YouSaid · the spoken record

Stacy Rasgon

lines on the record: 39
first: 2021-09-16
most recent: 2021-09-16
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“I would be thrilled. I don't cover ASML. I have a colleague of mine that is, but we can talk about it. And the semicap industry in general, again, it's even farther back in the supply chain. So you get cyclicality there. But again, that's another one of these areas. Like long term, that long-term secular story on semi-cap, capital intensity going up, which has implications across the value chain, I think is hugely interesting.”
2021-09-16 · Odd Lots · Stacy Rasgon on How the Global Chip Crisis May Be Getting Even Worse · IDENTIFIED FROM THE TRANSCRIPT · source
“We should do like a whole one of these calls and they just start probably on semicap on wafer fabrication equipment. That's a whole other part of the industry, right?”
2021-09-16 · Odd Lots · Stacy Rasgon on How the Global Chip Crisis May Be Getting Even Worse · IDENTIFIED FROM THE TRANSCRIPT · source
“The near to median from cyclical would still have a positive long term view in terms of secular growth of the industry. They're not mutually exclusive.”
2021-09-16 · Odd Lots · Stacy Rasgon on How the Global Chip Crisis May Be Getting Even Worse · IDENTIFIED FROM THE TRANSCRIPT · source
“The channel starts to bleed or build inventory, and so they reduce purchases of semis for a little bit and they bleed out inventory where they increase purchases and they build inventory. And so semis overship or undership demand. But it's much shorter. They tend to last a quarter, two or three. And they show up as kind of like resets. You sort of reset the base, either up or down rather than these big swings. You look what's going on right now. We're having a good old-fashioned supply cycle right now. We haven't had one of these in a long, long time. I don't know how this will land. Like historically, they tend to end badly, you know, and so we'll see. Although I could also argue that, like I said, maybe some of the secular drivers of the industry, if you go back to when we used to have big supply cycles, I would argue the secular growth in the industry was pretty strong back then too. So maybe you have that to try to offset it somewhat. But I mean, we've got a supply cycle going on right now. We haven't had seen one of these outside of memory in a long, long time. But you can believe that and be nervous about...”
2021-09-16 · Odd Lots · Stacy Rasgon on How the Global Chip Crisis May Be Getting Even Worse · IDENTIFIED FROM THE TRANSCRIPT · source
“And long term, this idea of is the industry someday a trillion dollar industry, I think absolutely it will be a trillion dollar industry, whether it's 2030 or 2035 or like what have you. I think a lot of the trends we're seeing are real, this whole idea of content increase and digitization and everything else. I'm a firm believer and more so than I have been. So I'm pretty positive long-term insanities. Now the near-term cyclical, this is kind of interesting because you kind of mentioned like semis used to be really, really cyclical and then they got less cyclical. What we used to see, we used to see these big supply cycles where like supply would exceed demand and pricing would follow when you get these really big swings. And the last really major supply cycle we had was the tech bubble in like 2000, 2001, mostly since then we had what are what are called inventory cycles. Again, semis are the back of the supply chain and you get fluctuations and demand that can propagate backwards and you get bigger swings. And usually an inventory cycle happens when the customers are...”
2021-09-16 · Odd Lots · Stacy Rasgon on How the Global Chip Crisis May Be Getting Even Worse · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't think that those two things are mutually exclusive. And so I'll give you my own view. So, number one, let me put the near-term cyclical concerns aside for a moment. Long-term, I'm actually more positive on Semis coming out of COVID than I've been in a long time in terms of that secular growth theme. I am. And look, the sector, I mean, like last year was $440 billion. And off the 2020 base, even if Semis just grew 5% a year over the cycle, you'd have a trillion dollar industry by 2035. And by the way, this year, semis are probably not going to grow 5%. They may grow 25% this year off of that 4%. And if they did, we'd get pretty close to 550 billion dollars. And so we'll see what things do, right? But you're going to have a lot of growth this year. And so even if we go into a downturn next year, who knows? Maybe we could, right? Sure. You think about that runway? We're likely still to be well over $500 billion would be my guess, even in a downturn scenario, which is much higher than we.”
