All right, well, having a good what's been going on with video? We've got certainly the quarterly revenue numbers that just a horror show for them, missing projections by more than one billion dollars. Let's get over too in King Bloomberg News u S Semiconductor Reporter, and this was a huge miss. Has been down to a fall in revenues from gaming. Give us a sense of why this is going on with this company, why nobody saw it coming?
I think the way to look at this race, I mean, you've got it right in terms of the extent of the miss was what surprised people and frightened them. There was a widespread belief that anybody related to the PC industry, which is video obviously is would would be in a difficult situation. Afterward, Intel said, what a MD said, and
what various other companies. But this, this magnitude, though, is definitely you know, surprised people on the downside, and you know, again raise the question of well, how much of this was demand for gaming PCs? How much of it was you know, the crypto backlash, Remember that some of their chips are used for crypto mining. Something they said they'd kind of gottom rid of but apparently there's still a
dependency there as well. Ian. Is there any sense that the behavior of the dollar had an impact here when you look at their offshore sales, and not particularly because you've got to remember a company like in Video is you know, has operations everywhere. It's got manufacturing going on in different places, so the the you know, the dollar situation, and it's not like we're only making things in the US, only designing in the US and then taking it overseas.
You know, most of their chips are manufactured in Taiwan and there would be assembled, so there's a lot of hedging can go on within their business model and a lot of flexibility within their price that wouldn't make the dollar, you know, the biggest issue here for them, Jeremy and the I mean, you know, it's really not about the earnings because the rear view, but it's about what they also say looking ahead, and what are they talking at in terms of outlook and what they're likely to see
in terms of demands of their products. Yeah, now that's that's the key question. If you take the bright side view, then in Video, Intel and all of the others have basically given us the bottom the worst possible moments, and that we're you know, we're now in a position to reflect a reasonable and market demand. If you take it the other way, people say, no, consumers just aren't going to be spending their you know, their hard and money
on discussion items like PCs for gaming. This myth at the PC industry tried to create, Oh hey, we're going to have three PCs in a house from now on. It's just not going to come true because guess what, you know, few bills are going up because inflation is sending their food bills up, and that it's going to be the issue going forward. So there's a real division of opinion on whether this is the bottom and idea
or whether this is a sign of things to come. Yeah, many of the major gaming companies have already reported either falling sales or outlooks that have been a little disappointing. I'm thinking of Sony and Microsoft in particular. But let's take a step back. I mean, to what extent um is the invidio problem something that the entire semiconductor industry is struggling with right now. Yeah, again, that's a good question. If you know, in Vidia, Intel, and a highly indexed
to the PC market. If you look at other companies that aren't having as big an issue, um, if you know, the supplying chips and to say, the automotive industry into the growing field of industrial use of semiconductors in factory equipment and things like that, some of those companies have been fairly mildly impacted by what we're seeing as as
a slowdown. And so really, you know, the way to look at it is it depends who you talk to and how heavily you are index to one of these markets that's falling off rapidly, such as PCs or indeed smartphones. Anything they had to say about actually supply chain constraints and the like. Yeah, know, again, that's a very good question. One of the big success stories for this company, you'll remember over the last few years has been the ability to get into a market, to take market share off
Intel and other companies and do really well there. And they said, you know, they again, very good growth for that division, but not as good as some people had projected. And they said, look, it's just because we can't get other types of chips to go into these complex motherboards that go into servers with our graphics chips at the center of them. So yeah, they're still lingering issues there.
So Ian, do we have to wonder about the potential for over capacity in this industry at a time when the US is kind of levering up a bit to spend some fifty billion dollars to help US chip makers. Again, that's a that's a fundamental question. I mean, as as you know, up until now, for the fifty years at the INSTI has been around, it's been just in time. It's all about being about efficiency and costs because it's
so expensive and it's only getting more expensive. So no in suspect capacity now because of the deal politics were saying, hey, maybe we need plants around the world, Maybe we need redundancy, maybe we need a supply chain that's more robust. If we do, then we're going to have to pay for it because these plants are not cheap, and they are really really not cheap when you're not running them flat out.
Good stuff and I always a pleasure. Thank you so much for being with us and helping us understand the videos story. Ian King is a Bloomberg reporter covering the semiconductor industry for US from our Bureau in San Francisco,