ANNOUNCER: FROM THE HEART OF WHERE INNOVATION, MONEY, AND POWER COLLIDE IN SILICON VALLEY AND BEYOND, THIS IS BLOOMBERG "TECHNOLOGY WITH CAROLINE HYDE AND ED LUDLOW. ED: I AM ED LUDLOW. GOOD MORNING FROM SAN FRANCISCO. CAROLINE HYDE IS OFF TODAY. THIS IS BLOOMBERG "TECHNOLOGY." COMING UP, FULL COVERAGE OF TECH EARNINGS AS AMAZON AND APPLE PREPARED TO REPORT. WE WILL BREAK DOWN A BIG BET ON THE INDIAN RETAILER.
SHARES OF SOPHIA SURGING TODAY, AS THE ONLINE BANK RAISES REVENUE GUIDANCE. WE WILL LOOK AT THIS WITH CEO ANTHONY NOTO. A VERY HEAVY TECH INDEX. BUT WE ARE TREADING WATER TO START THE WEEK.
A LOT OF EVENTS WITH THIS, SOME GOOD ECONOMIC DATA. WE ARE PUTTING ASIDE EARNINGS RECESSION FEARS AND INCREASINGLY PUTTING IN PLACE EXPECTATIONS FOR A SOFTER LANDING. THAT IS A QUESTION FOR DENNY FISH. WE ARE AT 3.94%. BITCOIN TRADING AT THIS NARROW RANGE, AT ABOUT $29,000 PER TOKEN. WE TALKED ABOUT THAT BIG EARNINGS THEME.
THESE ARE THE BIG NAMES WE ARE WATCHING IN THIS PROGRAM BLOOMBERG "TECHNOLOGY." SO IF I UP 18% NOW. THE BIGGEST JUMP IN AN INTRADAY BASIS. WE SPEAK WITH CEO ANTHONY NOTO HALFWAY THROUGH THE SHOW. ALSO, A MAKER OF SILICON CARBIDE. WE WILL DIG INTO WHAT THAT MEANS FOR THE EV SPACE. TWEET ME AT ED LUDLOW. WE WANT TO KNOW WHAT YOUR
QUESTIONS ARE. AMAZON AND APPLE REPORTING ON THURSDAY. WE GET TO THAT DISCUSSION IN A FORWARD-LOOKING SENSE WITH JANUS HENDERSON IN ONE SECOND. WITH THIS WEEK'S SURVEY, WE ASKED INVESTORS IF THEY INTEND TO INCREASE OR DECREASE EXPOSURE TO TECH STOCKS OVER THE NEXT SIX MONTHS. THAT IS THE QUESTION. THE DATA SHOWS MANY BETTING THAT THE GREAT TECH RALLY OF 2023 HAS STAYING POWER, BUT SOME APPEAR SKEPTICAL THAT THE ARTIFICIAL INTELLIGENCE AIR OUT WILL LIVE UP TO THE HYPE.
THESE ARE THE NUMBERS. WE WILL BREAK THOSE DOWN VERY SHORTLY. >> THREE YEARS TO FIVE YEARS IS THE WAY YOU BUY THESE. THIS IS NOT GOING TO BE A SHORT-TERM STORY.
>>'S IS RELATIVE TO THE REST OF THE MARKET. I THINK IT IS CROWDED AND WILL UNRAVEL. >> I LOOK AT THIS AS A 1995 MOMENT, THE BIGGEST TRANSFER MAKE AND WE HAVE SEEN IN TECH AND 35 YEARS. >> THERE IS MASSIVE GROWTH OPPORTUNITY AHEAD OF THEM.
THE AI CREATORS AND BENEFICIARIES SEEM TO BE CENTERED IN LARGE-CAP TECH, AND IT'S WE HAVE TO GO TO TAKE ADVANTAGE OF IT. >> THAT'S WHY THIS IS GOING TO WEED OUT. IT IS THE START OF A NEW BULL MARKET. ED: JOINING US NOW, DENNY FISH. THE SAME QUESTION TO YOU,
ALTHOUGH YOUR FOCUS IS PRETTY CLEAR. DO YOU INCREASE EXPOSURE TO CERTAIN PARTS OF THE MARKET RIGHT NOW OR PULLBACK? LYDIA: MY JOB --DENNY: MY JOB RUNNING THIS IS TO ALWAYS INVEST IN TECHNOLOGY. WE MOVE CAPITAL AROUND BASED ON WHERE WE FEEL THE BEST OPPORTUNITIES ARE.
AND IF WE JUST LOOK OVER THE LAST WEEK AND THINK ABOUT THE EARNINGS WE HAVE SEEN AND SOME OF THE DATA POINTS THAT ARE GIVING US DIRECTION GOING FORWARD, LARGE TECH NAMES, THINGS HAVE BEEN PRETTY GOOD SO FAR. DIGITAL ADVERTISING NAMES, META AND ALPHABET, THINGS ARE STARTING TO GET BETTER. THE SEMICONDUCTOR COMPLEX, FOR THE MOST PART, HAS BEEN A LITTLE BETTER THAN EXPECTATIONS AS WE GET THROUGH THE TROUGH OF THE CYCLE AND THE PARTS OF THAT SECTOR. GENERALLY SPEAKING, SOFTWARE HAS BEEN PRETTY GOOD, TOO. ALL THINGS CONSIDERED, THINGS OF BEEN PRETTY GOOD. ED: LET'S GO BACK TO LAST WEEK.
IS THERE A COMMON THREAD BETWEEN ALL OF THE NAMES THAT GIVE YOU A MACRO VIEW OF THE TECH SECTOR RIGHT NOW? DENNY: YES, IT REALLY DOES. THERE ARE CERTAIN PARTS GETTING BETTER, LIKE DIGITAL ADVERTISING, WHICH IS GOOD. IN SEMICONDUCTORS, IT HAS BEEN ALL ABOUT THE AREAS THAT ARE REALLY, REALLY GOOD. THEY REPORTED THIS MORNING. EXPOSURE TO AUTO HAS BEEN GREAT. SILICON CARBIDE IS ONE OF THE MOST SIGNIFICANT THEMES WITHIN SEMIS RIGHT NOW.
IF YOU JUST LISTEN TO THE TRANSCRIPTS AND EARNINGS CALLS FROM MICROSOFT, FROM META, FROM ALPHABET, FROM OTHERS WITHIN THE SEMI ECOSYSTEM, IT ACCELERATED COMPUTING, FPGAS. THEY ARE SUCKING ALL THE AIR OUT OF THE ROOM RIGHT NOW. THAT IS A REALLY IMPORTANT THEME. SOMETHING THAT IS MAYBE NOT AS WELL NOTICED BY THE AVERAGE INVESTOR WITHIN THE SEMICONDUCTOR SUPPLY CHAIN, BECAUSE OF THIS GROWTH IN ACCELERATED COMPUTING, IT IS CREATING THE NEED FOR DIFFERENT TYPES OF PACKAGING AS WELL. SO, THERE'S A LOT OF INTERESTING WAYS TO PLAY THAT.