2021-09-16 · Odd Lots · Stacy Rasgon on How the Global Chip Crisis May Be Getting Even Worse · IDENTIFIED FROM THE TRANSCRIPT · source
“Happen in terms of capital and capital intensies going up, free cash flow is going down, gross margins next year are way too high. They need to come down. They're talking about, they think PCs are going to grow next year. I personally think that they're saying that because they're screwed if PCs don't grow next year, right? I think numbers need a fairly sizable reset. And they've got an analyst day coming up in November when everybody's sort of widely expecting them to give us the model, like what is the vision for what this thing looks like during the transition as we go from where we are now to where maybe we're going in five years or whatever. And people are really hesitant to do anything with the stock in front of that analyst day because we don't actually know how low things like gross margins and free cash flow and everything are going to go. But you can make the case that they need to go a lot lower than they're getting modeled right now.”
2021-09-16 · Odd Lots · Stacy Rasgon on How the Global Chip Crisis May Be Getting Even Worse · IDENTIFIED FROM THE TRANSCRIPT · source
“Which is, I personally think if we're really interested in building up the US supply chain and semis, you need to make it resilient. I don't think you can bet on one company. I think you need to spread the wealth around. And guys like TSMC and Samsung, they already have customers. Intel's talked about they're going to work with Qualcomm and some others in like five years. Like maybe we'll see. TSMC and these other guys have customers today. So I'm of the opinion it'd probably be better to spread that wealth around. And we'll see a $52 billion is where it stops. Like I don't know. I think if we really want to make a difference, we need more. But it's a start. So we'll see. There's some other issues with Intel. We talked about the stock. I mean, the strategy sounds credible. So you could ask yourself, why has the stock been like such a dog? The problem is they've been running around trying to drum up excitement for what this vision could look like. And I get that. But I'm of the opinion they have to drop a hammer on us because you start thinking about this, the stuff like what's good, what's going to happen.”
2021-09-16 · Odd Lots · Stacy Rasgon on How the Global Chip Crisis May Be Getting Even Worse · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, right now it's $52 billion, I think, is the number on the table, which frankly is a rounding error. Again, TSMC has talked about one single company. They're going to go spend $100 billion over three years, one company. So the U.S. right now is saying $52 billion, which is manufacturing an R&D and a bunch of stuff over like a five-year period for the entire US-based industry. So, I mean, it kind of gives you an idea of the scale. It's probably not going to make much of a difference, but it's a start. You've got to start somewhere. And then like I said, we'll see how they get spread out between Intel and Samsung and TSMC. And it's funny, you know, Intel, like they did a paid article in Politico a little while back where, I mean, Gelsing was basically saying don't give the money to foreign companies, give it to us. Because TSMC, like they're going to build this factory in Arizona, it's five nanometers by the time they bring it online. That's going to be lagging edge and they're going to leave all the leading edge IP offshore. And so you should give the money to us effectively with saying that.”
2021-09-16 · Odd Lots · Stacy Rasgon on How the Global Chip Crisis May Be Getting Even Worse · IDENTIFIED FROM THE TRANSCRIPT · source
“And then they're going to be building out all this foundry stuff. And to do that, they're going to be getting subsidies, right? So this is the other thing. So that in general, the strategy simplified is to try to stabilize the roadmap, try to put out some sort of credible path to catching up, and thirdly, to beg for money from the government. It's not a dumb idea, right? If anybody, if there's any time right now to go get money from governments to build out semiconductor capacity, now's the time.”
2021-09-16 · Odd Lots · Stacy Rasgon on How the Global Chip Crisis May Be Getting Even Worse · IDENTIFIED FROM THE TRANSCRIPT · source
“Like a semi credible statement out there that says we can close the gap because his alternative was to lay down and die, right? Because if they can't catch up by that 2025 or whatever, they'll never catch up. That's it, right? So that's one thing that they're doing. The other thing they're doing is they're making more use of outsourcing. And again, they're doing a lot of stuff in-house. They're doing more stuff at TSMC. And so they're booking capacity, I guess, three nanometer capacity at TSMC. And so we'll see what kind of products they make. They're actually doing some graphic stuff over there now and they're going to be doing some other things. And then thirdly, they're going to be focusing on specialized packaging, what's called chiplets, where I'm disaggregating the chip into various types of functionalities and making each of those smaller pieces potentially different places and then combining those together. And this is something where Intel thinks they have an advantage. And they've got very good, this is packaging. They've got very good packaging technology, but so do others. And so we'll see how all this works out. So that's sort of the plan.”
