WEBVTT - Ian King on Applied Materials Earnings (Audio)

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<v Speaker 1>After the bell, we heard from Applied Materials. This is

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<v Speaker 1>the company that basically is the largest manufacturer of chip

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<v Speaker 1>making equipment. It gave a better than feared sales forecast

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<v Speaker 1>for the current quarter. We want to bring into the

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<v Speaker 1>conversation Bloomberg's Ian King. He covers all things semiconductors from

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<v Speaker 1>our studios and bureau in San Francisco. You know, it's

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<v Speaker 1>always a pleasure. What do you make of what we

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<v Speaker 1>had from aim At today? Well, any time a company

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<v Speaker 1>comes into earnings with all of the sort of clouds

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<v Speaker 1>on the horizon and everybody worried about where it's going

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<v Speaker 1>and analyss projecting a contraction and it says, oh no,

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<v Speaker 1>actually we're going to grow. Clearly is going to cause

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<v Speaker 1>some relief. And that's what we've certainly seen today. You know,

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<v Speaker 1>they're arguing very strongly. Hey, look, technology still counts. The

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<v Speaker 1>chip makers need to get better at what they're doing,

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<v Speaker 1>and we're kind of route one to do in that.

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<v Speaker 1>So that's our argument and it's holding up for now.

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<v Speaker 1>I think the elephant in the room, though, is the

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<v Speaker 1>situation with US and China, the Biden administration withholding some

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<v Speaker 1>of this advanced semiconductor technology from the Chinese, and I'm

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<v Speaker 1>wondering whether or not Applied material to address that point.

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<v Speaker 1>We I mean, you've now that it was a giant

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<v Speaker 1>part of what they had to talk to today. They said, look,

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<v Speaker 1>these restrictions that we saw came came in in October

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<v Speaker 1>the seventh are going to cost US two and a

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<v Speaker 1>half billion dollars of lost revenue in this year unless

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<v Speaker 1>the government sort of behaves itself and starts giving some

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<v Speaker 1>of these licenses. And then if we're looking, if everything

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<v Speaker 1>goes okay, might just be do we only lose one

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<v Speaker 1>and a half billion dollars of lost revenue? So can

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<v Speaker 1>you give me a sense of the types of semiconductors

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<v Speaker 1>that may be produced using this equipment and whether we

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<v Speaker 1>can glean anything from what Applied Materials had to say

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<v Speaker 1>about let's say the memory chip market versus microprocessors versus

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<v Speaker 1>some of the chips that are used in phones. Yeah,

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<v Speaker 1>I mean, from a market perspective, memory is obviously in

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<v Speaker 1>big trouble right now, and all of the producers are

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<v Speaker 1>cutting their orders for equipment. Not very good at all.

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<v Speaker 1>Applied said, look, you know that's bad, but guess what

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<v Speaker 1>people who are making logic chips, the kind of processes

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<v Speaker 1>are going to your iPhone or your PC. They're actually

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<v Speaker 1>doing relatively okay, and you know, our orders in that

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<v Speaker 1>particular area are not too bad. So when you look

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<v Speaker 1>at what we heard from in video yesterday, one of

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<v Speaker 1>the leading manufacturers of those graphics processors that are used

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<v Speaker 1>in some of the computer systems where cloud computing is involved,

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<v Speaker 1>also a critical component for the gaming devices, did aim

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<v Speaker 1>at give anything into the graphics chips market. Well, not

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<v Speaker 1>not specifically the graphics chip chip market. I mean, that

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<v Speaker 1>would be advanced logic, but if you throw what goes

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<v Speaker 1>that into the mix overall, the kind of conclusion that

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<v Speaker 1>we've sort of drawing from what's said this week is,

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<v Speaker 1>you know, the big iron, the enterprise systems, the cloud systems.

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<v Speaker 1>If you're selling technology into those markets, or technologies that

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<v Speaker 1>makes technology that goes in those markets, maybe things aren't

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<v Speaker 1>as bad. Maybe this recession concern is overblown. And that's

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<v Speaker 1>what these companies are sort of suggesting. If you sort

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<v Speaker 1>of aggregate what they're saying, consumer and other areas are

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<v Speaker 1>still pretty grim. Where does AMATT measure up in terms

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<v Speaker 1>of how is it measuring up against competitors like K

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<v Speaker 1>l A. Or Land Research or the Dutch company a

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<v Speaker 1>s mL. Yeah, I mean that's a very good question.

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<v Speaker 1>They claim the technologies are allowing them to gain market share,

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<v Speaker 1>but if you look at you know, the revenue forecast,

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<v Speaker 1>they along with Lime Research, are really the ones that

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<v Speaker 1>are getting hurt by this China action, by these trade

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<v Speaker 1>by these you know, these trade restrictions. Um. So you know,

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<v Speaker 1>pluses on one side, minuses on the other. Okay, Ian

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<v Speaker 1>good stuff always a pleasure. Thanks for making time for US.

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<v Speaker 1>Ian King covers the semiconductor industry for US at Bloomberg