1 00:00:02,480 --> 00:00:10,480 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. This is the Bloomberg 2 00:00:10,520 --> 00:00:13,720 Speaker 1: Daybreak Asia podcast. I'm Doug Krisner. You can join Brian 3 00:00:13,800 --> 00:00:16,640 Speaker 1: Curtis and myself for the stories, making news and moving 4 00:00:16,680 --> 00:00:19,560 Speaker 1: markets in the APAC region. You can subscribe to the 5 00:00:19,600 --> 00:00:23,080 Speaker 1: show anywhere you get your podcast and always on Bloomberg Radio, 6 00:00:23,320 --> 00:00:26,120 Speaker 1: the Bloomberg Terminal, and the Bloomberg Business app. 7 00:00:26,880 --> 00:00:30,600 Speaker 2: We're joined by Ross Mayfield, investment strategy analyst at Baird 8 00:00:30,640 --> 00:00:34,400 Speaker 2: Private Wealth Management. Ross a little bounce in Samsung here, 9 00:00:34,520 --> 00:00:37,120 Speaker 2: up about a quarter of one percent, and we got 10 00:00:37,159 --> 00:00:40,280 Speaker 2: a little hint in late trading that the selloff in 11 00:00:40,280 --> 00:00:42,960 Speaker 2: in tech might be running its course. It might be 12 00:00:42,960 --> 00:00:47,000 Speaker 2: a little early, but we did have Nvidia and AMD jumping. 13 00:00:47,720 --> 00:00:49,920 Speaker 2: Do you see that as continuing and what might it 14 00:00:50,000 --> 00:00:52,040 Speaker 2: mean for the rotation that we have in markets. 15 00:00:53,640 --> 00:00:55,640 Speaker 3: Yeah, it's a great question. It's the number one question 16 00:00:55,680 --> 00:00:58,480 Speaker 3: investor you should be asking right now. I think probably 17 00:00:58,520 --> 00:01:04,200 Speaker 3: the rotation has room to run both in the equities 18 00:01:04,200 --> 00:01:07,560 Speaker 3: that are starting to outperform, right so small caps starting 19 00:01:07,600 --> 00:01:12,640 Speaker 3: from historic valuation discount to large caps. You have earnings 20 00:01:12,680 --> 00:01:15,679 Speaker 3: breadths expanding, you know, with things like financials and energy 21 00:01:16,640 --> 00:01:19,040 Speaker 3: and industrials starting to do well, and then on the 22 00:01:19,080 --> 00:01:22,040 Speaker 3: other side, you know, you do have this anxiety about 23 00:01:22,319 --> 00:01:25,760 Speaker 3: all the AI capex whether these big tech companies are 24 00:01:25,760 --> 00:01:28,240 Speaker 3: going to be able to deliver the growth that is 25 00:01:28,280 --> 00:01:32,080 Speaker 3: priced into their multiple quarter after quarter. You know, I 26 00:01:32,480 --> 00:01:34,760 Speaker 3: don't think you have to be down on AI or 27 00:01:34,800 --> 00:01:37,960 Speaker 3: down on the secular theme to say they can take 28 00:01:37,959 --> 00:01:39,720 Speaker 3: a little bit more of a pause here. There might 29 00:01:39,760 --> 00:01:41,640 Speaker 3: need to be a little bit more air led out 30 00:01:41,640 --> 00:01:43,959 Speaker 3: of the trade before we level set things. 31 00:01:44,240 --> 00:01:47,039 Speaker 1: Is there a company that you think is most exposed 32 00:01:47,080 --> 00:01:49,480 Speaker 1: to that right now that we have yet to hear from. 33 00:01:51,080 --> 00:01:53,240 Speaker 3: No I? You know, honestly, I think it's it's all 34 00:01:53,280 --> 00:01:57,040 Speaker 3: of that have yet to report and that are deeply 35 00:01:57,120 --> 00:01:59,800 Speaker 3: linked with the theme. Right so, there are there are companies. 36 00:01:59,800 --> 00:02:02,800 Speaker 3: There are megacap tech companies that are exposed to AI 37 00:02:03,320 --> 00:02:07,600 Speaker 3: but are still primarily you know, AD companies where AI 38 00:02:07,920 --> 00:02:10,000 Speaker 3: is kind of the call option on the stock. And 39 00:02:10,000 --> 00:02:12,440 Speaker 3: then there are companies that are that are more deeply 40 00:02:12,560 --> 00:02:16,000 Speaker 3: levered whether their primary business model is you know, building 41 00:02:16,040 --> 00:02:19,040 Speaker 3: out the infrastructure of the capec Then if if there 42 00:02:19,040 --> 00:02:22,200 Speaker 3: seems to be an unsustainable spending spree and and really 43 00:02:22,240 --> 00:02:24,560 Speaker 3: what it comes back to for us is what are 44 00:02:24,560 --> 00:02:27,119 Speaker 3: the applications on the other side, Where is the where 45 00:02:27,200 --> 00:02:30,120 Speaker 3: is the payoff the results in the productivity boom. If 46 00:02:30,160 --> 00:02:32,480 Speaker 3: it's not clear that that's in the next you know, 47 00:02:33,200 --> 00:02:35,600 Speaker 3: twelve to twenty four months, If it's maybe a longer 48 00:02:35,680 --> 00:02:38,040 Speaker 3: term theme that has to take some time to play out, 49 00:02:38,080 --> 00:02:39,880 Speaker 3: then those companies could give back a little bit of 50 00:02:39,880 --> 00:02:43,359 Speaker 3: growth here, and again just kind of level set the valuation. 