Realme 5G down to $145 ** 80M 5G subscribers in Q2, 100M August prove 5G is real.** 5G Worldwide: Saudi first, USA last** 5G Phones $199-260
China is > 70% of 5G as subs pass 80M ** Primary: Cost per bit of wireless is falling at a ferocious rate
5X Advance for Africa with Massive MIMO ** Spectrum Marvell: 5 nm 20-40% better ** $400 TCL REVLL 5G at T-Mobile: Here comes 5G in the USA
$Hundreds of millions in extra chip costs prove Open-RAN not quite ready
Gary Dickerson, CEO of Applied Materials, pointed out to investors they might assemble their equipment in Singapore to evade fallout from U.S. sanctions. China is the largest purchaser of chip gear today and has committed over US$100 billion to chipmaking. The world #1 foundry, TSMC, doesn't want to lose orders from Huawei, which buys about $5 billion each year. I'm sure it would prefer that Applied sells it Singapore gear. TSMC needs more flexibility to respond to whatever comes next from the U.S.
Dickerson is confident the U.S. rules will have "minimal impact on our business." His CFO, Dan Durn, added, "We think there's a path forward on this based on our discussions with the ecosystem where it doesn't impact our expectations around the business."
Sensible businessmen from Europe to California are finding ways to protect their businesses from current and possible future U.S. restrictions.
Last year, a senior German expert told me that major companies are actively switching their supply chains away from the United States. They aren't anti-American or anti-Trump; they just know they have to protect their companies.
Dickerson and Durn have surely heard from customers around the world fears of buying U.S. equipment. If they are confident Applied will not be affected, I infer they believe the U.S. sanctions won't work or will be rapidly ended.
They are betting the future of a $50 billion company the U.S. will lose.
Yes, relative to the military end use, we talked about that on the earnings call. Basically, we believe that we'll be able to comply within this time period and we don't see a significant impact on our business. So -- and I would say that since our call, we're definitely aligned with that, maybe even a stronger understanding relative to minimal impact to our business. We do have, and we talked about that on the call, significant flexibility from a geographic footprint perspective. I think many investors know we have large operations in Singapore. We have large operations and Austin. In many cases we’re dual building products between those two operations. That really helps us also from a business continuity perspective, whether it's COVID-19 or any other type of situation. But again, Stacy, what we've communicated on the call is still the case. We believe that we'll be able to comply with minimal impact on our business. And then Dan, I don’t know if you want to talk about the other regulation that came out after our call?
Yes. So the second of the two, as it relates to Huawei, is not necessarily -- have implications for us, but certainly our customers will have to apply for a license. And again, based on interactions with government officials, senior level advisors who used to be senior levels official in the government, and because this is a rule targeted at our customers for compliance, certainly there's a lot of interaction throughout the combined ecosystem. When we net all of that together, based on what's written today and we're still in the comment period, the final rules will be promulgated in a couple months. But at least what's written today in interactions with advisors, ecosystem government officials, we think there's a path forward where there's not a need to reprofile our expectations for the balance of the year. And so based on our understanding of what’s written today, we feel pretty good about our path forward to have compliance within the industry that doesn't significantly impact the business.
I mean, for the rest of the year, is that just a statement of kind of like a four month waiting period that's there now, or is that a statement on demand at one customer shifting to another customer, like what gives you that kind of confidence?
Yes. And so it was less time bounded other than for the fact that we gave insight around how we see our business unfolding over the next couple of quarters. But our point of view of this impact isn't trying to thread a needle that says in the near-term it's not impacted, but there's longer term. We think there's a path forward on this based on our discussions with the ecosystem where it doesn't impact our expectations around the business. ...
... It seems to me that the geopolitical environment is getting worse, not better. And we are already seeing just because of the trade stuff, we're seeing supply chain start to move and everything else. What does it mean for you in terms of like China's move towards self-sufficiency? An, we've already seen smaller semi cap companies at least try to take like little niche bits and pieces out there. What does that mean if I'm thinking longer term, five years, 10 years? Is there a bifurcation of the supply chain, of the manufacturing? ...
Oh! For sure. Yes, definitely thinking about that. I would say that relative to the overall electronics ecosystem, if you look at the interconnection across the whole ecosystem, it's pretty significant. It's in everyone's best interest to have a constructive outcome from the entire electronics ecosystem.