WEBVTT - Micron, Qualcomm Show Strong AI Demand 0:00:00.120 --> 0:00:15.040 Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is live 0:00:15.120 --> 0:00:18.840 from the heart of Silicon Valley with ed Larbow in 0:00:19.040 --> 0:00:20.400 San Francisco. 0:00:23.040 --> 0:00:24.600 This is Bloomberg Tech coming up. 0:00:24.680 --> 0:00:29.639 Microns sows after its AI fueled forecast shatters all street projections, 0:00:29.640 --> 0:00:33.839 plus Qualcom jumps after posting a strong annual sales forecast. 0:00:33.880 --> 0:00:37.040 We are joined by Qualcom CEO Cristio armon live and 0:00:37.200 --> 0:00:42.000 Apple raises prices on some hardware and extreme measure in 0:00:42.080 --> 0:00:45.640 direct response to the memory and storage crunch. And it 0:00:45.720 --> 0:00:47.880 is memory that is still at the heart of what's 0:00:47.880 --> 0:00:49.080 happening on Bloomberg Tech. 0:00:49.280 --> 0:00:51.199 A super bullish sales outlook. 0:00:50.880 --> 0:00:53.120 From Micron, which is currently on track for its biggest 0:00:53.159 --> 0:00:55.120 jump in a month, but at the open on track 0:00:55.120 --> 0:00:57.840 for its biggest jumpsince twenty eleven. We will get to 0:00:57.880 --> 0:01:01.120 the details. There are two other big stories, one directly linked. 0:01:01.200 --> 0:01:05.640 Apple is raising prices on some hardware citing the memory 0:01:05.800 --> 0:01:09.080 and storage crunch and storage prices a Qualcom, fresh off 0:01:09.080 --> 0:01:11.600 its invested day, has a lot of news and extended 0:01:11.600 --> 0:01:15.039 conversation with the CEO. It is still memory and it 0:01:15.080 --> 0:01:17.520 is Micron, and here's what you need to know. Micron 0:01:17.600 --> 0:01:21.800 didn't just beat expectations, reset them higher, forecasting as much 0:01:21.840 --> 0:01:24.840 as fifty one billion dollars in fourth quarter revenue, well 0:01:24.840 --> 0:01:29.080 abuff all Street estimates. More importantly, Management says AI driven 0:01:29.120 --> 0:01:33.840 memory shortages could last beyond twenty twenty seven, keeping memory 0:01:33.880 --> 0:01:37.400 prices higher for the foreseeable future, even as Micron boosts 0:01:37.680 --> 0:01:41.640 it's manufacturing capacity. And that helps explain our other top story, 0:01:41.840 --> 0:01:45.399 Apple raising prices on some of their hardware offerings as 0:01:45.400 --> 0:01:49.400 the cost of key components memory stays high. Bloombers Mark 0:01:49.400 --> 0:01:51.640 German has the story, and you write that this is 0:01:51.680 --> 0:01:55.080 an extreme set of measures that Apple is taking. Where 0:01:55.120 --> 0:01:57.840 are the price hikes? What is Apple saying about the 0:01:57.880 --> 0:02:01.360 reasons why? And this is all about memory at the 0:02:01.440 --> 0:02:02.000 end of the day. 0:02:03.240 --> 0:02:06.840 Yeah, these price hikes are largely unprecedented in Apple's modern history. 0:02:06.880 --> 0:02:09.560 There hasn't been a time where they've hyped the prices 0:02:09.639 --> 0:02:13.400 across several different products, across much of its product lineup. 0:02:13.480 --> 0:02:15.919 This is the iPad, this is the Mac this is 0:02:15.960 --> 0:02:18.040 the Home pod, this is the Apple TV, this is 0:02:18.080 --> 0:02:21.959 the Vision Pro. It's essentially everything outside of some accessories 0:02:22.000 --> 0:02:25.000 and of course the iPhone, the most important product. The 0:02:25.080 --> 0:02:28.320 AirPods and the Apple Watch. So this is a very 0:02:28.680 --> 0:02:32.680 big deal. I think that the price increases are pretty significant, 0:02:32.720 --> 0:02:35.280 but they're not necessarily going to be a big deterrent 0:02:35.520 --> 0:02:38.799 to customers, particularly on the Mac side. The iPad makes 0:02:38.800 --> 0:02:41.200 me a little uneasy given all the competition in the 0:02:41.200 --> 0:02:44.760 tablet market and upgrade cycles, and then the Apple TV 0:02:45.000 --> 0:02:47.840 and home pod prices are pretty significant, and given that 0:02:47.880 --> 0:02:51.960 there's so many cheaper alternatives from Amazon, Google and elsewhere, 0:02:52.600 --> 0:02:54.640 that could be a little dangerous for Apple in that market. 