WEBVTT - Intel Is About to Relinquish Its Chipmaking Crown to Samsung 0:00:01.800 --> 0:00:04.440 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:04.480 --> 0:00:07.280 Bloomberg Quick Takes Tim Stanovik. We're here every day bringing 0:00:07.320 --> 0:00:09.840 you the latest news from the world to business and finance, 0:00:09.840 --> 0:00:13.640 plus technology, politics, economics, all purtnising the power of Business 0:00:13.680 --> 0:00:17.119 Week reporters and editors, not to mention our journalists and 0:00:17.160 --> 0:00:20.000 analyst in more than one twenty countries. You can download 0:00:20.000 --> 0:00:23.479 Bloomberg Business Weekend iTunes, SoundCloud, or Bloomberg dot Com. You 0:00:23.480 --> 0:00:25.439 can also listen to our radio show at two pm 0:00:25.480 --> 0:00:27.880 Eastern Time on the Bloomberg Radio or watch us on 0:00:27.920 --> 0:00:32.960 YouTube search Bloomberg clovel News. The fort annual JPMorgan Healthcare 0:00:32.960 --> 0:00:36.760 Conference underway. Virtually it's the event where it comes. It's 0:00:36.800 --> 0:00:39.519 the event where really anything in the healthcare space and 0:00:39.600 --> 0:00:43.239 everyone involved in the healthcare space typically gather on an 0:00:43.280 --> 0:00:45.839 annual basis. As we mentioned, it's virtual this year, and 0:00:45.840 --> 0:00:49.040 one of the companies participating is our upcoming guest. Jeff 0:00:49.080 --> 0:00:51.479 Jonas is Chief Innovation Officer on on the board of 0:00:51.520 --> 0:00:55.160 directors of Stage Therapeutics. Jeff joins us on the phone 0:00:55.160 --> 0:01:00.200 from Florida. Jeff, how are you, You're You're all well 0:01:00.200 --> 0:01:02.160 and thanks for having me. Yeah, thanks so much for 0:01:02.440 --> 0:01:04.760 joining us. First, first off, an update from you know 0:01:04.800 --> 0:01:08.319 what you're seeing right now at the JP Morgan Healthcare Conference. 0:01:08.560 --> 0:01:12.840 I know that you're attending it virtually as of now, 0:01:12.880 --> 0:01:15.040 as everybody is doing, but give us an update on 0:01:15.040 --> 0:01:18.360 on on really what the red is. Well, you know, 0:01:18.720 --> 0:01:21.280 it's a funny time. This has been a funny conference, 0:01:21.280 --> 0:01:25.360 and it's been, as you've mentioned, a standard get together 0:01:25.640 --> 0:01:30.000 conclay for biotech and pharma for decades, and this is 0:01:30.000 --> 0:01:32.800 the second year has been virtual. That said, I've been 0:01:33.080 --> 0:01:36.920 attending virtually. Um, there's some interesting news in the Cristoper space, 0:01:37.360 --> 0:01:40.200 some M and A, but it's still not the same 0:01:40.240 --> 0:01:44.240 as you know, being packed like sardines and Union Square. 0:01:44.280 --> 0:01:47.480 I can tell you which right now. We're glad not 0:01:47.520 --> 0:01:50.960 to be packed like sardines. Hey, Jeff. One thing though, UM, 0:01:51.040 --> 0:01:53.440 I do think about the pandemic and how it's affected 0:01:53.440 --> 0:01:56.920 the medical community and all of us overall, the questions, 0:01:57.160 --> 0:02:00.160 the information we've learned as we've watched vaccines being raid 0:02:00.240 --> 0:02:03.480 and understanding you know the process if you will. And 0:02:03.520 --> 0:02:06.600 I also think the world at large, the importance of 0:02:06.640 --> 0:02:09.840 mental wellness. We're talking about it like we've never before. 0:02:10.360 --> 0:02:12.640 How how how do you see the pandemic kind of 0:02:12.680 --> 0:02:16.200 impacting that world? In your world specifically, Well, you know, 0:02:16.240 --> 0:02:20.240 I'm a psychiatrist by training or recovering psychiatrists, and it's 0:02:20.520 --> 0:02:22.639 if you look at what's happened, I think, as you've 0:02:22.639 --> 0:02:26.760 pointed out, UM, we've seen a vast increase in the 0:02:26.800 --> 0:02:31.400 diagnosis of people suffering from mental health disorders, anxiety disorders, 0:02:31.639 --> 0:02:35.679 and really across the economic and age spectrum. It's not 0:02:35.760 --> 0:02:39.120 focusing on any particular segment. It's really all of us. 0:02:39.480 --> 0:02:41.959 And you know, there's there's actually some