AND ALSO, TALKING ABOUT SILICON CARBIDE, FOR EXAMPLE, MATERIAL SCIENCES HAVING A BIGGER AND BIGGER IMPACT WITHIN THE SEMICONDUCTOR SUPPLY CHAIN AS WELL. THOSE ARE REALLY, REALLY INTERESTING AREAS BECAUSE THEY ENABLE EV'S, THE GRID, ANYTHING THAT IS POWER ENABLED. ED: GOING BACK TO THAT IDEA ON PACKAGING A LITTLE BIT. WE HAD A CEO WHERE IT IS AN
AREA OF THEIR BUSINESS THAT THEY DON'T TALK ABOUT MUCH, OR PERHAPS WE DID NOT ASK. BUT WE'RE TRY TO FIND OUT WHAT HAPPENS WHEN WE GET PAST THE HEIGHT OF NVIDIA AND THE 100S. WHAT IS LEFT FOR THE REST TO COME IN? YOU SEEM TO SUGGEST THERE ARE OTHER OPPORTUNITIES. DENNY: ABSOLUTELY. WE CAN GO BACK DOWN TO THE MOST BASIC LEVEL. IF YOU THINK ABOUT INTEL, THEY ARE RAMPING UP A FOUNDRY BUSINESS.
YOU CANNOT PRODUCE GPU'S WITHOUT FOUNDRY. AND AT THE SAME TIME, THE FOUNDRY CANNOT EXIST WITHOUT SEMICONDUCTOR CAPITAL EQUIPMENT. THAT IS REALLY, REALLY IMPORTANT. THESE ARE ALL DERIVATIVE PLACE.
-- PLAYS. YOU CANNOT DESIGN CPUS WITHOUT ELECTRONIC DESIGN SOFTWARE. THESE ARE ALL REALLY, REALLY GOOD SUB INDUSTRIES WITHIN THIS BIGGER, BROADER THEME, IN WAYS THAT SHOULD HAVE MULTIYEAR TAILWINDS ASSOCIATED WITH IT. THE QUESTION ALWAYS COMES BACK TO, WHAT PERCENTAGE OF THE BUSINESS IS ACTUALLY BEING DRIVEN BY AI OR OTHER THINGS? THE REAL DIRECT PLACE, LIKE THE NVIDIA'S OF THE WORLD, BUT OTHER PLAYERS IN THE ECOSYSTEM THAT BENEFIT AS WELL. ED:
WE HAD THE DIRECTOR OF PORTFOLIO MANAGEMENT ON THE SHOW LAST WEEK. THE REASON HE COUNTS REFERENCES TO AI IN EARNINGS TRANSCRIPTS IS BECAUSE IT SHOWS IN TENSION, EVIDENCE OF A WILLINGNESS TO JUMP INTO THAT FIELD. D PUT ANY VALUE IN THAT DATA SET, SIMPLY TALKING ABOUT AI? DENNY: EVERYBODY IS TALKING ABOUT IT RIGHT NOW. YOU HAVE TO DISTILL FACT FROM FICTION. A REALLY GREAT CONFERENCE CALL LAST WEEK WAS THE META CONFERENCE CALL.
IT WAS NOT JUST TALKING ABOUT AI, BUT VERY, VERY SPECIFIC WAYS IN WHICH THE COMPANY IS LEVERAGING AI TO ACTUALLY IMPROVE ITS ECONOMICS. IT IS EVERYTHING FROM INCREASING THE EFFECTIVENESS OF AN AD TARGETING TO RETURN ON AD SPEND GOING BACK TO THEIR CUSTOMERS, BEING ABLE TO AUTO GENERATE CONTENT, WHICH IS REALLY, REALLY INTERESTING. IT IS THE FUNDAMENTAL PRINCIPLE OF GENERATIVE AI.
ONE OF THE THINGS THEY HAVE WANTED TO DO FOR YEARS IS MONETIZED THEIR MESSAGING PLATFORMS MORE EFFECTIVELY. NOW, WITH AI AND EMPOWERING THAT, IT SHOULD ENABLE THEM TO ACTUALLY MONETIZE WHATSAPP, FACEBOOK MESSENGER, INSTAGRAM MESSAGING IN A MUCH MORE MEANINGFUL WAY THAN THEY HAVE HISTORICALLY. ED: THE META CFO WAS ON THE PROGRAM TALKING ABOUT HOW AI PLAYED A ROLE IN THAT.
THIS WEEK, AMAZON AND APPLE, TWO LITERAL MEGA CAPS, WHAT ARE YOU EXPECTING OR HOPING TO HEAR FROM THEM? DENNY: THAT'S A GOOD QUESTION, EXPECT AND HOPE. I THINK IN AMAZON'S CASE, THERE IS A WIDER RANGE OF OUTCOMES. THE HOPE WOULD BE THAT WE SEE A REALLY NICE INFLECTION IN NORTH AMERICAN RETAIL PROFITABILITY. THAT HAS BEEN THE PART OF THE BUSINESS THAT HAS HAD A TOUGHER TIME BECAUSE OF OVERBUILT AND OVER HIRING DURING THE PANDEMIC. THEY HAD TO DIGEST INVESTMENTS.
WE ARE STARTING TO GET THROUGH THAT. SEEING PROGRESS THERE WILL BE IMPORTANT. WE HAD PRIME DAY, WHICH WAS CLEARLY THE BEST PRIME DAY EVER. WE SHOULD HEAR MORE ABOUT THAT. AMAZON SERVICES IS A BIG COMPONENT OF THE COMPANY. WE EXPECTED TO CONTINUE TO DECELERATE, BUT STABLE IN MUCH THE WAY MICROSOFT AND GOOGLE WAS WITH THEIR CLOUD COMPUTING PLATFORMS. THE HOPE THEY ARE WOULD BE THAT WE ARE GETTING
THROUGH THE OPTIMIZATIONS THAT ALL OF THE CLOUD PROVIDERS HAVE TALKED ABOUT OVER THE LAST COUPLE OF QUARTERS, GIVEN SOME OF THE MACRO HEADWINDS. LAST BUT NOT LEAST, ADVERTISING. IT IS A VERY SIGNIFICANT PART OF THE PROFITABILITY EQUATION FOR AMAZON. WHAT WE HAVE SEEN OUT OF META, OUT OF ALPHABET, AT ROKU LATE LAST WEEK, THE ADVERTISING MARKET SEEMS TO BE GETTING BETTER. THAT SHOULD BODE WELL FOR AMAZON AS WELL.
YOU MIX ALL THAT UP, HOPING FOR A BETTER THAN EXPECTED REPORT WITH KEY IMPROVEMENTS IN THOSE THREE AREAS. ED: OF ALL THE NAMES YOU HOLD IN YOUR FUNDS, WHICH, FROM A TECHNOLOGY PERSPECTIVE, IMPRESS YOU MOST? WHAT IS THE INNOVATOR NOW, BIG OR SMALL? DENNY: THAT'S A GOOD QUESTION. I WOULD SAY THAT IF WE THINK ABOUT THE TWO COMPANIES THAT HAVE BEEN ON THEIR FRONT FOOT MORE THAN ANY OTHERS AS IT RELATES TO AI, CLEARLY MICROSOFT. IT WAS VERY PRESCIENT OF THEM TO DO INVESTMENT INTO OPEN-AI WELL BEFORE PEOPLE WERE EVEN TALKING ABOUT IT. CHAT-GPT WAS THE MOMENT IN NOVEMBER, BUT THEY WERE LAYING THE TRACKS FOR HOW THEY ARE POSITIONED OVER THE LAST SEVERAL YEARS.
