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tv   Best of Bloomberg Technology  Bloomberg  December 30, 2021 11:00pm-11:30pm EST

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♪ >> i am emily chang. this is “bloomberg technology” >> that you take the tips and give them to your coach? >> no, i will stand up for canadian interests. >> coming up, the stories that shape the we can business around the world. >> thank you. >> it builds a conglomerate. >> they have it. you have to bring into reality. >> we can do anything. ♪ ♪
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♪ ♪ >> from the heart of where innovation, money, power and collide in silicon valley and beyond. this is “bloomberg technology” with emily chang. ♪ emily: i'm emily chang in san francisco and this is “bloomberg technology.” over the next 30 minutes, we will bring you some of the biggest interviews with chip makers as the chip shortage continues to disrupt the supply chains around the world. which industries are hurting the most and what's the outlook for
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2022? plus, our conversation with war the ceo of qualcomm, who is poised to take advantage of a wave of enough devices and the chip maker continues to challenge intel with major agreements with the biggest chip makers. you will also give us her take on the metaverse. first, global supply chains to the ends of 2021 having an impact well i don't understand technology, from the car industry to retail and it could last for months or even years to come. apple's tim cook talked about this on the latest earnings call, saying the shortage continues to squeeze apples operations and revenue. tim: for this quarter, we think that the primary cause of supply chain related shortages will be the chip shortage. it will affect, it is affecting
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pretty much most of our products currently. emily: meantime, the ceo of the chipmaker qualcomm joined us to talk about the company's latest earnings results. >> we are confident. we know what this company is capable of. we win based on technology. we have an incredible engineering center culture and we see demand for technology across a number of markets and i think it's largely played out as we expected and we're very happy with the performance of the company, very happy how we navigated the supply chains and more importantly, we have growth opportunities across a number of spaces. emily: how much of this is boom upside is better supply and how
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much is demand for qualcomm products? >> we talked at least two or three earnings calls ago when we said we saw the supply crisis, we took action early. we were prepared for it. we moved the source of our products. we've one of the few products, if not the only, that actual moved the source as the leading semiconductor, snapdragon processors. we've lunched multiple products as a result. we put capacity expansion in place. we made commitments to our suppliers, because we believe in the demand for qualcomm technology. as a result, we indicated that we will be material supply improvements coming at the end of the calendar year. that is reflected for q1.
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i, it is as we expected. we see improvement. it is balanced with demand. it's too short. we would ship more if we had more supply and as we enter 2022, around the first have the see the end of the supply year, we will see the end of the supply imbalance and demand is going to beat supply for the rest of the year. emily: at that point you're saying there's going to be an end of the supply and balance qualcomm only, and if so, how much does this drag on for other industries? others are saying this could go on for years. would you agree? >> that is correct. i have seen reports that companies probably will still be seeing shortages of supplies in 2023. that's not the case for us. you can find still pockets of areas that are still going to have more demand than supply but largely we'll see a lot more balance between supply and demand.
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emily: you mentioned android and high-end phones being in demand. i would love to get some color on what is happening in upmarket. would you say in china, for example, that android is growing faster than ios? >> what we see right now is an opportunity for qualcomm to grow much faster than the market. the single digit but we saw an -- mobile market, which is a mature market, still grows single digit but we saw an opportunity for premium devices happening with android for qualcomm, and customers with incredible high demand that is driving a lot of the growth and driving growth faster than the market itself. there are new form factors.
