Speaker 1: As we've been discussing, a MD reported profit that did
Speaker 1: top analyst projections in the prior quarter. Joining us now
Speaker 1: for a close look at the results. We've got Ian
Speaker 1: King Bloomberg News at US Semiconductor Reporter. So Ian profits
Speaker 1: better than expected, the outlook a little softer than expected,
Speaker 1: but shares rising after ours. What are the key takeaways here? Yeah,
Speaker 1: I mean I think you mentioned the shares rising. You've
Speaker 1: got a stock that's been heavily beaten up, and what
Speaker 1: I think investors have realized today is, oh, actually it's
Speaker 1: still growing. And when you look at the alternatives, you know,
Speaker 1: direct peer, citizen video or isn't or Intel, that's absolutely
Speaker 1: not the case. You know, in an Intel's case, it's
Speaker 1: no longer buying back stock. So there was kind of
Speaker 1: a reappraisal of of a m D really today, and
Speaker 1: you know that was based upon the fact that people
Speaker 1: believe it's still going to continue to take market share.
Speaker 1: What's the nature of the long turnaround that the chief
Speaker 1: executive officer releases who has talked about Yeah, I mean
Speaker 1: you dial it back to two thousand and fifteen when
Speaker 1: she took over. You know, this is a company that
Speaker 1: was like is it going to be able to continue
Speaker 1: to make payroll. She came in and said, look, you know,
Speaker 1: we're going to double down on on what we're good at,
Speaker 1: which is making very good micro processes or what we
Speaker 1: should be good at UM and just committed all of
Speaker 1: the company's even limited resources to that. And you know,
Speaker 1: here we are, several years later where they actually have
Speaker 1: better products in the market in many respects than Intel has.
Speaker 1: Intel has had its own stumbles, and they're really benefiting
Speaker 1: and rooting the rewards of those engineering efforts. We do
Speaker 1: have an environment though, where semis are rendering one of
Speaker 1: those famous cyclical downturns, and to reverse the old metaphor,
Speaker 1: a receiving tide is going to sink all boats. So
Speaker 1: what's the outlook here? Yeah, I mean this is a
Speaker 1: key point all along. Lisa, through the CEO, has said, look,
Speaker 1: I don't need a buoyant PC market me to be successful.
Speaker 1: We are so underrepresented, our market share has slumped so
Speaker 1: badly that as long as we continue to execute and
Speaker 1: do what we should put this company in its rightful place,
Speaker 1: we're going to be fine. And the numbers would appear
Speaker 1: to indicate that, I mean, even in a kind of
Speaker 1: disastrous quarter for PC related demand companies doing okay, the
Speaker 1: company did pre warn right and did the did the
Speaker 1: results turn out to be not quite so bad? That's
Speaker 1: that's exactly it. And you know the key figures to
Speaker 1: think about here. I mean, on the one hand, we've
Speaker 1: got this disastrous drop in PC chip revenue at the company,
Speaker 1: which you know, the the executives explained as being actually
Speaker 1: worse because inventory is a factor there that end demand
Speaker 1: isn't quite that bad. But on the flip side of that,
Speaker 1: we've got data center unit that's up forty and those
Speaker 1: are very expensive, very profitable chips, and it's doing a
Speaker 1: lot better there, and that's a lot of a lot
Speaker 1: of market share games and tell us about game consoles
Speaker 1: because that's looking like a pretty good stick to for
Speaker 1: am D as well. Yeah, I mean this is about
Speaker 1: that m D made back a few years ago that
Speaker 1: they would basically make custom chips for both the Xbox
Speaker 1: and the PlayStation. Low largein business, people said at the time.
Speaker 1: But you know what, it's been a steady business and
Speaker 1: I think you know, with those consoles being in you know,
Speaker 1: in demand for longer than people have expected, you know,
Speaker 1: shortages and everything like that a time like now, when
Speaker 1: you know supplies beginning to free up, then guess what,
Speaker 1: it's actually quite a good market to be in. And
Speaker 1: that's helping. So we've seen a really big pullback in
Speaker 1: these stocks right across the board. But m D is
Speaker 1: one of the worst um and but you also have
Speaker 1: you know, companies like in Nvidio that were just the
Speaker 1: Darling's a couple of years back, trade down more than
Speaker 1: fifty percent. Even the Philadelphia Semiconductor Index the socks down
Speaker 1: close to So when you talk to investors, is there
Speaker 1: a sense that you know, most of the work to
Speaker 1: the downside has been done or are they fearful of
Speaker 1: what the future holds with A and D. I think
Speaker 1: most of the most of the floss has been taken out.
Speaker 1: That tends to be what investors concentrate on. I mean,
Speaker 1: you know, just to give you perspective, if you'd brought
Speaker 1: the stock when Lisa Suit took over, it was a
Speaker 1: two dollars and eighty seven cents, Okay, got up as
Speaker 1: high as a hundred and three dollars last year, and
Speaker 1: now we're at sort of roughly what we're less than
Speaker 1: half that sixty dollars. Yeah, so there is a sense
Speaker 1: that a lot of the fluff has been taken out
Speaker 1: and that we're beginning to reflect what a reasonable price
Speaker 1: to earnings ratio would be. Of course, all companies right
Speaker 1: now dealing with inflation. How are a m D s
Speaker 1: costs looking and more broadly, consumed amount for PCs, Yeah,
Speaker 1: consumed amounts of PCs is. It's still a very ropey story.
Speaker 1: But again, I think something that's helping a m D
Speaker 1: here is that, you know, Lisa sUAS said all along, look,
Speaker 1: we think the market is gonna be probably worse than
Speaker 1: a lot of people do, and I think you know
Speaker 1: she's proven correct, But be if you've been running your
Speaker 1: company on that basis, then you're not going to get
Speaker 1: caught out as much with inventory and building inflated expectations.
Speaker 1: In terms of costs, everybody is a customer of TSMC.
Speaker 1: Everybody is having to pay t SMC to get as
Speaker 1: much as they can because of the shortages because TSMC
Speaker 1: doesn't have enough capacity. But m D has one of
Speaker 1: the advantages now of making these very high value chips,
Speaker 1: which it makes sense to t SMC to make, and
Speaker 1: therefore you know it's ahead of the queue in many respects.
Speaker 1: All right, thanks very much, Ian, always a pleasure. Ian King,
Speaker 1: Bloomberg News u S Semiconductor Reporter,