ROI strategy for their AI. I think gave the market

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Speaker 4: a chance to rally back higher.

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Speaker 2: So Dan, I'm sure you're aware that we had some

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Speaker 2: news today on the hedge fund called Situational Awareness. The

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Speaker 2: fund sold the bulk of its public equity holdings to Citadel,

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Speaker 2: and I think there's maybe a little bit of irony

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Speaker 2: here in terms of the firm's name. Situational Awareness had

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Speaker 2: been investing in companies tied to the boom in AI.

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Speaker 2: So Dan, I'm wondering whether you think that we're wanting

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Speaker 2: to get more stories like this, which is to say,

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Speaker 2: hedge funds being caught maybe leverage as a factor and

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Speaker 2: then the significant pain to their positions that is inflicted

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Speaker 2: as a result.

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Speaker 3: Well, I think we've gotten to the point where we

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Speaker 3: risk too much leverage in the market everywhere. You know,

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Speaker 3: this is what's happened with these you know, three and

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Speaker 3: four times leveraged ETFs on memory, this is what happened

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Speaker 3: to Ashton Brenner. He was, you know, heavily levered to

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Speaker 3: make the kind of profits that he was making. And

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Speaker 3: there's always opportunists in the market. In this case it

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Speaker 3: was Citadel, and Citadel was able to basically buy situational

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Speaker 3: awarenesses positions at the bottom and immediately get the kind

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Speaker 3: of rally we got today. But I think with the

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Speaker 3: market between the Fed news this week, the concern about

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Speaker 3: potential interest rate hikes, the uncertainty about inflation, the macro overall,

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Speaker 3: the China competition for AI with the United States, I

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Speaker 3: think there is a lot to be said about the

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Speaker 3: market as a whole and whether it has anything to

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Speaker 3: do with how resilient or robust the AI trade is

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Speaker 3: what we believe though, Doug is there's somewhere between ten

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Speaker 3: and twelve trillion dollars of cumulative capex that's going to

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Speaker 3: be spent on AI between now and twenty thirty and

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Speaker 3: companies like Nvidia and Micron which were sold heavily, especially

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Speaker 3: Micron the memory names in this last thirty days, these

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Speaker 3: companies are trading at extremely cheap valuations based on their

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Speaker 3: long term agreements and the long term profit expectations that

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Speaker 3: they have. So I think this shakeout was probably healthy

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Speaker 3: to de leverage some of what was going on in

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Speaker 3: the market, but I think it also provides a good

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Speaker 3: environment for some of these stocks that have gone down,

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Speaker 3: it feels like for a month straight to start going

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Speaker 3: back up.

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Speaker 2: So I hear your optimism when it comes to the

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Speaker 2: build out of AI focused on you know, the chip

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Speaker 2: sector and the hardware manufacturers. But I'm curious about the hyperscalers.

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Speaker 2: Whether you expect the continued growth in data center activity

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Speaker 2: to be concentrated in these big names, whether it's an Amazon,

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Speaker 2: and I want to get your take on the results

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Speaker 2: that we heard from Amazon after the bell names like

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Speaker 2: meta names, like alphabet names like Microsoftware. We're going to

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Speaker 2: see continued concentration among the hyperscalers or will we gradually

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Speaker 2: see an expansion in data center build out to go

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Speaker 2: beyond these big companies.

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Speaker 4: Yeah, I think.

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Speaker 3: You're going to see some augmentation to these bigger companies.

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Speaker 3: I think these hyperscalers will remain the largest. They had

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Speaker 3: such a market advantage coming out. We've seen new entrants,

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Speaker 3: popular names in the market like Nebus, Core, weave Iron

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Speaker 3: that are all building an adding capacity as part of

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Speaker 3: this AI build out in Boom. But the hyperscalers have

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Speaker 3: so much operational life, they have so much size and scale,

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Speaker 3: they have the customers in many cases, like in Google's case,

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Speaker 3: they have a full stack of infrastructure. Amazon and Microsoft

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Speaker 3: are following suit. Microsoft has the benefit of the largest

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Speaker 3: enterprise distribution on the planet and Aws have the benefit

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Speaker 3: of being the largest cloud coming into this AI pivot.