0:02:56.000 --> 0:02:59.720 Mark what struck me reading your report is how detailed 0:02:59.760 --> 0:03:03.040 a pool was in its explanation. Maybe you think that 0:03:03.919 --> 0:03:06.320 they weren't as detailed as perhaps they often are, But 0:03:06.400 --> 0:03:08.840 they're trying to tie this to what's happening in AI 0:03:08.960 --> 0:03:12.320 data centers, and they're trying to explain that for the 0:03:12.360 --> 0:03:14.800 longest time possible they held off on doing this. 0:03:15.120 --> 0:03:16.239 They have no choice. Now. 0:03:17.280 --> 0:03:20.080 Yeah, let's remember other companies in the consumer electronics space. 0:03:20.120 --> 0:03:24.880 Apple competitors hiked prices significantly in the prior months. Apple, 0:03:25.240 --> 0:03:27.600 you know it's a good thing. This time is fairly 0:03:27.680 --> 0:03:30.360 late to these price increases. About Apple's Apple, They're the 0:03:30.400 --> 0:03:34.320 most popular consumer electronics company. Everyone's buying these products, and 0:03:34.400 --> 0:03:37.120 so this is the biggest of all big deals when 0:03:37.160 --> 0:03:40.640 it comes to price increases, that being Apple. The most 0:03:40.640 --> 0:03:43.240 interesting thing to me in Apple's statement wasn't that they're 0:03:43.440 --> 0:03:45.200 blaming AI data centers and memory. 0:03:45.200 --> 0:03:45.760 We know that. 0:03:46.200 --> 0:03:48.600 It's that they seriously hinted that there will be more 0:03:48.600 --> 0:03:51.520 price increases to other products. They said that these are 0:03:51.560 --> 0:03:55.160 the price increases that are happening today, leaving the door open. 0:03:55.480 --> 0:03:58.280 I would say to iPhone and Apple watch price increases 0:03:59.040 --> 0:04:03.320 in September when announced the new models, Boobo's. 0:04:02.920 --> 0:04:05.640 Mark German, who leads our coverage of consumer technology, thank 0:04:05.640 --> 0:04:09.160 you very much. Yesterday, Microns stunned with quarterly estimates that 0:04:09.280 --> 0:04:14.160 absolutely shattered will streets expectations, signaling that the AI infrastructure 0:04:14.200 --> 0:04:17.680 boom remains strong again. Micron shares are on track for 0:04:17.720 --> 0:04:19.599 their best day in one month, but at the open, 0:04:20.000 --> 0:04:23.120 on track for their best day since twenty eleven. Supply 0:04:23.320 --> 0:04:25.479 is tight, it is going to stay tight. There is 0:04:25.520 --> 0:04:29.479 no line of sight to supply improving, and memory prices 0:04:29.480 --> 0:04:32.880 will remain high. That's the story. Chief market strategist Carosh 0:04:32.880 --> 0:04:35.240 Life of BEMO Wealth Management is with us for more 0:04:35.279 --> 0:04:38.920 and you have a very interesting, almost historical look at 0:04:38.920 --> 0:04:43.520 what will happen next, and that is that historically, for decades, 0:04:44.000 --> 0:04:49.000 tech had been a pretty reliable deflationary force. Mark just outlined, 0:04:49.400 --> 0:04:52.160 actually more price hikes could come on that higher end 0:04:52.160 --> 0:04:55.400 Apple hardware. What happens as a result. 0:04:56.200 --> 0:04:58.760 Well, I think Marcus are really trying to struggle with 0:04:58.800 --> 0:05:00.919 the fact that it looks like we've got an economic 0:05:01.040 --> 0:05:06.080 regime change, if you will, underway, and it starts as 0:05:07.160 --> 0:05:09.520 Mark talked about, it starts with the data centers and 0:05:09.560 --> 0:05:11.599 the build there. But it also you have to think 0:05:11.600 --> 0:05:14.240 through what life as a semiconductor company has been like 0:05:14.279 --> 0:05:19.400 because they go decades with very big pea contrough and 0:05:19.480 --> 0:05:24.160 so they want some reassurance from these companies before they 0:05:24.160 --> 0:05:27.919 start expanding capacity. They need reassurance that that demand is 0:05:27.960 --> 0:05:29.920 going to be there. They get some of the reassurance 0:05:29.920 --> 0:05:34.600 they're signing longer term contracts. There's really slowing expanding