2021-09-16 · Odd Lots · Stacy Rasgon on How the Global Chip Crisis May Be Getting Even Worse · IDENTIFIED FROM THE TRANSCRIPT · source
“We will have caught up and then surpassed TSMC at that point. So they put out this roadmap that says in like four, four, five years, we think we can close the gap with TSMC and 2025 and beyond we will surpass it. So a couple of things with that. Number one, even though it sounds good on paper, it's a very aggressive roadmap. Like I said, it's sort of four iterations in five years. And their trajectory and execution of the last decade, this would be a big change. So more power to that they can do that. But the problem is like even if they can execute on it and it's not a done deal, they basically came out and told everybody we're still going to be behind for the next four years, right? So the window is still for everybody else to attack us is still open for at least like four years. So that was the dark side of what they were saying. So even if they execute on it perfectly the window's still open for four years or more, and if they don't execute on it, they're screwed. But he had to come out and put a credible...”
2021-09-16 · Odd Lots · Stacy Rasgon on How the Global Chip Crisis May Be Getting Even Worse · IDENTIFIED FROM THE TRANSCRIPT · source
“10 now, and they're going to go to, I think, I can't remember what it's called, 10 enhanced superfin or something. And then they're going to go to Intel 4, and then Intel 3, which is like an enhanced seven. And then they're going to go to something called 20A. And 20a is like back in like 2024, 2025. And 20a technology will have a couple of new innovations. It's going to have something called a gate all around transistor structure, which we can talk about what that is, but it's a new type of structure on the transistor to get higher performance and everything. And so that's one thing the industry, by the way, is wrestling with that technology Samsung has at the roadmap. Intel's now putting it on the roadmap. And they're going to have something called back backside power, which again we could talk about. But they have some innovations there. And what they're basically saying is by that time frame, by that sort of like 2024, 2025 timeframe, when we introduce this 20A process using this gate all around architecture.”
2021-09-16 · Odd Lots · Stacy Rasgon on How the Global Chip Crisis May Be Getting Even Worse · IDENTIFIED FROM THE TRANSCRIPT · source
“And I guess that is their public stance on what the solution was. They're going to be much bigger using EUV, and that's going to fix the problem. It's also, by the way, clear probably why they didn't want to use it. It's very expensive. Their CapEx this year is going up to something like $20 billion, and that's not foundry. That's their own core business, but they don't really have a choice. So they claim that's fixed. They've also now, I don't know, a month, maybe two months ago, they put out a roadmap. And this roadmap, they did a few things. Number one is they adjusted their, remember we talked about the node nomenclature and how like Intel nodes didn't correspond to TSMC nodes in terms of process. So they've changed their nomenclature to a line. Okay. So what they were talking about, seven nanometers before, that is now Intel 4, 4 nanometers. Okay, fine. Whatever. I'm not going to knock them because they weren't gaining anything by being a pedantic about it. So, I mean, okay, fine. The other thing is they said they're going to do kind of like five evolutions in four years. They're going to do, they're doing.”
2021-09-16 · Odd Lots · Stacy Rasgon on How the Global Chip Crisis May Be Getting Even Worse · IDENTIFIED FROM THE TRANSCRIPT · source
“You bet, it's a few things. So you're right. When the day they hired Paquelsinger, I think the stock was up like 20%. And I get it. Like, I like Pat. Pat is the guy they probably should have hired two years ago, right? And so he's the right guy for the job. Now, that being said, he's not a magician either. He has to play the hand that he's been dealt. And the hand that he was dealt with is pretty tough. And I think I said this the first time it was on, but the problems that Intel's having, they didn't just develop like over the last couple of quarters. These have been 10 years in the making. And they're not going to get fixed in a couple of quarters. They will probably take five or ten years to fix. And so they've done a few things, actually, since we think that was last November when we chatted. And so they've done a few things. Number one, we talked a lot about their difficulties at seven nanometers. So they're claiming that seven nanometers is now fixed. They're claiming the issue was they weren't using EUV, what's called extreme ultraviolet lithography, which is a very advanced type of patterning technology to make very small features.”
