WEBVTT - Ian King on AMD Earnings (Audio)

0:00:00.120 --> 0:00:02.920
<v Speaker 1>As we've been discussing, a MD reported profit that did

0:00:02.960 --> 0:00:06.200
<v Speaker 1>top analyst projections in the prior quarter. Joining us now

0:00:06.240 --> 0:00:07.960
<v Speaker 1>for a close look at the results. We've got Ian

0:00:08.080 --> 0:00:13.560
<v Speaker 1>King Bloomberg News at US Semiconductor Reporter. So Ian profits

0:00:14.000 --> 0:00:17.520
<v Speaker 1>better than expected, the outlook a little softer than expected,

0:00:17.600 --> 0:00:21.279
<v Speaker 1>but shares rising after ours. What are the key takeaways here? Yeah,

0:00:21.320 --> 0:00:24.760
<v Speaker 1>I mean I think you mentioned the shares rising. You've

0:00:24.800 --> 0:00:29.319
<v Speaker 1>got a stock that's been heavily beaten up, and what

0:00:29.480 --> 0:00:33.040
<v Speaker 1>I think investors have realized today is, oh, actually it's

0:00:33.080 --> 0:00:36.600
<v Speaker 1>still growing. And when you look at the alternatives, you know,

0:00:36.840 --> 0:00:40.960
<v Speaker 1>direct peer, citizen video or isn't or Intel, that's absolutely

0:00:40.960 --> 0:00:42.959
<v Speaker 1>not the case. You know, in an Intel's case, it's

0:00:42.960 --> 0:00:45.760
<v Speaker 1>no longer buying back stock. So there was kind of

0:00:45.800 --> 0:00:49.200
<v Speaker 1>a reappraisal of of a m D really today, and

0:00:49.240 --> 0:00:51.120
<v Speaker 1>you know that was based upon the fact that people

0:00:51.120 --> 0:00:54.240
<v Speaker 1>believe it's still going to continue to take market share.

0:00:55.280 --> 0:00:58.400
<v Speaker 1>What's the nature of the long turnaround that the chief

0:00:58.440 --> 0:01:02.200
<v Speaker 1>executive officer releases who has talked about Yeah, I mean

0:01:02.240 --> 0:01:05.440
<v Speaker 1>you dial it back to two thousand and fifteen when

0:01:05.440 --> 0:01:07.560
<v Speaker 1>she took over. You know, this is a company that

0:01:07.680 --> 0:01:09.399
<v Speaker 1>was like is it going to be able to continue

0:01:09.440 --> 0:01:12.480
<v Speaker 1>to make payroll. She came in and said, look, you know,

0:01:13.000 --> 0:01:15.000
<v Speaker 1>we're going to double down on on what we're good at,

0:01:15.000 --> 0:01:17.800
<v Speaker 1>which is making very good micro processes or what we

0:01:17.800 --> 0:01:20.360
<v Speaker 1>should be good at UM and just committed all of

0:01:20.400 --> 0:01:24.520
<v Speaker 1>the company's even limited resources to that. And you know,

0:01:25.200 --> 0:01:28.120
<v Speaker 1>here we are, several years later where they actually have

0:01:28.280 --> 0:01:31.760
<v Speaker 1>better products in the market in many respects than Intel has.

0:01:32.040 --> 0:01:35.600
<v Speaker 1>Intel has had its own stumbles, and they're really benefiting

0:01:36.040 --> 0:01:39.920
<v Speaker 1>and rooting the rewards of those engineering efforts. We do

0:01:40.120 --> 0:01:42.399
<v Speaker 1>have an environment though, where semis are rendering one of

0:01:42.400 --> 0:01:46.600
<v Speaker 1>those famous cyclical downturns, and to reverse the old metaphor,

0:01:46.680 --> 0:01:49.160
<v Speaker 1>a receiving tide is going to sink all boats. So

0:01:49.320 --> 0:01:52.320
<v Speaker 1>what's the outlook here? Yeah, I mean this is a

0:01:52.400 --> 0:01:56.080
<v Speaker 1>key point all along. Lisa, through the CEO, has said, look,

0:01:56.880 --> 0:02:01.120
<v Speaker 1>I don't need a buoyant PC market me to be successful.

