# Chip Stocks Post Biggest Advance, Silicon Motion Earnings

An episode of [Bloomberg Daybreak: Asia Edition](https://invisiblenetwork.ai/podcast/1663863437), 31 Jul 2026, 26 min.

Audio: https://podtrac.com/pts/redirect.mp3/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/58e85be7-dbb5-4043-afed-af80014dc0b3/3bc882c4-f1b8-46ce-91d4-b498003273ae/audio.mp3?utm_source=Podcast&in_playlist=27143354-63aa-4ac5-965d-af80014dc0d3

Business and finance news from the Asia-Pacific. Chip Stocks on Wall Street posted its biggest gain in more than a year. Amazon.com Inc. rose 9.5% after cloud-computing revenue accelerated for a fifth straight quarter, while Microsoft Corp. surged 16% after earnings, adding roughly $450 billion to its value, the most by any stock in a single day. Apple Inc. dropped more than 6% in extended trading as supply shortages hurt its sales forecast. We speak to Daniel Newman, CEO of The Futurum Group. Plus - US-listed shares of Silicon Motion surged in New York trading, after the semiconductor device company reported second-quarter results that beat expectations and it gave a revenue forecast that is much stronger than expected. Bloomberg's Yvonne Man and David Ingles spoke to Jason Tsai, CFO of Silicon Motion. See omnystudio.com/listener for privacy information.

## Transcript

[0:00] Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News.
[0:11] Speaker 2: Welcome to the Daybreak Asia podcast. I'm Doug Prisoner. In
[0:14] Speaker 2: the US session, we had a powerful rally in semiconductor stocks.
[0:18] Speaker 2: This really reflected the view that the recent selling that
[0:20] Speaker 2: we have seen in this group was simply overdone. The
[0:23] Speaker 2: Philadelphia Semiconductor Index jump by more than eight percent, and
[0:27] Speaker 2: on top of that, other areas in the AI trade
[0:30] Speaker 2: rallied as well. Take for example, Microsoft up fifteen percent
[0:34] Speaker 2: on strong cloud growth, and Oracle shares were hire by
[0:38] Speaker 2: eight percent. That was after the company expanded its Gemini
[0:41] Speaker 2: AI partnership with Google and some more tech earnings. After
[0:45] Speaker 2: the closing bell, we heard from Amazon and Apple, and
[0:48] Speaker 2: we're going to take a closer look now at the
[0:51] Speaker 2: market action with Daniel Newman. He is the CEO of
[0:54] Speaker 2: Futurum Group. Daniel joining from here in New York City.
[0:58] Speaker 2: Thank you so much for being here. Give me your
[1:00] Speaker 2: sense of what you've seen play out over the last
[1:02] Speaker 2: twenty four hours.
[1:05] Speaker 3: Well, Doug, I think we were seeing a few different
[1:07] Speaker 3: things at the same time. Structurally, we believe that the
[1:10] Speaker 3: AI trade data build out is very much intact. We've
[1:13] Speaker 3: had a very good set of earnings through this cycle
[1:16] Speaker 3: so far.
[1:17] Speaker 4: More very strong.
[1:18] Speaker 3: Earnings delivered this week from the leaders in AI, the
[1:22] Speaker 3: leading hyperscalers as well as.
[1:24] Speaker 4: The semiconductor companies.
[1:25] Speaker 3: But at the same time, you saw a market go
[1:27] Speaker 3: from you know, all time highs or near all time
[1:30] Speaker 3: highs to year lows in less than thirty days. We
[1:34] Speaker 3: saw the costp in Korea almost on the daily, you know,
[1:39] Speaker 3: setting off you know, setting off trip wires and having
[1:43] Speaker 3: to stop the market on a day to day. And
[1:45] Speaker 3: then of course here in the US, you know, we
[1:47] Speaker 3: had that hard fall and people were kind of wondering
[1:50] Speaker 3: what's going on, and obviously, you know, there was a
[1:53] Speaker 3: lot of de leveraging going on. There was there's been
[1:56] Speaker 3: a lot of leverage into the market. Of course in
[1:58] Speaker 3: Korea that was a thing, but it was also it's
[2:01] Speaker 3: also a very significant thing here in the United States.
