WEBVTT - Ian King on Nvidia Earnings (Audio)

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<v Speaker 1>Yeah, let's move to the semiconductor chip space, if you will,

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<v Speaker 1>and more pain here for some of the corporates involved

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<v Speaker 1>with video, the latest one to give a week forecast

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<v Speaker 1>for the current period. It does suggest to demand maybe

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<v Speaker 1>even worse than fear. Let's get over and discuss all

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<v Speaker 1>this with Ian King, Bloomberg News US semiconductor reporter. We

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<v Speaker 1>got to the moment after ours four and a half

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<v Speaker 1>pers sent down video that they missed their forecast by

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<v Speaker 1>a billion dollars. Now, surely these corporate companies that normally

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<v Speaker 1>try and under promise and over deliver, this is not

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<v Speaker 1>the case here. Yeah. I mean what in video is

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<v Speaker 1>basically saying is, look, we have got this mountain of

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<v Speaker 1>inventory that essentially the massive dip that we're seeing contumer

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<v Speaker 1>spending driven by inflation quarter that we just couldn't respond

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<v Speaker 1>in time. We have all of these chips. Suppliers have

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<v Speaker 1>all of these chips that you know, we just don't

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<v Speaker 1>have the absolute demand for. So we're just going to

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<v Speaker 1>undership what's going after shelves for the next couple of

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<v Speaker 1>quarters and make sure that all of this works its

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<v Speaker 1>way through the system and that we get back to

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<v Speaker 1>a more healthy position. Is this a darling that's kind

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<v Speaker 1>of gone off the rails, or is this all understandable

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<v Speaker 1>given you know, this sort of progression of the pandemic

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<v Speaker 1>and and bottlenecks and the like, a mixture of both.

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<v Speaker 1>I would say, I think what has been underestimated by

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<v Speaker 1>investors is the amount of these GPU chips and video

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<v Speaker 1>makes that we're actually in the hands of the crypto minors.

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<v Speaker 1>And that's obviously a very volatile situation. And there's new

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<v Speaker 1>technology under way that will basically mean that video's chip

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<v Speaker 1>won't be used for this market anymore. So there's been

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<v Speaker 1>a lot of a lot of lack of clarity there.

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<v Speaker 1>But on the flip side, look, this is what the

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<v Speaker 1>chip industry does. It always gets ahead of itself, it

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<v Speaker 1>always gets caught out, and it always then has to

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<v Speaker 1>do this called inventory correction. The question is always how

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<v Speaker 1>long so, And I mean, we have a situation right

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<v Speaker 1>now also that other PC makers are feeling it. And

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<v Speaker 1>to me about gaming revenue, how that really held up

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<v Speaker 1>if it did hold up at a tour, which sure

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<v Speaker 1>it didn't. And on top of that, one of the

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<v Speaker 1>main drivers of growth that we've seen is the data centers.

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<v Speaker 1>Now you know how are they doing, and what's the

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<v Speaker 1>sort of forecast for them looking ahead, because that's going

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<v Speaker 1>to really also be something that we're going to be

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<v Speaker 1>perhaps looking at again in the next quarter. Yeah. No,

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<v Speaker 1>I mean you've you've nailed at These are the two

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<v Speaker 1>things that people are worried about. You know, just spoke

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<v Speaker 1>with the CEO about half an hour ago and he said, look,

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<v Speaker 1>you know, fundamentally the gaming market is in, you know,

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<v Speaker 1>in a good place. You know, lots of games out there,

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<v Speaker 1>lots of two technology, and there lots of exignment. But

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<v Speaker 1>you know, consumer spending is what it is. We'll just

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<v Speaker 1>have to work our way through this. So obviously that's

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<v Speaker 1>a you know, a rather sort of how can I

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<v Speaker 1>put this less bullish approach, and we've heard from him

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<v Speaker 1>about that market. Data center is a very different situation though,

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<v Speaker 1>he's saying, look, we just literally can't meet demand. We

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<v Speaker 1>can't get enough of the support chips we need for

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<v Speaker 1>the cards we need for the systems, otherwise would be

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<v Speaker 1>even better than this record level that we're at. So

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<v Speaker 1>two very different situations. You know that the chip industry

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<v Speaker 1>is kind of two faces if you like that. We're

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<v Speaker 1>still not out of the chip shortages. But we're already

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<v Speaker 1>into oversupply of other types of chips. So consumer electronics

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<v Speaker 1>and smartphones suffering I guess a lot here, and part

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<v Speaker 1>of that can be explained, I suppose by inflation. But

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<v Speaker 1>since data center is more on the enterprise side, that

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<v Speaker 1>looks pretty solid and maybe enough to wretch things back. Yeah,

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<v Speaker 1>I mean the balance of these two businesses. For in videos,

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<v Speaker 1>it's it's very much at that point right where if

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<v Speaker 1>data center has a really really good quarter and gaming

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<v Speaker 1>stays at kind of this level, then data center will

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<v Speaker 1>be more important. But overall, the problem, Brian and is

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<v Speaker 1>that there is concerned amongst the analysts based upon what

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<v Speaker 1>other chipmakers have said that guess what, we're consumer leads

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<v Speaker 1>than enterprise will follow because we'll see an overall week

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<v Speaker 1>in the economy and that'll cause large companies to cut

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<v Speaker 1>their budgets and that will just work. It's right, screw

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<v Speaker 1>into things like in videos data center business. So that's

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<v Speaker 1>the abiding concern untils sorry in vidious CEO. So don't

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<v Speaker 1>worry about that. We're not seeing that. The technology reasons

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<v Speaker 1>for all of this data center spending is still strong.

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<v Speaker 1>Don't planic kind of thing. But that's that's definitely in

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<v Speaker 1>underligning concern and I think that's you know, you're asking

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<v Speaker 1>the right questions in let's have also look at how

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<v Speaker 1>in videos stacks up next to its rivals, and you

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<v Speaker 1>know they've said similar things. Does this perhaps lead that

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<v Speaker 1>would be because of the number of them cause regulatory

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<v Speaker 1>concerns some consolidation. The problem, I think is that there's

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<v Speaker 1>been so much over the last four or five years

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<v Speaker 1>that we're down to a very few players, and as

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<v Speaker 1>we saw within Video and their attempt to get hold

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<v Speaker 1>of UM that there's just so much opposition amongst the

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<v Speaker 1>customer base, you know, those willing to whisper to regulators

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<v Speaker 1>around the world. But you know, consolidation is just is

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<v Speaker 1>just very, very difficult to go through as a process

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<v Speaker 1>because there's so many ways to undermine any deal that

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<v Speaker 1>gets proposed that it just doesn't seem to be a

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<v Speaker 1>huge amount of appetite for that right now, anything that's

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<v Speaker 1>not small and just roughly an add on that nobody

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<v Speaker 1>cares about kind of thing. Just in ten seconds, margins

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<v Speaker 1>margin held them well. Margin's held up well because we're

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<v Speaker 1>moving to the sort of speaks speaks to management, I suppose,

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<v Speaker 1>And yeah, anyway out of time this time, but Jensen

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<v Speaker 1>Wong is a good operator. Interesting to see how long

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<v Speaker 1>it takes for the company to bounce back. Ian King

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<v Speaker 1>with US as usual, providing some insightful commentary.