2021-09-16 · Odd Lots · Stacy Rasgon on How the Global Chip Crisis May Be Getting Even Worse · IDENTIFIED FROM THE TRANSCRIPT · source
“The gamers didn't really want to step up and pick up the slack. And so obviously we saw some fairly big shortfalls at the beginning of end of 18, beginning of 19 for guys like NVIDIA. This time their news cycle, it's called Ampere is the codename for it. I do think actually gaming demand is quite strong for it. They can't get the parts. So one hope for NVIDIA is if and when the miners stop buying that the gamers will start to pick up the slack and we'll see. Like we're not there yet in terms of demand is still like off the charts, I think, for both Nvidia and AMD for graphics cards.”
2021-09-16 · Odd Lots · Stacy Rasgon on How the Global Chip Crisis May Be Getting Even Worse · IDENTIFIED FROM THE TRANSCRIPT · source
“So that was like back during the 2018 bubble. I don't think we've seen anything near that much for the guys that make the custom mining chips this time. I don't think TSMC has been prioritizing those guys nearly as much. But in general, I mean, we've just got tightness all around at the leading edge, and certainly that's been part of the problem with graphics cards. It's been hard to get. And obviously the demand has been very strong. I'd also say for graphics cards, even beyond crypto, the gaming cycle this time is much stronger. Obviously, we had COVID and people were trapped in their houses and they wanted to, the video games were a good way to pass the time, so they wanted to buy the cards. And the products from both NVIDIA and A&D this time are actually much better than the prior cycle, which was kind of like, you know, second half of 2018. And so there's actually a lot more, I think, demand from gamers for the parts this time versus last time where I do think a lot of that incremental demand was from the crypto miners. And so what happened in 2018, 2019, when the miners stopped buying...”
2021-09-16 · Odd Lots · Stacy Rasgon on How the Global Chip Crisis May Be Getting Even Worse · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't think so. You can talk about the crypto impact on shortages in a couple of different ones. They're just like, for example, shortages of graphics cards. And again, go try to buy one. The other is like taking up capacity at the foundries. And I remember”
2021-09-16 · Odd Lots · Stacy Rasgon on How the Global Chip Crisis May Be Getting Even Worse · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it's hard to know. I do think in auto we've seen that. In other end market, again, I could mention graphics cards. I mean, you can't even buy a graphics card right now. They're just selling everything they can make right now. But yeah, I do think we're seeing some of it. Anecdotally, we are seeing it.”
2021-09-16 · Odd Lots · Stacy Rasgon on How the Global Chip Crisis May Be Getting Even Worse · IDENTIFIED FROM THE TRANSCRIPT · source
“Some of that. So you could call that stockpiling in some sense, right? It's hard to know how widespread it is and everything else, but I mean, it's a normal behavior that we might see. In cars, we are seeing, to your point, some of these things are getting left, but the thing with cars, you can't just like we can't go back, you know, like my first car was a 1978 Toyota Corolla. It didn't have very much in the ways of semiconductors in it, right? We're probably not going back to something like that. You can't, right? And in fact, one thing we're seeing from the auto vendors, the limited supply of semis that they do have, they're actually selling higher-end cars, right? They're actually prioritizing because the profits are higher, right? So they're saving the limited semi-condition because they have to actually make as much money as possible with them. And so in some cases, we may be seeing like mix actually going up rather than down.”
2021-09-16 · Odd Lots · Stacy Rasgon on How the Global Chip Crisis May Be Getting Even Worse · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, we are seeing some of that. So, some of the car, we've seen like cars, I'll make it up, but like, you know, shipping without the electronically controlled rearview mirror or stuff like that, right? We're seeing some things. Because remember, if you're going to ship a car, you kind of need the full kit. If there's things you could leave out where the car is still saleable and then add them later, like we're seeing some of that. The other thing we're seeing with auto vendors sometimes is they're building the cars. They're building the car complete except for the stuff they have and they're parking it. So that when they get the part they need, then they can ship. I actually suspect we're seeing this in PCs as well. My maths and we've published this. My maths suggest that as strong as PCs are right now, I think CPU shipments, the microprocessor shipments are even stronger. And we've heard like HP has sort of talked about on earnings calls about building things like strategic inventory. I suspect they're building kits and sitting on the shelf. And so as soon as they get the final parts that they're missing that they can ship.”
2021-09-16 · Odd Lots · Stacy Rasgon on How the Global Chip Crisis May Be Getting Even Worse · IDENTIFIED FROM THE TRANSCRIPT · source
“When the man starts to roll off. And I don't know what it's going to look like. I guess we'll. This year we'll probably be fine still in terms of the fundamentals of the numbers. We'll see what 22 and 23 look like. Those are the kind of timeframes we're probably talking about in terms of supply coming on. And we'll see how well it is well maxed it is to demand like when it does it.”