CLEARLY, NVIDIA, IT IS THE ONLY REAL 100% PURE PLAY ON AI BECAUSE THEY DOMINATE THE MARKET FOR GPU'S. AND SO THEY DOMINATE ACCELERATE COMPUTING. THAT IS WHERE ALL THE CAPITAL IS GOING.
IF YOU ACTUALLY DISSECT CAP X, WHICH WE HAVE HEARD IS GROWING ACROSS ALL THE MAJOR PLATFORMS, AND LOOK AT THE PERCENTAGE THAT IS GOING TO ACCELERATE WITH COMPUTING VERSUS WHAT'S GOING TO BUILDING, IT IS A MATERIAL INCREASE FOR A COMPANY LIKE NVIDIA. THIS WOULD BE TWO. ED: LYDIA RAINFORTH --DENNY FISH , SUCH A BROAD KNOWLEDGE BASE. THANK YOU VERY MUCH FOR YOUR TIME. WE WILL TELL YOU MORE ON THE INDIAN DEAL THAT WILL GIVE THE BIG BOX RETAILER A 77% STAKE IN THE COMPANY.
WE ARE ALSO WATCHING SHARES OF ADOBE. MORGAN STAN LEE -- MORGAN STANLEY ANALYSTS PUSHING TO STREET HIGH. THEY NOTE THAT GREATER CLARITY ON AI ENABLED PRODUCTS AND THE MONETIZATION ROADMAP INCREASES THEIR CONFIDENCE THAT WE ARE ACCELERATING THE CREATIVE CLOUD ORGANIC GROWTH ENERGY. THAT PRICE TARGET MEANS SHARES NEED TO JUMP AROUND 25% MORE IN THE NEXT 12 MONTHS. HE SEES THAT HAPPENING.
THIS IS BLOOMBERG "TECHNOLOGY." ED: WALMART IS TAKING ITS CLAIM IN INDIA'S RETAIL MARKET, PAYING 1.4 BILLION DOLLARS TO TIGER GLOBAL MANAGEMENT FOR ITS REMAINING STAKE IN FLIP CART. THEY SAY THEY ALSO AGREED TO SELL THE 1% STAKE IN FLIP CART TO WALMART.
JOINING US IS BRANDON CASE, WHO COVERS WALMART, AND HANNAH PALMER WHO COVERS ALL THINGS. WHY THE BOOST IN FLIP CART? >> I THINK THIS SHOWS THE COMPANY'S WILLINGNESS TO DEEPEN ITS VET ON INDIA. IT HAS BEEN PARING INTERNATIONAL PORTFOLIO IN THE PAST FEW YEARS. IT HAS GOTTEN INTO THE U.K., BRAZIL, JAPAN. THE JEWELS IN THE CROWN ARE BIG, IMPORTANT BUSINESSES IN MEXICO AND CANADA, AN IMPORTANT BUSINESS IN CHINA, AND INDIA, WHERE FLIP CART IS ONE OF THE BIGGEST E-COMMERCE COMPANIES IN THE COUNTRY. ED: TIGER, WHY DID THEY SELL? >> THEY HAVE BEEN KEEN ON INDIAN INVESTMENTS.
THEY GOT IN, AND 2009, AT A $40 MILLION INVESTIGATION. IN THIS ENVIRONMENT, WHEN THERE ARE SO FEW IPOS, IT HELPS THEM PROVIDE DISTRIBUTIONS TO THEIR INVESTORS AND PROVIDE A RETURN TO THEM. THEY GOT A GOOD PRICE FOR THEIR EXIT, GIVEN HOW EARLY THEY GOT IN. ED: HERE ON BLOOMBERG "TECHNOLOGY," I THINK WE FOCUS ON INDIA A LOT.
THERE ARE A LOT OF PEOPLE THERE. I THINK IT'S A BIG OPPORTUNITY. WHAT HAVE THEY SET ABOUT OPPORTUNITY? BRENDAN: THEY FIRST WENT INTO FLIPKART IN 2018. THEY BOUGHT A MAJORITY STAKE FOR $16 BILLION.
THAT IS WALMART'S BIGGEST EVER ACQUISITION. NOW, THEY HAVE FLIPKART GOING TOE TO TOE WITH AMAZON AND OTHER COMPANIES IN INDIA. THE OTHER PART OF IT IS PHONE PAY, WHICH IS A DIGITAL PAYMENT COMPANY, WHICH USED TO BE PART OF FLIPKART. THE TWO SEPARATED IN DECEMBER. OMAR HAS HIGH HOPES FOR BOTH COMPANIES. THEY HAVE TALKED ABOUT POTENTIAL FOR A PUBLIC OFFERING. TIMING REMAINS MURKY, BUT IT COULD MOVE THE NEEDLE FOR THE PARENT COMPANY AS A WHOLE. ED:
YOU OUTLINED THE REASONS WHY THEY GOT OUT. BRENDAN: THERE HAD -- HEMA: THERE HAD BEEN EARLY INVESTMENT IN ASIAN COUNTRIES. THEY BUILT UP A STEAK OF $1 MILLION OVER THE YEARS. IN THE PAST FIVE YEARS OR SIX YEARS, THEY SOLD SOME OF THOSE STAKES. THIS IS THE FINAL EXIT FOR THEM. WHAT THIS MEANS FOR INVESTORS
IN THE FUND IS THAT INVESTORS ARE GETTING A $3.5 BILLION RETURN. THAT IS THE GAIN ON THAT BASICALLY $1 BILLION INVESTMENT. IT IS A PRETTY GOOD EXIT. KEEP IN MIND THAT THE VALUATION OF FLIPKART, IT WAS A VALUED LOWER THAN THE LAST ROUND, BUT NOT TERRIBLY LOW. THE LAST ROUND WAS ABOUT THREE
$8 BILLION. THE VALUATION OF FLIPKART WAS ABOUT $35 BILLION. ED: IT IS AN INTERESTING PLAY ON THE E-COMMERCE SITE. IT FITS IN WITH THE WALMART WE KNOW. YOU AND I HAVE SPENT A BIT A BIT OF ASH HAVE SPENT A BIT OF TIME OUT IN ARKANSAS.
WHERE DOES FLIPKART FIT IN WITHIN THE BROADER TECH STRATEGY FOR WALMART? BRENDAN: CERTAINLY, FLIPKART AND PHONE PAY ARE A BIG PIECE OF THE PUZZLE. WALMART HAS LEARNED A LOT FROM THOSE COMPANIES AND WILL PROBABLY CONTINUE TO LEARN MORE FROM THOSE COMPANIES. IF YOU SHIFT THE FOCUS BACK TO THE U.S., YOU'RE STILL TALKING ABOUT A BIG FOCUS ON E-COMMERCE. IN TERMS OF INVESTMENT, THE WAY THAT IS MANIFESTING ITSELF RIGHT NOW IS IN A RETHINKING OVERHAUL OF A LOT OF DISTRIBUTION CENTERS AND A LOT OF STORES.