capacity, 0:05:34.800 --> 0:05:39.280 but in the process of really definitely targeting their production 0:05:39.880 --> 0:05:42.240 much the same way that or that many of the 0:05:42.279 --> 0:05:45.680 semiconductor companies did during the pandemic, and they diverted it 0:05:45.720 --> 0:05:48.839 away from auto companies and put it towards the PC 0:05:49.040 --> 0:05:52.920 manufacturers and the AI creators. If you will, So they're 0:05:52.920 --> 0:05:55.800 being very strategic in how they're doing, and the industry 0:05:55.839 --> 0:05:58.599 overall is trying to watch its margins. I think what 0:05:58.720 --> 0:06:01.760 investors have to deal with is, you know, there was 0:06:01.800 --> 0:06:06.160 this presumption early on that higher prices and more over 0:06:06.200 --> 0:06:08.640 here just came because someone was shaking a money tree 0:06:08.680 --> 0:06:10.960 over there. But it's a pretty zero sum game in 0:06:11.040 --> 0:06:14.680 terms of if you're a company, you've got you're paying 0:06:14.680 --> 0:06:18.560 in one category and giving up in another. And so 0:06:18.720 --> 0:06:22.200 Apple sending that message that they've held on for a 0:06:22.320 --> 0:06:26.080 very long time, not past pricing increases along. That's actually 0:06:26.080 --> 0:06:29.200 pretty indicative across the economy where a lot of companies 0:06:29.200 --> 0:06:31.719 have done that. They've held it as long as they can, 0:06:31.800 --> 0:06:35.720 and so it leaves us the consumer and us as 0:06:35.760 --> 0:06:39.159 investors to be very discerning about where we're going to 0:06:39.200 --> 0:06:41.919 see it pull through, where we're willing to pay up. 0:06:41.960 --> 0:06:44.240 I think Apple is betting that people are willing to 0:06:44.240 --> 0:06:47.040 pay up for those those specific products. 0:06:47.839 --> 0:06:51.120 What Micron said last night was remarkable. The number is 0:06:51.160 --> 0:06:53.839 fifty one billion dollars up to in the fiscal fourth 0:06:53.920 --> 0:06:55.600 quarter when the streets saw forty three. 0:06:55.680 --> 0:06:56.360 So there's just a. 0:06:56.360 --> 0:07:02.200 Simple element of outperformance relative to expectations, but the admission 0:07:02.240 --> 0:07:04.600 that they have no line of sights to the supply 0:07:04.920 --> 0:07:09.840 situation improving and therefore prices remaining high. How does the 0:07:09.880 --> 0:07:12.880 market model for that with everyone else in the equation, 0:07:12.920 --> 0:07:15.120 the capex deployers, the hyperscalers. 0:07:15.800 --> 0:07:18.920 I think it's it's difficult to model because basically what 0:07:18.920 --> 0:07:21.800 we're doing is as an economy, we're trying to rewire 0:07:21.920 --> 0:07:27.240 the whole economy very rapidly and make up for decades 0:07:27.440 --> 0:07:31.280 of under investment and infrastructure because we haven't invested in 0:07:31.280 --> 0:07:33.800 the energy grid. We haven't needed to because the demand 0:07:33.920 --> 0:07:36.080 wasn't up, and now we're asking demand to go up 0:07:36.440 --> 0:07:40.000 many multiples of where it has been historically, and so 0:07:40.560 --> 0:07:43.160 markets have to adjust to the fact that you'll probably 0:07:43.240 --> 0:07:47.600 have higher endemic core inflation, if you will. But you're 0:07:47.640 --> 0:07:50.600 seeing from the fixed income markets that they're actually pretty 0:07:50.640 --> 0:07:53.000 tolerant of that because of the fact that it's coming 0:07:53.080 --> 0:07:58.400 from steady demand. It's not coming from workforce demanding higher wages, 0:07:58.480 --> 0:08:01.320 but it's coming from growth we're putting in the economy, 0:08:01.720 --> 0:08:03.760 and economics one on one would tell you that in 0:08:03.800 --> 0:08:06.040 the long run, and we invest in that in the 0:08:06.200 --> 0:08:09.520 capital infrastructure, it does tee us up for an era 0:08:09.600 --> 0:08:13.040 of more productive growth. But there's this interim period that 0:08:13.080 --> 0:08:15.040 it's going to take us a while. We're probably talking 0:08:15.120 --> 0:08:17.720 later in the decade or early next decade when we 0:08:17.800 --> 0:08:21.840 finally see the big deflationary impacts of this come through. 