51 00:02:44,320 --> 00:02:47,320 Speaker 2: We did see Microsoft denounce a lift in AI led 52 00:02:47,400 --> 00:02:51,400 Speaker 2: profits from seven percentage points of the profit to eight 53 00:02:51,440 --> 00:02:55,840 Speaker 2: percentage points, and I think maybe as a result of that, 54 00:02:55,840 --> 00:02:58,720 Speaker 2: that's why you saw Nvidia jump five percent in late trading. 55 00:02:59,480 --> 00:03:01,639 Speaker 2: We haven't seen a move like that. It's been all 56 00:03:01,680 --> 00:03:04,959 Speaker 2: down really. And then you also had this line for Microsoft, 57 00:03:05,000 --> 00:03:08,160 Speaker 2: which I thought was quite interesting, a company executive saying 58 00:03:08,200 --> 00:03:11,560 Speaker 2: that the company does not have enough capacity to meet 59 00:03:11,560 --> 00:03:15,400 Speaker 2: customer demand for AI services and cloud services. 60 00:03:15,639 --> 00:03:19,160 Speaker 3: That's something, Yeah, it is, I mean it. And again 61 00:03:19,200 --> 00:03:21,440 Speaker 3: it goes to all right, maybe in the next six 62 00:03:21,560 --> 00:03:24,560 Speaker 3: twelve months. You know, we could quibble about the speed 63 00:03:24,600 --> 00:03:27,400 Speaker 3: of this, but the secular theme is is there and 64 00:03:27,440 --> 00:03:30,959 Speaker 3: it's not going away, and there's real you know, profits 65 00:03:31,000 --> 00:03:34,840 Speaker 3: and spending and productivity and now that we can point to, 66 00:03:35,400 --> 00:03:37,920 Speaker 3: and I think that differentiates it pretty clearly from some 67 00:03:37,960 --> 00:03:41,200 Speaker 3: of the other, you know, tech hype cycles that we've 68 00:03:41,200 --> 00:03:44,040 Speaker 3: seen in the last five to ten years, where there 69 00:03:44,080 --> 00:03:47,600 Speaker 3: are real items today you can point to, in real 70 00:03:47,800 --> 00:03:50,880 Speaker 3: earnings and profits you can point to today. And the 71 00:03:50,960 --> 00:03:52,800 Speaker 3: question now is that how long does it take to 72 00:03:52,880 --> 00:03:56,760 Speaker 3: spread to the non tech, non com services sectors, and 73 00:03:56,800 --> 00:03:59,960 Speaker 3: when do the financialist companies and when do the utilities 74 00:04:00,000 --> 00:04:03,480 Speaker 3: start to say, hey, we're seeing meaningful productivity games because 75 00:04:03,520 --> 00:04:06,400 Speaker 3: of this investment that we've made in the AI that 76 00:04:06,520 --> 00:04:08,440 Speaker 3: you know, the big tech companies are building out the 77 00:04:08,440 --> 00:04:09,520 Speaker 3: infrastructure for today. 78 00:04:09,640 --> 00:04:11,640 Speaker 1: So Ross, let's go back to the rotation that you 79 00:04:11,760 --> 00:04:13,880 Speaker 1: touched on a moment ago. I mean, if there were 80 00:04:14,640 --> 00:04:17,000 Speaker 1: several areas of the market that would kind of come 81 00:04:17,120 --> 00:04:21,520 Speaker 1: under the umbrella of places to look at in kind 82 00:04:21,560 --> 00:04:27,720 Speaker 1: of deploying cash that may be right now not necessarily levered, 83 00:04:27,760 --> 00:04:29,880 Speaker 1: but but put to work in a way where you 84 00:04:29,920 --> 00:04:33,520 Speaker 1: could really captivate on this idea that the FED is 85 00:04:33,560 --> 00:04:35,919 Speaker 1: going to be successful in engineering a soft landing and 86 00:04:35,920 --> 00:04:38,680 Speaker 1: we're going to get some sort of recovery and economic growth. 87 00:04:38,800 --> 00:04:42,520 Speaker 1: That seems to be one of the questions overhanging the market. 88 00:04:42,560 --> 00:04:48,520 Speaker 3: No, yeah, absolutely. I think that everything we're seeing today 89 00:04:49,680 --> 00:04:52,760 Speaker 3: with small caps rallying with all of the other parts 90 00:04:52,760 --> 00:04:56,799 Speaker 3: of the rotation our contingent on interest rates are falling 91 00:04:56,960 --> 00:04:59,719 Speaker 3: because a soft landing is on the horizon. If interest 92 00:04:59,800 --> 00:05:03,120 Speaker 3: rates are uh, you know, falling in the market because 93 00:05:03,279 --> 00:05:06,320 Speaker 3: there's a big economic correction on the horizon because growth 94 00:05:06,400 --> 00:05:09,120 Speaker 3: is coming under question, then this rotation, to me, he 95 00:05:09,160 --> 00:05:11,320 Speaker 3: doesn't have much room to run. I think right now 96 00:05:12,360 --> 00:05:14,159 Speaker 3: the base case is still a soft landing, and so 97 00:05:14,200 --> 00:05:17,680 Speaker 3: if you're looking to areas of the market that could 98 00:05:17,680 --> 00:05:20,760 Speaker 3: still have room to run, I think you start with financials. 