[2:05] Speaker 3: I think what we saw yesterday was a lot of
[2:08] Speaker 3: the capitulation that the market wanted to see, and then
[2:12] Speaker 3: you got some short covering and you now saw a huge,
[2:15] Speaker 3: powerful rally that was based on getting some good results
[2:20] Speaker 3: from Microsoft, getting some good results from today from Amazon,
[2:26] Speaker 3: seeing these companies that are committing these big dollars in Capex,
[2:30] Speaker 3: feeling confident that they are spending wisely and building an.
[2:34] Speaker 4: ROI strategy for their AI. I think gave the market
[2:36] Speaker 4: a chance to rally back higher.
[2:38] Speaker 2: So Dan, I'm sure you're aware that we had some
[2:40] Speaker 2: news today on the hedge fund called Situational Awareness. The
[2:44] Speaker 2: fund sold the bulk of its public equity holdings to Citadel,
[2:48] Speaker 2: and I think there's maybe a little bit of irony
[2:50] Speaker 2: here in terms of the firm's name. Situational Awareness had
[2:54] Speaker 2: been investing in companies tied to the boom in AI.
[2:57] Speaker 2: So Dan, I'm wondering whether you think that we're wanting
[3:00] Speaker 2: to get more stories like this, which is to say,
[3:03] Speaker 2: hedge funds being caught maybe leverage as a factor and
[3:07] Speaker 2: then the significant pain to their positions that is inflicted
[3:11] Speaker 2: as a result.
[3:13] Speaker 3: Well, I think we've gotten to the point where we
[3:16] Speaker 3: risk too much leverage in the market everywhere. You know,
[3:22] Speaker 3: this is what's happened with these you know, three and
[3:25] Speaker 3: four times leveraged ETFs on memory, this is what happened
[3:28] Speaker 3: to Ashton Brenner. He was, you know, heavily levered to
[3:32] Speaker 3: make the kind of profits that he was making. And
[3:35] Speaker 3: there's always opportunists in the market. In this case it
[3:39] Speaker 3: was Citadel, and Citadel was able to basically buy situational
[3:44] Speaker 3: awarenesses positions at the bottom and immediately get the kind
[3:48] Speaker 3: of rally we got today. But I think with the
[3:50] Speaker 3: market between the Fed news this week, the concern about
[3:54] Speaker 3: potential interest rate hikes, the uncertainty about inflation, the macro overall,
[4:01] Speaker 3: the China competition for AI with the United States, I
[4:05] Speaker 3: think there is a lot to be said about the
[4:09] Speaker 3: market as a whole and whether it has anything to
[4:11] Speaker 3: do with how resilient or robust the AI trade is
[4:15] Speaker 3: what we believe though, Doug is there's somewhere between ten
[4:18] Speaker 3: and twelve trillion dollars of cumulative capex that's going to
[4:21] Speaker 3: be spent on AI between now and twenty thirty and
[4:25] Speaker 3: companies like Nvidia and Micron which were sold heavily, especially
[4:30] Speaker 3: Micron the memory names in this last thirty days, these
[4:34] Speaker 3: companies are trading at extremely cheap valuations based on their
[4:38] Speaker 3: long term agreements and the long term profit expectations that
[4:41] Speaker 3: they have. So I think this shakeout was probably healthy
[4:44] Speaker 3: to de leverage some of what was going on in
[4:46] Speaker 3: the market, but I think it also provides a good
[4:49] Speaker 3: environment for some of these stocks that have gone down,
[4:52] Speaker 3: it feels like for a month straight to start going
[4:55] Speaker 3: back up.
[4:55] Speaker 2: So I hear your optimism when it comes to the
[4:57] Speaker 2: build out of AI focused on you know, the chip
[5:01] Speaker 2: sector and the hardware manufacturers. But I'm curious about the hyperscalers.
[5:05] Speaker 2: Whether you expect the continued growth in data center activity
[5:10] Speaker 2: to be concentrated in these big names, whether it's an Amazon,
[5:13] Speaker 2: and I want to get your take on the results
[5:16] Speaker 2: that we heard from Amazon after the bell names like
[5:18] Speaker 2: meta names, like alphabet names like Microsoftware. We're going to
[5:23] Speaker 2: see continued concentration among the hyperscalers or will we gradually
[5:28] Speaker 2: see an expansion in data center build out to go
[5:31] Speaker 2: beyond these big companies.
[5:34] Speaker 4: Yeah, I think.
[5:35] Speaker 3: You're going to see some augmentation to these bigger companies.