2021-09-16 · Odd Lots · Stacy Rasgon on How the Global Chip Crisis May Be Getting Even Worse · IDENTIFIED FROM THE TRANSCRIPT · source
“Probably not. I could argue that there was a structural case that whatever the normalized run rated PCs ought to be, it's probably higher than it was pre-COVID. And you can make that argument about a number of end markets. And so even if we get a glut, some of these things we probably had pulled forward in digitization and everything pre-COVID or since pre-COVID. And we've got more people doing remote. Remote work is going to be a thing from now on, like whether or not people start to go back to the offices more. I could argue that some structural level things should be higher. You know, in terms of capacity, I think Tracy, you asked during the intro, why isn't the semiconductor industry added capacity? It just takes time. They're all trying. I mean, you can go look at the semicap guys, like wafer fab equipment, WFE is going through the roof right now. And you've got big forecasts from big companies, you know, throwing out big numbers in terms of what they're planning on spending over the next few years. Capacity probably will get at it. It just takes time to get added. So the worry, obviously, is that capacity comes online right now.”
2021-09-16 · Odd Lots · Stacy Rasgon on How the Global Chip Crisis May Be Getting Even Worse · IDENTIFIED FROM THE TRANSCRIPT · source
“And so that may be some of what we're seeing right now. So I don't know. Yeah, at some point we may get a glut. Now at the same time, you can also argue that like post-COVID, some of this demand is real. And so I'll look at PCs, for example. PCs right now have been incredibly strong. I mean, we were doing 250 to 260 million PCs a year pre-COVID in like in 2019. 2020, we did 300 million. 2021 right now, we're on track to do probably close to 350, which would sort of match the peak in the industry, which is in 2011. And there's a big controversy in PCs radar. PC is going to grow next year. They're going to be down. Like, whatever. But even if they're down, they're probably not going back to 250.”
2021-09-16 · Odd Lots · Stacy Rasgon on How the Global Chip Crisis May Be Getting Even Worse · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, never say never, right? And again, the normal practice is, yeah, you'd wake up one day and you'd see a glut. That is normally how this would happen. And again, this is why investors are worried. And this is why even though the numbers are going up, the stocks aren't really going up all that much. Multiples are coming down. People are worried that we're getting closer to peak, right? And I guess mathematically, like by definition, we're getting closer to peak every day. At the same time, we could be quote unquote close to peak for quite some time, right? Because as long as this stuff's working, the other thing you need to remember with this is even though demand is really strong, I mean, like you need everything. So that's the thing is like the auto value, you see I'll pick on the auto vendors again. They could be getting 95% of everything they need, but if they don't have the 5% that they need, they can't ship the car, right? And you could have a situation where like you'd have auto vendor A, you know, they have 95% and they're short 5% and auto vendor V has 95% of what they need and they're short 5%, but it's a different 5%.”
2021-09-16 · Odd Lots · Stacy Rasgon on How the Global Chip Crisis May Be Getting Even Worse · IDENTIFIED FROM THE TRANSCRIPT · source
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2021-09-16 · Odd Lots · Stacy Rasgon on How the Global Chip Crisis May Be Getting Even Worse · IDENTIFIED FROM THE TRANSCRIPT · source
“And so the companies are doing the best they can in this environment to try to manage through it. Is there stockpiling going? Undoubtedly their stockpiling. I don't see how there couldn't be. Can you measure it? No, it's hard. And I'll give you an example. There were some cases where, again, you go look at the auto vendors, even if they're stockpiling. They may be stockpiling so much, but we still are seeing actual production cuts. So clearly, even if they're stockpiling in some parts, clearly they don't have enough of what they need to build the cars that they want. So we're still seeing some primary examples here of situations where actual shortages, where the shortages still seem to be real, because we wouldn't be having actual production cuts if they didn't have actual shortages. You've heard the chaos. Now you can see it.”