99 00:05:21,640 --> 00:05:24,479 Speaker 3: You've got rates coming down, You've got lending picking back 100 00:05:24,560 --> 00:05:26,919 Speaker 3: up in a soft landing. You know, the banks, the 101 00:05:26,960 --> 00:05:30,760 Speaker 3: capital markets companies. Activity on the capital market side is 102 00:05:30,800 --> 00:05:34,239 Speaker 3: just starting to pick up. It's levered to wealth management, 103 00:05:34,279 --> 00:05:37,039 Speaker 3: which has been you know, a behemoth and down the 104 00:05:37,080 --> 00:05:39,800 Speaker 3: cap scale. You know the small cap industries that we 105 00:05:39,880 --> 00:05:43,200 Speaker 3: reference all the time that they're very much overweight banks 106 00:05:43,200 --> 00:05:45,760 Speaker 3: and regional banks. So I think you look to financials 107 00:05:45,800 --> 00:05:47,840 Speaker 3: first as the place to kind of play this theme. 108 00:05:48,040 --> 00:05:50,000 Speaker 3: If soft landing is your base. 109 00:05:49,839 --> 00:05:53,279 Speaker 2: Case, there's some other interesting angles. You have the Intel 110 00:05:53,440 --> 00:05:57,279 Speaker 2: story today, sources telling us that Intel will will cut 111 00:05:57,320 --> 00:06:01,560 Speaker 2: thousands of jobs to reduce cost. Now, the politicians want 112 00:06:01,600 --> 00:06:05,120 Speaker 2: Intel to produce more at home, but it's expensive. So 113 00:06:05,240 --> 00:06:06,720 Speaker 2: what are the implications of that. 114 00:06:09,320 --> 00:06:11,480 Speaker 3: Well, I think it's two parts of the story. Right. 115 00:06:11,520 --> 00:06:14,600 Speaker 3: You've got the broader macro picture, which is that you know, 116 00:06:14,720 --> 00:06:16,680 Speaker 3: you can see it in the Jolts data today, you 117 00:06:16,720 --> 00:06:18,800 Speaker 3: can see it in any of the labor market indicators 118 00:06:18,839 --> 00:06:21,520 Speaker 3: over the last couple of months, that the labor market 119 00:06:21,560 --> 00:06:24,080 Speaker 3: is cooling, That we are no longer in the labor 120 00:06:24,120 --> 00:06:26,560 Speaker 3: market of twenty twenty two or even twenty twenty three, 121 00:06:27,160 --> 00:06:30,360 Speaker 3: and that the demand for labor is not where it was, 122 00:06:30,440 --> 00:06:32,760 Speaker 3: and that the supply of labor has kind of right side. 123 00:06:32,839 --> 00:06:34,960 Speaker 3: So you have a cooling labor market, and I think 124 00:06:35,520 --> 00:06:37,880 Speaker 3: that's the primary reason that the FED to come out 125 00:06:38,480 --> 00:06:41,960 Speaker 3: aggressively indicating a break keat in September to give the 126 00:06:42,000 --> 00:06:45,800 Speaker 3: markets some confidence and to keep companies from starting to 127 00:06:46,080 --> 00:06:48,760 Speaker 3: offload labor. But the other thing on the you know, 128 00:06:49,080 --> 00:06:52,320 Speaker 3: in tech and trying to enshore some of these more 129 00:06:52,360 --> 00:06:54,880 Speaker 3: technical or more critical supply chains, is that it's just 130 00:06:54,920 --> 00:06:57,159 Speaker 3: really hard to find the skilled labor here right now 131 00:06:58,320 --> 00:07:00,359 Speaker 3: to kind of get those up and run. You know, 132 00:07:00,400 --> 00:07:04,200 Speaker 3: we've seen stories out of Arizona to that same effect, 133 00:07:04,240 --> 00:07:07,120 Speaker 3: and it's just it's a very different kind of job 134 00:07:07,120 --> 00:07:08,719 Speaker 3: than we're used to here, so it'll take some time 135 00:07:08,760 --> 00:07:09,960 Speaker 3: to get the Formula eight. 