0:02:01.720 --> 0:02:05.000
<v Speaker 1>We are so underrepresented, our market share has slumped so

0:02:05.120 --> 0:02:08.640
<v Speaker 1>badly that as long as we continue to execute and

0:02:08.720 --> 0:02:11.160
<v Speaker 1>do what we should put this company in its rightful place,

0:02:11.320 --> 0:02:13.360
<v Speaker 1>we're going to be fine. And the numbers would appear

0:02:13.400 --> 0:02:15.560
<v Speaker 1>to indicate that, I mean, even in a kind of

0:02:15.639 --> 0:02:20.880
<v Speaker 1>disastrous quarter for PC related demand companies doing okay, the

0:02:21.000 --> 0:02:24.600
<v Speaker 1>company did pre warn right and did the did the

0:02:24.639 --> 0:02:27.400
<v Speaker 1>results turn out to be not quite so bad? That's

0:02:27.520 --> 0:02:31.080
<v Speaker 1>that's exactly it. And you know the key figures to

0:02:31.120 --> 0:02:32.880
<v Speaker 1>think about here. I mean, on the one hand, we've

0:02:32.880 --> 0:02:37.560
<v Speaker 1>got this disastrous drop in PC chip revenue at the company,

0:02:37.600 --> 0:02:40.560
<v Speaker 1>which you know, the the executives explained as being actually

0:02:40.560 --> 0:02:44.919
<v Speaker 1>worse because inventory is a factor there that end demand

0:02:45.000 --> 0:02:47.400
<v Speaker 1>isn't quite that bad. But on the flip side of that,

0:02:47.480 --> 0:02:52.440
<v Speaker 1>we've got data center unit that's up forty and those

0:02:52.440 --> 0:02:55.520
<v Speaker 1>are very expensive, very profitable chips, and it's doing a

0:02:55.560 --> 0:02:57.639
<v Speaker 1>lot better there, and that's a lot of a lot

0:02:57.680 --> 0:03:00.639
<v Speaker 1>of market share games and tell us about game consoles

0:03:00.680 --> 0:03:02.320
<v Speaker 1>because that's looking like a pretty good stick to for

0:03:02.400 --> 0:03:05.160
<v Speaker 1>am D as well. Yeah, I mean this is about

0:03:05.160 --> 0:03:07.560
<v Speaker 1>that m D made back a few years ago that

0:03:07.600 --> 0:03:11.440
<v Speaker 1>they would basically make custom chips for both the Xbox

0:03:11.520 --> 0:03:14.960
<v Speaker 1>and the PlayStation. Low largein business, people said at the time.

0:03:15.040 --> 0:03:18.000
<v Speaker 1>But you know what, it's been a steady business and

0:03:18.080 --> 0:03:21.000
<v Speaker 1>I think you know, with those consoles being in you know,

0:03:21.200 --> 0:03:24.000
<v Speaker 1>in demand for longer than people have expected, you know,

0:03:24.040 --> 0:03:27.200
<v Speaker 1>shortages and everything like that a time like now, when

0:03:27.280 --> 0:03:30.320
<v Speaker 1>you know supplies beginning to free up, then guess what,

0:03:30.639 --> 0:03:32.480
<v Speaker 1>it's actually quite a good market to be in. And

0:03:32.520 --> 0:03:37.080
<v Speaker 1>that's helping. So we've seen a really big pullback in

0:03:37.120 --> 0:03:39.840
<v Speaker 1>these stocks right across the board. But m D is

0:03:39.880 --> 0:03:42.920
<v Speaker 1>one of the worst um and but you also have

0:03:43.200 --> 0:03:45.440
<v Speaker 1>you know, companies like in Nvidio that were just the

0:03:45.560 --> 0:03:49.760
<v Speaker 1>Darling's a couple of years back, trade down more than