2021-09-16 · Odd Lots · Stacy Rasgon on How the Global Chip Crisis May Be Getting Even Worse · IDENTIFIED FROM THE TRANSCRIPT · source
“90 that you need, I'll give you those in 50 weeks. So your next step is to order a thousand semiconductor from wherever you could hope to cobble them together on the hope that you can build up the hundredth you need and then you cancel all the other orders. And so what semiconductor investors tend to watch for? This is a phenomenon known as lead times. Like how long does it take to get the product after you order it? And those lead times are stretching out. What investors tend to watch for is when the lead times start to pull back in because that's usually when the cancellations start to happen. And so what a lot of companies are doing right now is they're actually doing things like putting in long lead time orders, non-cancelable orders, for example. Generally in the space, historically that you didn't do that. There were no penalties to canceling orders. Companies, now some companies are starting to put things like non-cancelable orders. Other companies are parsing their orders. It's like, well, I know this customer's ordering 100 parts, but I think they only need 30. So I'm going to only ship them 30. We're seeing some of that as well.”
2021-09-16 · Odd Lots · Stacy Rasgon on How the Global Chip Crisis May Be Getting Even Worse · IDENTIFIED FROM THE TRANSCRIPT · source
“And their actual, my opinion, at least, is that semiconductor company management teams, their actual visibility into what their end customers are truly doing is precisely zero. They have no idea. They do the best they can. I'm not blaming them. It's not good or bad. It just is. And the best companies out there are willing to accept this and deal with it. But their actual visibility is not great. By the way, companies are trying to do some stuff right to get to your second question around potential double ordering and stockpiling. And so yes, this is a standard kind of behavior, probably not just in semis. I mean, this is normal human behavior. Like when you can't get something that you need, you tend to order more. And again, this is a phenomenon known as double ordering. And I mean, a simple example, let's say you're making widgets and you need a hundred semiconductors, you know, whatever, right? And your vendor says, okay, I can't. I'll give you 10. I can supply 10 and I'll give you the other, you know.”
2021-09-16 · Odd Lots · Stacy Rasgon on How the Global Chip Crisis May Be Getting Even Worse · IDENTIFIED FROM THE TRANSCRIPT · source
“And then who does that get sold to like a Taiwanese ODM? Maybe what's called original device manufacturer who builds like a notebook computer. And then they stick it on a plane or a boat, right? And they sell it. You know, they send it off to HP or something like that. And then HP sells it to Best Buy and then Best Buy sells it to you. Or like, however, there's probably other steps in there as well, but there's a lot of points within that chain where you can get inventory building or bleeding or anything else. And the fluctuations tend to magnify as you work from the front of the chain back. And this is a very well-known thing. You see it all the time. And the semis are at the back of that supply chain. So small fluctuations, even small fluctuations in end demand, like at the customer level can propagate backwards and have correspondingly larger impact like the farther back you go in the chain and the semis are just at the back. And remember, I think we talked about this last time, but the semi companies have to plan in this environment.”
2021-09-16 · Odd Lots · Stacy Rasgon on How the Global Chip Crisis May Be Getting Even Worse · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, yeah. So let's address the first question. Like, why are Semi's the bull whip, right? Yeah, they're at the back of the supply chain. So again, you think about them, and I'll take a microprocessor for a PC just as a simple example, you know, like Intel or AMD or whoever makes the processor.”
2021-09-16 · Odd Lots · Stacy Rasgon on How the Global Chip Crisis May Be Getting Even Worse · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, even as the numbers have continued to go up and up and up because people still don't know how sustainable this strong demand is.”
2021-09-16 · Odd Lots · Stacy Rasgon on How the Global Chip Crisis May Be Getting Even Worse · IDENTIFIED FROM THE TRANSCRIPT · source
“It is. And so you're right. So semis are extremely But it is still causing problems. And it's funny, like obviously the question I get the most is, how long is it going to last? I wish I had an answer. I don't, you know. And it's really funny when you think about the stocks, right? And the companies, I mean, they're still putting up monster numbers. The sector right now in terms of revenue is on track to grow probably 25% this year and blow past $500 billion for the first time in history. And every quarter their companies are putting up better and better numbers. And I would say investor conviction is getting less and less, like the higher the numbers go. Because we've all seen this movie before. We see this massive strong demand. Nobody really knows how much of it is real and how much of it is phantom. We talked about double ordering and everything else the last time it was here. You know how this is when things are uncertain, they order more. And so it's funny the stocks haven't done much of anything.”