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Speaker 4: I think over the next handful of.

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Speaker 3: Years, what we know for sure is we are constrained,

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Speaker 3: and so as long as we are constrained, we will

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Speaker 3: see opportunistic you know, new companies entering the market to

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Speaker 3: compete into these spaces, and you will see these companies

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Speaker 3: actually partnering with the likes of Google, Amazon, Microsoft, Oracle.

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Speaker 3: So I think for the next handful of years it's

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Speaker 3: more of a situation of and than or. But I

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Speaker 3: think that you know, the reason the AI trade as

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Speaker 3: a whole will continue to have concern is not so

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Speaker 3: much about to your point, about the hardware and the

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Speaker 3: capex and build out these companies. Amazon validated and reaffirmed

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Speaker 3: today that they actually raised their CAPEX guidance to two

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Speaker 3: hundred and twenty billion and still can't build enough compute.

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Speaker 4: Google raised its CAPEX.

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Speaker 3: Number significantly a week ago after having eighty two percent

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Speaker 3: growth in its cloud business. These companies are going to

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Speaker 3: partner they're going to expand they're going to get access

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Speaker 3: to every bit of compute they can. Because what we

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Speaker 3: found out is models are changing very quickly. And we

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Speaker 3: saw the Kimi incident a year ago, we had the

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Speaker 3: Deep Seek incident. We're finding models are not the moat

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Speaker 3: in itself. The moat is compute and having enough compute

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Speaker 3: to support this boom.

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Speaker 2: To that point, Deep Seek is building an AI data

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Speaker 2: center in Inner Mongolia. I mean, do we have to

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Speaker 2: be concerned about I hear what you're saying in terms

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Speaker 2: of where the LM kind of part of the story

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Speaker 2: fits in and the Deep Seek moment or the Kimmy

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Speaker 2: K three moment in China. But I'm wondering whether or

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Speaker 2: not we have to be cognizant of the fact that

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Speaker 2: China is going to be pretty aggressive in building out

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Speaker 2: the compute infrastructure, they building out data centers, and whether

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Speaker 2: or not they could do it at a lower cost,

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Speaker 2: and what level of risk that represents two American firms.

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Speaker 4: Look, this is the most important.

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Speaker 3: It's an existential battle for global economic leadership winning AI.

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Speaker 3: This is what people have to understand when they, you know,

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Speaker 3: are having this debate about the US and China. They're

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Speaker 3: having debate about whether the US provides its leading edge

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Speaker 3: technology from an Nvidia or you know, whether we allow

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Speaker 3: ASML to ship their most advanced machines. China absolutely is

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Speaker 3: a formula competitor, and of course they play by different rules.

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Speaker 3: We've seen that with Kimmy and others, where there's you know,

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Speaker 3: suspicion that Kimi is trained largely by using advanced techniques

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Speaker 3: to distill and do more than just distill.

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Speaker 4: Clawed anthropic.

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Speaker 3: And so this is going to be the front in

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Speaker 3: which we weighed the next multiple decades of economic leadership war.

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Speaker 4: And so yes, absolutely, it's important that we are concerned.

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Speaker 3: It's important that we build the right rules, that we

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Speaker 3: provide US companies the opportunity to do business in China

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Speaker 3: where it makes sense. But what we don't do is

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Speaker 3: arm the largest competitor for economic leadership with all of

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Speaker 3: our innovation, all of our tools, without understanding the consequences.

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Speaker 2: I want to ask about Apple, and then I have

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Speaker 2: one other question as it relates to breaking news on anthropic.

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Speaker 2: What did you make of Apple's results after the bill?