0:03:49.840 --> 0:03:54.600
<v Speaker 1>fifty percent. Even the Philadelphia Semiconductor Index the socks down

0:03:55.120 --> 0:03:59.080
<v Speaker 1>close to So when you talk to investors, is there

0:03:59.120 --> 0:04:01.400
<v Speaker 1>a sense that you know, most of the work to

0:04:01.440 --> 0:04:04.440
<v Speaker 1>the downside has been done or are they fearful of

0:04:04.520 --> 0:04:08.400
<v Speaker 1>what the future holds with A and D. I think

0:04:09.080 --> 0:04:12.680
<v Speaker 1>most of the most of the floss has been taken out.

0:04:12.760 --> 0:04:16.400
<v Speaker 1>That tends to be what investors concentrate on. I mean,

0:04:16.520 --> 0:04:19.039
<v Speaker 1>you know, just to give you perspective, if you'd brought

0:04:19.080 --> 0:04:21.440
<v Speaker 1>the stock when Lisa Suit took over, it was a

0:04:21.839 --> 0:04:24.960
<v Speaker 1>two dollars and eighty seven cents, Okay, got up as

0:04:25.040 --> 0:04:29.320
<v Speaker 1>high as a hundred and three dollars last year, and

0:04:29.400 --> 0:04:31.839
<v Speaker 1>now we're at sort of roughly what we're less than

0:04:31.920 --> 0:04:36.040
<v Speaker 1>half that sixty dollars. Yeah, so there is a sense

0:04:36.080 --> 0:04:37.960
<v Speaker 1>that a lot of the fluff has been taken out

0:04:38.040 --> 0:04:41.479
<v Speaker 1>and that we're beginning to reflect what a reasonable price

0:04:41.480 --> 0:04:45.280
<v Speaker 1>to earnings ratio would be. Of course, all companies right

0:04:45.320 --> 0:04:48.640
<v Speaker 1>now dealing with inflation. How are a m D s

0:04:48.720 --> 0:04:52.840
<v Speaker 1>costs looking and more broadly, consumed amount for PCs, Yeah,

0:04:52.960 --> 0:04:57.440
<v Speaker 1>consumed amounts of PCs is. It's still a very ropey story.

0:04:58.000 --> 0:05:00.640
<v Speaker 1>But again, I think something that's helping a m D

0:05:00.800 --> 0:05:03.760
<v Speaker 1>here is that, you know, Lisa sUAS said all along, look,

0:05:04.120 --> 0:05:06.680
<v Speaker 1>we think the market is gonna be probably worse than

0:05:06.760 --> 0:05:09.080
<v Speaker 1>a lot of people do, and I think you know

0:05:09.400 --> 0:05:11.640
<v Speaker 1>she's proven correct, But be if you've been running your

0:05:11.640 --> 0:05:13.680
<v Speaker 1>company on that basis, then you're not going to get

0:05:13.680 --> 0:05:18.560
<v Speaker 1>caught out as much with inventory and building inflated expectations.

0:05:18.560 --> 0:05:22.919
<v Speaker 1>In terms of costs, everybody is a customer of TSMC.

0:05:23.080 --> 0:05:25.760
<v Speaker 1>Everybody is having to pay t SMC to get as

0:05:25.839 --> 0:05:28.720
<v Speaker 1>much as they can because of the shortages because TSMC

0:05:29.200 --> 0:05:32.200
<v Speaker 1>doesn't have enough capacity. But m D has one of

0:05:32.240 --> 0:05:35.720
<v Speaker 1>the advantages now of making these very high value chips,

0:05:35.760 --> 0:05:39.240
<v Speaker 1>which it makes sense to t SMC to make, and

0:05:39.279 --> 0:05:43.120
<v Speaker 1>therefore you know it's ahead of the queue in many respects.

0:05:44.120 --> 0:05:46.640
<v Speaker 1>All right, thanks very much, Ian, always a pleasure. Ian King,

0:05:46.720 --> 0:05:49.200
<v Speaker 1>Bloomberg News u S Semiconductor Reporter,