[5:40] Speaker 3: I think these hyperscalers will remain the largest. They had
[5:43] Speaker 3: such a market advantage coming out. We've seen new entrants,
[5:47] Speaker 3: popular names in the market like Nebus, Core, weave Iron
[5:52] Speaker 3: that are all building an adding capacity as part of
[5:54] Speaker 3: this AI build out in Boom. But the hyperscalers have
[5:58] Speaker 3: so much operational life, they have so much size and scale,
[6:02] Speaker 3: they have the customers in many cases, like in Google's case,
[6:05] Speaker 3: they have a full stack of infrastructure. Amazon and Microsoft
[6:09] Speaker 3: are following suit. Microsoft has the benefit of the largest
[6:12] Speaker 3: enterprise distribution on the planet and Aws have the benefit
[6:16] Speaker 3: of being the largest cloud coming into this AI pivot.
[6:20] Speaker 4: I think over the next handful of.
[6:22] Speaker 3: Years, what we know for sure is we are constrained,
[6:25] Speaker 3: and so as long as we are constrained, we will
[6:28] Speaker 3: see opportunistic you know, new companies entering the market to
[6:33] Speaker 3: compete into these spaces, and you will see these companies
[6:37] Speaker 3: actually partnering with the likes of Google, Amazon, Microsoft, Oracle.
[6:43] Speaker 3: So I think for the next handful of years it's
[6:47] Speaker 3: more of a situation of and than or. But I
[6:50] Speaker 3: think that you know, the reason the AI trade as
[6:53] Speaker 3: a whole will continue to have concern is not so
[6:56] Speaker 3: much about to your point, about the hardware and the
[6:59] Speaker 3: capex and build out these companies. Amazon validated and reaffirmed
[7:03] Speaker 3: today that they actually raised their CAPEX guidance to two
[7:07] Speaker 3: hundred and twenty billion and still can't build enough compute.
[7:11] Speaker 4: Google raised its CAPEX.
[7:13] Speaker 3: Number significantly a week ago after having eighty two percent
[7:16] Speaker 3: growth in its cloud business. These companies are going to
[7:19] Speaker 3: partner they're going to expand they're going to get access
[7:21] Speaker 3: to every bit of compute they can. Because what we
[7:23] Speaker 3: found out is models are changing very quickly. And we
[7:26] Speaker 3: saw the Kimi incident a year ago, we had the
[7:28] Speaker 3: Deep Seek incident. We're finding models are not the moat
[7:31] Speaker 3: in itself. The moat is compute and having enough compute
[7:36] Speaker 3: to support this boom.
[7:38] Speaker 2: To that point, Deep Seek is building an AI data
[7:41] Speaker 2: center in Inner Mongolia. I mean, do we have to
[7:43] Speaker 2: be concerned about I hear what you're saying in terms
[7:46] Speaker 2: of where the LM kind of part of the story
[7:49] Speaker 2: fits in and the Deep Seek moment or the Kimmy
[7:52] Speaker 2: K three moment in China. But I'm wondering whether or
[7:55] Speaker 2: not we have to be cognizant of the fact that
[7:58] Speaker 2: China is going to be pretty aggressive in building out
[8:01] Speaker 2: the compute infrastructure, they building out data centers, and whether
[8:05] Speaker 2: or not they could do it at a lower cost,
[8:07] Speaker 2: and what level of risk that represents two American firms.
[8:12] Speaker 4: Look, this is the most important.
[8:13] Speaker 3: It's an existential battle for global economic leadership winning AI.
[8:18] Speaker 3: This is what people have to understand when they, you know,
[8:22] Speaker 3: are having this debate about the US and China. They're
[8:25] Speaker 3: having debate about whether the US provides its leading edge
[8:28] Speaker 3: technology from an Nvidia or you know, whether we allow
[8:33] Speaker 3: ASML to ship their most advanced machines. China absolutely is
[8:39] Speaker 3: a formula competitor, and of course they play by different rules.
[8:42] Speaker 3: We've seen that with Kimmy and others, where there's you know,
[8:44] Speaker 3: suspicion that Kimi is trained largely by using advanced techniques
[8:49] Speaker 3: to distill and do more than just distill.
[8:54] Speaker 4: Clawed anthropic.
[8:55] Speaker 3: And so this is going to be the front in
[8:58] Speaker 3: which we weighed the next multiple decades of economic leadership war.
[9:04] Speaker 4: And so yes, absolutely, it's important that we are concerned.