really good data 0:02:42.000 --> 0:02:45.119 around this. UM. And without belaboring this, if you look 0:02:45.280 --> 0:02:49.240 just for example, the economic costs are in the US 0:02:49.280 --> 0:02:53.080 just for depressive disorders in the year two thousand, year talking, 0:02:53.080 --> 0:02:56.440 it was about three billion, which was very substantial. In 0:02:57.280 --> 0:03:00.320 one the estimate of the cost of depress and is 0:03:00.360 --> 0:03:03.480 almost eight hundred billions, more than two and a half 0:03:03.480 --> 0:03:05.720 fold what we saw in the in the year two 0:03:05.760 --> 0:03:08.200 thousand and the same has been true that kind of 0:03:08.240 --> 0:03:11.560 increased for neurological disorders. So I think we all know 0:03:11.680 --> 0:03:14.919 that our lives are different. People are under stress. Um, 0:03:14.960 --> 0:03:19.600 there is a paucity of of availability of mental health practitioners, 0:03:19.840 --> 0:03:23.360 people are isolating more so it really is a perfect swarm. 0:03:23.480 --> 0:03:25.600 But Jeff, you know, I hear the data from one 0:03:25.600 --> 0:03:29.360 and I asked myself, is that actually measuring the effect 0:03:29.440 --> 0:03:32.400 of the pandemic? Because here we are two and we're 0:03:32.480 --> 0:03:34.600 entering your three of the pandemic. So I'm wondering to 0:03:34.680 --> 0:03:38.360 what extent you can actually attribute that increase in depression 0:03:38.360 --> 0:03:41.800 and anxiety to the pandemic versus what we won't see 0:03:41.800 --> 0:03:46.040 for years. Succomb Oh, I think that's exactly right. Remember, 0:03:46.120 --> 0:03:49.520 these are all instantaneous numbers or incidents as it were, 0:03:50.000 --> 0:03:53.320 the sequali or the after effects of what we're going 0:03:53.320 --> 0:03:55.720 through now. I think many of these things are still 0:03:55.800 --> 0:03:58.200 yet to be counted. So, if you know, I think 0:03:58.240 --> 0:04:01.880 that's why we're seeing, you know, this, this negative impact 0:04:01.960 --> 0:04:05.920 on brain health and the increasing diagnosis of ment of 0:04:05.960 --> 0:04:09.240 depression and anxieties sorts across the board. Hey what about 0:04:09.360 --> 0:04:11.160 to Jeff? You know, we talked so much here in 0:04:11.160 --> 0:04:15.520 Bloomberg about data collection, Right, the better the pros and 0:04:15.560 --> 0:04:17.920 cons of data collection, Right, But I do think about 0:04:17.920 --> 0:04:21.960 the data that's being collected during the pandemic about mental wellness, 0:04:22.040 --> 0:04:25.000 how that might help us in terms of figuring out 0:04:25.000 --> 0:04:29.000 more productive, more constructive strategies to really help all of 0:04:29.080 --> 0:04:32.520 us with our mental well being. Well, I think that's 0:04:32.520 --> 0:04:35.400 a really important point. And mental health has not been 0:04:35.720 --> 0:04:38.440 on the forefront of people's minds, you know, over the 0:04:38.520 --> 0:04:41.919 last decade, even though it is almost a crisis in 0:04:41.960 --> 0:04:45.159 our ability to deliver beneficial care. And I think the 0:04:45.279 --> 0:04:48.599 data we're acquiring now are really pointing out to the 0:04:48.800 --> 0:04:52.120 area that we have significant unmet medical need. We don't 0:04:52.160 --> 0:04:55.880 have enough practitioners. There hasn't been a lot of innovation 0:04:55.920 --> 0:05:00.000 and mental health medication and treatments over the last twenty years, 0:05:00.000 --> 0:05:02.000 so there's been a posse of that sort of innovation 0:05:02.040 --> 0:05:05.240 as well. So our hope is and and again the 0:05:05.320 --> 0:05:09.160 data are still coming in that with with better data 0:05:09.200 --> 0:05:12.440 and more information, we'll be able to craft better therapies 0:05:12.440 --> 0:05:15.800 that are really more tailored to individuals versus the sort 0:05:15.839 --> 0:05:19.200 of one size fits all that's really predominated, especially in 0:05:19.240 --> 0:05:21.279 psychiatry over the last twenty years. So what does that 0:05:21.279 --> 0:05:25.240 actually look like on a practical level, Well, the first 0:05:25.240 --> 0:05:27.240 thing we have to do is start looking at people's 0:05:27.279 --> 0:05:31.240 individual problems, and you know, and the socioeconomic issues, but 0:05:31.400 --> 0:05:35.520 more importantly, to make accurate diagnoses and to provide therapies 0:05:35.560 --> 0:05:38.280 as quickly as possible. If you think about this from 0:05:38.279 --> 0:05:41.320 a medical standpoint, if you had a broken leg, you 0:05:41.320 --> 0:05:44.359 wouldn't wait around, you know too, you know, two months 0:05:44.560 --> 0:05:46.480 in order to get better or to see a doctor. 