Bloomberg Audio Studios, Podcasts, radio news.
This is Bloomberg day Break Weekend, our global look at the top stories in the coming week from our day Break anchors all around the world. Straight Ahead on the program, a look at next week's BED meeting and what stubbornly high inflation may mean for interest rates going forward. Also earnings from a US tech giant. I'm Tom Busby in New York.
I'm Stephen Carolyn London.
The question of autonomous weapons and how they should be regulated is up for discussion at a global conference in Vienna.
I'm dead Prisoner, looking at whether the market for memory chips is turning as we look ahead to earnings from Samsung.
That's all straight ahead on Bloomberg day Break Weekend on Bloomberg Eleve Them three Own, New York, Bloomberg ninety nine to one, Washington, DC, Bloomberg one O six one, Boston, Bloomberg nine sixty, San Francisco, DAB Digital Radio, London, Sirius XM one nineteen and around the world on Bloomberg Radio dot Com and via the Bloomberg Business App.
Good day to you.
I'm Tom Busby, and we begin today's program with the Federal Reserve policymakers meet this coming Tuesday and Wednesday to decide on monetary policy. But after some rather disturbing data on inflation, could there really be interest rate cuts in
the near future and for more? Were joined by Michael McKee, Bloomberg International Economics and Policy correspondent, Well, Michael, after the Fed's preferred measure of underlying inflation rose by just a little more than forecast in March, what do you expect to hear from the Federal Open Market Committee this Wednesday? And will it change their dot plot any There's.
No change in the dot plot.
That dot plot won't be revised until June, so we don't have to worry about that. No new economic forecasts, and no change in the Fed's attitude at this point. We saw the last couple of months before this coming meeting a lot of FED officials starting to say, well, maybe we're in no hurry to cut interest rates, and the data only reinforce that. So I think at this point that you're going to hear Jaypoal push back on
the idea of rate cuts anytime soon. He won't put a time frame on it because they really don't know what's going to happen with the inflation. So I think what we're going to end up with is sort of status quo anti after the meeting, where the Fed is on hold and markets can price in November or December if they want, and nobody will really care because everybody will figure it'll change a lot between now and then and we'll see what happens.
But higher for longer. That's going to be the watch through the spring, through the summer into the fall.
Yeah, we need a new watch word, because it's not higher, it's high, it's you know, it's leave it where it is. There's no sentiment at all for raising interest rates at this point. The Fed thinks that interest rates are high enough, especially real rates being like two and a half percent, that that will have an effect. It will push down on inflation over time. It's just a question of how long that time period is now.
Previously, the Fed projected hinted allegations of as many as three rate cuts this year. I think we can safely say that maybe out the window right now.
That's probably out the window right now. I think it's fair to say that if there were a dot plot, it would be showing two or fewer rate cuts this year. But again I go back to the markets are always trying to figure out what the FED is going to do, and investors are taking options on what the Fed might do because they want to be there if the story
changes and they want to make money on it. So we get these narratives of the market saying two rate cuts or three rate cuts or no rate cuts or whatever. And Fed officials are at a point now where they just do not know what's going to happen with inflation. It's hard to predict given the things that are moving,
given the issues that we're seeing. So they're just going to take it month by month, and they're not really going to give you a good firm answer on what's going to happen, and they're not going to say whether markets are right or wrong.
Yeah, and there's a lot of meetings. Well, we have May first, we'll have a decision. That's that's this coming week, a June meeting, of July meeting, a September meeting. Interesting timing on the November meeting, and two days after the election, two days after a little delay there, right.
Well, the loser is of the election is going to say, well, the FED should have and why did they wait until I lost?
Yeah, Yeah, it's all the Fed's fault. Well, let's talk about there are still also good news in the economy. The economy is still strong, There is still strength, the labor to market market, still resilient, consumer spending a ton of money. So what's the fundamental cause of all this stubbornly high inflation.