BASICALLY, BOOSTING THE BET ON AUTOMATION, ROBOTICS, AND TRYING TO JUST BECOME MORE EFFICIENT, IN TERMS OF FULFILLING ONLINE DEMAND THEY HAVE. ED: ALRIGHT. TEAM REPORTING, THANK YOU TO YOU BOTH. IN OTHER RETAIL NEWS, AMAZON SAYS IT IS PUSHING TO MAKE SPEEDY DELIVERY A PRIORITY. ONLINE RETAIL GIANT PLANS TO DOUBLE THE NUMBER OF U.S. SAME-DAY DELIVERY CENTERS IN "THE COMING YEARS," THOUGH IT DID NOT DISCLOSE HOW MANY SAME-DAY WAREHOUSES IT HAS. MOST SAME-DAY FACILITIES ARE SMALLER AND CLOSER TO MAJOR POPULATION CENTERS ACROSS THE U.S. AMAZONS COURT OF THE RESULTS,
AS WE HAVE BEEN SAYING, COME OUT THIS THURSDAY. COMING UP, PRESIDENT BIDEN PLANNING TO SIGN AN EXECUTIVE ORDER TO LIMIT U.S. TECH INVESTMENTS IN CHINA. WHAT THIS MEANS FOR AI AND CHIPS, NEXT. THIS IS BLOOMBERG. ♪ ED: TIME FOR TALKING TECH. FIRST UP, DISNEY AND NBC ARE PAYING LOBBYISTS TO WATCH OVER LEGISLATION THAT WOULD BAR THEM FROM USING AI AS A STATE TAX BREAK. THE NEW YORK BILL COMES AS BOTH COMPANIES BATTLE HOLLYWOOD WRITER AND ACTOR STRIKES OVER THE FUTURE USE OF AI DISPLACING WORKERS IN FILM AND TV PRODUCTIONS.
PLUS, CURVE FINANCE, A NATIVE TOKEN AND ONE OF CRYPTO'S TOP DECENTRALIZED EXCHANGES, TUMBLED AFTER THE PLATFORM SAID IT HAD BEEN HACKED. A GLITCH IN PROGRAMMING LANGUAGE , VIPER, WHICH IS WIDELY USED IN APPS, RANGED IN ESTIMATES -- IN LOSSES ESTIMATED FROM $20 MILLION TO $40 MILLION. U.S. OFFICIALS ARE GROWING INCREASINGLY CONCERNED BY CHINA'S RUSH INTO THE PRODUCTION OF LEGACY CHIPS. PRESIDENT BIDEN LIMITED CONTROLS OVER CHINA'S ABILITY TO SECURE THESE ADVANCED CHIPS TO POWER AI MODELS. BEIJING HAS RESPOND BY POURING
BILLIONS OF DOLLARS INTO FACTORIES FOR THE SO-CALLED LEGACY CHIPS THAT ARE NOT BANNED AND ARE STILL ESSENTIAL TO THE LOCAL ECONOMY. LET'S STICK WITH THE STORY AND BRING IN KAILEY LEINZ OUT OF D.C. THE CONCERN IS CLEAR, THE QUESTION IS, WHAT ARE THEY GOING TO DO ABOUT IT? KAILEY: IT'S A TOUGH QUESTION. THEY WANTED TO READ SOME LIGHT LIGHTLY WITH CHINA. THEY WANT TO BE TARGETED, NARROW, SPECIFIC WITH THE RESTRICTIONS THEY PUT INTO PLACE, SO AS NOT TO ESCALATE IN DRAMATIC FASHION THIS TIT FOR TAT THAT IS GOING ON BETWEEN THE LARGEST ECONOMIES.
HENCE WHY THE BIDEN ADMINISTRATION FOCUSED ON IS ADVANCED CHIP MAKING. THAT LEAVES LEGACY CHIPS AS ESSENTIALLY FAIR GAME FOR CHINA. TYPICALLY, THOSE 28 NANOMETERS AND WIDER, THAT IS WHAT THEY ARE RAMPING UP.
YES, THAT TECHNOLOGY IS MORE THAN A DECADE OLD, BUT IT IS STILL VERY CRITICAL, IN TERMS OF THINGS LIKE SMARTPHONES AND EV'S. IT IS THE SHORTAGE OF LEGACY CHIPS THAT WERE SUCH A PROBLEM IN THE PANDEMIC ERA. THE CHIP SHORTAGES WIPED BILLIONS OF DOLLARS OFF OF COMPANY ABILITY TO SERVE -- TO SUPPLY THINGS. IF CHINA CAN DOMINATE THAT MARKET, FLOOD IT WITH THESE LEGACY CHIPS, EVEN WESTERN COMPANIES ARE GOING TO BE DEPENDENT ON CHINA FOR THEM. THAT GIVES BEIJING MORE
COVERAGE. THE U.S. IS LOOKING INTO HOW THEY CAN REIGN IN CHINA, BUT THEY DON'T WANT TO CAST TOO WIDE A NET FOR FEAR OF THE RETALIATION? RING FROM AGING. ED:
THAT'S EXACTLY MY POINT. YOU ARE IN D.C. THIS IS A WORRYING STORY WHEN THE MAIN ACTORS IN D.C. ARE TRYING TO GET ONTO FRIENDLIER FOOTING WITH CHINA. KAILEY: IT IS A DIFFICULT TIGHTROPE THAT THE BIDEN ADMINISTRATION IN PARTICULAR IS TRYING TO WALK. YOU DO HAVE ADMINISTRATION OFFICIALS, LIKE SECRETARY OF STATE ANTONY BLINKEN, MAKING THE CHIP TO CHINA TO TRY TO REESTABLISH COMMUNICATION WITH THEIR COUNTERPARTS. AT THE SAME TIME, HE HAD THIS TIT FOR TAT BACK-AND-FORTH ON TRADE MEASURES.
THAT IS WHY WE ARE LOOKING AT WHAT COULD BE AN EXECUTIVE ORDER INTO OUTBOUND TO CHINA. THEY ARE TRYING TO KEEP IT VERY NARROW AND SPECIFIC. WE UNDERSTAND THAT EXECUTIVE ORDER WILL FOCUS ON THINGS LIKE SEMICONDUCTORS, AI, AND QUANTUM COMPUTING. THEY ARE TRYING TO PUT A WIDE CAST ON OUTBOUND INVESTMENT INTO CHINA, KEEP IT FOCUSED ON WHAT WOULD PROTECT U.S. NATIONAL SECURITY INTERESTS AND
NOT HARM CHINA TO GREATLY ECONOMICALLY. THE LINE CONTINUALLY OUT OF THE ADMINISTRATION IS THAT THIS IS NOT ABOUT TO DO DAMAGE TO THE CHINESE ECONOMY, JUST PROTECTING U.S. INTERESTS, D RISKING RATHER THAN DECOUPLING. IT IS A DIFFICULT EQUATION. ED: IT IS ANOTHER EXAMPLE WITH THE U.S. AND EU BEING ALIGNED IN THIS
PARTICULAR ISSUE OVER CHINA. KAILEY LEINZ, OUT OF D.C., THANK YOU. WE WILL TALK MORE ABOUT CHIPS LATER IN THE PROGRAM. COMING UP, SO IF I SHARES
SURGING TODAY. WE WILL DISCUSS WHY, WITH THE CEO OF THE COMPANY ANTHONY NOTO. THIS IS BLOOMBERG "TECHNOLOGY." ♪ ED: WELCOME BACK TO BLOOMBERG "TECHNOLOGY."