0:05:46.839 --> 0:05:49.800 And yet we don't treat mental health with the same urgency. 0:05:50.240 --> 0:05:52.599 And these are life threatening conditions that we do with 0:05:52.680 --> 0:05:56.000 other medical conditions. So if you need to see a psychiatrist, 0:05:56.080 --> 0:05:58.720 you may have to wait, you know, several weeks or 0:05:58.720 --> 0:06:02.400 if not months, or psychlotherapist. And so the kind of 0:06:02.480 --> 0:06:04.480 data that we need and what we're seeing is that 0:06:04.640 --> 0:06:08.120 is really demonstrating not only the economic loss but the 0:06:08.240 --> 0:06:12.279 personal cost of delaying therapy and not having better access 0:06:12.320 --> 0:06:15.560 to mental health across the board. All right, we've got 0:06:15.560 --> 0:06:18.360 to run. Hey, Jeff Um come back anytime. We'd love 0:06:18.400 --> 0:06:21.880 to continue this conversation. Jeff Jonas, his Chief Innovation Officer, 0:06:21.960 --> 0:06:25.680 Board of Directors member, former CEO of Stage Therapeutics, joining 0:06:25.760 --> 0:06:28.919 us on the phone from Florida. I do think the 0:06:28.960 --> 0:06:31.920 increased conversation we're having about mental wellness, it's really important. Yeah, 0:06:31.920 --> 0:06:34.080 And I think his point about you know, what this 0:06:34.120 --> 0:06:36.200 looks like in a few years really stands because we 0:06:36.240 --> 0:06:39.360 don't know the effects. Yeah, exactly in personalization, right, individualization. 0:06:39.400 --> 0:06:41.599 That makes a lot of sense to me. Medicine increasingly 0:06:41.600 --> 0:06:44.400 moving in that direction. This is Bloomberg Business Week, and 0:06:44.440 --> 0:06:49.240 this is Bloomberg Radio. This is Bloomberg Business Week with 0:06:49.320 --> 0:06:54.640 Carol Messer and Bloomberg Quick Takes. Tim Stinovic on Bloomberg Radio. Well, 0:06:54.680 --> 0:06:56.279 as we mentioned, a lot coming this week on the 0:06:56.320 --> 0:06:59.120 US economy, Fitch J. Powell up on Capitol Hill for 0:06:59.160 --> 0:07:02.719 his confirmation hearing, and a lot is on the terminal 0:07:02.880 --> 0:07:05.640 and at Bloomberg dot com about interest rates and inflation. 0:07:05.960 --> 0:07:09.480 New York Fed President Bill Dudley winging Goldman Sacks also 0:07:09.600 --> 0:07:12.160 with some comments both writing about you know, Tim, more 0:07:12.200 --> 0:07:14.760 aggressive FED tightening cycles. Are all looking at the economy 0:07:14.800 --> 0:07:16.600 thinking the Fed has to play catch up. We'll do that, 0:07:16.720 --> 0:07:21.240 howevery that's the question, because we're also seeing some major 0:07:21.240 --> 0:07:23.920 disruptions as a result of a Macron. A great story 0:07:23.960 --> 0:07:27.080 on the Bloomberg Terminal by Sean Donnan and other of 0:07:27.080 --> 0:07:29.880 our Bloomberg Economics colleagues. Here Sean Donn and his senior 0:07:29.880 --> 0:07:31.680 economics writer for Bloomberg News, He joins us on the 0:07:31.680 --> 0:07:34.240 phone from Maryland. Sean, I was having a conversation with 0:07:34.320 --> 0:07:37.600 a friend earlier this morning over text because we were 0:07:37.640 --> 0:07:40.840 talking about the disruptions happening at our kids nursery school, 0:07:41.160 --> 0:07:44.600 and she wrote that short staffing because of COVID is 0:07:44.640 --> 0:07:46.960 the new supply chain And I said, oh, my god, 0:07:47.400 --> 0:07:49.800 you're absolutely right. You hit it the nail on the head. 0:07:50.040 --> 0:07:52.000 What have you found about the economic effects of all 0:07:52.040 --> 0:07:54.680 of these workers calling out sick? Well, I mean, that's 0:07:54.680 --> 