1
00:00:00,080 --> 00:00:03,160
Speaker 1: Joining us his Lad Savov, who is Bloombergs tank Get

2
00:00:02,880 --> 00:00:06,480
Speaker 1: did take a look at Samsung's quarterly profit report. Glad,

3
00:00:06,480 --> 00:00:09,520
Speaker 1: As you heard Doug mentioned, there's Samsung Electronics profit dropping.

4
00:00:10,840 --> 00:00:13,440
Speaker 1: This was much worse than expected. Yet the stock is

5
00:00:13,480 --> 00:00:17,520
Speaker 1: actually trading higher this morning. That's a curiosity, But I

6
00:00:17,560 --> 00:00:19,639
Speaker 1: guess the first question should be how bad is the

7
00:00:19,680 --> 00:00:24,320
Speaker 1: crisis in the memory chip market? Um It is bad.

8
00:00:24,360 --> 00:00:28,880
Speaker 1: I mean, forecast for Samsung and for any electronics company

9
00:00:28,920 --> 00:00:31,560
Speaker 1: were already very dour and very downbeat for so for

10
00:00:31,600 --> 00:00:33,519
Speaker 1: samsing to miss them in the fashion that it did

11
00:00:33,720 --> 00:00:37,160
Speaker 1: is really significant. It tells us that UM as as

12
00:00:37,240 --> 00:00:39,760
Speaker 1: much as estimates and outlooks have said that it will

13
00:00:39,800 --> 00:00:42,599
Speaker 1: be a down quarter for the holiday season, it has

14
00:00:42,640 --> 00:00:46,919
Speaker 1: been worse. When you think of bad weathers for consumer demand, especially,

15
00:00:46,960 --> 00:00:48,800
Speaker 1: you think of Apple and its iPhone, but you also

16
00:00:48,840 --> 00:00:51,879
Speaker 1: think of the widest smartphone industry, and Samsung supplies all

17
00:00:51,920 --> 00:00:54,320
Speaker 1: the components that go into that, the displays, the memory,

18
00:00:55,080 --> 00:00:57,240
Speaker 1: a lot of the other components and parts that go

19
00:00:57,280 --> 00:01:00,520
Speaker 1: into every smartphone, and China the world's big small for market.

20
00:01:00,600 --> 00:01:06,080
Speaker 1: For example, this week, figures from its national statistics trackers

21
00:01:06,520 --> 00:01:09,640
Speaker 1: indicated that they had thirty drop in smartphone sales, so

22
00:01:09,680 --> 00:01:12,199
Speaker 1: that again gives you an indication. So it is really bad.

23
00:01:12,400 --> 00:01:16,200
Speaker 1: Now why is the share prices shop as it is. Well,

24
00:01:16,240 --> 00:01:19,679
Speaker 1: because it might be bad enough for where Samthing would

25
00:01:19,680 --> 00:01:22,640
Speaker 1: actually have to take action. UM as the world's biggest

26
00:01:22,720 --> 00:01:25,880
Speaker 1: memory makers, Something is really cautious about cutting back production

27
00:01:26,240 --> 00:01:29,920
Speaker 1: so that it doesn't get accused of exercise monopoly power.

28
00:01:30,200 --> 00:01:33,600
Speaker 1: So its competitors such as SKA, Heinix and Micron have

29
00:01:33,720 --> 00:01:36,560
Speaker 1: done that. They've cutback capital expenditure of the cutback production.

30
00:01:37,160 --> 00:01:40,120
Speaker 1: UM Something is very wary about doing that. In October

31
00:01:40,240 --> 00:01:42,800
Speaker 1: it said it won't do it. But as bad as

32
00:01:42,800 --> 00:01:46,240
Speaker 1: this quoter has been, some people, markets and investors are

33
00:01:46,280 --> 00:01:50,120
Speaker 1: interpreting that is an indicator that would have to do it. Okay,

34
00:01:50,120 --> 00:01:52,800
Speaker 1: So if you're anticipating an announcement on a production that

35
00:01:52,920 --> 00:01:55,360
Speaker 1: cut back, when might that be and what sort of

36
00:01:55,360 --> 00:01:58,920
Speaker 1: scale might we expect? UM, Well, we can kind of

37
00:01:58,960 --> 00:02:02,560
Speaker 1: take our lead from again the competitors such as micro

38
00:02:02,680 --> 00:02:07,120
Speaker 1: in the US. There's also Kyosha in Japan. UM Kyosha

39
00:02:07,160 --> 00:02:09,680
Speaker 1: in the last few months of the year said that

40
00:02:09,760 --> 00:02:12,600
Speaker 1: by December, so by this point it would be effective.

41
00:02:12,880 --> 00:02:14,360
Speaker 1: They were kind of back production by as much as

42
00:02:14,400 --> 00:02:18,799
Speaker 1: thirty three zero UM. It's really significant. Micron has done

43
00:02:18,800 --> 00:02:21,520
Speaker 1: some kind backs to the scale of temper cent, but

44
00:02:21,600 --> 00:02:24,639
Speaker 1: also talked about having to do further, So we're definitely

45
00:02:24,639 --> 00:02:28,000
Speaker 1: talking double digits. UM. As far as industry wide goes,

46
00:02:28,320 --> 00:02:30,240
Speaker 1: as far as how how far Samsung is going to

47
00:02:30,280 --> 00:02:33,760
Speaker 1: go again, I would lean in favor of Samson being

48
00:02:33,960 --> 00:02:38,640
Speaker 1: very cautious about making very major cards. What the company

49
00:02:38,720 --> 00:02:42,560
Speaker 1: said is that it's customers are making inventory adjustments, so

50
00:02:42,960 --> 00:02:45,600
Speaker 1: they may also be an anticipation that orders and demand

51
00:02:45,639 --> 00:02:47,600
Speaker 1: will kind of pick up as the year goes along.

52
00:02:47,960 --> 00:02:50,959
Speaker 1: So have we moved completely away from the supply chain

53
00:02:51,040 --> 00:02:55,359
Speaker 1: crisis into the weak demand crisis period? Very much so,

54
00:02:55,600 --> 00:02:57,760
Speaker 1: very much so. UM. It used to be the case

55
00:02:58,160 --> 00:03:00,799
Speaker 1: during the pandemic that we have both supply crunch and

56
00:03:00,840 --> 00:03:05,600
Speaker 1: the logistics crunch. Hong Kong, where we are now shipments

57
00:03:05,600 --> 00:03:07,680
Speaker 1: in and out of it used to be really really expensive.

58
00:03:07,800 --> 00:03:10,280
Speaker 1: Now all of those container prices have all basically come

59
00:03:10,280 --> 00:03:12,520
Speaker 1: down to pre pandemic level, so the logistics runch has

60
00:03:12,560 --> 00:03:15,280
Speaker 1: been solved really good example Sony, they just did their

61
00:03:15,280 --> 00:03:19,200
Speaker 1: CES presentation yesterday and they talked about the PlayStation five.

62
00:03:19,240 --> 00:03:21,720
Speaker 1: They so thirty million units to date and they're saying

63
00:03:21,720 --> 00:03:24,040
Speaker 1: that it's going to be much more available they didn't have.

64
00:03:24,040 --> 00:03:26,680
Speaker 1: It has held than it ever has before. So the

65
00:03:26,680 --> 00:03:28,880
Speaker 1: supply crunch we can kind of say it's behind us now.

66
00:03:28,960 --> 00:03:30,919
Speaker 1: We do have more of a demand isship of companies

67
00:03:31,480 --> 00:03:35,080
Speaker 1: Lad Pleasure. Thank you, Glad shave Off Blumberg, chech Editor,