The fundamental cause appears to be that we just got into a situation of higher inflation and for a lot of reasons. Companies couldn't raise prices for years and years and years, and now they can, and they're trying to make up for the fact that they couldn't raise prices for so long, raise their margins, pay for some of the additional stuff that they're going to have to buy, or the additional wages they're going to have to pay, and it's it's gradually getting squeezed out of the economy.
Although for the last three months, what we're seeing is it's sort of just paused. It's just stopped. So when does it reaccelerate higher or lower, we don't know.
And the inflation rate that we saw this was just last week. The PCE for March two point seven percent.
Right year of a year. It's not bad.
I mean, it's not the two percent goal, but it really and it didn't affect, you know, the markets all that much you would expect if it was came in a little higher than expected and certainly higher than it was a year ago. But is that a new normal? Maybe a two point seven?
It could be at least something we have to get used to for a while because we're not going to see any major changes anytime soon. The base effects, the fact that inflation was lower last year at this time means we won't get as much of a benefit on the year over year numbers. They are going to stay higher, and so people will look at that and think this
is a problem. Also, the annualized rate of where we are now, if you're looking at the last three months and you look at it at an annual rate, you're up in the threes three point nine or something like that. So the trend is not your friend. Is the story here? And even if we don't see a big breakout in inflation, it doesn't look like we're going to see it come down soon. So then the question becomes how.
Do people adapt to that?
Do they start to feel this is a normal price level, even if the inflation rate has come down but not all the way to where it was, or do they still stay angry about it and complain about prices going up.
Well, we shall see May first this Wednesday, the decision from the Fed. Our thanks to Michael McKee, Bloomberg International Economics and Policy correspondent, And we turn now to more big tech earnings as Apple reports at second quarter results this coming Thursday, and for more on what to look for, we're joined by Anna rag Rana, Bloomberg Intelligence Senior Technology Analyst.
Now Honor Rock. A lot of headwinds facing Cooper Tino lately, but let's start with what you're expecting to hear in Apple's Q two report.
Yeah, the expectations are pretty low. And you know, in all fairness, things have been tough for them and we don't see that changing at least in the next you know, six or twelve months, only because China has been weak and there are no signs that that's improving.
Frankly, Now, China, there were reports that iPhone shipments in the first three months of this year tumbled nineteen percent. That's devastating. I mean, it's the second biggest market bare yeah.
Yeah, they're a local brand called Wahweh, which is doing very well, and partially they're doing well because they came out with a new phone after a few years of being really absent in the market. So people who you know, I would say, wanted a new phone are probably choosing something more local, something that they are used to, And you know that's really hurting Apple because it is a high end brand, but you know it is it is not I would say doing as well as it was a few years ago.
Well, the iPhone definitely the cash cow, but there's also iPads, max services like Apple Music, Apple TV plus what's new and what will investors be looking for in those revenue streams?
Yeah, I think you know, almost all of them will pretty much be in line with what the company said would happen in the last quarter. So no major surprises and iPads right now, because the next one is going to be launched next month. No same thing for the Mac and the back pro. The services business is the only one that I would say is going to have a good growth rate, somewhere in the ten to twelve
percent range. They have been doing well there because you know, once you have the device, you're going to go and buy more things in terms of games and applications, and you know, more iCloud storage. So all sorts of things do add up into it. You know, you break your phone, the Apple care goes into it, so that all those things bundle up and that's doing better. But you know, services alone cannot just sustain Apple's growth. It has to
be the iPhone. So the biggest thing for us is going to be what comments do they make about China and do they really show us any hope of a recovery over there?
How about its AI ambitions? Is there a perception on Wall Street Apple maybe a little behind some of the other T giants.
Oh you're too kind by staying a little uh far behind and in that particular case, and I think I think they've realized it. And you know, we we saw Mark German telling us that they shut down the car division and are putting all the engineers back in the AI you know framework at this point. So they have an event coming in June called the WWDC or the Worldwide Developers Conference, where they have promised to showcase a
lot of their new AI features. I think it's going to be still too early for them to come up with something really a killer app like Opening I. I think that's going to take a little bit longer, perhaps another year to get get really squared away. If they were investing crazy amount of money right now.