0:07:56.120 a great way of thinking about it. This is I mean, 0:07:56.120 --> 0:07:59.320 if you remember back that supply chain crisis that hit 0:07:59.400 --> 0:08:01.800 us all last skier starting to hit the tail end 0:08:01.840 --> 0:08:05.840 of that's something that we weren't really expecting in terms 0:08:05.920 --> 0:08:08.960 of UH an economic impact. And as we were going 0:08:09.000 --> 0:08:11.680 into this O Macron variant, we had kind of gotten 0:08:11.720 --> 0:08:15.560 into a groove and how we deal with surges the 0:08:15.600 --> 0:08:19.480 economy and businesses have become pretty good at adapting UH 0:08:19.520 --> 0:08:21.200 to new conditions. And then all of a sudden, we've 0:08:21.200 --> 0:08:24.080 got this new condition UH in the economy, which is 0:08:24.160 --> 0:08:26.760 just we've got a lot of people outsick in America 0:08:26.960 --> 0:08:30.160 right now because we're getting all of these positive tests 0:08:30.160 --> 0:08:33.680 and people may not be getting as sick in the 0:08:34.080 --> 0:08:37.280 broadly as as as they were beforehand, but they still 0:08:37.320 --> 0:08:39.640 have to stay at home in quarantine for five days 0:08:39.679 --> 0:08:43.559 ten days, depending on the business that you work for. UH, 0:08:43.920 --> 0:08:47.040 that may affect their family members who may be forced 0:08:47.040 --> 0:08:49.880 to stay home because of rules as well. And at 0:08:49.880 --> 0:08:52.880 a certain point, when you start talking to businesses, they're saying, actually, 0:08:52.920 --> 0:08:56.640 it's having a material impact on our ability to do business. 0:08:56.679 --> 0:08:59.480 So I talked Toledo Pizza, which is a pizza chain 0:08:59.559 --> 0:09:03.000 down here, and the CEO, James Beale, it's a family company, 0:09:03.000 --> 0:09:05.920 they've been around since you've never seen anything like this. 0:09:06.040 --> 0:09:10.640 He's literally having the shut stores because they don't have 0:09:10.800 --> 0:09:13.439 enough people, and they don't have enough people, not because 0:09:13.440 --> 0:09:15.720 they can't hire enough people, which was a lot of 0:09:15.720 --> 0:09:17.679 the impact last year, but because it got too many 0:09:17.679 --> 0:09:22.720 people calling in sake right now, right and we've seen 0:09:22.800 --> 0:09:24.800 we've all been places where we see signs that they 0:09:24.920 --> 0:09:27.360 just you know, closed because they just don't have enough workers. 0:09:27.679 --> 0:09:29.840 The other thing, though, Sean I'm thinking about, is the 0:09:29.880 --> 0:09:32.599 markets have this great ability to look through things, and 0:09:32.640 --> 0:09:34.360 we've had a lot of guests coming on like we 0:09:34.400 --> 0:09:37.240 have to look through this period of a macron and 0:09:37.320 --> 0:09:39.440 just get to the other side of the economy. Uh 0:09:39.480 --> 0:09:43.000 and and things start to bounce back pretty quickly. Um, 0:09:43.880 --> 0:09:45.760 why shouldn't we just be doing that here, like we 0:09:45.880 --> 0:09:48.240 understand what's going on, and why won't it just be 0:09:48.360 --> 0:09:50.599 maybe a few week thing where we'll explain away in 0:09:50.600 --> 0:09:53.320 the data points what was going on and look forward. 0:09:54.160 --> 0:09:57.480 Oh sure, I mean look absolutely could be a question 0:09:57.679 --> 0:10:00.800 of just a few weeks. Uh. And we've seen that 0:10:01.240 --> 0:10:03.400 a lot of people point to what happened in South Africa, 0:10:03.480 --> 0:10:07.480 what's been happening in the UK. Already some science possibly 0:10:07.480 --> 0:10:10.240 out of New York that the omicron cases are are 0:10:10.320 --> 0:10:14.520 peaking there. But really we've also got to think about 0:10:14.559 --> 0:10:16.960 the scale of the impact and how that kind of 0:10:16.960 --> 0:10:19.720 flows through the through the economy right now. As an 0:10:19.720 --> 0:10:22.640 economist I like called Nick Bunker, he's the chief economist 0:10:22.640 --> 0:10:26.439 that indeed the job site we're all familiar with, um. 0:10:26.600 --> 0:10:29.720 And he grew up in the Boston area, and he says, 0:10:29.800 --> 0:10:32.319 this is a lot like the