0:08:21.960 --> 0:08:24.520 Because in the meantime, we all want access to it, 0:08:24.760 --> 0:08:27.200 we need data centers to get access to it, and 0:08:27.240 --> 0:08:30.239 there's that bottleneck in the middle that's going to need sorting. 0:08:31.240 --> 0:08:34.120 Carol, just really quick before we let you go, Micron. 0:08:34.240 --> 0:08:36.240 The funny thing about it in other memory names is 0:08:36.240 --> 0:08:38.440 that they're trading it like a pretty reasonable multiple. 0:08:42.400 --> 0:08:44.800 Well, they're super reasonable, and like I've heard this morning, 0:08:44.880 --> 0:08:47.880 like you've seen even within VIDIA two. Every time they report, 0:08:48.040 --> 0:08:51.440 people look at the stock price, you know, simplistically on 0:08:51.480 --> 0:08:53.960 the front. They look at the stock price and forget 0:08:54.000 --> 0:08:56.560 to put the stock price relative to the earnings. And 0:08:56.600 --> 0:08:59.360 the valuations have been coming down on these names actually 0:08:59.480 --> 0:09:03.000 for quite some time because the earnings are so unbelievably strong. 0:09:04.320 --> 0:09:07.040 It's a stock that literally is priced oney one hundred 0:09:07.040 --> 0:09:08.920 and ninety dollars a share. But yeah, I looked at 0:09:09.280 --> 0:09:12.400 twelve month fort EPs. Carrisflyfe for BIMO Wealth Management's great 0:09:12.400 --> 0:09:14.080 to have you back on the show, Thank you very much. 0:09:14.360 --> 0:09:16.720 Coming up, we're going to stick with Semiconductors. A conversation 0:09:16.800 --> 0:09:21.560 with Qualcom CEO Christiano Amon on data centers, deeper push 0:09:21.600 --> 0:09:24.920 into data centers, M and A. Qualcom's been busy and 0:09:24.960 --> 0:09:27.360 they gave some pretty interesting numbers for the future. That 0:09:27.480 --> 0:09:39.680 conversation's next. This is Bloomberg Tech. Okay shares of quodcorm 0:09:39.720 --> 0:09:42.040 We're up around four percent. They had opened up more 0:09:42.080 --> 0:09:45.880 than eleven percent. The company unveiled ambitious long term growth 0:09:45.920 --> 0:09:49.280 targets at its investor day in New York. Quilecom is 0:09:49.320 --> 0:09:52.520 projecting more than fifteen billion dollars in annual AI data 0:09:52.559 --> 0:09:55.920 center revenue by fiscal twenty twenty nine, and forty billion 0:09:55.960 --> 0:09:59.920 dollars in annual sales from businesses outside of smartphones, double 0:10:00.080 --> 0:10:02.840 the target that it is set two years ago. Joining 0:10:02.920 --> 0:10:06.400 us now is caulled Com CEO christianom On and Bloomberg's 0:10:06.440 --> 0:10:09.120 the clothes anchor remained Boss Stick and Christian. It's great 0:10:09.120 --> 0:10:11.000 to have you back on Bloomberg Tech. And here with 0:10:11.360 --> 0:10:13.520 remain and I if we could, can we just start 0:10:13.520 --> 0:10:15.880 on actually the near term because the five billion dollar 0:10:15.960 --> 0:10:19.240 data center number for fiscal twenty seven is really interesting 0:10:19.280 --> 0:10:21.240 to a lot of people. I think they really want 0:10:21.280 --> 0:10:24.360 to understand the composition of it right. Data center can 0:10:24.400 --> 0:10:26.680 mean a lot of things. Where is Quark I'm going 0:10:26.720 --> 0:10:27.640 to move most quickly. 0:10:28.080 --> 0:10:30.960 Yeah, very good. Happy to talk to both of you guys. 0:10:31.520 --> 0:10:35.160 Look this exciting time, especially because we kind of upgraded 0:10:35.240 --> 0:10:39.240 our non handset revenue as we've been diversifying the company 0:10:39.320 --> 0:10:42.600 from twenty two to forty and enter the data center market. 