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Speaker 4: Apple did fine?

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Speaker 3: I mean, look the way Tim Cook was talking about

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Speaker 3: input costs.

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Speaker 4: His desire for Chinese memory to be able to enable them.

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Speaker 4: You would have thought they were going to miss their profits.

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Speaker 3: I mean again, Apples and Operations, you know, is an

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Speaker 3: operating machine.

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Speaker 4: They tend to make their numbers. They very rarely miss

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Speaker 4: the markets selling it.

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Speaker 3: Because Apple's been a safe haven for the last month,

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Speaker 3: it's run to all time highs. There's still some questions

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Speaker 3: around the company's AI strategy. You know, iPhone sales look decent.

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Speaker 3: MAC sales were good, but you have to remember a

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Speaker 3: lot of the revenues are based on pricing right now,

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Speaker 3: not just the actual unit sales. And then of course,

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Speaker 3: you know China was down, so you always have to

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Speaker 3: look at that number. That's an important one for Apple.

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Speaker 3: But they did make their EPs number. It's notable that

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Speaker 3: they made it off the tariff income that they had returned.

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Speaker 3: Otherwise they would have been in the midpoint of at

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Speaker 3: the midpoint of their guidance last quarter as opposed to

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Speaker 3: beating it.

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Speaker 4: It was a good quarter as a tidy quarter.

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Speaker 3: Apple is the safe haven of the mag seven right now,

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Speaker 3: and investors have been backing it. I'm wondering right now

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Speaker 3: that with this rotation, if this is it wasn't so

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Speaker 3: much Apple's bad print. It was more dollars are rotating

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Speaker 3: back into this this AI boom, with the Microsoft rally,

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Speaker 3: with the Amazon rally, and video has been oversold, so

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Speaker 3: you might start to see some of the error come

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Speaker 3: out of that Apple balloon.

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Speaker 4: You know.

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Speaker 2: As I'm listening to and I'm thinking about the rate

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Speaker 2: of change that we have seen in artificial intelligence, I'm

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Speaker 2: wondering about the next generation of handheld devices that is

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Speaker 2: going to be custom made for this AI system that

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Speaker 2: we're describing. And I want to get your view on

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Speaker 2: Anthropic because tonight in the US, we learned that a

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Speaker 2: couple of the company's AI models breached three different organizations

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Speaker 2: in cybersecurity testing. Something went wrong, it went awry, And

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Speaker 2: this is only a little more than a week after

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Speaker 2: OpenAI disclosed a similar incident. And I'm wondering whether you

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Speaker 2: are concerned about the rate of change, particularly on THELM side,

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Speaker 2: the model side, that things are moving a little too

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Speaker 2: quickly for your comfort level, and that we need to

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Speaker 2: try to find a way to modulate this, or are

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Speaker 2: you okay? And maybe you're of the belief that the

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Speaker 2: industry can regulate itself and get this stuff under control.

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Speaker 2: What's your feeling on that.

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Speaker 3: Well as a footnote on your comment about the future

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Speaker 3: of devices, that is Apple's existential risk is if a

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Speaker 3: new device or platform was to disrupt Apple's position. Now,

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Speaker 3: going back to the Anthropic and open as situation, this

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Speaker 3: is really interesting. You know, you have two companies that

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Speaker 3: have been sort of screaming from the rooftop that AI

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Speaker 3: needs more regulation. We've had this kind of back and

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Speaker 3: forth about can the frontier models.

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Speaker 4: And these closed source win.

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Speaker 3: We've had companies like Nvidia coming out loudly to support

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Speaker 3: more open source globally, and you know, you have these

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Speaker 3: jail break sort of rogue agents coming out and part

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Speaker 3: of me almost wonders, like, how does this happen? How

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Speaker 3: do two different trillion dollar companies have agents doing things

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Speaker 3: that they're not monitoring them, they're not watching them. It's

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Speaker 3: wild to me that this took days on the open

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Speaker 3: AI one. We don't know what's going to happen with

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Speaker 3: the Anthropic When you have with the open AI one,

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Speaker 3: these went on for days before they were even discovered.