136 00:07:10,480 --> 00:07:13,320 Speaker 2: Even so, it's more expensive than the labor that you know, 137 00:07:13,360 --> 00:07:15,840 Speaker 2: some of these companies have been using in Asia. So 138 00:07:16,240 --> 00:07:19,520 Speaker 2: it's an interesting ongoing story. Ross. Thank you, Ross Mayfield 139 00:07:19,880 --> 00:07:31,360 Speaker 2: from Baird Private Wealth Management. Vlad Savov joins us now 140 00:07:31,440 --> 00:07:34,120 Speaker 2: in our studio is vlad is Bloomberg Tech editor to 141 00:07:34,160 --> 00:07:37,880 Speaker 2: talk a little bit more about Samsung. So we mentioned 142 00:07:37,920 --> 00:07:40,800 Speaker 2: it was a huge net profit beat. You had chip 143 00:07:40,840 --> 00:07:44,960 Speaker 2: sales that did well, displays delivering a surprise, and importantly 144 00:07:45,000 --> 00:07:49,720 Speaker 2: in artificial intelligence, the HBM high bandwidth memory chip seen 145 00:07:49,800 --> 00:07:52,120 Speaker 2: as as a key driver. I guess there's a lot 146 00:07:52,160 --> 00:07:53,480 Speaker 2: to like here, Vlad. 147 00:07:53,760 --> 00:07:56,640 Speaker 4: Oh, absolutely. I mean you can tell the story just 148 00:07:56,680 --> 00:07:59,200 Speaker 4: by looking at the sales growth and when you look 149 00:07:59,240 --> 00:08:01,720 Speaker 4: at memory the vision that's more than one hundred and 150 00:08:01,720 --> 00:08:06,200 Speaker 4: forty percent relative to second quarter last year up and 151 00:08:06,600 --> 00:08:10,239 Speaker 4: that's where everything flows from when you talk about HBM. 152 00:08:10,360 --> 00:08:13,400 Speaker 4: That's just one part of it. What we're seeing with 153 00:08:13,480 --> 00:08:17,000 Speaker 4: the entire AI frenzy and spending spree is that when 154 00:08:17,040 --> 00:08:21,239 Speaker 4: you decide to get the Nvidia A accelerators, which require HBM, 155 00:08:21,760 --> 00:08:25,080 Speaker 4: you also you can't have bottlenecks elsewhere on your system. 156 00:08:25,160 --> 00:08:27,560 Speaker 4: So that means you're going to get DDR five, which 157 00:08:27,600 --> 00:08:31,240 Speaker 4: is the fastest dynamic random access memory. You're going to 158 00:08:31,280 --> 00:08:34,439 Speaker 4: get solid state as opposed to the old spinning hard drives. 159 00:08:34,840 --> 00:08:37,360 Speaker 4: You're going to upgrade all across the board, and Samsung 160 00:08:37,400 --> 00:08:39,120 Speaker 4: benefits with all these upgrades. 161 00:08:39,920 --> 00:08:42,640 Speaker 1: So if I look at Samsung, how does this company 162 00:08:42,679 --> 00:08:44,959 Speaker 1: on the chip side compared to what's been happening at 163 00:08:45,040 --> 00:08:45,840 Speaker 1: sk Heinex. 164 00:08:46,880 --> 00:08:50,120 Speaker 4: Well, that's a very interesting point. ESK Hannicks has said 165 00:08:50,200 --> 00:08:54,400 Speaker 4: better chip operating profit for several quarters than Samsung, and 166 00:08:54,440 --> 00:08:57,880 Speaker 4: that's because Esk Hannis is the leader in HBM. It 167 00:08:58,040 --> 00:09:01,199 Speaker 4: is Nvidia's preferred partner for h Now, one of the 168 00:09:01,240 --> 00:09:03,680 Speaker 4: things that just happened yesterday is that Samsung said that 169 00:09:03,760 --> 00:09:07,120 Speaker 4: it has gotten Nvidia as a customer, So going forward, 170 00:09:07,360 --> 00:09:09,760 Speaker 4: Samsung is going to be one of the providers for Nvidia. 171 00:09:10,200 --> 00:09:13,360 Speaker 4: Both companies have been looking forward to that relationship happening, 172 00:09:13,679 --> 00:09:17,520 Speaker 4: and this particular quarter Samsung's chip operating profit was hired 173 00:09:17,559 --> 00:09:18,560 Speaker 4: and s k highexis. 174 00:09:19,080 --> 00:09:21,520 Speaker 2: Yeah, so it's interesting. The stock is up one percent 175 00:09:21,600 --> 00:09:24,319 Speaker 2: this morning, but the you know, Samsung has kind of 176 00:09:24,360 --> 00:09:26,960 Speaker 2: struggled this year. The stock price only up three percent 177 00:09:27,120 --> 00:09:29,800 Speaker 2: or so a year to date. I know you're not 178 00:09:30,040 --> 00:09:33,400 Speaker 2: really here to talk about about stocks, but are some 179 00:09:33,480 --> 00:09:37,000 Speaker 2: of those reasons that caused that lag in the stock price? 180 00:09:37,080 --> 00:09:38,800 Speaker 2: Are some of those dissipating? 181 00:09:39,360 --> 00:09:41,559 Speaker 4: Well, actually, I do want to talk about socks. It's 182 00:09:41,600 --> 00:09:44,880 Speaker 4: really interesting to me how AI has transformed tech socks. 183 00:09:44,920 --> 00:09:48,720 Speaker 4: In particular. We mentioned Microsoft earlier and how it took 184 00:09:48,760 --> 00:09:50,640 Speaker 4: as much as an eight percent hit on the share 185 00:09:50,679 --> 00:09:55,679 Speaker 4: price after missing by a sliver the expectations for AI revenue. 