Speaker 1: Yeah, let's move to the semiconductor chip space, if you will,
Speaker 1: and more pain here for some of the corporates involved
Speaker 1: with video, the latest one to give a week forecast
Speaker 1: for the current period. It does suggest to demand maybe
Speaker 1: even worse than fear. Let's get over and discuss all
Speaker 1: this with Ian King, Bloomberg News US semiconductor reporter. We
Speaker 1: got to the moment after ours four and a half
Speaker 1: pers sent down video that they missed their forecast by
Speaker 1: a billion dollars. Now, surely these corporate companies that normally
Speaker 1: try and under promise and over deliver, this is not
Speaker 1: the case here. Yeah. I mean what in video is
Speaker 1: basically saying is, look, we have got this mountain of
Speaker 1: inventory that essentially the massive dip that we're seeing contumer
Speaker 1: spending driven by inflation quarter that we just couldn't respond
Speaker 1: in time. We have all of these chips. Suppliers have
Speaker 1: all of these chips that you know, we just don't
Speaker 1: have the absolute demand for. So we're just going to
Speaker 1: undership what's going after shelves for the next couple of
Speaker 1: quarters and make sure that all of this works its
Speaker 1: way through the system and that we get back to
Speaker 1: a more healthy position. Is this a darling that's kind
Speaker 1: of gone off the rails, or is this all understandable
Speaker 1: given you know, this sort of progression of the pandemic
Speaker 1: and and bottlenecks and the like, a mixture of both.
Speaker 1: I would say, I think what has been underestimated by
Speaker 1: investors is the amount of these GPU chips and video
Speaker 1: makes that we're actually in the hands of the crypto minors.
Speaker 1: And that's obviously a very volatile situation. And there's new
Speaker 1: technology under way that will basically mean that video's chip
Speaker 1: won't be used for this market anymore. So there's been
Speaker 1: a lot of a lot of lack of clarity there.
Speaker 1: But on the flip side, look, this is what the
Speaker 1: chip industry does. It always gets ahead of itself, it
Speaker 1: always gets caught out, and it always then has to
Speaker 1: do this called inventory correction. The question is always how
Speaker 1: long so, And I mean, we have a situation right
Speaker 1: now also that other PC makers are feeling it. And
Speaker 1: to me about gaming revenue, how that really held up
Speaker 1: if it did hold up at a tour, which sure
Speaker 1: it didn't. And on top of that, one of the
Speaker 1: main drivers of growth that we've seen is the data centers.
Speaker 1: Now you know how are they doing, and what's the
Speaker 1: sort of forecast for them looking ahead, because that's going
Speaker 1: to really also be something that we're going to be
Speaker 1: perhaps looking at again in the next quarter. Yeah. No,
Speaker 1: I mean you've you've nailed at These are the two
Speaker 1: things that people are worried about. You know, just spoke
Speaker 1: with the CEO about half an hour ago and he said, look,
Speaker 1: you know, fundamentally the gaming market is in, you know,
Speaker 1: in a good place. You know, lots of games out there,
Speaker 1: lots of two technology, and there lots of exignment. But
Speaker 1: you know, consumer spending is what it is. We'll just
Speaker 1: have to work our way through this. So obviously that's
Speaker 1: a you know, a rather sort of how can I
Speaker 1: put this less bullish approach, and we've heard from him
Speaker 1: about that market. Data center is a very different situation though,
Speaker 1: he's saying, look, we just literally can't meet demand. We
Speaker 1: can't get enough of the support chips we need for
Speaker 1: the cards we need for the systems, otherwise would be
Speaker 1: even better than this record level that we're at. So
Speaker 1: two very different situations. You know that the chip industry
Speaker 1: is kind of two faces if you like that. We're
Speaker 1: still not out of the chip shortages. But we're already
Speaker 1: into oversupply of other types of chips. So consumer electronics
Speaker 1: and smartphones suffering I guess a lot here, and part
Speaker 1: of that can be explained, I suppose by inflation. But
Speaker 1: since data center is more on the enterprise side, that
Speaker 1: looks pretty solid and maybe enough to wretch things back. Yeah,
Speaker 1: I mean the balance of these two businesses. For in videos,
Speaker 1: it's it's very much at that point right where if
Speaker 1: data center has a really really good quarter and gaming
Speaker 1: stays at kind of this level, then data center will
Speaker 1: be more important. But overall, the problem, Brian and is
Speaker 1: that there is concerned amongst the analysts based upon what
Speaker 1: other chipmakers have said that guess what, we're consumer leads
Speaker 1: than enterprise will follow because we'll see an overall week
Speaker 1: in the economy and that'll cause large companies to cut
Speaker 1: their budgets and that will just work. It's right, screw
Speaker 1: into things like in videos data center business. So that's
Speaker 1: the abiding concern untils sorry in vidious CEO. So don't
Speaker 1: worry about that. We're not seeing that. The technology reasons
Speaker 1: for all of this data center spending is still strong.
Speaker 1: Don't planic kind of thing. But that's that's definitely in
Speaker 1: underligning concern and I think that's you know, you're asking
Speaker 1: the right questions in let's have also look at how
Speaker 1: in videos stacks up next to its rivals, and you
Speaker 1: know they've said similar things. Does this perhaps lead that
Speaker 1: would be because of the number of them cause regulatory
Speaker 1: concerns some consolidation. The problem, I think is that there's
Speaker 1: been so much over the last four or five years
Speaker 1: that we're down to a very few players, and as
Speaker 1: we saw within Video and their attempt to get hold
Speaker 1: of UM that there's just so much opposition amongst the
Speaker 1: customer base, you know, those willing to whisper to regulators
Speaker 1: around the world. But you know, consolidation is just is
Speaker 1: just very, very difficult to go through as a process
Speaker 1: because there's so many ways to undermine any deal that
Speaker 1: gets proposed that it just doesn't seem to be a
Speaker 1: huge amount of appetite for that right now, anything that's
Speaker 1: not small and just roughly an add on that nobody
Speaker 1: cares about kind of thing. Just in ten seconds, margins
Speaker 1: margin held them well. Margin's held up well because we're
Speaker 1: moving to the sort of speaks speaks to management, I suppose,
Speaker 1: And yeah, anyway out of time this time, but Jensen
Speaker 1: Wong is a good operator. Interesting to see how long
Speaker 1: it takes for the company to bounce back. Ian King
Speaker 1: with US as usual, providing some insightful commentary.