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Speaker 3: So we have technology and a rate of change that's

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Speaker 3: you know, that's exponential right now, and the problem is

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Speaker 3: is policymakers and regulation can never keep up, so expecting

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Speaker 3: those things to happen and get ahead. It has never

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Speaker 3: happened in history. And now we have the most important

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Speaker 3: arms race between the East and the West, especially US

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Speaker 3: and China, where we're going to say let's slow down.

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Speaker 3: I just don't see that happening. I do think we

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Speaker 3: need more framework. I do think we need policies that

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Speaker 3: quickly have models evaluated before they're sent out in masks.

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Speaker 4: And I do think some of that's being worked on.

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Speaker 3: I think that these systems and some of these rogue events,

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Speaker 3: they will continue to happen, and we do need to,

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Speaker 3: you know, pay better attention. But I put a lot

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Speaker 3: of the blame this on anthropic and on Open AI.

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Speaker 3: They're building new products, they're shipping them out. They should

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Speaker 3: be watching that.

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Speaker 2: Dan, we'll leave it there, thank you so very much.

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Speaker 2: He is Daniel Newman, the CEO of Futureum Group, joining

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Speaker 2: from New York City here on the Daybreak Asia podcast.

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Speaker 2: Welcome back to the Daybreak Asia Podcast. I'm Doug Krisner

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Speaker 2: in New York. Trading US listed chairs in Silicon Motion

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Speaker 2: picked up twenty four percent as Taiwan based semiconductor device

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Speaker 2: maker reported second quarter results above expectations. Now, Silicon Motion

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Speaker 2: also gave a revenue forecast much stronger than expected. The

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Speaker 2: CFO of Silicon Motion is Jason Sai. He spoke with

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Speaker 2: Bloomberg TV host David Englase and ivon Man.

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Speaker 5: Jason, it's great to have you back on earnings and

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Speaker 5: post earnings, certainly as what the market was liking. Here

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Speaker 5: was the guidance for the third quarter, and of course

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Speaker 5: these blowout earnings from your side of things of the

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Speaker 5: second what does it tell you about where you can

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Speaker 5: still gain market share and really how sustainable this momentum

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Speaker 5: is now.

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Speaker 6: Yeah, thanks for having me on the show again. I

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Speaker 6: really appreciate it. Look, I think if you take a

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Speaker 6: look at our core business over the course of the

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Speaker 6: last many years, you know, we've been very consumer centric

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Speaker 6: PCs and smartphones, and obviously we've seen all the data

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Speaker 6: points around the weakness in these markets driven by high

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Speaker 6: cost of memory and storage.

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Speaker 7: We've been gaining a lot of share here.

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Speaker 6: We've been laying the foundation for a lot of share

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Speaker 6: game with the flash makers, with the module makers, and

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Speaker 6: so we've far exceeded any you know, the end market

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Speaker 6: results because of the share game, because we're upgrading to

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Speaker 6: higher end products and so that business, the core business

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Speaker 6: continues to execute.

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Speaker 7: Extremely well in the difficult environment.

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Speaker 6: I think what investors have really liked is diversifying our business.

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Speaker 6: Our automotive fare eye solutions have done extremely well.

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Speaker 7: That's scaling incredibly well.

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Speaker 6: Our enterprise boot drive business is scaling incredibly well, and

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Speaker 6: that's going that's becoming a bigger and bigger portion of

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Speaker 6: our business. And then you know, our enterprise controller business

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Speaker 6: is you know, it was zero a year ago and

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Speaker 6: you know, exiting this year, we expect that to be

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Speaker 6: five to ten percent of our business.

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Speaker 7: And that started to scale in the second quarter.