186 00:09:55,960 --> 00:09:58,640 Speaker 4: So it's really fascinating to me that we're seeing kind 187 00:09:58,679 --> 00:10:01,440 Speaker 4: of like venture capital thinking with some of the world's 188 00:10:01,440 --> 00:10:03,719 Speaker 4: biggest stocks. And what I mean by that is when 189 00:10:03,720 --> 00:10:06,960 Speaker 4: you look at Meta and Google, Meta is share price 190 00:10:07,000 --> 00:10:09,320 Speaker 4: has shut up just because it's bought a bunch of 191 00:10:09,360 --> 00:10:12,160 Speaker 4: Nvidia hardware, just because it said we are in AI 192 00:10:12,280 --> 00:10:14,840 Speaker 4: and we're really serious about it. Google has taken hits 193 00:10:14,840 --> 00:10:17,520 Speaker 4: to a share price because it's AAA system has had 194 00:10:17,559 --> 00:10:22,040 Speaker 4: some malfunctions over the years, and it's fascinating. I mean, 195 00:10:22,559 --> 00:10:26,400 Speaker 4: when you look at Samsung in isolation, it has brilliant results, 196 00:10:26,440 --> 00:10:28,320 Speaker 4: but it's just holding steady as far as the shared 197 00:10:28,360 --> 00:10:31,240 Speaker 4: price goes. And that's only because it hasn't had the 198 00:10:31,280 --> 00:10:34,079 Speaker 4: same up and down roller coaster effect that the likes 199 00:10:34,120 --> 00:10:35,360 Speaker 4: of Fiske Handings have had. 200 00:10:35,920 --> 00:10:39,640 Speaker 1: So I also think of smartphones when I think of Samsung, 201 00:10:39,760 --> 00:10:42,400 Speaker 1: not just the chips. Yesterday we had a story about 202 00:10:42,880 --> 00:10:44,959 Speaker 1: perhaps a bit of a delay in the rollout of 203 00:10:45,000 --> 00:10:49,360 Speaker 1: the new Apple Intelligence. Maybe we don't see a perfect 204 00:10:49,360 --> 00:10:53,600 Speaker 1: alignment between the release of Apple Intelligence and the latest phone. 205 00:10:53,640 --> 00:10:56,240 Speaker 1: Although I find out a little bit hard to believe. 206 00:10:56,679 --> 00:10:59,640 Speaker 1: Where is Samsung when it comes to AI as it 207 00:10:59,679 --> 00:11:00,720 Speaker 1: meets smartphone? 208 00:11:01,640 --> 00:11:04,360 Speaker 4: Well, twenty twenty four for Samsung has been a complete 209 00:11:04,440 --> 00:11:07,320 Speaker 4: rebranding effort. I mean, AI has been a smartphone for ages, 210 00:11:07,360 --> 00:11:10,280 Speaker 4: but as of twenty twenty four, every Samsung smartphone is 211 00:11:10,280 --> 00:11:13,760 Speaker 4: an aiphone. And it's worth saying their flagship series has 212 00:11:13,760 --> 00:11:18,960 Speaker 4: done really well. They more than doubled, I'm sorry, not 213 00:11:19,000 --> 00:11:21,600 Speaker 4: more than doubled. They had double digit growth both in 214 00:11:21,679 --> 00:11:26,240 Speaker 4: sales and shipments for the new Galaxy as twenty four series, 215 00:11:26,440 --> 00:11:30,600 Speaker 4: So as far as the market that's really plateaued, is 216 00:11:30,600 --> 00:11:32,960 Speaker 4: a really mature market. Somethime has done really well with 217 00:11:33,360 --> 00:11:36,720 Speaker 4: especially it's flagship series, and it says that it's seeing 218 00:11:37,240 --> 00:11:40,079 Speaker 4: premium demands rising in the last half of the year. 219 00:11:41,080 --> 00:11:43,400 Speaker 2: So I'm curious whether or not you think, now, Vlad, 220 00:11:43,480 --> 00:11:46,240 Speaker 2: that the selloff that we've seen in some of these 221 00:11:46,760 --> 00:11:50,280 Speaker 2: high flying AI companies might be nearing an end, because 222 00:11:50,360 --> 00:11:53,520 Speaker 2: this was a pretty strong report here, and Microsoft on 223 00:11:54,200 --> 00:11:59,280 Speaker 2: second reflection, actually, you know, said a few things that 224 00:11:59,679 --> 00:12:03,400 Speaker 2: may encourage investors, particularly that the AI led profit did 225 00:12:04,120 --> 00:12:05,400 Speaker 2: increase over last quarter. 226 00:12:05,880 --> 00:12:09,920 Speaker 4: Yeah, I would imagine, So, like I say, Samsung gave 227 00:12:10,000 --> 00:12:13,400 Speaker 4: us really encouraging results. It did say that it sees 228 00:12:14,080 --> 00:12:17,400 Speaker 4: strong demand through at least the lightholf the year. We're 229 00:12:17,440 --> 00:12:20,560 Speaker 4: going to have the analyst call with the company executives 230 00:12:20,880 --> 00:12:22,439 Speaker 4: in a little while and they can discuss that a 231 00:12:22,480 --> 00:12:25,199 Speaker 4: little bit further. But all the indications are both from 232 00:12:25,240 --> 00:12:28,360 Speaker 4: Microsoft and from Samsung that the demand is enduring. So, 233 00:12:29,000 --> 00:12:30,600 Speaker 4: like I say, it's a bit of a roller coaster. 