[9:07] Speaker 3: It's important that we build the right rules, that we
[9:09] Speaker 3: provide US companies the opportunity to do business in China
[9:13] Speaker 3: where it makes sense. But what we don't do is
[9:16] Speaker 3: arm the largest competitor for economic leadership with all of
[9:20] Speaker 3: our innovation, all of our tools, without understanding the consequences.
[9:24] Speaker 2: I want to ask about Apple, and then I have
[9:26] Speaker 2: one other question as it relates to breaking news on anthropic.
[9:30] Speaker 2: What did you make of Apple's results after the bill?
[9:35] Speaker 4: Apple did fine?
[9:36] Speaker 3: I mean, look the way Tim Cook was talking about
[9:40] Speaker 3: input costs.
[9:41] Speaker 4: His desire for Chinese memory to be able to enable them.
[9:46] Speaker 4: You would have thought they were going to miss their profits.
[9:49] Speaker 3: I mean again, Apples and Operations, you know, is an
[9:52] Speaker 3: operating machine.
[9:53] Speaker 4: They tend to make their numbers. They very rarely miss
[9:58] Speaker 4: the markets selling it.
[9:59] Speaker 3: Because Apple's been a safe haven for the last month,
[10:02] Speaker 3: it's run to all time highs. There's still some questions
[10:05] Speaker 3: around the company's AI strategy. You know, iPhone sales look decent.
[10:09] Speaker 3: MAC sales were good, but you have to remember a
[10:11] Speaker 3: lot of the revenues are based on pricing right now,
[10:16] Speaker 3: not just the actual unit sales. And then of course,
[10:21] Speaker 3: you know China was down, so you always have to
[10:23] Speaker 3: look at that number. That's an important one for Apple.
[10:25] Speaker 3: But they did make their EPs number. It's notable that
[10:28] Speaker 3: they made it off the tariff income that they had returned.
[10:32] Speaker 3: Otherwise they would have been in the midpoint of at
[10:34] Speaker 3: the midpoint of their guidance last quarter as opposed to
[10:37] Speaker 3: beating it.
[10:38] Speaker 4: It was a good quarter as a tidy quarter.
[10:39] Speaker 3: Apple is the safe haven of the mag seven right now,
[10:44] Speaker 3: and investors have been backing it. I'm wondering right now
[10:46] Speaker 3: that with this rotation, if this is it wasn't so
[10:49] Speaker 3: much Apple's bad print. It was more dollars are rotating
[10:53] Speaker 3: back into this this AI boom, with the Microsoft rally,
[10:56] Speaker 3: with the Amazon rally, and video has been oversold, so
[11:00] Speaker 3: you might start to see some of the error come
[11:01] Speaker 3: out of that Apple balloon.
[11:03] Speaker 4: You know.
[11:03] Speaker 2: As I'm listening to and I'm thinking about the rate
[11:06] Speaker 2: of change that we have seen in artificial intelligence, I'm
[11:09] Speaker 2: wondering about the next generation of handheld devices that is
[11:13] Speaker 2: going to be custom made for this AI system that
[11:17] Speaker 2: we're describing. And I want to get your view on
[11:21] Speaker 2: Anthropic because tonight in the US, we learned that a
[11:25] Speaker 2: couple of the company's AI models breached three different organizations
[11:30] Speaker 2: in cybersecurity testing. Something went wrong, it went awry, And
[11:34] Speaker 2: this is only a little more than a week after
[11:37] Speaker 2: OpenAI disclosed a similar incident. And I'm wondering whether you
[11:41] Speaker 2: are concerned about the rate of change, particularly on THELM side,
[11:47] Speaker 2: the model side, that things are moving a little too
[11:49] Speaker 2: quickly for your comfort level, and that we need to
[11:53] Speaker 2: try to find a way to modulate this, or are
[11:56] Speaker 2: you okay? And maybe you're of the belief that the
[11:59] Speaker 2: industry can regulate itself and get this stuff under control.
[12:01] Speaker 2: What's your feeling on that.
[12:03] Speaker 3: Well as a footnote on your comment about the future
[12:07] Speaker 3: of devices, that is Apple's existential risk is if a
[12:10] Speaker 3: new device or platform was to disrupt Apple's position. Now,
[12:17] Speaker 3: going back to the Anthropic and open as situation, this
[12:20] Speaker 3: is really interesting. You know, you have two companies that
[12:22] Speaker 3: have been sort of screaming from the rooftop that AI
[12:25] Speaker 3: needs more regulation. We've had this kind of back and
[12:30] Speaker 3: forth about can the frontier models.