A QUICK TECH -- A QUICK CHECK ON THE MARKETS. WHERE ALMOST FLAT THIS MONDAY. BIG EARNINGS TO COME THIS WEEK. WE ARE COMING OFF A BIT OF A RALLY IN THE NASDAQ 100.
WE TALK ABOUT IT BECAUSE THEY'RE SO MAY TECH NAMES. WHERE COMING OFF A 2% WEEKLY GAIN LAST WEEK. IF THERE IS ONE NAME WE ARE WATCHING, IT IS SOPHIA. WE ARE UP MORE THAN 18% NOW. RAISING FULL-YEAR REVENUE
GUIDANCE, ADDING NUMBERS IN THE QUARTER GONE. THERE'S A LOT OF MOMENTUM IN THIS STOCK AND COMPANY. LET'S GET MORE ON THE COMPANY EARNINGS AND BRING IN SOPHIA CEO ANTHONY NOTO. WELCOME AND THANKS FOR YOUR TIME . I WANT TO UNDERSTAND SOMETHING BETTER. THE 784,000 MEMBERS THAT YOU
JUST ADDED IN THE QUARTER JUST ON, WHAT DOES THAT MEAN? ARE THEY DEPOSITORS? WHAT KIND OF SERVICES ARE THEY USING? ANTHONY: THEY HAVE A PRODUCT WITH US. WE HAD 85,000 MEMBERS, UP 40%. THE TWO LARGEST PIECES OF THAT WERE SOPHIA MONEY, WHICH IS 4.4% INTEREST ON SAVINGS IF YOU DO DIRECT DEPOSIT WITH US. YOU CAN SPEND ANY TIME, ANYWHERE YOU WANT WITH NO RESTRICTIONS, NO FEES.
BECAUSE WE ARE TREATING YOU AS A MEMBER, YOU GET ACCESS TO OUR MEMBER BENEFITS REWARD PROGRAMS, AS WELL AS A FREE CERTIFIED FINANCIAL PLANNER. IN ADDITION TO THAT, WE OFFER A FREE CREDIT CARD AND THAT NUMBER. WE ALSO OFFER BROKERS, SO YOU CAN BUY SINGLE STOCKS WITHOUT COMMISSIONS. ETF'S, SIX ROBO ACCOUNTS, AND WE OFFER CRYPTOCURRENCY. WE MOST RECENTLY DID AN IPO. IN ADDITION TO FOUR DIFFERENT TYPES OF LOANS, WE HAVE THOSE PRODUCTS THAT I JUST MENTIONED. WE ALSO HAVE A TECHNOLOGY PLATFORM REVENUE SECTION. ED: ON THE DEPOSITOR AND DEPOSIT
SIDE, IS IT AS SIMPLE AS YOU TAKING BUSINESS FROM THE REGIONAL BANKS THAT SUFFERED IN THE FIRST HALF OF THIS YEAR? ANTHONY: WE ARE TAKING BUSINESS, BUT NOT FROM THE REGIONAL BANKS, THE TOP FIVE BANKS IN THE COUNTRY, BY DEPOSIT ACCOUNTS. THAT IS WHERE WE ARE GETTING THE BULK OF OUR MARKET SHARE FROM. WE HAVE POSITIONED SOPHIA OVER THE LAST 5.5 YEARS TO BE A ONE-STOP SHOP FOR ALL OF YOUR FINANCIAL SERVICES NEEDS. WE GIVE YOU ALL THE PRODUCTS YOU NEED ON A DAILY BASIS, BUT WE ARE ALSO THERE FOR THE BIG DECISIONS YOU HAVE TO MAKE FINANCIALLY, LIKE BUYING A HOME, PAYING FOR COLLEGE EDUCATION, STARTING TO INVEST IN RETIREMENT.
IT IS THE EVERYDAY PRODUCTS AND LARGER PRODUCTS. MOST OF THOSE HAVE BEEN UNSECURED LOANS. OUR GOAL IS TO PUT A MEMBER AT THE CENTER WHAT WE ARE DOING. WITH TO BE THERE FOR EVERYTHING THEY DO AND HAVE THAT LONG-TERM RELATIONSHIP IN ORDER TO HELP THEM GET THEIR MONEY RIGHT, TO REACH THE POINT THEY HAVE ENOUGH OF IT TO DO WHAT THEY WANT, WHETHER THAT IS OWNING A HOME, RETIREMENT AT A CERTAIN AGE. ED: THE STOCK IS AT MORE THAN 18%, THE BIGGEST JUMP IN A YEAR. WHAT DO YOU MAKE OF THAT REACTION? ANTHONY: THE TEAM HAS BEEN WORKING INCREDIBLY HARD OVER THE LAST 5.5 YEARS TO BUILD OUT THIS
COMPLETE SUITE OF PRODUCTS. FOR THE FIRST TIME, 50% OF OUR GROWTH ON A YEAR-TO-YEAR BASIS CAME FROM NON-LENDING PRODUCTS. THE LENDING PRODUCTS FOR THE FIRST ONES WE HAVE HAD.
THE OTHERS HAVE BEEN INTRODUCED SINCE THEN. 50% OF OUR YEAR-TO-YEAR REVENUE GROWTH CAME FROM OUR FINANCIAL SERVICES SEGMENT AND OUR TECHNOLOGY PLATFORM SEGMENT. IT'S THE FIRST TIME WE CAN TRULY SAY THAT OUR STRIDES AT BEING A ONE-STOP SHOP ARE PLAYING OUT ON THE FINANCIAL REVENUE SIDE. ON THE PROFIT SIDE, WE HAD OUR FOURTH CONSECUTIVE QUARTER ON RECORD. BUT WE ARE ON TRACK FOR PROFITABILITY IN THE FOURTH
QUARTER WITH ONE SEGMENT OF OUR THREE THAT IS STILL LOSING MONEY, BUT ONLY LOST $4 MILLION IN NET IMPROVED FROM A LOSS OF $24 MILLION IN Q1 OF THIS YEAR, AND $44 MILLION IN Q4 OF LAST YEAR. THIS SEGMENT SHOULD BECOME PROFITABLE BY THE END OF THE AIR, REINFORCING THE FACT THAT NOT ONLY ARE WE GIVING THE CONSUMER A GREAT COMPLETE ONE-STOP SHOP, BUT FINANCIAL RESULTS ALSO REFLECT THAT DIVERSIFICATION. ED: YOU HAD A GOAL OF 30% RETURN ON EQUITY.
THAT IS DOUBLE JP MORGAN. IS THAT STILL INSIGHT, THAT GOAL? ANTHONY: ABSOLUTELY. WE BELIEVE WE WILL HAVE 35% MARGINS AND 20% GAP MARGINS. THE MIX OF BUSINESSES THAT WE HAVE, IT IS NOT JUST FINANCIAL SERVICES, BUT ALSO A TECHNOLOGY PLATFORM BUSINESS, WHERE WE ENABLE PROCESSING OF PAYMENTS AS WELL AS BANKING IN A BOX FOR OTHER PROVIDERS. WE HAVE OVER 125 MILLION ACCOUNTS IN THAT SEGMENT THAT ARE GENERATING OVER $8 BILLION OF TRANSACTIONS A YEAR THAT WE GET PAID FOR.