What could happen though?
And that's another rumor that we heard thanks to Mark German, that they may do a deal with Google to license their model to put them on the you know, the iOS operating system. Now, if that happens, I think that could be the catalyst investor may be looking for, because while Apple may be behind in some of that GENEI capabilities, Google's been doing well over there, and I think licensing that intellectual property from Google may may help Apple's ambition.
No, that would be something very new for Apple dealing with Google then, but.
They do that on the search side, remember they you know, that's the default search, So they actually have a partnership and Google pays a lot of money to Apple for for those rights.
Hey, let's talk about the vision pro the mixed reality headset thirty five hundred bucks. Has this been a real swing and a miss for Apple? I mean reports say demand is so low that it's slash introduction.
Yeah, But to be very honest, I saw that report. Also, when we had first looked at this thing, we were already at that number of four hundred to five hundred thousand units or somewhere in that range. This is not a killer app. Think of this as this is an investment in what could be someday a bigger opportunity in terms of a new kind of operating system to do things. It's never going to be another iPhone, but it has a new category, it could have new apps, so you know,
it's it's a good R and D experiment. I think, you know, some people will own it right now at thirty five hundred. I think a lot more people will own it at two thousand dollars someday when it you know, when the lower model comes out and the price goes down and people build applications on it. So it's a long term bet, but it's not going to move the needle for you and me financially. If you're looking at from Apple's you know overall revenue base well.
Apple Q two earnings out this Thursday. In our thanks to Ana rag Rana, Bloomberg Intelligence senior technology analyst, coming up on Bloomberg Day Break weekend to look ahead to a global conference in Vienna, where the question of autonomous weapons and how they should be regulated will be up for discussion. I'm Tom Busby and this is Bloomberg. This is Bloomberg day Break weekend, our global look ahead at the top stories for investors in the coming week. I'm
Tom Busby in New York. Up later in our program will look ahead to earnings from Samsong in the state of the chip industry. But first, UK Prime Minister Rishi Sunak says he's committed to spending two point five percent of his country's GDP on the military by twenty thirty.
France and Germany have also begun efforts to ramp up their own military spending and on the agenda at this week twenty twenty four Vienna Conference on Autonomous Weapons Systems, Leaders, we're going to peek at the latest technological developments in military weaponry which could change modern warfare forever and for more. Let's go to London and bring in Bloomberg Daybreak. Europe bankor Stephen Carroll.
Tom After decades of scaling back, Russia's invasion of Ukraine prompted a rethink of defense budgets across Europe. Germany has started acalarrating military spending, including creating a one hundred undred billion euro rearmament fund. France two is stepping up spending on weapons. Here in the UK, the Prime Minister has promised to increase defense spending to two and a half percent of GDP by twenty thirty, although that would be
after an election that's set for later this year. We spoke to a UK Politek's reporter James Wilcock about the pledge on Bloomberg Radio this week.
Well, he would.
Say that we live in a more uncertain world Steven. It's also very, very very popular with his back benches. Some of them have even pushed for it to goes high as three percent in the past, and that's the Defense Secretary, Ben Wallat's former Defense acually I actually say so it is a popular policy with the backbenchers. It's like to play well with the public as well. It's also something that Boris Johnson promised as Prime Minister back
in twenty twenty two. So it is worth saying that this bid has now been refreshed, so it sort of plays to all of his bases in the sense, not to get away from the fact that it is a large sum of money.
Yes, I'm two and a half percent of GDP of the target. I mean, the new element is putting the time frame around it, right, delivering that by twenty thirty it would seem. But of course there's a general election coming up, so how does that work?
Quite I mean, and this is part of what is increasing these some quite cynical politicking by the Conservative Party where they promise spending commitment increases that will then have to be delivered after the next election. The big spike in this kind of money will come in twenty twenty eight, and so Labor for its parts, have said that in the next year if they were to being government, would have to institute a review into the military spending. That
would happen in the next year. So there is no commitment here to continue this beyond the next government if the next government work to be Labor. And it was quite fascinating at the press conference which is announce this. He was next to the Native Secretary General Jen Stoltenberg. Journalist tried to ask YenS if he'd had spoken to Labor, so like intervened and said, you know, YenS wouldn't be answering questions on that because that's dragging him into domestic politics.