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Speaker 6: So we're really seeing a really nice diversification of our

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Speaker 6: business playing out. We're confident that we can grow our

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Speaker 6: business in excess of one hundred percent this year. So

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Speaker 6: from you know, eight hundred plus million last year to

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Speaker 6: you know, one hundred percent of that. There's more than

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Speaker 6: one hundred percent of that this year. Gross margins are improving,

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Speaker 6: operating leverage is coming in along with it. So overall,

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Speaker 6: driven by strengthen the core business, expanding opportunities, improving profitability,

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Speaker 6: and responsible expense management. You know, I think we're we're

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Speaker 6: really excited by it, not just what the rest of

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Speaker 6: this year holds, but certainly going into twenty seven and

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Speaker 6: twenty eight.

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Speaker 8: I mean, things look fantastic in all fronts. And I

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Speaker 8: think the fact that you, you know, you out performed

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Speaker 8: your guidance, I think my first question there then would

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Speaker 8: be you've given guidance out. I mean, how visible is it.

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Speaker 8: I mean, it's great to have a number out there,

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Speaker 8: but I just want to get a sense really of

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Speaker 8: underlying demand where it seems companies are giving out guidance

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Speaker 8: and just outperforming what they give out.

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Speaker 6: You know, for us, there was a lot of things

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Speaker 6: that happened Interracorder, right, you know, demand spikes more than expected,

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Speaker 6: Our customers are seeing better sell through, our customers are

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Speaker 6: upgrading the components that they're ordering.

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Speaker 7: All these things are happening Intracorder.

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Speaker 6: You know, we've got inventory that can support that type

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Speaker 6: of dynamic movement. But you know, as some of these

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Speaker 6: new businesses scale, new customers scale, sometimes early on they're

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Speaker 6: not necessarily as confident on kind of the scale of

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Speaker 6: that ramp, and as that ramp happens, they become more

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Speaker 6: confident on what demand looks like and they upsize the orders,

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Speaker 6: and so yes, I think, you know, we always try

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Speaker 6: to give a balance view on what guidance us a

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Speaker 6: realistic view on kind of what we think we can do.

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Speaker 6: But certainly, you know, the hope is that you know,

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Speaker 6: the customers are seeing better demand, and I think we're

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Speaker 6: certainly seeing that through the share gains and through the

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Speaker 6: advancements into new markets, new businesses and new customers.

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Speaker 7: One of the things that we really are croud of.

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Speaker 6: Is a lot of these new businesses, the visibility and

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Speaker 6: the durability is great. These are products, our solutions are

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Speaker 6: going into products that are you know, in cars and

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Speaker 6: base stations and data centers that are part of devices

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Speaker 6: that are tens of thousands, hundreds of thousands, millions of dollars,

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Speaker 6: and so you know, that type of visibility, that type

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Speaker 6: of design when has better visibility, it's it's higher barriers

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Speaker 6: to entry, gives us longer term understanding as to kind

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Speaker 6: of how we need to source, what we need to source,

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Speaker 6: what inventory we need to have. So it really helps

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Speaker 6: drive that long term visibility for us and gives us

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Speaker 6: confidence on you not just second quarter or third quarter

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Speaker 6: doing well, but next two years, three years doing well again.

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Speaker 8: Don't get me wrong, that's a fantastic problem to have.

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Speaker 8: What are your conversations like now with your suppliers. I

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Speaker 8: just want to understand how you're managing your future capacity

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Speaker 8: as most demand comes online.

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Speaker 6: Yeah, you know, I think that's well known that TSMC

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Speaker 6: and a lot of the substrate folks are tied on capacity.

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Speaker 7: Substrate availability is tight.

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Speaker 6: We're fortunate that we're one of the top customers of

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Speaker 6: TSMC and we've been a great They've been a great

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Speaker 6: partner of ours.

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Speaker 7: We've been a great.