Blizzarders seventy eight, which 0:10:32.360 --> 0:10:35.520 is this legendary blizzard that hit uh, New England in 0:10:35.600 --> 0:10:37.800 nineteen seventy eight, which up to four feet of snow 0:10:37.880 --> 0:10:40.760 get dropped on the economy and for a few weeks 0:10:40.760 --> 0:10:43.040 there you have this huge disruption in the economy, there's 0:10:43.040 --> 0:10:45.920 a huge clean up operation, there's a big bounce back. 0:10:46.200 --> 0:10:48.720 But you've got to think about this as not just 0:10:48.800 --> 0:10:51.319 a regional economic event. This is like the blizzard or 0:10:51.360 --> 0:10:53.800 seventy eight kind of hit everywhere in the US at 0:10:53.840 --> 0:10:57.480 the same time right now in terms of workers staying home, 0:10:58.040 --> 0:11:01.040 and that is um that's all. It may not be 0:11:01.080 --> 0:11:03.800 as big a deal as what we saw in March 0:11:03.880 --> 0:11:07.520 and April when we had these lockdowns in place and 0:11:07.640 --> 0:11:11.200 the pandemic was very new. We've adapted. We're all working 0:11:11.240 --> 0:11:13.560 from home, or a lot of us are working from home. 0:11:14.120 --> 0:11:17.160 We're finding new ways to to work and and and 0:11:17.360 --> 0:11:21.440 do our jobs. But it could be pretty short and sharp, 0:11:21.559 --> 0:11:24.680 and that could flow through as well into supply chains. 0:11:24.720 --> 0:11:27.640 What if that brings us back to a place where, 0:11:28.120 --> 0:11:32.200 for example, those parts shortages that we were seeing last 0:11:32.360 --> 0:11:36.280 year that we're pretty acute again, those get extended further 0:11:36.360 --> 0:11:39.640 into this year and that starts affecting GDP. And that's 0:11:39.679 --> 0:11:43.280 one of the reasons we've seen economists UH downgrade their 0:11:43.320 --> 0:11:46.200 growth forecast for for the first quarter. And you know 0:11:46.280 --> 0:11:48.000 that's the quarter we're in. Now, we can look at 0:11:48.000 --> 0:11:51.120 what's happened now, we can expect good things on the horizon, 0:11:51.760 --> 0:11:54.040 but you know, it pays to pay attention to what's 0:11:54.080 --> 0:11:56.640 happening around us now as well. Hey, Sean, what's the 0:11:56.679 --> 0:11:59.240 best what's the most important piece of data that you're 0:11:59.240 --> 0:12:01.640 gonna be watching for are in the coming weeks to 0:12:01.760 --> 0:12:05.920 help us understand what actually happens with the omicron variant 0:12:05.920 --> 0:12:10.080 in regard to technomic impact. I think there's there's there's 0:12:10.080 --> 0:12:14.160 a couple of things. One is what really happens to 0:12:14.240 --> 0:12:19.040 some of the big industrial companies like the automakers and 0:12:19.080 --> 0:12:22.439 how many people do they have outsick? And does that 0:12:22.640 --> 0:12:27.720 really then again flow through into the economy. And remember 0:12:27.920 --> 0:12:30.000 that story about car prices that we were all telling 0:12:30.120 --> 0:12:33.320 last year and inflation. Uh so what do we see 0:12:33.360 --> 0:12:36.720 in kind of heavy industry like that? Uh. The other 0:12:36.720 --> 0:12:38.480 one is one that's kind of harder to get a 0:12:38.520 --> 0:12:40.920 handle on, and that's I wish we had to take 0:12:40.960 --> 0:12:43.120 her on the on the terminal for how many Americans 0:12:43.120 --> 0:12:46.040 are outsick on any given day, because in some ways 0:12:46.080 --> 0:12:48.560 that would be the best economic barometer you could have 0:12:48.679 --> 0:12:51.960 right now. Sickco I'm one of our programmers are listening. Hey. 0:12:52.000 --> 0:12:54.600 One thing I do think about though, and highly recommended 0:12:54.960 --> 0:12:56.760 sixty minutes at a great piece about kind of what's 0:12:56.760 --> 0:12:58.880 going on in the US labor force right now. I 0:12:58.920 --> 0:13:04.120 do wonder too, um sean for companies who are like man, 0:13:04.480 --> 0:13:06.160 I don't want to ever be in a position where 0:13:06.200 --> 0:13:08.559 we might go through something like this and where my 0:13:08.920 --> 0:13:13.839 you know, reliance on workers, um just really makes me 0:13:13.880 --> 0:13:15.920 so vulnerable. I