So it's a fascinating move by the Prime Minister to sort of look strong on the world stage whilst also trying to put labor into a spending commitment in hot water. So worth saying though that in this reporting, Sunak says this spending pledge, which he tops up to being seventy five billion over the next six years, is already fully costed, so it would not involve any spending cuts or any
tax rises. He says it would be partly down to savings of nearly three billion pounds by cutting the civil service.
The entire civil service paybill.
Is ten billions, so there are some fascinating sums here that civil servants and policy wonks are still yet still properly take a look at that.
Was Benberg Radio's UK politics reporter James Woolcock. Now, where all of this extra money will be spent is a topic that's going to be discussed at an event in the Austrian capital Vienna in the coming days. The Conference on Autonomous Weapons Systems will be tackling how developments and
artificial intelligence are revolutionizing how wars are fought. Our reporter at Jonathan Tarne will be there, and I've been speaking to him about these issues and started by asking him exactly what sort of technology is covered by the term autonomous weapons.
Virtually every day there's a new deal that's announced that involves autonomy and weapons systems. We saw the European Commission give Fails the Defense Maker contract that will you know, basically identify potential battlefield targets that will be uploaded into a database so that you know, future weapon systems can
work with drones and artillery to more quickly kill battlefield targets. Obviously, in the Ukraine War we've seen some application of that concept already, drones reducing the amount of time that artillery needs to identify as target and fire. We've also seen in the Gaza conflict the use of artificial intelligence under the so called Lavender program to identify potential targets. So this is a very rapidly developing war space.
Tell Us about who's going to be attending this conference.
I would categorize them as the rule takers rather than the rule makers. Generally, these are going to be largely delegations, high level delegations from the Global South, some European countries on a foreign minister level. But these are not going to be the countries that are necessarily making the weapons systems.
These are the countries that have a huge interest in regulating the autonomous weapons systems because they conceivably could be on the other end, and they want to have a rule book in order before they're before these systems widely proliferate.
Because of course, this is an issue that poses major ethical questions for those that are in this industry. What's being thought around the impact that the proliferation of these kinds of weapons could have on conflict?
Yeah, absolutely, you know, aside from the ethical issue of you know, reducing individual human lives to data in a potential autonomous weapons system, you know, you're seeing people trying to frame within established humanitarian law. So I mean, you know, humanitarian law does exist on the books. It requires distinction, proportionality, and precaution when militaries engage each other with civilians oftentimes
in between. And so people are trying to step inside the technological development and the engineering development and trying to apply some of the ethical norms that have been established in the wake of the Last World War and try to bring some responsibility to bear to the developers, the engineers, the algorithm makers, and as well as the militaries who are going to have to develop rules of engagement when using this technology.
When we talk about the sort of the development of this technology, where are we seeing the bulk of the development happening which parts of the world.
Well, I mean it's the It closely tracks general military expenditures as well as arms exports.
So you're talking about the big three.
US, China, and Russia in terms of development and where
we're focusing. It really depends on who you talk to. Obviously, if you speak to the companies, they're going to tell you that we're talking about narrow versus general autonomous system development that is narrow, which is where we are currently with autonomous systems, drones, satellites identifying potential targets that will help a human make a decision, but whether it's to engage versus eventually conceivably and this is kind of the sky net what has been here too for science fiction,
generalized artificial intelligence that can target and engage by itself. If you ask military people, they're going to come out with a different set of answers about where we are in the development arc, and I think rules of engagement
speak prominently there. I mean, do we you use this in an urban battle landscape populated by civilians and then you move down the spectrum to the general public represented by officials and diplomats, and you know, that is what next week's conference is mostly about speaking too, and that is where there's a rising call for regulation.