[12:32] Speaker 4: And these closed source win.
[12:34] Speaker 3: We've had companies like Nvidia coming out loudly to support
[12:39] Speaker 3: more open source globally, and you know, you have these
[12:45] Speaker 3: jail break sort of rogue agents coming out and part
[12:50] Speaker 3: of me almost wonders, like, how does this happen? How
[12:54] Speaker 3: do two different trillion dollar companies have agents doing things
[12:58] Speaker 3: that they're not monitoring them, they're not watching them. It's
[13:02] Speaker 3: wild to me that this took days on the open
[13:04] Speaker 3: AI one. We don't know what's going to happen with
[13:06] Speaker 3: the Anthropic When you have with the open AI one,
[13:08] Speaker 3: these went on for days before they were even discovered.
[13:12] Speaker 3: So we have technology and a rate of change that's
[13:15] Speaker 3: you know, that's exponential right now, and the problem is
[13:19] Speaker 3: is policymakers and regulation can never keep up, so expecting
[13:25] Speaker 3: those things to happen and get ahead. It has never
[13:28] Speaker 3: happened in history. And now we have the most important
[13:32] Speaker 3: arms race between the East and the West, especially US
[13:35] Speaker 3: and China, where we're going to say let's slow down.
[13:38] Speaker 3: I just don't see that happening. I do think we
[13:40] Speaker 3: need more framework. I do think we need policies that
[13:43] Speaker 3: quickly have models evaluated before they're sent out in masks.
[13:46] Speaker 4: And I do think some of that's being worked on.
[13:49] Speaker 3: I think that these systems and some of these rogue events,
[13:53] Speaker 3: they will continue to happen, and we do need to,
[13:57] Speaker 3: you know, pay better attention. But I put a lot
[13:59] Speaker 3: of the blame this on anthropic and on Open AI.
[14:02] Speaker 3: They're building new products, they're shipping them out. They should
[14:04] Speaker 3: be watching that.
[14:05] Speaker 2: Dan, we'll leave it there, thank you so very much.
[14:07] Speaker 2: He is Daniel Newman, the CEO of Futureum Group, joining
[14:10] Speaker 2: from New York City here on the Daybreak Asia podcast.
[14:21] Speaker 2: Welcome back to the Daybreak Asia Podcast. I'm Doug Krisner
[14:24] Speaker 2: in New York. Trading US listed chairs in Silicon Motion
[14:28] Speaker 2: picked up twenty four percent as Taiwan based semiconductor device
[14:32] Speaker 2: maker reported second quarter results above expectations. Now, Silicon Motion
[14:37] Speaker 2: also gave a revenue forecast much stronger than expected. The
[14:41] Speaker 2: CFO of Silicon Motion is Jason Sai. He spoke with
[14:45] Speaker 2: Bloomberg TV host David Englase and ivon Man.
[14:48] Speaker 5: Jason, it's great to have you back on earnings and
[14:51] Speaker 5: post earnings, certainly as what the market was liking. Here
[14:54] Speaker 5: was the guidance for the third quarter, and of course
[14:57] Speaker 5: these blowout earnings from your side of things of the
[14:59] Speaker 5: second what does it tell you about where you can
[15:02] Speaker 5: still gain market share and really how sustainable this momentum
[15:05] Speaker 5: is now.
[15:08] Speaker 6: Yeah, thanks for having me on the show again. I
[15:10] Speaker 6: really appreciate it. Look, I think if you take a
[15:12] Speaker 6: look at our core business over the course of the
[15:15] Speaker 6: last many years, you know, we've been very consumer centric
[15:18] Speaker 6: PCs and smartphones, and obviously we've seen all the data
[15:21] Speaker 6: points around the weakness in these markets driven by high
[15:24] Speaker 6: cost of memory and storage.
[15:26] Speaker 7: We've been gaining a lot of share here.
[15:27] Speaker 6: We've been laying the foundation for a lot of share
[15:29] Speaker 6: game with the flash makers, with the module makers, and
[15:32] Speaker 6: so we've far exceeded any you know, the end market
[15:36] Speaker 6: results because of the share game, because we're upgrading to
[15:40] Speaker 6: higher end products and so that business, the core business
[15:43] Speaker 6: continues to execute.