0:10:42.640 --> 0:10:47.319 And five billion in fiscal twenty seven. It's a high 0:10:47.400 --> 0:10:50.840 confidence number that we have based on customer engagements we 0:10:50.960 --> 0:10:54.199 have right now. Most of their revenue is from a 0:10:54.440 --> 0:10:58.520 custom ASA engagement that expanded since the acquisition of Alpha 0:10:58.600 --> 0:11:02.679 Wave and started to see in their revenue some of 0:11:02.720 --> 0:11:06.199 this innovative technology we came up for celebrators. It doesn't 0:11:06.200 --> 0:11:11.240 require HBM memory is our high bandwidth compute and as 0:11:11.440 --> 0:11:14.640 we keep executing on those customers, we're excited to see 0:11:14.679 --> 0:11:17.720 the revenue going to about fifteen billion in fiscal twenty nine. 0:11:18.040 --> 0:11:21.000 I am curious Christiana when it comes to those longer 0:11:21.080 --> 0:11:23.720 term targets and the bridge between the short term. So 0:11:23.840 --> 0:11:27.000 what you have put out there for twenty twenty seven. 0:11:27.520 --> 0:11:29.040 Is there any sense I know you haven't named the 0:11:29.080 --> 0:11:32.200 customers that get you over that bridge here, but is 0:11:32.240 --> 0:11:34.400 that going to fill the whole of that five billion 0:11:34.440 --> 0:11:36.160 based on the one billion that we already know is 0:11:36.200 --> 0:11:36.640 out there? 0:11:36.840 --> 0:11:40.280 Look the five billion, as I said it, I'll give 0:11:40.320 --> 0:11:44.200 you the composition. I think what I can say right now, 0:11:44.280 --> 0:11:46.840 I think, as it expects, a lot of those contracts 0:11:46.840 --> 0:11:50.960 are governed by non disclosure. We have one large hyperscalar 0:11:51.000 --> 0:11:54.320 customer in the United States, one large hyperscalar customer in China, 0:11:54.920 --> 0:11:59.200 and then we have some other engagements that we had 0:11:59.280 --> 0:12:02.199 on a data center that is all into the five 0:12:02.360 --> 0:12:04.960 billion dollars. So the five billion dollar is it's a 0:12:05.120 --> 0:12:08.000 very high confident forecast to which we have the customers, 0:12:08.080 --> 0:12:12.520 the capacity, the memory allocation and everything. As we think 0:12:12.600 --> 0:12:15.920 about the engagement we have today, and also we talk 0:12:15.960 --> 0:12:20.000 about a contract that we have with Meta also for 0:12:20.160 --> 0:12:23.760 two generations of the CPU, especially as we position ourselves 0:12:23.800 --> 0:12:28.560 for the GENTECHCPU opportunities, that those engagements are into the 0:12:28.640 --> 0:12:32.960 fifteen billion dollar number for Qualcom as an eventrate, those 0:12:32.960 --> 0:12:35.560 are great numbers, but really when you look at the scale, 0:12:35.640 --> 0:12:39.439 what's happening in the data center. You imagine, as we 0:12:39.559 --> 0:12:42.640 execute and we show our differentiation, they could be upside. 0:12:42.679 --> 0:12:45.480 But we're just you know, being focused on the engagements 0:12:45.520 --> 0:12:46.040 we have today. 0:12:46.080 --> 0:12:47.960 I do have to ask. So an investor seem pretty 0:12:47.960 --> 0:12:50.400 pleased is what they heard yesterday about your articulating this 0:12:50.480 --> 0:12:53.600 longer term data center strategy. But I'm curious. I mean, 0:12:53.880 --> 0:12:57.120 you famously exited the data center business back in twenty seventeen, 0:12:57.160 --> 0:12:59.040 twenty eighteen, and I know there were a lot of 0:12:59.080 --> 0:13:02.079 direct a lot of reasons for that that went beyond 0:13:02.080 --> 0:13:05.320 your operational control. But there was a lot of competition then. 0:13:05.679 --> 0:13:08.439 There's probably even more competition today. Why do you think 0:13:08.480 --> 0:13:11.000 you can get it right now compared to what it 0:13:11.120 --> 0:13:12.319 was eight years ago. 0:13:12.480 --> 0:13:18.200 Yeah, look the circumstances. I think when we started on 0:13:18.320 --> 0:13:21.440 the CPU, actually, I know people talk about data center 0:13:21.480 --> 0:13:24.080 as a general term, but we actually we start a 0:13:24.080 --> 0:13:27.760 long time with an ARM compatible eyes at CPU. Very early, 0:13:27.880 --> 0:13:30.480 there was a big software barrier. This is before AI, 0:13:31.320 --> 0:13:34.280 and you know at the time I did not you know, 0:13:34.360 --> 0:13:36.760 the market wasn't ready for it only until later. So 0:13:36.800 --> 0:13:39.080 it was kind of the probably the right decision for 0:13:39.160 --> 0:13:41.480 qualk at a time. This is a different conversation. It's 0:13:41.480 --> 0:13:43.559 a different data center right now, this is about AI. 0:13:44.520 --> 0:13:47.480 But it's a valid question, right so I will give 0:13:47.520 --> 0:13:50.320 you the same answer that I gave when we entered 0:13:50.320 --> 0:13:53.600 the automotive business, when we entered the industrial business, and 0:13:53.640 --> 0:13:56.840 everything that we have been doing to diversify the company. 