Is there any hope of progress being made on that issue? Because as you say, there an ativy outline, there are so many elements to this that would need to be thought about and discussed. What is the hope that there might actually be some consensus on what can be regulated?
Yeah, I mean the short answer is no.
The reason this is taking place in Vienna is because Vienna is home to arguably the most successful arms control convention in history. That's Nuclear Non Proliferation Treaty one hundred and ninety three parties signed that. You know, it's subsequently helped to bring into force the Treaty against the Nuclear Weapons.
But the point here is that we're really at the beginning in these and if there was any treaty or tangible set of rules, that will take years to negotiate, and there's a lot of skepticism that negotiation can keep pace with the rate of technological change, and there are just some very fundamental questions such as monitoring and verification. I mean, with something like the NPT, which has very
successfully prevented nuclear weapons from proliferating. You have physical inspectors going around the world and measuring grand levels of enriched uranium or plutonium, and there's a material regime in place. Much more complicated in the digital realm, where you're conceivably programming and developing algorithms that frankly break the space.
And time continuum. You know, we.
Were like used to as human beings hitting each other over the head with the rock, and then that developed into projectiles, long bows or guns. But this sense of immediacy and the process of killing one another is stretching into days and weeks or months with autonomous systems where items can be programmed to kill at a distance and great time length.
I mean, given the absolute enormity of these dilemmas, how are the industry playing this in the meantime.
Well, the industry is very excited because it means more.
Contracts, and we've seen the markets reaction to the AI hype in recent weeks and months, and so you know, this is a way for the military not only to plug into the AI buzz, but also they're riding a
wave of increased militarism at present. We see nations increasing defense budgets, We see the outbreak of war on multiple fronts and multiple theaters around the world, and so you know, clearly the defense industry stands to benefit from this, and there's a number of arguments that they make, and some of them may well turn out to be accurate, that this will help to reduce casualties and help decision making
so that civilians are not caught in the crossfire. Nevertheless, there's legitimate concern by a number of countries that will be attending the Vienna meeting next week to make sure that rules are enforced. Just as rules of war are enforced with older technologies, they want to ensure that rules are enforced with digital technologies.
Thanks to our apporter in Vienna, Jonathan Cherone Stephen Carol in London, you can catch us every weekday morning here for Bloomberg Daybreak. You're it be getting out six am in London and one am on Wall Strace.
Tom Well, thank you, Stephen, coming up on Bloomberg day Break weekend and look ahead to Samsung earnings and the state of the computer chip industry. I'm Tom Busby, and this is Bloomberg. I'm Tom Busby in New York with your global look ahead at the top stories for investors in the coming week. When it comes to tech earnings these days, the focus is on artificial intelligence, and that's
especially true for chip makers. Their products are used in a variety of applications, from smartphones to data centers and more. And one of the biggest AI chip makers, South Korea, Samsung, is out with its latest earnings this week. Daybreak Asia co host Brian Curtis and Doug Krisner join us now for a preview.
Tom. The chip makers are at the heart of the AI revolution. As we've seen, much of the focus has been on AI data centers and accelerators made by Nvidia, but high bandwidth memory chips are equally critical, and we'll talk more about that. They've been called the backbone of both artificial intelligence and machine learning. Here's Bloomberg Semiconductor reporter Ian.
King, and this is really an essential part of these large AI training models, the speed at which the process that can get into memory, grab the information and get back out and get back on with what it's doing. Has a huge impact on how quickly you can train AI. So that's a really good opportunity for some song, for Micron and for.
Heinix, that is Bloomberg C and King. Now, just last week, South Korea's sk Heinix said sales related to AI more than doubled in the latest quarter. Sk Heinex is the world's number two maker of memory chips. In the week ahead, we'll hear from number one Samsung once again, Bloomberg C and King.
The traditional volume, which memory is all about volume really comes from smartphones and comes from PCs. Those markets aren't getting any worse, but it's way too early to say that they're in growth mode again. What people are really focused on is the data center and AI market and how that is going to have an impact on memory. Twenty twenty four is going to be a good year for these companies. Everybody's forecasts a double digit revenue growth after a pretty disastrous year last year.