want to automate as much as I can. 0:13:16.000 --> 0:13:17.920 I wonder how much automation is going on that's going 0:13:17.960 --> 0:13:21.160 to stay with us forever in certain industries that will 0:13:21.200 --> 0:13:24.680 impact the labor force for years to come. I think 0:13:24.679 --> 0:13:27.800 there's no doubt that one of the long term I'm 0:13:27.800 --> 0:13:30.560 gonna call it a scar here, but it's a change, 0:13:30.559 --> 0:13:33.280 and some we'll see it as a positive change. Uh, 0:13:33.600 --> 0:13:36.440 in this economy is going to be more automation. I'm 0:13:36.440 --> 0:13:39.360 gonna bring us back to Ledo Pizza here in the 0:13:39.440 --> 0:13:41.720 DC area, and they've got a hundred and ten stores. 0:13:42.360 --> 0:13:46.839 It's a pretty thriving pizza chain here here. Locally, they 0:13:46.880 --> 0:13:51.240 have thirteen fewer people that they employ today than they 0:13:51.280 --> 0:13:54.080 did before the pandemic. And that's not about being outsick. 0:13:54.160 --> 0:13:57.679 That's just fewer staff that they need. And what they've done, 0:13:57.800 --> 0:14:00.760 according to the CEO, James Biel, was you know, part 0:14:00.760 --> 0:14:03.360 of that was driven by by shortages in the labor market, 0:14:03.360 --> 0:14:07.200 the hard the hard times they were having finding workers. 0:14:07.240 --> 0:14:09.640 But they've adapted. And one of the ways they've adapted 0:14:09.720 --> 0:14:15.320 is they've automated their ordering down their menu. You just 0:14:15.400 --> 0:14:17.280 don't need to deal with as many people as you 0:14:17.360 --> 0:14:20.480 used to get a pizza pizza, and that's a scar 0:14:20.600 --> 0:14:22.920 in this economy. Gotta runch on. It's a great story, 0:14:22.920 --> 0:14:25.280 Sean Donn, and he's seen your economics writer at Bloomberg 0:14:25.360 --> 0:14:27.440 News ruining us on the phone from Maryland. You're listening 0:14:27.440 --> 0:14:33.200 to Bloomberg Business Week and this is Bloomberg. You're listening 0:14:33.280 --> 0:14:37.080 to Bloomberg Business Week with Carol Messer and Bloomberg Quick 0:14:37.160 --> 0:14:42.320 Takes Tim Stenovic on Bloomberg Radio. This is Bloomberg Business 0:14:42.400 --> 0:14:46.280 Week with Carol Messer and Bloomberg Quick Takes Tim Stenovic 0:14:46.680 --> 0:14:51.360 on Bloomberg Radio. This week, Bloomberg Business Week's magazine, it's 0:14:51.400 --> 0:14:54.120 all about the your head issue, those things to keep 0:14:54.120 --> 0:14:56.840 on your radar in two and Tim. That includes, of course, 0:14:57.120 --> 0:14:59.640 the semiconductor space big story. Last year, it's going to 0:14:59.720 --> 0:15:03.040 contin knew to be so this year innovation disruptors and 0:15:03.080 --> 0:15:05.360 just plain old competition playing its way out. Yeah. The 0:15:05.360 --> 0:15:08.400 big question is who reigned supreme? And how about the 0:15:08.920 --> 0:15:11.720 long time you know, Kings of chip making or King 0:15:11.760 --> 0:15:14.120 of chip making? Does it remain king? We have our 0:15:14.120 --> 0:15:16.560 own king of chipmaking too, it's in King. He's US 0:15:16.600 --> 0:15:19.720 Semiconductor and Networking reporter at Bloomberg News. He joins the 0:15:19.760 --> 0:15:22.120 slide from the San Francisco studio and it's always great 0:15:22.160 --> 0:15:24.160 to have you on the program. Let's talk a little 0:15:24.160 --> 0:15:27.200 bit about Intel, because the company is on the brink 0:15:27.240 --> 0:15:29.520 of losing its status as the world's largest chipmaker. I 0:15:29.520 --> 0:15:32.280 thought that girl Singer came back to Intel to prevent 0:15:32.320 --> 0:15:35.280 this from happening. Yeah, no, that that's what he's been 0:15:35.280 --> 0:15:40.120 talking about. He's very, very focused on basically restoring Intel 0:15:40.120 --> 0:15:42.160 to its dominance. You remember when he left in two 0:15:42.240 --> 0:15:44.440 thousand and nine. Until it was at the peak of 0:15:44.480 --> 0:15:47.400 its powers, it was the largest chip maker by market value, 0:15:47.800 --> 0:15:51.000 the largest chip maker by revenue, the leader in terms 0:15:51.000 --> 0:15:55.280 of technology, the best plants, the