Ian King on AMD Earnings (Audio)

I mean I think you mentioned the shares rising. You've got a stock that's been heavily beaten up, and what I think investors have realized today is, oh, actually it's still growing. And when you look at the alternatives, you know, direct peer, citizen video or isn't or Intel, that's absolutely not the case. You know, in an Intel's case, it's

no longer buying back stock. So there was kind of a reappraisal of of a m D really today, and you know that was based upon the fact that people believe it's still going to continue to take market share. What's the nature of the long turnaround that the chief executive officer releases who has talked about Yeah, I mean you dial it back to two thousand and fifteen when she took over. You know, this is a company that was like is it going to be able to continue

to make payroll. She came in and said, look, you know, we're going to double down on on what we're good at, which is making very good micro processes or what we should be good at UM and just committed all of the company's even limited resources to that. And you know, here we are, several years later where they actually have better products in the market in many respects than Intel has. Intel has had its own stumbles, and they're really benefiting

and rooting the rewards of those engineering efforts. We do have an environment though, where semis are rendering one of those famous cyclical downturns, and to reverse the old metaphor, a receiving tide is going to sink all boats. So what's the outlook here? Yeah, I mean this is a key point all along. Lisa, through the CEO, has said, look, I don't need a buoyant PC market me to be successful.

We are so underrepresented, our market share has slumped so badly that as long as we continue to execute and do what we should put this company in its rightful place, we're going to be fine. And the numbers would appear to indicate that, I mean, even in a kind of disastrous quarter for PC related demand companies doing okay, the company did pre warn right and did the did the results turn out to be not quite so bad? That's that's exactly it. And you know the key figures to

think about here. I mean, on the one hand, we've got this disastrous drop in PC chip revenue at the company, which you know, the the executives explained as being actually worse because inventory is a factor there that end demand

isn't quite that bad. But on the flip side of that, we've got data center unit that's up forty and those are very expensive, very profitable chips, and it's doing a lot better there, and that's a lot of a lot of market share games and tell us about game consoles because that's looking like a pretty good stick to for am D as well. Yeah, I mean this is about that m D made back a few years ago that they would basically make custom chips for both the Xbox

and the PlayStation. Low largein business, people said at the time. But you know what, it's been a steady business and I think you know, with those consoles being in you know, in demand for longer than people have expected, you know, shortages and everything like that a time like now, when you know supplies beginning to free up, then guess what, it's actually quite a good market to be in. And that's helping. So we've seen a really big pullback in

these stocks right across the board. But m D is one of the worst um and but you also have you know, companies like in Nvidio that were just the Darling's a couple of years back, trade down more than

fifty percent. Even the Philadelphia Semiconductor Index the socks down close to So when you talk to investors, is there a sense that you know, most of the work to the downside has been done or are they fearful of what the future holds with A and D. I think most of the most of the floss has been taken out.

That tends to be what investors concentrate on. I mean, you know, just to give you perspective, if you'd brought the stock when Lisa Suit took over, it was a two dollars and eighty seven cents, Okay, got up as high as a hundred and three dollars last year, and now we're at sort of roughly what we're less than half that sixty dollars. Yeah, so there is a sense that a lot of the fluff has been taken out and that we're beginning to reflect what a reasonable price

to earnings ratio would be. Of course, all companies right now dealing with inflation. How are a m D s costs looking and more broadly, consumed amount for PCs, Yeah, consumed amounts of PCs is. It's still a very ropey story.

But again, I think something that's helping a m D here is that, you know, Lisa sUAS said all along, look, we think the market is gonna be probably worse than a lot of people do, and I think you know she's proven correct, But be if you've been running your company on that basis, then you're not going to get caught out as much with inventory and building inflated expectations. In terms of costs, everybody is a customer of TSMC.

Everybody is having to pay t SMC to get as much as they can because of the shortages because TSMC doesn't have enough capacity. But m D has one of the advantages now of making these very high value chips, which it makes sense to t SMC to make, and therefore you know it's ahead of the queue in many respects. All right, thanks very much, Ian, always a pleasure. Ian King, Bloomberg News u S Semiconductor Reporter,