Bloombergs Ian King for a closer look at semiconductor markets and to help preview the Samsung earnings. We're joined by Bloomberg's Glad Savov, our tech editor in Hong Kong, and Youlam Lee, Bloomberg, senior tech editor based in Seoul. ELM, let me go to you first. So we already had the preliminary results from Samsung sales and profit higher than expected, so we kind of know what to expect, and analysts are projecting net income up fourfold from a year ago.
It seems an astonishing number. Will will that be more because of semiconductors or smartphones or both?
That's right, there are something is a very complex company with different type of businesses. Obviously, semiconductor unit is such an important pivotal unit for the company that is expected to rebound in the first quarter, as well as smartphone unit. Smartphone obviously they have introduced you know, the S twenty four new AI phone in the first quarter, so that is really boosting their shipments and revenue during the quarter.
Their division together is with home appliances and together they account for you know, majority of the maybe forty percent of the revenue. So we expect both the semiconductor unit as well as the semiconductor and Home applians unit to do well in the first quarter.
Vlad, when we consider chips used in AI. Fast speed comes to mind, reduced power consumption comes to mind. I'm wondering when you compare the chips manufactured by Samsung and you compare them, Let's say to sk Heinex, how do they stack up one against the other.
Well, that's the interesting thing, and I mean Julien can speak more to that, but really Heinis for the first time in their relationship Samsung, Heine's being very close to America competitors, has the lead. Heinis took that lead. It invested very early into HBM as a category, and it has the lead in having the better technology. It has the lead in having Nvidia as its customer, and Vidia
trusted Heinex and its technology first. Now, the thing that's happening and the thing that's going to happen over the next few months, is Samsung is catching up. It says that it has a more advanced version of HBM. It's moving fast. It has the bigger resources. And one of the interesting things that we saw in the wake of Heinex's earnings, which were really impressive, was share price actually dropped. And part of the reason for that was because investors
and analysts we're looking at Heinex. Henix has to increase capacity, so it has to increase spending. Every bit of growth for Heinex in terms of its productivity and in terms of its sales is going to come at the cost of more capex.
So a lot. We have heard some different comments from the companies that we've heard from so far. We had very strong numbers from Texas Instruments looking more at the automotive and industrial sectors, and then you already highlighted sk Heinex and TSMC actually raised a few questions about smartphones and PCs and ASML's numbers were kind of scarily bad. Should we be positive about the overall semiconductor industry here or should we be somewhat cautious?
Oh?
I believe so again. AI is such a massive trend. This past week, Metas earnings gave a warning sign to a bunch of people in the US, and I came on radio and I said, do mistake Meta for being a representative for the entire industry. And what happened immediately the next day, Microsoft and Google boths of past expectations, largely driven by the cloud businesses, the ones that provide those AI services that infrastructure the facility for companies, startups,
et cetera to train the AI models. The demand is their Heinix, TSMC, Samsung, all the component suppliers and video as well. They had gone to sell as many chips as they can make. That is the thing that we've seen, especially with Heinis. We've had Tom Kang in South Korea saying, if Henis wants to sell more chips, it needs to build more factories.
You limb when you think about artificial intelligence, so much of the focus has been on these data centers, but I'm wondering when it comes to the individual devices, the smartphones in particular, how sophisticated it has Samsung become in building smartphones that can handle a lot of the AI technology that we're looking forward to applying to various aspects of life.
Yeah. Sure. So.
One one of the areas that some song is really pollish this R is the rise of on device AI applications. So in other words, traditionally, if you want to have applications such you have to go through you know, Cloud or some such. But companies like Samsung and Google and trying to build you know, a on device basically you know applications that you don't have to go through a cloud that is going to be helpful to you know, for security reasons. So they are really betting the chips.
You know, they are expecting stronger robust demand for chips that are going to be used on devices this year as more companies really move into this space.