best profit margins. You know, 0:15:55.360 --> 0:15:58.360 it really was a leader, and now it's not. It's 0:15:58.440 --> 0:16:01.000 arguably going to lose the last of those titles, which 0:16:01.040 --> 0:16:04.400 is the one by revenue in two thousand for two 0:16:04.400 --> 0:16:07.520 thousand and twenty one. And really everything that he said 0:16:07.520 --> 0:16:10.600 since he took over last year is look, I'm going 0:16:10.640 --> 0:16:12.640 to get Intel back. I'm going to put Intel back 0:16:12.680 --> 0:16:15.840 where it belongs. So hey, Ian, it's still going to 0:16:15.880 --> 0:16:18.600 be a dominant player Intel that is. But what's the 0:16:18.680 --> 0:16:24.120 significance of you know, Intel and the history of what 0:16:24.280 --> 0:16:26.440 it has done in terms of chipmaking and just really 0:16:26.440 --> 0:16:30.760 Silicon Valley. How is that just kind of remarkable in 0:16:30.880 --> 0:16:34.800 terms of this shift. Yeah, I mean Intel basically taught 0:16:35.080 --> 0:16:39.760 the industry that, you know, these are the economics that matter, 0:16:39.840 --> 0:16:42.840 Moore's law that everybody quotes good and more, the founder 0:16:42.880 --> 0:16:46.440 of Intel. It's about economics, It's about scale, it's about speed. 0:16:47.000 --> 0:16:49.640 Intel has always had the most capital to deploy. It's 0:16:49.680 --> 0:16:52.560 always moved faster. It's always made it difficult for the 0:16:52.600 --> 0:16:55.840 opposition to keep up. Now it's facing and we talked 0:16:55.840 --> 0:16:58.160 about some song in the story, but also t SMC 0:16:58.280 --> 0:17:01.560 in Taiwan. Companies that have as much access to capital, 0:17:01.600 --> 0:17:04.399 that are deploying as much capital, that are running just 0:17:04.640 --> 0:17:07.480 as fast as Intel, and they're enabling lots of other 0:17:07.520 --> 0:17:11.640 companies who they manufacture for to compete and to take 0:17:11.680 --> 0:17:15.119 market share away from Intel. Clearly that's not good for Intel. 0:17:15.640 --> 0:17:17.640 As you say, it's it's still a huge company. It's 0:17:17.640 --> 0:17:20.080 seventy billion dollars of revenue is not to be sniffed at. 0:17:20.440 --> 0:17:22.720 But that kind of lead that ability to say, hey, 0:17:22.840 --> 0:17:24.679 here we are. You need to come chase me, and 0:17:24.720 --> 0:17:27.520 this is the pain that is involved in chasing me. 0:17:27.920 --> 0:17:30.760 That's gone away. What do we always say about Intel's 0:17:30.760 --> 0:17:34.360 ability or packed Elsinger's ability to to pull this off. Yeah, 0:17:34.359 --> 0:17:37.320 I mean it's Initially when he came, you know, back 0:17:37.320 --> 0:17:40.280 to Intel last February, said all the right things, said, look, 0:17:40.320 --> 0:17:43.439 this isn't good enough, this is not Intel. These you know, 0:17:43.920 --> 0:17:46.440 mismanagement that's been going on while I've been away. I'm 0:17:46.480 --> 0:17:49.080 going to reverse that. Intel is back, you know, very much, 0:17:49.400 --> 0:17:52.040 beating his fist on his chest and using a lot 0:17:52.080 --> 0:17:56.160 of the throwbacks to Intel's prior leadership in terms of messaging. 0:17:56.200 --> 0:17:59.840 But then what became clear as Intel reported earnings averaged 0:18:00.119 --> 0:18:03.520 a seven percent decline on the day after every earnings 0:18:03.680 --> 0:18:08.879 was released because those earnings were showing margins narrowing and 0:18:08.920 --> 0:18:10.680 guess what, We're going to spend a lot of money 0:18:10.680 --> 0:18:13.080 to get us back. And so what what's really going 0:18:13.160 --> 0:18:17.200 on is saying the right things, making the right decisions arguably, 0:18:17.680 --> 0:18:20.560 but at the same time showing what the cost is 0:18:20.760 --> 0:18:22.800 and the amount of time it might take to get 0:18:22.840 --> 0:18:26.600 Intel back to leadership. Hey, in in a world where 0:18:26.760 --> 0:18:29.320 so much of the global economy is all about services, 0:18:29.320 --> 0:18:31.080 and certainly for the United States, we don't make a 0:18:31.160 --> 0:18:34.359 lot of stuff anymore. But the opportunity with a company 0:18:34.359 --> 0:18:37.240 