234 00:12:31,080 --> 00:12:35,720 Speaker 4: Just because some of this was on Blue Sky thinking 235 00:12:35,800 --> 00:12:39,080 Speaker 4: and just expecting AI will be a constant growth driver, 236 00:12:39,360 --> 00:12:42,160 Speaker 4: I think that has been normalized. A's been an adjustment 237 00:12:42,200 --> 00:12:44,680 Speaker 4: and correction. Samsung is one of the companies that never 238 00:12:44,720 --> 00:12:47,760 Speaker 4: had that sky high rise. Therefore it isn't seeing the 239 00:12:47,800 --> 00:12:49,680 Speaker 4: same corresponding. 240 00:12:49,160 --> 00:12:51,680 Speaker 1: Dropping and as you pointed out on the M Live blog, 241 00:12:51,679 --> 00:12:54,600 Speaker 1: a big surprise when it came to the display division. 242 00:12:54,640 --> 00:12:57,320 Speaker 1: I think operating profit, as you said, was close to 243 00:12:57,400 --> 00:13:01,400 Speaker 1: double expectations very quickly, Lad, what's driving this. 244 00:13:02,360 --> 00:13:04,600 Speaker 4: Well, going back to the Galaxy is twenty four series, 245 00:13:04,800 --> 00:13:07,640 Speaker 4: it had a great result and it is where Samson 246 00:13:07,679 --> 00:13:10,440 Speaker 4: puts a lot of its own technology, camera, sensors, displays, 247 00:13:10,440 --> 00:13:13,360 Speaker 4: et cetera. And maybe looking forward to the next generation 248 00:13:13,440 --> 00:13:14,120 Speaker 4: iPhone as well. 249 00:13:14,800 --> 00:13:17,240 Speaker 2: All right, Lad, thanks very much for joining us. We've 250 00:13:17,280 --> 00:13:27,720 Speaker 2: been chatting here with Ladsavov, Bloomberg Tank Editor. Well, Italian 251 00:13:27,760 --> 00:13:32,320 Speaker 2: Prime Minister Georgia Maloney has trumpeted China's potential for helping 252 00:13:32,320 --> 00:13:36,520 Speaker 2: bring it in to the grinding war in Ukraine, and 253 00:13:36,559 --> 00:13:39,680 Speaker 2: she is seeking to forge closer ties with the world's 254 00:13:39,720 --> 00:13:42,800 Speaker 2: number two economy. Joining us now on the program for 255 00:13:42,880 --> 00:13:46,440 Speaker 2: some discussion is Rebecca Chong Wilkins, Bloomberg Asia Government and 256 00:13:46,559 --> 00:13:50,320 Speaker 2: Politics Correspondent. So what can we expect out of this 257 00:13:50,800 --> 00:13:52,560 Speaker 2: China visit by Georgia Maloney. 258 00:13:53,880 --> 00:13:56,720 Speaker 5: Well, all in all seems like quite a successful charm 259 00:13:56,800 --> 00:14:00,760 Speaker 5: offensive by Maloney. I mean, this visit came after a 260 00:14:00,840 --> 00:14:04,160 Speaker 5: few months after she left the Belt and Road initiative. 261 00:14:04,240 --> 00:14:07,240 Speaker 5: She was the only Italy is the only NATO only 262 00:14:07,320 --> 00:14:10,640 Speaker 5: G seven country to join it ruffle diplomatic feathers when 263 00:14:10,679 --> 00:14:16,000 Speaker 5: she joined, and it certainly irked Beijing when they departed. 264 00:14:16,440 --> 00:14:18,600 Speaker 5: So in some ways, a big part of this trip 265 00:14:18,760 --> 00:14:22,040 Speaker 5: was really to go and smooth things over with President 266 00:14:22,120 --> 00:14:25,160 Speaker 5: she didn't Ping, and Maloneia sort of touted herself as 267 00:14:25,200 --> 00:14:29,400 Speaker 5: this kind of very suave diplomat who's able to traverse 268 00:14:29,440 --> 00:14:32,320 Speaker 5: these divides, so able to talk to, for example, Victor 269 00:14:32,360 --> 00:14:35,560 Speaker 5: Auburn in Hungary as well as sort of leaders in 270 00:14:35,920 --> 00:14:38,120 Speaker 5: France and Germany and so on, and she'd had at 271 00:14:38,120 --> 00:14:40,360 Speaker 5: some point to sort of done these back channel conversations 272 00:14:40,400 --> 00:14:43,640 Speaker 5: with Auburn, for instance. She now seems to see she 273 00:14:43,760 --> 00:14:48,760 Speaker 5: didn't Ping as a similar such figure where she, unlike others, 274 00:14:48,840 --> 00:14:51,480 Speaker 5: is able to kind of bridge out and do and 275 00:14:51,520 --> 00:14:56,160 Speaker 5: conduct this kind of diplomatic outreach. The sort of bilateral 276 00:14:56,240 --> 00:15:00,000 Speaker 5: successes around this, I think speak to the potential, perhaps 277 00:15:00,000 --> 00:15:03,640 Speaker 5: perhaps that this might work they you know, and China 278 00:15:03,640 --> 00:15:07,280 Speaker 5: have renewed this through these three years of cooperation. Quite 279 00:15:07,280 --> 00:15:11,600 Speaker 5: a wide ranging agreement there, everything from education, food security, 280 00:15:11,920 --> 00:15:14,680 Speaker 5: a little bit of tech in their evs, getting a 281 00:15:14,800 --> 00:15:16,440 Speaker 5: name check and AI as well. 282 00:15:17,080 --> 00:15:19,760 Speaker 1: So if there is a bit of quid pro quo, 283 00:15:20,000 --> 00:15:22,880 Speaker 1: I'm curious about what China may want from Italy. 