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Speaker 6: Partner of them for twenty plus years, so you know,

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Speaker 6: they've always been very helpful for us in being able

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Speaker 6: to expand our capacity, expand our allocation, expand are way

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Speaker 6: for availability in real time, and so working with them

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Speaker 6: closely to ensure that we've got a good understanding as

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Speaker 6: to kind of what the base case looks like versus

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Speaker 6: kind of what upside looks like, and being having that

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Speaker 6: ability to flex with them. Substrates, you know, as you

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Speaker 6: guys all know, has been tight. Our customers have been

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Speaker 6: willing to work with us to find alternative substrates that

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Speaker 6: help ease some of those supply constraints. We've got you know,

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Speaker 6: a tier, you know, just best in class operations team

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Speaker 6: that have been on this since the very early days

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Speaker 6: and so have been ahead of making sure that as

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Speaker 6: substrate availability becomes tighter and tighter, we've got alternatives that

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Speaker 6: we can scale with our customers. So we're confident that

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Speaker 6: even as the business more than doubles this year, we've

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Speaker 6: got the capacity to support that.

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Speaker 5: You talked about these these ramp ups that you had

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Speaker 5: obviously with Nvidio. I think you have one coming up

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Speaker 5: with Google as well. Can you tell us a bit

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Speaker 5: more about me seems like you're seeing a lot of

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Speaker 5: growth on that front here. Should I be worried about

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Speaker 5: concentration risk in any event that you know, we start

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Speaker 5: to see volumes start to fade a little bit, or

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Speaker 5: that you know, this ramp up is actually going to

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Speaker 5: be delayed as anyway.

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Speaker 6: Yeah, So a lot of these programs that you're referring to,

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Speaker 6: you know, coming in later this year, going into twenty seven,

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Speaker 6: driving growth twenty seven and twenty eighth as well. But

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Speaker 6: these are you know, certainly some examples that folks have

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Speaker 6: talked about, but behind the scenes, it's a much broader

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Speaker 6: range of customers and markets solutions that we're supporting, right,

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Speaker 6: you know, we've got a teleco company for one of

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Speaker 6: the largest teleco equipment companies out there work using our

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Speaker 6: boot drives for their base stations.

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Speaker 7: That'll start scaling the back half of the year.

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Speaker 6: We've got virtually every automaker around the world, whether it's

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Speaker 6: you know, traditional internal combustion engine, whether it's battery electric,

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Speaker 6: whether it's autonomous, what have you. Right, we have virtually

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Speaker 6: every automaker using our solutions as well.

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Speaker 7: So, you know, point being is that a.

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Speaker 6: Lot of this growing business is scaling across a very

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Speaker 6: broad range of customers. Certainly people like to talk about

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Speaker 6: the largest GPU company or the largest search company, and

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Speaker 6: those are you know, big names to be associated with,

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Speaker 6: and we're certainly very proud of the wins we have there.

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Speaker 6: But if you just kind of double click a little

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Speaker 6: bit beyond that, you know, the breadth and scale of

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Speaker 6: other customers is pretty fantastic as well. So it's a

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Speaker 6: really diversified business, diversified end markets, a diversified customer base

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Speaker 6: that we have, and so we're not we're not concerned

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Speaker 6: that there's going to be an outsized contribution from one customer,

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Speaker 6: one product or one vertical that's going to have issues

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Speaker 6: down the road, and that's you know, for our business.

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Speaker 6: Having the diversification helps us kind of work through the

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Speaker 6: psychicality of certain end markets in any given period, right,

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Speaker 6: Having that wide range of end markets helps smooth that out.

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Speaker 5: Yeah, and certainly, I mean, as you say, you're shifting

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Speaker 5: beyond just the consumer driven set of things, but I

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Speaker 5: guess it is still a headwind for so like emotion

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Speaker 5: is of course the potential slow down what we're seeing

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Speaker 5: in the PC market, smarophone market. I think during the

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Speaker 5: analyst call, you guys were asked about the China outlook there.