WE HAVE A MIX THAT IS MUCH MORE LIKE AMERICAN EXPRESS THAN A TRADITIONAL BANK, IN THAT WE HAVE BOTH THIS LARGE TECHNOLOGY BUSINESS IN ADDITION TO THESE HIGHER PRODUCTS, LIKE OUR CREDIT CARD AND INVEST PRODUCTS. ED: SO FAR, IT HAS BEEN VERY CLOSE TO THE STUDENT LOANS STORY. SINCE LAST WE SPOKE, WE HAVE HAD SOME CLARITY FROM THE REGULATORY SIDE I JUST WONDERED IF YOU COULD UPDATE US ON WHAT KIND OF OPPORTUNITY YOU ARE NOW SEEING IN STUDENT LOANS FOR THE COMPANY. ANTHONY: THE STUDENT LOAN REFINANCING BUSINESS THIS QUARTER WAS RELATIVELY DEPRESSED, AS IT HAS BEEN FOR THE LAST THREE YEARS, WHILE THE MORATORIUM ON FEDERAL STUDENT LOANS WAS IN PLACE. FOR THOSE NOT FAMILIAR, WE TAKE
STUDENT LOANS AND HELP OUR MEMBERS REFINANCE THEM AT A LOWER RATE, OR EXTENDING THE TERMS TO HAVE A LOWER MONTHLY PAYMENT, EVEN IF IT AS -- IT IS AT THE SAME OR HIGHER RATE. THAT WAS PROFITABLE IN Q4 2019. WHEN THE MORATORIUM GOT PUT IN PLACE, WHICH WAS NECESSARY GIVEN THE PANDEMIC AND CRISIS WE WERE UNDER, THE BUSINESS WENT TO BE VERY SMALL, ABOUT ONE QUARTER OF WHAT USED TO BE. WE ANTICIPATE THAT WILL COME
BACK MORE STRONGLY IN 2024. THERE WILL START TO BE A PICKUP IN Q3 AND MORE IN Q4. OUR OUTLOOK FOR IT HAS NOT CHANGED SINCE THE BEGINNING OF THE YEAR, WHICH WAS AN EXPECTATION THAT THE FEDERAL PAYMENTS WOULD RESUME COME SEPTEMBER AND OCTOBER TIME PERIOD, WHICH IS WHAT WILL HAPPEN. THERE ARE 40 MILLION PEOPLE IN
THE UNITED STATES THAT STILL HAVE A FEDERAL STUDENT LOAN. THOSE PEOPLE CAN REFINANCE WITH SOPHIA. TO DATE IN A COMPANY'S HISTORY, WE HAVE NOT FINANCED MORE THAN ONE MILLION STUDENT LOANS. THERE IS A LARGE OPPORTUNITY
STILL AHEAD OF US, BUT ONE NOT REFLECTED IN TODAY'S RESULTS, NOR WILL THAT REFLECT ANY GREATER EXPECTATION THEM BEFORE. ED: BEFORE WE LOSE YOU, I WANT YOU TO RECALL YOUR DAYS AT TWITTER. THE IDEA OF AND EVERYTHING APP, GOING FROM A SOCIAL MEDIA PLATFORM, ADDING BANKING, ADDING IN OTHER FINANCIAL SERVICES.
DO YOU THINK THAT THAT IS A REALITY FOR X TO BECOME A PLATFORM LIKE THAT? ANTHONY: WHEN I JOINED THE COMPANY IN EARLY 2018, 5 .5 YEARS AGO, EVERY FINTECH COMPANY SAID THEY WANTED TO BE A ONE-STOP SHOP. 5.5 YEARS LATER, ONLY SOPHIA HAS -- HAS DONE IT. -- SOPHIA HAS DONE IT. LOOK AT THE INCUMBENTS. THEY HAVE NOT BEEN ABLE TO PUT ALL THEIR DIGITAL PRODUCTS ON THE PLATFORM AND BE A ONE-STOP SHOP. IT IS NOT EASY TO DO, AND
INCREDIBLY LARGE INVESTMENT. WE HAVE BEEN FUNDING IT FOR 5.5 YEARS. IT IS A TALL MOUNTAIN TO CLIMB. WE FEEL LIKE WE HAVE CLIMBED THAT AND ARE ON THE OTHER SIDE. WE WISH EVERYONE LUCK TRYING TO GET OVER IT.
HOPEFULLY, IT WILL BE GOOD FOR THE INDUSTRY AND THE MORE RELIABLE FINTECH COMPANIES THEY CAN BE, WE THINK WE WILL BENEFIT FROM THAT. WE THINK IT IS A TALL TASK TO GO AFTER, BUT WHEN WE HAVE DONE SUCCESSFULLY. I WISH OTHER PEOPLE LUCK. ED: A TALL PATH TO GO AFTER. KEN ELON MUSK DO IT BASED ON HIS EXPANSE WITH PAYPAL AND HIS CAREER SO FAR? ANTHONY: WE TAKE EVERYONE SERIOUSLY, ANYONE WHO ONCE TO COMPETE, WHETHER IT IS A SINGLE PRODUCT OR THE ENTIRE PLATFORM. THERE IS A LOT OF COMPETITION AND WE ARE NO STRANGER TO SEEING THAT.
WE HAVE COMPANIES 100 TIMES BIGGER THAN US THAT WE ARE COMPETING WITH BEARD WE HAVE BEEN ABLE TO DO QUITE WELL. I'M CONFIDENT THAT WILL BE THE CASE. I DON'T THINK ANYONE HAS BIGGER ASPIRATIONS THAN WE HAVE AT SOPHIA -- SOFI. WE HAVE TO DELIVER EVERY SECOND OF EVERY HOUR OF EVERY DAY. ED: SHARES OF 18%, RAISING NET REVENUE GUIDANCE TO $1.97 BILLION TO $2.03 BILLION FOR 2023. THANK YOU SO MUCH FOR YOUR
TIME. COMING UP HERE ON BLOOMBERG "TECHNOLOGY," HASSANE GOING TO DISCUSS. IN AN UPDATE ON SILICON CARBIDE. THIS IS BLOOMBERG "TECHNOLOGY." >> 5, 4, 3, 2, 1. IGNITION AT FULL POWER. ED: SPACEX SENT THE LARGEST COMMERCIAL COMMUNICATIONS SATELLITE EVER INTO ORBIT THIS WEEKEND. THE PAYLOAD WAS ON TOP OF ITS FALCON HEAVY TAKING OFF FROM THE LAUNCHPAD AT NASA IN FLORIDA.