284 00:15:24,200 --> 00:15:27,800 Speaker 5: Well. I think in some ways China is against this 285 00:15:28,080 --> 00:15:31,920 Speaker 5: backdrop of increasing antagonism with the EU. Think about the 286 00:15:32,080 --> 00:15:35,120 Speaker 5: terriffs are the probes that they've responded sort of tip 287 00:15:35,200 --> 00:15:39,560 Speaker 5: for tap probes. I think is looking for advocates among 288 00:15:39,680 --> 00:15:44,040 Speaker 5: that cohort of EU countries that can argue its case essentially, 289 00:15:44,600 --> 00:15:47,680 Speaker 5: and that becomes more appealing if, for example, we see 290 00:15:47,680 --> 00:15:50,920 Speaker 5: a President Trump return to the White House and take 291 00:15:51,000 --> 00:15:54,440 Speaker 5: more punitive action on the EU. That might make some 292 00:15:54,480 --> 00:15:57,480 Speaker 5: figures in the EU more inclined to sort of reopening 293 00:15:57,680 --> 00:16:02,400 Speaker 5: and strengthening again those tradelines with China. And China already 294 00:16:02,400 --> 00:16:06,400 Speaker 5: has close tides with Victor Albam. We saw she stop 295 00:16:06,760 --> 00:16:10,880 Speaker 5: there and do that sort of hungary hungary visit after 296 00:16:10,960 --> 00:16:15,840 Speaker 5: he visited France. But having another sort of close partner 297 00:16:16,240 --> 00:16:19,760 Speaker 5: and friend in that cohort is meaningful to Beijing at a. 298 00:16:19,760 --> 00:16:22,880 Speaker 2: Moment like this might be a little bit awkward timing, 299 00:16:22,960 --> 00:16:27,720 Speaker 2: given it comes so closely after Maloney abandoned the Belton 300 00:16:27,800 --> 00:16:31,200 Speaker 2: Road initiative, and I know that there was some doubt 301 00:16:31,240 --> 00:16:33,760 Speaker 2: as to whether or not she would end up meeting 302 00:16:34,000 --> 00:16:38,400 Speaker 2: hijin pain given that well everything really she's out of government, 303 00:16:38,440 --> 00:16:42,120 Speaker 2: he's out of state and everything in China. Do we 304 00:16:42,160 --> 00:16:46,440 Speaker 2: have any inclination on how relations are personally between the two. 305 00:16:48,120 --> 00:16:51,240 Speaker 5: Not a great deal, I mean, Malaney, unsurprisingly we have 306 00:16:51,360 --> 00:16:55,720 Speaker 5: had more from her side. She characterized this meeting and 307 00:16:55,760 --> 00:16:58,880 Speaker 5: the discussion as sort of frank and respectful. We did 308 00:16:58,880 --> 00:17:00,840 Speaker 5: see the sort of images of you know, these two 309 00:17:00,920 --> 00:17:03,440 Speaker 5: long tables as we usually see sitting down. There was 310 00:17:03,480 --> 00:17:06,200 Speaker 5: a little bit of chuckling and smiling as I saw. 311 00:17:06,480 --> 00:17:11,959 Speaker 5: But one indicator perhaps reflected in Chinese Chinese state media 312 00:17:12,400 --> 00:17:16,720 Speaker 5: which really has praised the Ties, one publication saying so 313 00:17:16,800 --> 00:17:18,679 Speaker 5: far just could be a sort of new model for 314 00:17:18,840 --> 00:17:23,280 Speaker 5: East West relationships. So in state media at least we 315 00:17:23,400 --> 00:17:27,680 Speaker 5: see really sort of warm words expressed about the potential 316 00:17:27,800 --> 00:17:29,560 Speaker 5: of this partnership. 317 00:17:29,880 --> 00:17:32,600 Speaker 1: What about when it comes to war in Ukraine? I mean, 318 00:17:32,640 --> 00:17:35,960 Speaker 1: we know that Hu Jinping is pretty much aligned himself 319 00:17:36,359 --> 00:17:41,199 Speaker 1: with Russian President Putin. Maloney, for her part, maybe a 320 00:17:41,240 --> 00:17:44,359 Speaker 1: little critical of what's been happening in Ukraine. Is this 321 00:17:44,480 --> 00:17:45,400 Speaker 1: going to be a big deal? 322 00:17:45,440 --> 00:17:45,880 Speaker 2: Do you think? 323 00:17:47,000 --> 00:17:49,199 Speaker 5: I think this is if not a big deal, but 324 00:17:49,440 --> 00:17:53,080 Speaker 5: probably the big deal when it comes to China and 325 00:17:53,240 --> 00:17:55,320 Speaker 5: the rest of the EU. It has been a sort 326 00:17:55,359 --> 00:17:59,479 Speaker 5: of huge sticking point with many you know, EU and 327 00:17:59,560 --> 00:18:04,360 Speaker 5: Western indeed US folks feeling that China is not leveraging 328 00:18:04,400 --> 00:18:08,040 Speaker 5: its relationship with Putin a so called no limits relationship enough. 