0:13:57.480 --> 0:14:01.440 Those are fast moving markets now changing with technology. So 0:14:01.520 --> 0:14:04.680 what we really focus is not what the data center 0:14:04.800 --> 0:14:06.800 is doing today, but what the data center is going 0:14:06.800 --> 0:14:09.040 to be doing tomorrow. The data center is now moving 0:14:09.120 --> 0:14:12.920 to agentic. That's why you see CPU companies on the rise, 0:14:13.360 --> 0:14:16.480 you see demand on the rise. The data center is 0:14:16.520 --> 0:14:20.440 being disaggregated. Is not one single GPU that does everything. 0:14:20.480 --> 0:14:23.320 You have different harder and we're coming out with a 0:14:23.400 --> 0:14:27.520 comprehensive portfolio. We have. We have a CPU, we have 0:14:27.800 --> 0:14:32.520 a new memory solution that is not a memory from 0:14:32.560 --> 0:14:35.760 the memory provider, has actually been designed by Qualcom that 0:14:35.800 --> 0:14:39.520 doesn't require HBM. We have a different accelerator for the 0:14:39.560 --> 0:14:43.000 desegregated computes, and we have our semiconductor scale which is 0:14:43.040 --> 0:14:47.840 good for customisings. So that's what we're doing. And you know, 0:14:47.920 --> 0:14:52.840 if technology matters and you have fast innovations cycles, there's 0:14:52.920 --> 0:14:53.280 room for. 0:14:53.280 --> 0:14:58.120 Qualcom Bloomberg Tech Live on Bloomberg Television and Bloomberg Radio 0:14:58.160 --> 0:15:00.880 all around the world, and we're speaking to Qualcom's Cristiano 0:15:00.920 --> 0:15:04.400 Amon and a big part of Qualcomm's story is custom 0:15:04.480 --> 0:15:08.040 silicon now A six. You mentioned it a moment ago, Cristiano. 0:15:08.040 --> 0:15:11.960 Bloomberg reported on May twenty sixth that byte Dance was 0:15:12.000 --> 0:15:15.840 one of those HYPERSCALA companies, and at the time Qualcom 0:15:15.840 --> 0:15:18.880 didn't comment how is that going to work? You know, 0:15:18.920 --> 0:15:21.880 there is a distinction between an A six program and 0:15:22.040 --> 0:15:25.640 export of accelerator, which is your own name on it, 0:15:26.120 --> 0:15:29.760 within the current confines of the US export controls that 0:15:29.800 --> 0:15:30.360 are in place. 0:15:31.320 --> 0:15:34.280 Well, was still not commenting on it, but I'll tell 0:15:34.320 --> 0:15:39.320 you that like everybody else that has a significant portion 0:15:39.600 --> 0:15:43.240 of their data center revenues, also with customers in China, 0:15:43.360 --> 0:15:47.600 there is a there's a very clear set of regulations 0:15:47.600 --> 0:15:50.760 and specifications that you have to follow and you should 0:15:50.800 --> 0:15:54.120 expect to Qualcom it's complying with those and I think 0:15:54.120 --> 0:15:58.440 there's different types of products that are distant for China 0:15:58.520 --> 0:16:01.200 and those are the ones that we are shipping to 0:16:01.280 --> 0:16:02.320 our channel customers. 0:16:03.360 --> 0:16:03.720 Thank you. 0:16:04.520 --> 0:16:08.480 The data center business is multifaceted, so ASEX your own 0:16:08.520 --> 0:16:12.200 accelerators and now CPU. But the market's in a place 0:16:12.240 --> 0:16:16.359 where in video or AMD on an annual break basis 0:16:16.560 --> 0:16:18.360 bring a new generation of technology. 0:16:18.440 --> 0:16:18.640 Right. 0:16:19.040 --> 0:16:21.640 And so the question that a lot of people pose 0:16:21.720 --> 0:16:24.240 for you, Christiano is by the time the accelerators come 0:16:24.280 --> 0:16:27.480 to market and the CPUs in twenty twenty eight and 0:16:27.560 --> 0:16:31.280 customers deploy them, will they not be obsolete? Is it 0:16:31.360 --> 0:16:33.440 not too late to kind of get into those markets 0:16:33.480 --> 0:16:35.960 when you look at the peers and how they deploy. 