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i think the samsung -- the flip, higher speed to 5g and consumer s right now are becoming even more dependent on smart phones. they want higher capabilities. that is driving growth. in q1, which is traditionally a very high quarter when we sell modems to one of our customers. most of the growth in the quarter is coming in the android. they started to see the correlation being indexed towards the growth of premium and high-end phones. emily: we care about phones but everybody seems to be daring a lot about the metaverse right now. i'm curious, do you think the metaverse will be as big as mark zuckerberg seems to think it will be and what will qualcomm's role be in it? >> that's a great question. i love to answer this question, because we invested over a decade in fundamental technologies to enable virtual
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reality, augmented reality. we've been talking about xr for a long time. and the way i see it is the success of oculus, especially the quest two, significant scale, this business getting scale, that success drove facebook to think about even changing the company name and believing in the metaverse. and what is unique about this is we are the company enabling those devices. even if you have different versions of what the metaverse is going to look like across the different systems, what you're eating in common over those devices is qualcomm. there are over 50 devices and all of those have qualcomm snapdragon x.r. yes, they could be as big as phones, to answer your question. it could be as big as phones. i believe the connection of
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physical and digital space will be a reality. i have don't necessarily believe that you're going to spend your life on digital space but is it's going to be a daily thing of our normal lives to connect people and spaces to those connections. i would like to see all of us in addition to our smartphones carrying a pair of glasses. that market could be as big as the mobile market itself. we're very excited about it. emily: that was the qualcomm ceo. coming up, our interview with the ceo of amd. when does she think this shortage will mark: -- end and the metaverse will begin? they with us. this is bloomberg. ♪
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♪ emily: amd is looking into the future, teaming up with meta. here is my conversation with lisa su. >> we talked about a range of things. we talked about new products in terms of our new c.p.u. and g.p.u. products as well as the fact that 10 of the largest are
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using it. we are excited about it. i'm just going to say a little bit about our long-term focus on the data center and really wanting to make sure we are working and partnering with the most important companies in the world. emily: as you say, you are working with so many hyper scalars, including not just meta but microsoft and amazon and google. if a some color on what it has taken to win over these big customers and cut into market share of your competitors? >> is has been our focus for the last four, five years has been to build up the capabilities in the data center. we see the data center as one of the most exciting, if not the most exciting markets in semiconductors. there is a massive need for high-performance computing and each one of these large hyperscalers are doing such unique and innovative things. so being able to partner with the best means you learn how to make your road map even growing
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stronger going forward. emily: now i do want to talk about meta and the metaverse. a lot of people still don't know what the metaverse verse is. and just how big an opportunity do you think it is and the way you see your role in it. >> we are excited. if i take a step back and talk about high-performance computing , what i believe is there is this mega cycle around needing computing in so many different applications. you're talking about collaboration applications, research applications, analyzing massive amounts of data, and yes, the metaverse is the next thing on top of it. though, we believe it is a very large opportunity. if you look at high-performance computing, i think the metaverse is one of those areas that many people are talking about in terms of how do you bring together virtual reality and
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mixed reality together with all of the collaboration we're doing now. i think we have new expectations of what life is like post pandemicc. -- post-pandemic. it is an exciting vision. it's an opportunity where you need high-performance cpus, processors, gpu's, and artificial intelligence, machine learning, and visualization, and bringing all that together. we are unique in the sense that we really do look at the end use cases and working with our partners on making that happen. we view tremendous opportunity in high-performance computing going forward. emily: you do have new gpu's and cpus. i'm curious why we're seeing a broadening out when it is that focus and execution that has served amd so well. >> we are excited about the data center overall, emily. when you look at the expansion,
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it is really an area of secular growth, and is markets get larger, you see more specialization. or product family and general-purpose data center server processors have done extremely well and we will continue to be very aggressive on that roadmap, but the fact is there are these large-use cases around high-performance getting and ai, and those gpu's, and we can put them together in very efficient ways. we announced today that we're broadening our offerings to include a cloud focus processor line. versus let's call it a more general-purpose line. and again, this is just an expansion of computing allowing and enabling us to one, invest more and two, try to tailor and partner with what we think our customers and partners will need going forward. emily: how do you see your next
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design for data center chips cutting into market share for folks like intel and users of arm technology that are also going to break in? >> well, the key in this market frankly is execution. strong execution generation after generation. our current generation, the processors are fantastic. we are very, very excited about the adoption. we just announced our third earnings and we doubled our server processors as well as our data processor sales year on year. that tells a little bit about the momentum we have. this generation is the fourth generation. it is very strong and is built on top of the capabilities we have with milan. he added new i/o features. we expanded the cores and performance. what that means for customers is
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they can do more with the same footprint. it's all about total cost of ownership and how much they can do in a given footprint. it is another big step forward. we will use 5 nm technology. we will have a lot of new architectural features. we're excited about it. emily: with all of these new products, you seem to be ending for a bigger amd. -- seem to be planning for a bigger amd. can you get if supply to meet these ambitions? >> no question we are planning for a bigger amd. if we look at our trajectory, the last two years has been tremendous growth. we just guided 2021 to 65% year on year growth. when we first started, in january, we thought it was 37%. we have been able to at a lot of supply. there is strong demand for amd processors now. we're working very closely with all of our supply chain workers.