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Speaker 5: What is the demand picture looking like to you on

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Speaker 5: that front here and what do you think is going

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Speaker 5: to be the outlook way forward?

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Speaker 6: Yeah, we're certainly seeing that, right, I mean, I think

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Speaker 6: certainly on especially on the low end in China, it's

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Speaker 6: been an incredibly difficult market there.

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Speaker 7: We don't really do a whole lot on the low end.

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Speaker 6: We're more mainstream to premium side, so and that's where

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Speaker 6: a lot of the hands at OEMs are focusing more

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Speaker 6: of their attention on a low end handset. The cost

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Speaker 6: of memory, the cost of DRAM and nand far exceeds

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Speaker 6: kind of the affordability of that product.

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Speaker 7: So where you're seeing the biggest hit in unit volume

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Speaker 7: and demand is on the low end.

440
00:23:58,280 --> 00:24:01,640
Speaker 6: Mainstream premium ones are still holding up a little bit better,

441
00:24:01,680 --> 00:24:05,040
Speaker 6: and that's where we see most of our business, and

442
00:24:05,080 --> 00:24:07,800
Speaker 6: certainly the share games that we've talked about here is

443
00:24:08,040 --> 00:24:09,160
Speaker 6: doing wonders.

444
00:24:09,200 --> 00:24:10,040
Speaker 7: We're going to be, you.

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00:24:10,080 --> 00:24:14,360
Speaker 6: Know, almost doubling our smartphone related business this year, consumer

446
00:24:14,400 --> 00:24:18,280
Speaker 6: and IoT to related business this year. Our client SSDs

447
00:24:18,359 --> 00:24:21,320
Speaker 6: against similar dynamic low end is where you're seeing a

448
00:24:21,359 --> 00:24:23,800
Speaker 6: lot more of the pressure. We're not so much at

449
00:24:23,800 --> 00:24:25,800
Speaker 6: the low end. We're in the mainstream to higher end.

450
00:24:26,960 --> 00:24:29,639
Speaker 6: We're you know, first half this year we've grown forty

451
00:24:29,680 --> 00:24:32,560
Speaker 6: percent year on year, and certainly that's in the face

452
00:24:32,640 --> 00:24:36,080
Speaker 6: of a very challenging PC market. And so overall, I

453
00:24:36,080 --> 00:24:38,560
Speaker 6: think the story that we've been talking about, the foundation

454
00:24:38,680 --> 00:24:41,560
Speaker 6: that we've been building in share gains has really been

455
00:24:41,680 --> 00:24:45,840
Speaker 6: continue to pay dividends. We're seeing flashmakers being less interested

456
00:24:45,880 --> 00:24:49,399
Speaker 6: in the space, more interested in outsourcing, more interested in

457
00:24:49,440 --> 00:24:52,840
Speaker 6: working with us, and that's helping drive a lot of opportunities.

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00:24:53,200 --> 00:24:57,240
Speaker 2: That was Jason Si, CFO at Silicon Motion, speaking with

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Speaker 2: Bloomberg TV host David and Glace and of on Men

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Speaker 2: bringing you their conversation here on the Daybreak Asia Podcast.

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Speaker 2: Thanks for listening to today's episode of the Bloomberg Daybreak

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Speaker 2: Asia Edition podcast. Each weekday, we look at the story

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Speaker 2: shaping markets, finance, and geopolitics in the Asia Pacific. You

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00:25:17,640 --> 00:25:21,760
Speaker 2: can find us on Apple, Spotify, the Bloomberg Podcast YouTube channel,

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Speaker 2: or anywhere else you listen. Join us again tomorrow for

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Speaker 2: insight on the market moves from Hong Kong to Singapore

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Speaker 2: and Australia. I'm Doug Chrisner, and this is Bloomberg