0:16:36.400 --> 0:16:39.400 Absolutely not. Look, I get this question all the time, 0:16:39.440 --> 0:16:41.560 and I think if that was true, Qualcom will not 0:16:41.640 --> 0:16:45.560 diversify from phones and enter the automotive industry, into the industrial, 0:16:45.640 --> 0:16:50.320 into the robotics, into the broadband. And I actually believe 0:16:50.520 --> 0:16:54.200 it's exactly what I've said before. I'm going to give you. 0:16:54.760 --> 0:16:56.560 I'm going to give you a simple answer. There are 0:16:56.560 --> 0:17:00.640 four vectors of differentiation accelerator. First of all, we know 0:17:00.920 --> 0:17:03.240 that power matter. If you look at the demand that 0:17:03.280 --> 0:17:05.960 exists in the data center right now, is a demand 0:17:05.960 --> 0:17:08.600 that going like this and the energy available is like this, 0:17:09.040 --> 0:17:11.919 So that creates It's perfect for Qualcom because what we 0:17:11.960 --> 0:17:16.959 do is very power efficient. We design our technology always 0:17:16.960 --> 0:17:18.880 thinking there's going to be a battery on the other side, 0:17:18.920 --> 0:17:20.800 and we're going to have efficient and power consumption. That's 0:17:20.800 --> 0:17:23.320 one vector of differentiation. The other one is what I said, 0:17:23.560 --> 0:17:26.800 we design for the future which does not have the 0:17:26.960 --> 0:17:30.240 memory constraint that you have today. We don't have to 0:17:30.320 --> 0:17:33.040 move a lot of data between the accelerator to memory, 0:17:33.080 --> 0:17:37.320 and that reduces thermal, reduces power consumption, and re increases 0:17:37.359 --> 0:17:40.520 the memory bandwidth. And we don't have to use expensive HBM. 0:17:40.880 --> 0:17:43.200 We have the ability to do this at a much 0:17:43.280 --> 0:17:46.800 lower cost. Number three is we are coming in with 0:17:47.040 --> 0:17:52.640 very high density of transistors with our accelerator, and. 0:17:52.600 --> 0:17:53.639 We're not a small company. 0:17:53.680 --> 0:17:58.040 I think we we ship forty billion components a year. 0:17:58.520 --> 0:18:01.560 We do more than already new chips per year on 0:18:01.720 --> 0:18:04.200 leading notes, and I think we have the ability to execute. 0:18:04.400 --> 0:18:07.679 And if the data center is changing because of AGENTIC, 0:18:07.920 --> 0:18:11.679 and the data center is changing because of this aggregation, 0:18:11.880 --> 0:18:13.360 there's an entry point for Qualcom. 0:18:14.119 --> 0:18:18.840 I am curious, Krishano, particularly with Meta and Dragonfly, how 0:18:18.880 --> 0:18:23.320 confident are you that Meta will still be there in 0:18:23.400 --> 0:18:25.720 twenty twenty eight as a partner, and I asked that 0:18:25.840 --> 0:18:28.960 only not so much from the Qualcom side. But Meta 0:18:29.000 --> 0:18:30.719 has sort of moved around a little bit with some 0:18:30.760 --> 0:18:33.679 of its strategies and how it's approaching AI. Is the 0:18:33.720 --> 0:18:36.680 agreement that you have with them? Is that basically firm 0:18:37.040 --> 0:18:42.440 look two parts. Yes, we have a contract with Meta. 0:18:42.480 --> 0:18:44.679 That's why we talk about them as a customer for 0:18:44.760 --> 0:18:49.399 two generations and it's very significant for our CPU. We 0:18:49.520 --> 0:18:51.159 have a very unique CPU if you look at some 0:18:51.160 --> 0:18:53.280 of the metrics we're provided, and I think we have 0:18:53.320 --> 0:18:55.840 a track record that have a good CPU. The second 0:18:55.880 --> 0:18:58.440 part of the question, I will never bet against Meta. 0:18:58.520 --> 0:19:02.520 You know they have they have incredible first party applications, 0:19:02.520 --> 0:19:04.120 they have a lot of data, they have a lot 0:19:04.119 --> 0:19:05.359 of data from consumers. 0:19:05.600 --> 0:19:09.399 They're well positioned. We are on the early innings of AI. 0:19:09.480 --> 0:19:12.280 Anybody that believes right now that whoever the players are 0:19:12.320 --> 0:19:15.480 on an I AI, this is what is already defined. 