[15:44] Speaker 7: Extremely well in the difficult environment.
[15:46] Speaker 6: I think what investors have really liked is diversifying our business.
[15:52] Speaker 6: Our automotive fare eye solutions have done extremely well.
[15:55] Speaker 7: That's scaling incredibly well.
[15:57] Speaker 6: Our enterprise boot drive business is scaling incredibly well, and
[16:01] Speaker 6: that's going that's becoming a bigger and bigger portion of
[16:04] Speaker 6: our business. And then you know, our enterprise controller business
[16:07] Speaker 6: is you know, it was zero a year ago and
[16:10] Speaker 6: you know, exiting this year, we expect that to be
[16:12] Speaker 6: five to ten percent of our business.
[16:14] Speaker 7: And that started to scale in the second quarter.
[16:16] Speaker 6: So we're really seeing a really nice diversification of our
[16:20] Speaker 6: business playing out. We're confident that we can grow our
[16:23] Speaker 6: business in excess of one hundred percent this year. So
[16:26] Speaker 6: from you know, eight hundred plus million last year to
[16:29] Speaker 6: you know, one hundred percent of that. There's more than
[16:31] Speaker 6: one hundred percent of that this year. Gross margins are improving,
[16:34] Speaker 6: operating leverage is coming in along with it. So overall,
[16:38] Speaker 6: driven by strengthen the core business, expanding opportunities, improving profitability,
[16:44] Speaker 6: and responsible expense management. You know, I think we're we're
[16:48] Speaker 6: really excited by it, not just what the rest of
[16:50] Speaker 6: this year holds, but certainly going into twenty seven and
[16:52] Speaker 6: twenty eight.
[16:54] Speaker 8: I mean, things look fantastic in all fronts. And I
[16:58] Speaker 8: think the fact that you, you know, you out performed
[17:00] Speaker 8: your guidance, I think my first question there then would
[17:03] Speaker 8: be you've given guidance out. I mean, how visible is it.
[17:09] Speaker 8: I mean, it's great to have a number out there,
[17:11] Speaker 8: but I just want to get a sense really of
[17:13] Speaker 8: underlying demand where it seems companies are giving out guidance
[17:18] Speaker 8: and just outperforming what they give out.
[17:24] Speaker 6: You know, for us, there was a lot of things
[17:26] Speaker 6: that happened Interracorder, right, you know, demand spikes more than expected,
[17:30] Speaker 6: Our customers are seeing better sell through, our customers are
[17:35] Speaker 6: upgrading the components that they're ordering.
[17:37] Speaker 7: All these things are happening Intracorder.
[17:39] Speaker 6: You know, we've got inventory that can support that type
[17:42] Speaker 6: of dynamic movement. But you know, as some of these
[17:44] Speaker 6: new businesses scale, new customers scale, sometimes early on they're
[17:49] Speaker 6: not necessarily as confident on kind of the scale of
[17:52] Speaker 6: that ramp, and as that ramp happens, they become more
[17:55] Speaker 6: confident on what demand looks like and they upsize the orders,
[18:01] Speaker 6: and so yes, I think, you know, we always try
[18:04] Speaker 6: to give a balance view on what guidance us a
[18:07] Speaker 6: realistic view on kind of what we think we can do.
[18:09] Speaker 6: But certainly, you know, the hope is that you know,
[18:13] Speaker 6: the customers are seeing better demand, and I think we're
[18:16] Speaker 6: certainly seeing that through the share gains and through the
[18:20] Speaker 6: advancements into new markets, new businesses and new customers.
[18:24] Speaker 7: One of the things that we really are croud of.
[18:26] Speaker 6: Is a lot of these new businesses, the visibility and
[18:29] Speaker 6: the durability is great. These are products, our solutions are
[18:34] Speaker 6: going into products that are you know, in cars and
[18:36] Speaker 6: base stations and data centers that are part of devices
[18:42] Speaker 6: that are tens of thousands, hundreds of thousands, millions of dollars,
[18:44] Speaker 6: and so you know, that type of visibility, that type
[18:48] Speaker 6: of design when has better visibility, it's it's higher barriers
[18:53] Speaker 6: to entry, gives us longer term understanding as to kind
[18:57] Speaker 6: of how we need to source, what we need to source,
[19:00] Speaker 6: what inventory we need to have. So it really helps
[19:02] Speaker 6: drive that long term visibility for us and gives us
[19:05] Speaker 6: confidence on you not just second quarter or third quarter
[19:08] Speaker 6: doing well, but next two years, three years doing well again.