THE JUPITER THREE SATELLITE WAYS 9 METRIC TONS AND IS THE SIZE OF A BUS. IT WILL PROVIDE WIRELESS INTERNET OVER NORTH AMERICA AND SOUTH AMERICA, OPERATED BY HUGHES NETWORK SYSTEMS. LET'S TALK CHIPS. SHARES OF ONSEMI ARE UP AFTER MAKING THE MOST OF SENSING CHIP SALES, GIVING AN OUTLOOK FOR THE THIRD QUARTER ABOVE EXPECTATIONS. IT WAS ALSO A RECORD QUARTER
FOR AUTOMOTIVE REVENUES. SILICON CARBIDE REVENUES GROUP FOUR TIMES YEAR-OVER-YEAR. FOR MORE, HASSANE EL-KHOURY, ONSEMI'S CEO HERE WITH US. THE THIRD-QUARTER OUTLOOK ABOVE EXPECTATIONS. WHAT GAVE YOU THE CONFIDENCE THEY ARE? WHAT ARE THE FACTORS BEHIND THAT? HASSANE: TWO YEARS AGO, WE DOUBLED DOWN ON AUTOMOTIVE AND INDUSTRIAL, BUT MORE IMPORTANTLY ON THE TECHNOLOGY OF POWER AND SENSING. THOSE ARE THE TECHNOLOGIES DRIVING ALL THE MEGATRENDS YOU'RE TALKING ABOUT AS FAR AS ELECTRIFICATION OF THE VEHICLE, BUT ALSO THE INFRASTRUCTURE NECESSARY TO SUPPORT THAT ELECTRIFICATION, LIKE RENEWABLE ENERGY, ENERGY GENERATION, AND FAST CHARGERS. THAT BUSINESS HAS BEEN RANKING
FOR US AND THAT IS WHAT IS GOING TO PROVIDE THAT GROWTH IN THE THIRD QUARTER, WHICH ALSO PROVIDED THAT GROWTH IN THE SECOND QUARTER. ED: I WAS READING THE TRANSCRIPT FROM THE EARNINGS CALL. THE WORD "SECULAR" COMES UP. THIS IS A SECULAR DEMAND STORY. WHAT HAPPENS WHEN TECHNOLOGY TRANSITIONS HAPPEN? HOW DO YOU MAINTAIN MENTAL WHEN THERE IS SECULAR DEMAND? HASSANE: FIRST, YOU HAVE TO PRE-INVEST. WE HAVE BEEN INVESTING IN SILICON CARBIDE SPECIFICALLY, BUT ALSO SENSING HER AUTONOMOUS DRIVING. WE HAVE BEEN INVESTING OVER THE LAST TWO YEARS WHILE WE HAVE STARTED OUR TRANSFORMATION.
WE TALKED ABOUT THESE TRENDS AS BEING THE TRANSFER IS FOR THE FUTURE THAT ARE GOING TO SUPPORT THAT GROWTH ABOVE THE SEMICONDUCTOR MARKET GROWTH. WE REITERATED THAT YOU A FEW MONTHS AGO. NOW, THAT HAS STARTED DELIVERING. YOU CAN SEE THE PENETRATION OF EV'S FROM TOTAL VEHICLES MADE HAS BEEN INCREASING QUARTER ON QUARTER, YEAR-OVER-YEAR, ONLY TO REACH MAY 50% BY 2030. THIS IS A MULTI-DECADE LONG MEGATREND THAT WE ARE PARTICIPATING IN. ED:
THERE ARE SOME OEMS. I THINK TESLA HAS DISCUSSED THIS, ABOUT WANTING TO REDUCE THIS EXPOSURE TO SILICON CARBIDE DUE TO THE EXPENSE. HOW DO YOU MANAGE THAT MINDSET AMONG THE END CUSTOMER? HASSANE: IT'S ACTUALLY A VERY GOOD OPPORTUNITY FOR US. WE ARE IN A VERY GOOD POSITION. WE PROVIDE SILICON AND SILICON CARBIDE.
YOU HEARD ME TALK ABOUT THE MODULE CAPABILITY. WE ARE ABLE TO PUT SILICON CARBIDE AND SILICON POWER TO GIVE THE MOST OPTIMAL SOLUTION FOR A CUSTOMER SYSTEM NEED. WE HAVE HAD THAT. WE ARE IN PRODUCTION WITHIN INDUSTRIAL. WE ARE GOING TO PRODUCTION IN
AUTOMOTIVE. IT LITERALLY PLAYS VERY WELL AND HOW WE SEE THE MARKET. ONE THING I WOULD NOTE, THE REDUCTION IN SILICON CARBIDE IS NOT ON A VEHICLE TO VEHICLE BASIS. IT IS A DIFFERENT PLATFORM.
IF YOU WANT ALTER HIGH-PERFORMANCE, LONG-RANGE, SILICON CARBIDE IS IT. IF YOU'RE TALKING ABOUT CITY DRIVING, OR YOU WILL CHARGE IT EVERY EVENING, SHORT RUN, OF COURSE IGBT CAN DO THE JOB. AND IF YOU WANT SOMETHING IN BETWEEN, THAT IS WHERE SILICON CARBIDE COMES IN. OUR FOCUS, WE ONLY WIN WHEN OUR CUSTOMER WINS. WHETHER IT IS SILICON OR SILICON CARBIDE, WE ARE ABLE TO SUPPORT BOTH. THAT IS OUR STRATEGY. ED: GETTING INTO SILICON CARBIDE EARLY, THE ADVANTAGES FROM AN ENERGY EFFICIENCY STANDPOINT, I SEE SOME OF YOUR COMPETITORS COMING AROUND SILICON CARBIDE. THEY HAVE SCALED.
HOW DO YOU STAY COMPETITIVE WITHOUT THE SAME SORT OF SCALE THAT SOME OF THE COMPETITION HAS? HASSANE: COMPARED TO ANY OF THE COMPETITION, WE EITHER HAVE MORE SCALE OR WE ARE AT SCALE. SCALE IS NOT AN ISSUE. IF YOU LOOK AT SOME OF OUR PEERS OR COMPETITORS THAT YOU ARE DESCRIBING, THEY HAVE HAD ISSUES EITHER RAMPING AT THE PACE WE HAVE DONE IT OR THEY ARE NOT DIRECTLY INTEGRATED, MEANING THEY ARE STILL DEPENDENT ON MATERIAL OR SOURCING MATERIAL FROM THIRD-PARTY OR MERCHANT MARKETS. THIS ADDS TO THE RISK IN THE SUPPLY RESILIENCY OR SUPPLY INSURANCE WE HAVE TO GIVE OUR CUSTOMERS.
WHERE WE ARE, ON TOP OF THE TECHNOLOGY INNOVATION, WE ARE ABLE TO GIVE OUR CUSTOMER SUPPLY ASSURANCE THROUGH A SUPPLY RESILIENT NETWORK. WE HAVE PROVEN THAT. GOING FOR X YEAR-OVER-YEAR IS NOT SOMETHING YOU STUMBLE UPON. IT IS SOMETHING YOU HAVE TO
EXECUTE EVERY DAY. WE HAVE PROVEN OUR EXECUTION AND WE WILL CONTINUE DELIVERING. THAT ADDS TO THE CONFIDENCE OUR CUSTOMERS HAVE. YOU HAVE SEEN THAT TRANSLATE INTO SUPPLY AGREEMENTS THAT HAVE REACHED A RECORD IN THIS QUARTER AS WELL. ED: I HAVE REPORTED ON SOME
TWO-YEAR ONES THAT HAVE COME INTO THIS SPACE. FOR EXAMPLE, BOSCH FIGHTING A SILICON CARBIDE NAME. IS THIS SOMETHING FOR YOU ON THE TABLE OR IS IT NOT NECESSARY? HASSANE: I WOULD SAY M&A IS NOT NECESSARY FOR US TO ACHIEVE WHAT WE NEED TO ACHIEVE. EVERYTHING WE HAVE OUTLINED AT OUR OUT LISTING, WE HAVE BEEN ABLE TO ACHIEVE ORGANICALLY WITH EXECUTION AND MARKET DRIVERS ARE THERE FOR US TO GROW WITH.