0:19:15.880 --> 0:19:18.560 This is a this is a decade long and I 0:19:18.560 --> 0:19:21.080 think if what we learned something about the Internet is 0:19:21.880 --> 0:19:24.320 your technologe is going to move very fast and the 0:19:24.359 --> 0:19:26.919 players are going to change. I will not bet against Meta. 0:19:27.400 --> 0:19:29.639 Christiana, can I just jump in on Meta really quickly? 0:19:29.720 --> 0:19:31.919 What I find really interesting about it is the relationship 0:19:31.960 --> 0:19:35.120 was already there right snap Dragon in quest. I spent 0:19:35.200 --> 0:19:37.600 a lot of time down in Palo Alto on the 0:19:37.600 --> 0:19:40.000 Irian project kind of looking at what's under the hood. 0:19:40.320 --> 0:19:43.320 How much did that existing relationship on the consumer electronic 0:19:43.440 --> 0:19:46.440 side get the win on the data center side. 0:19:46.560 --> 0:19:48.840 It's one hundred percent. Look at the end of the day, 0:19:49.920 --> 0:19:52.480 this is not this is not one time relationship. We 0:19:52.600 --> 0:19:55.840 have built over a long period of time, a strategic 0:19:55.880 --> 0:19:58.440 relationship and what happened Also have those relationship in place 0:19:58.480 --> 0:20:01.119 and we have more products, you have trust, you'll have 0:20:01.600 --> 0:20:04.159 the capability of execution. And by the way, this is 0:20:04.200 --> 0:20:07.480 also true what happened on customising. We bought Alpha Wave. 0:20:07.760 --> 0:20:10.119 They have some engagements, but the other part of Qualcom. 0:20:10.200 --> 0:20:13.680 Qualcom has brought a relationship with some of those companies 0:20:13.680 --> 0:20:16.359 and I think that just scale and that's exactly what 0:20:16.480 --> 0:20:16.920 you're seeing. 0:20:17.119 --> 0:20:18.480 Well, can I ask you a little bit about that? 0:20:18.560 --> 0:20:22.119 You mentioned Alpha Wave. You've obviously you have Dentana, you 0:20:22.200 --> 0:20:24.840 have the Modular deal. You made a lot of acquisitions 0:20:24.840 --> 0:20:27.600 in a relatively short period of time. I guess my 0:20:27.680 --> 0:20:31.520 question is twofold a should we expect more anytime soon? 0:20:31.920 --> 0:20:34.760 And based on the acquisitions that you've done, have you 0:20:34.880 --> 0:20:38.159 actually already sort of integrated that into some sort of 0:20:38.520 --> 0:20:42.120 sellable product that's already sort of out there as. 0:20:41.960 --> 0:20:44.720 One, yeah, one hundred percent. Look if you look at 0:20:44.720 --> 0:20:47.720 our track record, right so, especially as I think about 0:20:47.720 --> 0:20:51.920 the diversification of the company. First was automotive. We bought 0:20:52.080 --> 0:20:55.119 a River and that is now the stack that you 0:20:55.160 --> 0:20:59.760 see on BMW for a highway autopilot. We bought Nuvia. 0:21:00.119 --> 0:21:03.040 You see now our CPU showing up not only in 0:21:03.119 --> 0:21:05.960 PC's and phones and automotive, but now in the data center. 0:21:06.760 --> 0:21:09.320 We bought Alpha Wave, and you see us now into 0:21:09.359 --> 0:21:13.000 the connectivity business and the custom AASAIC business, and the 0:21:13.080 --> 0:21:16.399 Module acquisition is incredibly exciting. I actually don't think the 0:21:16.520 --> 0:21:19.920 industry investors really understand what that acquisition is. I think 0:21:19.920 --> 0:21:21.600 my prediction is people are going to read the three 0:21:21.680 --> 0:21:23.520 or four or five times and eventually they're going to 0:21:23.560 --> 0:21:28.880 get it, which is an industry friendly alternative that we're 0:21:28.920 --> 0:21:32.800 going to make it available upon close to everybody. So 0:21:33.000 --> 0:21:34.000 all of those things. 0:21:33.800 --> 0:21:37.280 That Module acquisition you're Chris Latry is sticking around absolutely. 0:21:37.800 --> 0:21:41.359 That's why you can see, if anything, if anything, what 0:21:41.480 --> 0:21:43.840 you should see about this acquisition. By being an all 0:21:43.880 --> 0:21:47.680