[19:14] Speaker 8: Don't get me wrong, that's a fantastic problem to have.
[19:18] Speaker 8: What are your conversations like now with your suppliers. I
[19:22] Speaker 8: just want to understand how you're managing your future capacity
[19:26] Speaker 8: as most demand comes online.
[19:31] Speaker 6: Yeah, you know, I think that's well known that TSMC
[19:35] Speaker 6: and a lot of the substrate folks are tied on capacity.
[19:39] Speaker 7: Substrate availability is tight.
[19:42] Speaker 6: We're fortunate that we're one of the top customers of
[19:45] Speaker 6: TSMC and we've been a great They've been a great
[19:47] Speaker 6: partner of ours.
[19:48] Speaker 7: We've been a great.
[19:48] Speaker 6: Partner of them for twenty plus years, so you know,
[19:52] Speaker 6: they've always been very helpful for us in being able
[19:55] Speaker 6: to expand our capacity, expand our allocation, expand are way
[20:00] Speaker 6: for availability in real time, and so working with them
[20:04] Speaker 6: closely to ensure that we've got a good understanding as
[20:07] Speaker 6: to kind of what the base case looks like versus
[20:09] Speaker 6: kind of what upside looks like, and being having that
[20:11] Speaker 6: ability to flex with them. Substrates, you know, as you
[20:14] Speaker 6: guys all know, has been tight. Our customers have been
[20:18] Speaker 6: willing to work with us to find alternative substrates that
[20:21] Speaker 6: help ease some of those supply constraints. We've got you know,
[20:25] Speaker 6: a tier, you know, just best in class operations team
[20:29] Speaker 6: that have been on this since the very early days
[20:31] Speaker 6: and so have been ahead of making sure that as
[20:35] Speaker 6: substrate availability becomes tighter and tighter, we've got alternatives that
[20:38] Speaker 6: we can scale with our customers. So we're confident that
[20:43] Speaker 6: even as the business more than doubles this year, we've
[20:46] Speaker 6: got the capacity to support that.
[20:50] Speaker 5: You talked about these these ramp ups that you had
[20:53] Speaker 5: obviously with Nvidio. I think you have one coming up
[20:56] Speaker 5: with Google as well. Can you tell us a bit
[20:59] Speaker 5: more about me seems like you're seeing a lot of
[21:01] Speaker 5: growth on that front here. Should I be worried about
[21:05] Speaker 5: concentration risk in any event that you know, we start
[21:09] Speaker 5: to see volumes start to fade a little bit, or
[21:12] Speaker 5: that you know, this ramp up is actually going to
[21:14] Speaker 5: be delayed as anyway.
[21:18] Speaker 6: Yeah, So a lot of these programs that you're referring to,
[21:20] Speaker 6: you know, coming in later this year, going into twenty seven,
[21:23] Speaker 6: driving growth twenty seven and twenty eighth as well. But
[21:27] Speaker 6: these are you know, certainly some examples that folks have
[21:30] Speaker 6: talked about, but behind the scenes, it's a much broader
[21:33] Speaker 6: range of customers and markets solutions that we're supporting, right,
[21:39] Speaker 6: you know, we've got a teleco company for one of
[21:42] Speaker 6: the largest teleco equipment companies out there work using our
[21:46] Speaker 6: boot drives for their base stations.
[21:48] Speaker 7: That'll start scaling the back half of the year.
[21:50] Speaker 6: We've got virtually every automaker around the world, whether it's
[21:55] Speaker 6: you know, traditional internal combustion engine, whether it's battery electric,
[21:58] Speaker 6: whether it's autonomous, what have you. Right, we have virtually
[22:02] Speaker 6: every automaker using our solutions as well.
[22:04] Speaker 7: So, you know, point being is that a.
[22:06] Speaker 6: Lot of this growing business is scaling across a very
[22:10] Speaker 6: broad range of customers. Certainly people like to talk about
[22:13] Speaker 6: the largest GPU company or the largest search company, and
[22:15] Speaker 6: those are you know, big names to be associated with,
[22:17] Speaker 6: and we're certainly very proud of the wins we have there.