329 00:18:09,080 --> 00:18:13,240 Speaker 5: And also you know, other allegations that China is facilitating 330 00:18:13,240 --> 00:18:16,879 Speaker 5: the transport of certain you know, goods to support in 331 00:18:16,920 --> 00:18:21,040 Speaker 5: the Russia's industrial war machine. That is a massive sticking point. 332 00:18:21,320 --> 00:18:24,800 Speaker 5: Maloney has somewhat addressed this, I mean she mentioned that 333 00:18:24,880 --> 00:18:27,080 Speaker 5: this sort of Bathing's backing of Russia is a point 334 00:18:27,080 --> 00:18:31,600 Speaker 5: of great friction. But she also has continually emphasized she 335 00:18:31,880 --> 00:18:34,480 Speaker 5: as a potential sort of key player. She as a 336 00:18:34,520 --> 00:18:38,400 Speaker 5: figure who could be instrumental, potentially in trying to bring 337 00:18:38,440 --> 00:18:41,080 Speaker 5: about as a Europeans call it this phrase of a 338 00:18:41,440 --> 00:18:45,760 Speaker 5: just piece. I think it will continue to be the 339 00:18:45,800 --> 00:18:49,760 Speaker 5: point of discussion, and it's worth noting that of course 340 00:18:50,040 --> 00:18:53,640 Speaker 5: see so far and China so far, other than presenting 341 00:18:54,040 --> 00:18:57,520 Speaker 5: that peace proposal, which sort of was met with quite 342 00:18:57,520 --> 00:19:02,560 Speaker 5: a lot of skepticism initially, hasn't done an enormous amount. However, 343 00:19:02,680 --> 00:19:05,840 Speaker 5: I think as we get closer to the US election, 344 00:19:05,960 --> 00:19:09,600 Speaker 5: for instance, we see Ukraine trying to organize that second 345 00:19:10,040 --> 00:19:14,399 Speaker 5: peace summit. Ukraine acknowledges and is aware that has struggled 346 00:19:14,400 --> 00:19:18,480 Speaker 5: to win over key players like Beijing and other figures 347 00:19:18,480 --> 00:19:21,679 Speaker 5: in the global South. You can think of Brazil, Indonesia. 348 00:19:21,760 --> 00:19:27,160 Speaker 5: India for example, is aware that again if Trump were 349 00:19:27,240 --> 00:19:30,159 Speaker 5: to return to the White House, there is increased urgency 350 00:19:30,520 --> 00:19:32,399 Speaker 5: if he again, if you were to pull back on 351 00:19:32,480 --> 00:19:35,680 Speaker 5: that support, pull back on US spending, that these other 352 00:19:36,000 --> 00:19:41,199 Speaker 5: figures like China may become increasingly pivotal, and that, of 353 00:19:41,240 --> 00:19:44,760 Speaker 5: course we see that visit by the foreign minister, Ukraine's 354 00:19:44,760 --> 00:19:48,000 Speaker 5: foreign minister to China last week. 355 00:19:48,440 --> 00:19:51,320 Speaker 2: Just briefly. How sensitive are the trade issues between the 356 00:19:51,320 --> 00:19:53,560 Speaker 2: two countries, Italy and China. 357 00:19:54,920 --> 00:19:57,720 Speaker 5: Well, in some ways they do seem to have sort 358 00:19:57,720 --> 00:20:00,840 Speaker 5: of on a bilateral from a bio your point of view, 359 00:20:00,960 --> 00:20:02,720 Speaker 5: do you seem to have sort of got the show 360 00:20:02,840 --> 00:20:06,320 Speaker 5: back on the road does seem like the agreements, and 361 00:20:06,359 --> 00:20:08,360 Speaker 5: there's some MOUs. Of course, we always wait to see 362 00:20:08,400 --> 00:20:10,480 Speaker 5: if they transpire, but it does seem like we are 363 00:20:10,480 --> 00:20:12,880 Speaker 5: moving in the right direction for Italy at least. 364 00:20:13,640 --> 00:20:17,720 Speaker 1: Rebecca Cheung Wilkins there Bloomberg Asia Government and Politics Correspondent. 365 00:20:19,880 --> 00:20:23,320 Speaker 2: This is the Bloomberg Daybreak Asia podcast, bringing you the 366 00:20:23,400 --> 00:20:26,840 Speaker 2: stories making news and moving markets in the Asia Pacific. 367 00:20:27,080 --> 00:20:30,240 Speaker 2: Visit the Bloomberg Podcast channel on YouTube to get more 368 00:20:30,280 --> 00:20:34,080 Speaker 2: episodes of this and other shows from Bloomberg. Subscribe to 369 00:20:34,119 --> 00:20:37,920 Speaker 2: the podcast on Apple, Spotify, or anywhere else you listen, 370 00:20:38,200 --> 00:20:41,399 Speaker 2: and always on Bloomberg Radio, the Bloomberg Terminal, and the 371 00:20:41,400 --> 00:20:42,720 Speaker 2: Bloomberg Business app.