WEBVTT - Ian King on TI Earnings (Audio)

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<v Speaker 1>We've had a real downward push on the China stocks

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<v Speaker 1>this week, obviously after the wrap up of the Party Congress,

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<v Speaker 1>and it's a little difficult to read. Some of the

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<v Speaker 1>futures are pointing up, but they're not active contracts. And

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<v Speaker 1>then we had earnings after the bell that disappointed, and

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<v Speaker 1>that that's what we'll be focusing on here in the

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<v Speaker 1>next couple of minutes. Texas Instruments, for instance, declining more

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<v Speaker 1>than five percent in after hours after the company gave

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<v Speaker 1>a disappointing quarterly forecast. Joining US now is Ian King

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<v Speaker 1>Bloomberg new US Semiconductor reporter. So Texas Instruments such an

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<v Speaker 1>important company, it's a bell weather, it's in so many

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<v Speaker 1>different areas. I guess this would send a a little

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<v Speaker 1>bit of disquiet throughout the industry here. Yeah, no, that's

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<v Speaker 1>absolutely right. I mean, if you're looking at what's happened

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<v Speaker 1>in the semi extent or in the largely been companies

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<v Speaker 1>that heavily depend upon PCs and computers and smartphones that

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<v Speaker 1>have been the ones saying, you know that demand is

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<v Speaker 1>really falling quickly. As you point to out, t I

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<v Speaker 1>is way broader than that, you know, big dependence on

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<v Speaker 1>Industrial and they said that, you know, orders are being

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<v Speaker 1>canceled and the orders are declining, and that has you know,

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<v Speaker 1>much broader implications. So nothing that different, Or did they

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<v Speaker 1>say anything different to some of the other companies that

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<v Speaker 1>or is it that they're going exactly thing kind of verbued? Yeah,

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<v Speaker 1>I mean that's a very good question, is I mean,

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<v Speaker 1>in typical t I fashion, they didn't give an awful

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<v Speaker 1>lot away and refuse a lot of direct questions, and

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<v Speaker 1>I you know, I spoke to the CFO afterwards and

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<v Speaker 1>he said, look, anybody who tells you that this is

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<v Speaker 1>recession fears or tells you that this is just a

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<v Speaker 1>steady kind of stickle of the semi conducause where we

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<v Speaker 1>have what are called these inventory corrections, just doesn't know

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<v Speaker 1>what they're talking about, because it's impossible to know. He

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<v Speaker 1>you know, he said, if it's just an inventory correction,

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<v Speaker 1>which is fairly typical, you know, every sort of six

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<v Speaker 1>or so quarters of upside we get a couple of

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<v Speaker 1>down quarters because people have ordered too much. Then that's

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<v Speaker 1>one set of circumstance which is frankly on the milder

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<v Speaker 1>end of the spectrum. If you know, you've got a

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<v Speaker 1>layer on this other element of people, you know, businesses

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<v Speaker 1>clumping down on their budgets and cutting back on capex

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<v Speaker 1>and investment. And that's where more studious obviously has you know,

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<v Speaker 1>much deeper potential harm to what's going to happen to

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<v Speaker 1>the industry. It seems like one of the areas that

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<v Speaker 1>actually had some strength was automotive. But you know, that's

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<v Speaker 1>a kind of an interesting situation there because you still

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<v Speaker 1>have demand that so much stronger than supply, and all

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<v Speaker 1>the while interest rates are heading up, and you would

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<v Speaker 1>think that at some point even the automotive industry will

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<v Speaker 1>take a little bit of a hit. Yeah, And that

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<v Speaker 1>was exactly the conversation that that you know t I

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<v Speaker 1>hide with analysts on the conference caller. You know, they

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<v Speaker 1>were asked again, how, you know, can we keep going

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<v Speaker 1>up until the right and they said absolutely not, No,

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<v Speaker 1>that can't be the case. However, there are still shortages,

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<v Speaker 1>there are still things that we can't get to our

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<v Speaker 1>car makers as as quickly as they would like or

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<v Speaker 1>or in the quantity that we were like. So that's

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<v Speaker 1>kind of a good sign. At the same time, they said, look,

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<v Speaker 1>you have to understand that auto is different. There's never

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<v Speaker 1>been an expansion in the number of chips a car

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<v Speaker 1>that we've seen. There's never been an expansion in the

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<v Speaker 1>technology that's going into vehicles that we're seeing right now.

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<v Speaker 1>So that's you know, naturally kind of distorting things and

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<v Speaker 1>meaning that that kind of demand is going to be

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<v Speaker 1>much more persistent. Okay, so good to talk with you again,

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<v Speaker 1>I and thanks very much, Ian King. Bloomberg News US

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<v Speaker 1>Semiconductor report looking at Texas instruments here