[22:21] Speaker 6: But if you just kind of double click a little
[22:22] Speaker 6: bit beyond that, you know, the breadth and scale of
[22:26] Speaker 6: other customers is pretty fantastic as well. So it's a
[22:30] Speaker 6: really diversified business, diversified end markets, a diversified customer base
[22:34] Speaker 6: that we have, and so we're not we're not concerned
[22:38] Speaker 6: that there's going to be an outsized contribution from one customer,
[22:42] Speaker 6: one product or one vertical that's going to have issues
[22:47] Speaker 6: down the road, and that's you know, for our business.
[22:49] Speaker 6: Having the diversification helps us kind of work through the
[22:53] Speaker 6: psychicality of certain end markets in any given period, right,
[22:56] Speaker 6: Having that wide range of end markets helps smooth that out.
[23:01] Speaker 5: Yeah, and certainly, I mean, as you say, you're shifting
[23:03] Speaker 5: beyond just the consumer driven set of things, but I
[23:05] Speaker 5: guess it is still a headwind for so like emotion
[23:08] Speaker 5: is of course the potential slow down what we're seeing
[23:12] Speaker 5: in the PC market, smarophone market. I think during the
[23:14] Speaker 5: analyst call, you guys were asked about the China outlook there.
[23:18] Speaker 5: What is the demand picture looking like to you on
[23:21] Speaker 5: that front here and what do you think is going
[23:23] Speaker 5: to be the outlook way forward?
[23:26] Speaker 6: Yeah, we're certainly seeing that, right, I mean, I think
[23:28] Speaker 6: certainly on especially on the low end in China, it's
[23:31] Speaker 6: been an incredibly difficult market there.
[23:33] Speaker 7: We don't really do a whole lot on the low end.
[23:36] Speaker 6: We're more mainstream to premium side, so and that's where
[23:40] Speaker 6: a lot of the hands at OEMs are focusing more
[23:42] Speaker 6: of their attention on a low end handset. The cost
[23:45] Speaker 6: of memory, the cost of DRAM and nand far exceeds
[23:49] Speaker 6: kind of the affordability of that product.
[23:52] Speaker 7: So where you're seeing the biggest hit in unit volume
[23:56] Speaker 7: and demand is on the low end.
[23:58] Speaker 6: Mainstream premium ones are still holding up a little bit better,
[24:01] Speaker 6: and that's where we see most of our business, and
[24:05] Speaker 6: certainly the share games that we've talked about here is
[24:08] Speaker 6: doing wonders.
[24:09] Speaker 7: We're going to be, you.
[24:10] Speaker 6: Know, almost doubling our smartphone related business this year, consumer
[24:14] Speaker 6: and IoT to related business this year. Our client SSDs
[24:18] Speaker 6: against similar dynamic low end is where you're seeing a
[24:21] Speaker 6: lot more of the pressure. We're not so much at
[24:23] Speaker 6: the low end. We're in the mainstream to higher end.
[24:26] Speaker 6: We're you know, first half this year we've grown forty
[24:29] Speaker 6: percent year on year, and certainly that's in the face
[24:32] Speaker 6: of a very challenging PC market. And so overall, I
[24:36] Speaker 6: think the story that we've been talking about, the foundation
[24:38] Speaker 6: that we've been building in share gains has really been
[24:41] Speaker 6: continue to pay dividends. We're seeing flashmakers being less interested
[24:45] Speaker 6: in the space, more interested in outsourcing, more interested in
[24:49] Speaker 6: working with us, and that's helping drive a lot of opportunities.
[24:53] Speaker 2: That was Jason Si, CFO at Silicon Motion, speaking with
[24:57] Speaker 2: Bloomberg TV host David and Glace and of on Men
[25:00] Speaker 2: bringing you their conversation here on the Daybreak Asia Podcast.
[25:06] Speaker 2: Thanks for listening to today's episode of the Bloomberg Daybreak
[25:09] Speaker 2: Asia Edition podcast. Each weekday, we look at the story
[25:13] Speaker 2: shaping markets, finance, and geopolitics in the Asia Pacific. You
[25:17] Speaker 2: can find us on Apple, Spotify, the Bloomberg Podcast YouTube channel,
[25:21] Speaker 2: or anywhere else you listen. Join us again tomorrow for
[25:25] Speaker 2: insight on the market moves from Hong Kong to Singapore
[25:28] Speaker 2: and Australia. I'm Doug Chrisner, and this is Bloomberg

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