And VLADI in terms of monetizing AI for companies out there in the industry, are we about ready to switch or is it too early to start talking about the Microsoft's and Googles and companies that are either in the enterprise or in the consumer sector and seeing some real monetization there.
Well, I won't answer the question. I will let the CIOs of a bunch of tech companies answering the question. And NOBO did a survey of the CIOs chief information officers of global firms, and the major takeaways were Number one, they also were the companies is unprepared to capitalize on AI.
Number two.
A good two percent of them said that they won't be able to show return and investment on AI for the next two years. So that really gives you a sense of the timeline that we're working on here. And then you also have to bear in mind AI has been around for a long time, but just kind of working behind the scenes. What are you talking about, like AI in small phone cameras or AI to detect and
categorize the photos that you take with those cameras. It's been around, and what we're seeing is it's much more of a smooth transition than you might imagine. So AI today in monetization terms, it's happening, but it's subtle. You can't really tell. Tencent, for example, says AI is doing a helpful job in improving its ad targeting meta likewise Google likewise, But again that's kind of under the hood,
behind the scenes. The impactful AI the stuff that people pay subscription fees for, that's years down the line.
Honestly, I want to bring in the China chips story into the equation here. We know that the US export controls are in place, obviously limiting China's access to certain chip making technology. Earlier, Brian and I spoke with Robert Lee, the senior tech analyst over at Bloomberg Intelligence. He's based in Hong Kong, and the question was on China's chip industry and how it's developing, and whether or not a company like Samsung or even sk Heinez should be concerned.
It's probably a little bit early days for Samson and others to worry about the threat from the Chinese. But at the end of the day, the weight of the state is backing Huawei and SMIC and SMIC being the Chinese equivalent of TEARSMC. So you've got you know, you've got a lot of national pride, a lot of strategic national long term objectives, and a lot of money flowing into that sector.
That is rapidly of Bloomberg Intelligence. So if we can agree that there is some sort of race happening. Broadly speaking about what's going on in the semiconductor industry, you lim, I'm wondering when it comes to a company like Samsung, how much are they devoting to research and development to trying to find the next generation of memory chips.
It's tremendous, that's all they're really betting on right now. When the smartphone came along, you know, the world changed. They see the same moment, so they want to capitalize. They want to secure the leadership.
LA based in Hong Kong. But for the purposes of our visit today, you're in Tokyo and our studios there and give me a sense of what's happening right now in Japan with the semiconductor industry and how it's growing.
Just like saith Korea, just like Taiwan, Japan has made semiconductors and national priority. And one very interesting example, we were talking to a chip making startup in the US and one thing that they said was Japan is making a push to bring Japanese semiconductor designers and engineers back to the country. They want to get their own national
talent back to the country. They have a startup called Rapidus Corp. Which is aiming to do two nanometer highly advanced I mean it's not available today chip making by twenty twenty seven. It's a very aggressive thing to go from zero to super advanced chip making by twenty twenty seven. But that's back by many of the biggest companies in
the country, Sony and many others. And when you bring in all that expertise that Japan already had, as it is already the source for many of the key materials, components, equipment for chip making, if you do all of that, if you bring in the expertise, and Japan is also investing and subsidizing TSMC setting up at least one factory to maybe even three or four, depending on how that negotiation goes. It wants to do just like the US.
It wants to bring in the expertise that he lacks, and he wants to lean into the expertise that he already has.
Vlad, thank you very much, and Eulam thank you as well. Bloomberg's Lad Savov, tech editor in Hong Kong, and ulm Lee, Bloomberg Senior Tech editor based in Seoul. I'm Brian Curtis in Hong Kong, along with Doug Krisner. You can catch us every weekday here for Bloomberg day Break Age the beginning at eight am in Hong Kong and eight pm on Wall Street.
Tom our thanks to Brian and Doug. And that does it for this edition of Bloomberg day Break Weekend. Join us again Monday morning at five am Wall Street time for the latest on markets overseas and the news you need to start your day.
I'm Tom Busby. Stay with us.
Top stories and global business headlines are coming up right now.