like Intel where we actually make something, how important is 0:18:37.280 --> 0:18:39.320 that to the United States? And I think about you know, 0:18:39.400 --> 0:18:43.040 government intervention or government assistance here in making sure that 0:18:43.080 --> 0:18:48.359 we're still you know, making something in this global economy. Yeah, 0:18:48.400 --> 0:18:50.159 I mean if if you know, if you ought to 0:18:50.240 --> 0:18:52.439 view it from a nation centric point of view, and 0:18:52.520 --> 0:18:55.720 Gelsing are certainly one of those that does suit. So 0:18:56.359 --> 0:18:59.119 the chip industry is enormously important. It's a it's a 0:18:59.200 --> 0:19:04.840 fundamental piece of technology that underpins everything UM and the US. 0:19:05.200 --> 0:19:07.720 You know that the ability to manufacture that is really 0:19:07.720 --> 0:19:10.800 centered in only Intel and a bit in Micron. Everybody 0:19:10.800 --> 0:19:12.639 else kind of doesn't do it anymore. It's done by 0:19:12.720 --> 0:19:16.240 Sam song it's done by t SMC. Those are arguably 0:19:16.280 --> 0:19:18.600 the leaders right now. And what Girl Singer has argued, 0:19:18.640 --> 0:19:21.720 and there's you know, gained some traction with politicians who 0:19:21.760 --> 0:19:24.560 are listening to him, saying, look, if we don't have this, 0:19:24.720 --> 0:19:27.000 we we lose that ability. It's not something you can 0:19:27.040 --> 0:19:29.320 just get back, you know. It's it's based on knowledge, 0:19:29.359 --> 0:19:32.680 it's based on experience, and if that's going away, maybe 0:19:32.680 --> 0:19:35.119 it's gone for good. So he's really trying to do 0:19:35.160 --> 0:19:37.720 something about that. And you're not unprecedented, right, go back 0:19:37.720 --> 0:19:40.000 to is it the seventies right where the US you know, 0:19:40.600 --> 0:19:42.879 there was a consortium to really help develop the U 0:19:42.920 --> 0:19:47.240 S semiconductor sector. So it's not unprecedented, No, it's it's 0:19:47.280 --> 0:19:49.879 it's not unprecedented if you look at the numbers. You know, 0:19:49.920 --> 0:19:53.479 Intel became the world's largest chipmaker in ninety two. Up 0:19:53.560 --> 0:19:58.520 until nineteen ninety is you know, the US was responsible 0:19:58.600 --> 0:20:02.080 for sort of a third of production worldwide, Europe almost 0:20:02.080 --> 0:20:04.160 as much. You know, Asia was just a third. Now 0:20:04.240 --> 0:20:07.040 that's massively changed and that's a lot of money, and 0:20:07.440 --> 0:20:09.760 but it's it's nohow I think that people are much 0:20:09.760 --> 0:20:12.480 more concerned about that once you lose that. Know how, 0:20:12.520 --> 0:20:15.280 once you lose that experience, once that's gone, it's very 0:20:15.359 --> 0:20:17.120 hard to get back. And do you get the sense 0:20:17.119 --> 0:20:21.800 from your reporting that policymakers understand the importance of the 0:20:21.840 --> 0:20:24.080 chip industry to the United States? Do they understand what 0:20:24.600 --> 0:20:27.040 you know is does Intel and do my crime? Do 0:20:27.080 --> 0:20:29.040 they get what they're what they want from the US 0:20:29.119 --> 0:20:32.560 government in terms of actual help. I think there's two 0:20:32.560 --> 0:20:35.359 ways to look at this. You have an unprecedented piece 0:20:35.440 --> 0:20:38.399 of industrial policy, which is something that the US just 0:20:38.520 --> 0:20:41.800 doesn't do before Congress. Right now, the Chips Acts fifty 0:20:41.800 --> 0:20:44.439 two billion dollars sounds like a lot of money on 0:20:44.480 --> 0:20:47.480 the flip side hasn't been funded yet. It's still stalled, 0:20:47.520 --> 0:20:51.200 and that's causing frustration amongst the chip industries like Okay, 0:20:51.200 --> 0:20:53.000 so you finally woken up, you finally get it, but 0:20:53.240 --> 0:20:55.399 there's not enough money and be you haven't even funded that. 0:20:55.520 --> 0:20:58.120 So yes and no, I think is the answer to that? Hey, 0:20:58.200 --> 0:21:00.240 and I think about you know, investors who are into 0:21:00.280 --> 0:21:03.199 your conversation here and what you're saying, Um, I'm just 0:21:03.240 --> 0:21:05.320