HOWEVER, WE ALWAYS LOOK AND USE M&A. WE USE THAT AS COMPLEMENT TREE. IF WE CAN GET AN M&A ASSET TO ACCELERATE SOMETHING WE ARE DOING OR MAKE IT EVEN BETTER AND FASTER, BE A BETTER USE OF CAPITAL RATHER THAN US INVESTING IN IT, WE ARE ABSOLUTELY GOING TO DO IT. 18 MONTHS AGO, WE ACQUIRED A SUBSTRATE MANY FACTORING COMPANY. THAT GAVE US THE CAPABILITY AND WE APPLIED OUR ABILITY TO SCALE. FROM THE TIME WE ACQUIRED IT, A
14 MONTH PERIOD, WE FIVE X'ED THAT. WE WILL USE M&A AS A COMPLEMENT TREE ASPECT. THERE IS NOTHING I WILL SIT HERE AND SAY WE ARE MISSING TO ACHIEVE OUR GOALS OR LONG-TERM FINANCIAL TARGET. WE WILL USE M&A TO ACCELERATE IT BETTER. ED: IN CHINA, THEY HAVE BEEN DOMESTICATING THEIR SUPPLY FOR SILICON CARBIDE, HAND-IN-HAND WITH THE BROADER EV SUPPLY CHAIN THERE. DOES CHINA STILL REPRESENT AN
OPPORTUNITY FOR YOU? HASSANE: CHINA IS AN OPPORTUNITY FOR US TO WE HAVE HAD ENGAGEMENT. WE ALWAYS SAID OVER REVENUE AND EXPOSURE OVERALL IS GEOGRAPHICALLY DISTRIBUTED. AND MORE IMPORTANTLY, IT IS CUSTOMER DIVERSE. WE DON'T HAVE A REGION THAT WE HAVE ADDITIONAL FOCUS ON VERSUS OTHERS. THAT MAKES US VERY COMFORTABLE TO BE ABLE TO MANAGE THE SUPPLY AND DEMAND SIDE OF IT. THAT IS ONE. AS FAR AS SILICON CARBIDE SPECIFICALLY IN CHINA, THE FOCUS TODAY IN CHINA IS REALLY ON THE SUBSTRATE MANUFACTURING.
FROM A DEVICE AND MODULE CAPABILITY, WE ARE FAR AHEAD, A FEW GENERATIONS AHEAD. THAT'S WHY A LOT OF MARQUEE NAMES IN CHINA HAVE MULTIYEAR LT SA'S. THAT IS PROOF THAT WE CAN PROVIDE SOMETHING LOCAL THAT THEY CANNOT. WHETHER IT IS CHINA, EUROPE, OR NORTH AMERICA, YET TO KEEP INNOVATING.
THAT IS HOW YOU REMAIN AHEAD. ED: THANK YOU TO HASSANE EL-KHOURY, TALKING EVERYTHING SILICON CARBIDE. COMING UP, GUESS WHO BACK ON TWITTER. I MEAN, ASK, -- X AFTER NEARLY EIGHT MONTHS. THIS IS BLOOMBERG.
ED: YE, THE ARTIST FORMERLY KNOWN AS KANYE WEST, HAS BEEN REINSTATED ON X, THE PLATFORM FORMERLY KNOWN AS TWITTER. THIS COMES AFTER AN EIGHT MONTH SUSPENSION FOR BREACHING A COMPANY ROLE ABOUT INCITING VIOLENCE. THE ACCOUNT WON'T BE ELIGIBLE FOR MONETIZATION, NOR WERE -- NOR WILL ADVERTISEMENTS APPEAR NEXT TO POSTS. HE HAS YET TO POST. NEITHER HE NOR X HAVE WANTED TO BLOOMBERG'S REQUESTS FOR COMMENT. APPLE IS JUST WEEKS AWAY FROM INTRODUCING THE IPHONE 15 AND NEXT GENERATION WATCHES. THIS MARKS ANOTHER STEPPINGSTONE TOWARD THE COMPANY'S DREAM IPHONE. THE CHANGES TO THE APPLE WATCH
WILL BE MODEST. I LEARNED A NEW WORD TODAY. BEZEL. WHAT IS THAT? MARK: THAT IS BASICALLY A SMARTPHONE TERM FOR THE BORDER AROUND THE SCREEN. THIS YEAR, THE BIG VISUAL CHANGE ON THE IPHONE 15 PRO, AT LEAST FROM THE FRONT, WILL BE THAT THOSE BORDERS ARE GOING TO GET ABOUT ONE-THIRD IN HER. THAT MIGHT NOT SEEM LIKE A LOT, BUT THE TECHNOLOGY BEHIND IT, FUNNY ENOUGH, IS CALLED LIPO.
IT IS A SPECIAL MANUFACTURING TECHNOLOGY THAT ALLOWS THEM TO GET THE SCREEN CLOSER TO THE BORDERS, CLOSER TO THE EDGES. IT IS A BIG VISUAL IMPROVEMENT. SOMEDAY IN THE FUTURE, APPLE WANTS TO HAVE A WATERLESS PHONE WITH NO BUTTONS, NO CAMERA CUTOUTS ON THE FRONT. THIS IS ANOTHER STEP TOWARD
THAT. ED: I ENCOURAGE THE AUDIENCE TO GO AND READ THE LATEST ABOUT THE NEW DETAILS FOR WHAT WE EXPECT. WHAT ABOUT UPGRADES TO THE WATCH, WHY WILL THEY BE MODEST? MARK: LAST YEAR WAS A PRETTY SIGNIFICANT UPGRADE, THE APPLE WATCH ULTRA, WHICH IS THE FIRST NEW APPLE WATCH DESIGN. IT IS THE FIRST ONE IN FOUR YEARS. QUITE A BIT OF TIME. YOU HAVE A REDESIGNED APPLE WATCH SC. AND THEN, YOU HAD A PRETTY MINOR UPDATE TO THE SERIES EIGHT. NONETHELESS, YOU HAD THREE NEW
MODELS. YOU CAN'T REALLY DO THREE NEW MODELS, INCLUDING TWO NEW DESIGNS IN ONE YEAR, THAN THE NEXT YEAR EXPECT ANYTHING MAJOR. THIS YEAR IS PRETTY MODERATE. SERIES NINE IS THE STANDARD APPLE WATCH. THERE WILL BE THE SECOND-GENERATION GENERATION APPLE WATCH ULTRA. I WOULD EXPECT NEW COLORS, BUT FASTER PROCESSORS WILL BE THE LATEST TALK. ED: MARK GURMAN, CHECK OUT HIS LATEST ON WIMMER.COM PAIRED
THAT DOES IT, I'M AFRAID, FOR THIS EDITION OF BLOOMBERG "TECHNOLOGY." A BUSY START TO THE WEEK. WE HAVE OUR PODCASTS ANYWHERE YOU GET THEM. AS I SAID, BLOOMBERG.COM. FROM HERE IN SAN FRANCISCO, THIS IS BLOOMBERG "TECHNOLOGY."
2023-08-01