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and we feel very good about the trajectory of what we see going into 2022 and beyond and these are all long-term playoffs so -- partnerships, so it is really about how do we plan with our customers and supply chain partners, not just this quarter or next quarter, but for 2022, the 23 and beyond to make sure we meet this incredible demand that is out there. emily: the supply issues seem to be a continuing crisis for everyone else. i'm curious how long you think we'll see the ripple effect of this? is it something you think will reverberate across industries for years, potentially? >> yeah, i get asked that question a lot. you have asked that question a few times. i will tell you that i think the environment is such that there's a lot of capacity and investment being put online. that is positive. like i said, we saw more growth
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and more capability towards the end of 2021 than earlier in the year. i think the first half of 2022 will be tight, but we will see improvements as we go into the second half of 2022, and i feel confident that the semiconductor industry will respond to the challenge in every quarter it will get incrementally better going forward. emily: as you look into 2022, what are going to be the defining trends that will go private amd's growth in the next year? >> >> it's a very exciting world in high-performance computing. if we look at the fact that just little market size 18 months ago, we might have sized it as $80 billion or so. we now see it as $100 billion. there is a lot of need for those
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computing capability's. from an amd standpoint, i think our product portfolio is the best it's ever been and it's only going to get better. are excited. we have a lot of products we are launching in 2022. we will talk more about that in the coming months. our goal is to partner with the best of brands in the industry and make sure we are providing the best solutions, so i think it is a great growth environment for us. we will continue to work hard to satisfy all the demand out there, but i think we are very optimistic about 2022. emily: coming up, the chip shortage didn't deter global foundries from going public this year. we have a conversation with the ceo next. this is bloomberg. ♪
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♪ emily: despite global supply chain issues and a massive chip shortage, global foundry if the markets. ceo tom caulfield talked about the company's future and his outlook for when chip supply will finally be able to meet demand. >> over the next two years, 2021 and 2022, we're going to be deploying $6.5 billion in
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in capital the plumbing to advance our manufacturing capability. part of that, the funding for that comes from what we raise today. that will go into part of the funding for that expansion. >> is that expansion going to come soon enough to help solve the crisis? >> look, we started this expansion at the end of 2020. he started with spending $4 billion in singapore, $1 billion in the u.s., and $1.5 billion in dresden, germany. each quarter we were creating more capacity and being able to close that gap in some of the man we have. >> i'm wondering what the rationale was for a low float ipo, and what that will mean for you. are you going to be tapping the capital markets again at all in any fashion? >> this is not a stock for like a day trader. this is stock for long-term investors. this is a methodical way of
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letting some of the stock out into public markets to fund our growth. >> course, previously privately held. how much will that company, will that investment still be talked around with your growth story, how much will you be able to do? >> i think you're asking how much will they have after the end of the day today after the trading? i'm sorry. i didn't catch that question. >> indeed, how will you be working alongside them? they were previously privately held. how are you going to tell your growth story? >> for one, we're going to be funding our own growth going forward. they were owned about 85% of the company after today, and they will continue to be a big shareholder. they will move their position down over the next five years or so and continue to bring in
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strategic and like-minded investors like themselves, but our free-cash flow generation, after this burst of investment that are making right now, we will generate cash flow from operations to both grow our business and generate healthy free cash flow. >> we were speaking with the professor of harvard yesterday who focuses on supply chains and he said one of the problems was everyone once -- wants to invest in this new technology but there is still some demand for the older technology that is still needed. how are you thinking about investing in both of those and also maintaining that edge and that growth? >> let me simplify it. i think there are two segments. what we call single-digit animator, which is about compute-centric applications, gpu's, cpus, data center, and
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then we have the pervasive deployment of semiconductors. at is a $74 billion tam, and we are putting $52 billion in that department of semiconductors. i would argue that it has the most advanced technology when it comes to power management or our efficiency of our transistors. we need connectivity and power efficiency, and we are the leading edge provider. >> the stock was down today. it was a massive ipo, one of the biggest of the year. is there something about your story that you don't think investors are getting? >> not at all. you have a tremendous opportunity ahead. we know we need to execute. rational and consistent markets
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will reward us going forward. emily: that was the ceo of global foundries. coming up next, a one-on-one down with amd ceo in a special edition of bloomberg 1.0. you don't want to miss it. this is bloomberg. ♪
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>> these are your first word headlines. the u.s. and russia will hold three rounds of talks on european security next month. the plan was revealed after a phone call between joe biden and vladimir putin. the kremlin says putin was satisfied with the talk. the white house says biden asked russia to de-escalate tensions with ukraine. investors will get fresh insight into fed plans next week. the central bank starts


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