2021-09-16 · Odd Lots · Stacy Rasgon on How the Global Chip Crisis May Be Getting Even Worse · IDENTIFIED FROM THE TRANSCRIPT · source
“What they do a lot in Malaysia, they do what's called back end. It's a lot of what's called packaging. So they don't necessarily, they don't have like semiconductor factories in Malaysia. They're not making like chips. Once you actually make the chip in the factory, you have to what's called packaging. You have to put the electrical leads and everything on it's such that you can take that chip and actually put it on a circuit board. So they do that kind of stuff, assembly and testing and other things in Malaysia. And a lot of those issues were impacted. A lot of that stuff's done in Southeast Asia and a lot of things were impacted by COVID. So that's just something else icing on the cake on top of everything else and not getting better.”
2021-09-16 · Odd Lots · Stacy Rasgon on How the Global Chip Crisis May Be Getting Even Worse · IDENTIFIED FROM THE TRANSCRIPT · source
“Billions of dollars dad capacity. And, you know, historically, they added capacity to demand that they saw. And when demand was very, very much stronger than that, they just didn't have the capacity that was available. And because that demand is still strong, we're still short. We're still tight. And so now you have to layer on on top of all that, though. Remember, this stuff is never smooth. When you have these kinds of problems, they do cascade and they cause more issues. It's just a big mess. I mean, it still is. And so we haven't had time to actually bring enough capacity online to alleviate things. And the demand, you know, in most parts of the market, we can talk about where people are worried about demand maybe starting to roll over a bit, but in general, demand is still strong. Supply is still tight, and we've still got problems. It hasn't alleviated yet. And now you throw, you know, the resurgence of Delta on top of this. And again, you mentioned Malaysia.”
2021-09-16 · Odd Lots · Stacy Rasgon on How the Global Chip Crisis May Be Getting Even Worse · IDENTIFIED FROM THE TRANSCRIPT · source
“Demand came roaring back, obviously. The plant started opening up. They went back hat in hand to try to get capacity to get production, and it just didn't exist. And it was like, well, you know, get in line, right? It'll take time. And remember what I said. You know, even if you're starting, even if you have the capacity available, it takes months to make these chips from a dead start. And so that caused cascading effects. I mean, it still has, right? The other issue in the other end, Marcus, was just demand was very strong. And that was part of the reason we saw issues in auto as well. I mean, the capacity that they were using got backfilled in many cases by other stuff. But just in general, we've seen really, really strong demand. I mean, much stronger than I think anybody thought was going to be possible in things like PCs and like anything that was sort of work from home study, from home play from home. I think you also need to couple this with the fact that the industry itself, I mean, you know, remember semis, it costs.”
2021-09-16 · Odd Lots · Stacy Rasgon on How the Global Chip Crisis May Be Getting Even Worse · IDENTIFIED FROM THE TRANSCRIPT · source
“But if we look at the automotive sector for a set, that's where we're seeing some of the biggest issue. We've seen the biggest issues all the whole time. And you're right, we're still actually seeing production cuts. You mentioned Toyota. We also had recently GM and Ford and a bunch of others, and it's been going. So they're still seeing shortages. You have to remember the issue there was initial supply chain whipsaws, you know, in the beginning of COVID. Factories got shut down. People were locked in their houses. They weren't driving demand, at least initially, for a small amount of time plummeted. And remember, the auto vendors canceled all their orders.”
2021-09-16 · Odd Lots · Stacy Rasgon on How the Global Chip Crisis May Be Getting Even Worse · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so maybe helpful to go back a little bit and talk about what caused these shortages in the first place. And I talked about this, I think, I can't remember, maybe it was the second time that I was on”
2021-09-16 · Odd Lots · Stacy Rasgon on How the Global Chip Crisis May Be Getting Even Worse · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I mean, so we had hoped that by now things would be getting back to some semblance of normalcy. And you're right, they're really not. It's actually getting worse, not better in many parts of the market. So we still are seeing production shortfalls. We're still seeing shortages. We'd been helping, obviously, that COVID would be on the decline at this point. It is not. It is still causing disruptions. You mentioned Malaysia and some other areas. So yeah, we're not back to normal yet. We're still seeing some of the same issues that we've been seeing for quite a while.”
2021-09-16 · Odd Lots · Stacy Rasgon on How the Global Chip Crisis May Be Getting Even Worse · IDENTIFIED FROM THE TRANSCRIPT · source