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Game or Mine Ethereum? – The Six Five Webcast
by Daniel Newman | February 22, 2021

On this episode of The Six Five Webcast host Patrick Moorhead and Daniel Newman discuss the tech new stories that made headlines this week. The six handpicked topics for this week are:

  1. NVIDIA Bifurcates Gaming and Crypto Cards
  2. Qualcomm Fixed Wireless
  3. M1 MacBooks versus latest Intel Evo notebooks
  4. New Adds to Amazon Sustainability Pledge
  5. Google pays and Facebook blocks Australia media
  6. Austin storms disrupt Samsung, Infineon, NXP

For a deeper diver into each topic, please click on the links above. Be sure to subscribe to The Six Five Webcast so you never miss an episode.

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Disclaimer: The Six Five Insiders Podcast is for information and entertainment purposes only. Over the course of this podcast, we may talk about companies that are publicly traded and we may even reference that fact and their equity share price, but please do not take anything that we say as a recommendation about what you should do with your investment dollars. We are not investment advisors and we do not ask that you treat us as such.

Transcript:

Daniel Newman: Welcome to this week’s edition of The Six Five Podcast. I’m your host today, Daniel Newman, joined by my always esteemed cohost, Patrick Moorhead. Friday seems to be our day for whatever reason, Patrick. We just finally get our stuff together. It gives us a chance to assess the week and all of the banging technology that’s gone on. Frankly, this week, I think Friday was the first hope of actually being able to get you onto a show because you had a week that, hey, I think a lot of people want to hear about because we hear about the good life in Texas from you quite a bit, but this was the other side of the coin.

Patrick Moorhead: Yeah, for sure, Daniel, and it is good to see you. This is my first full day back at work. I actually had to go off and do something, I guess, for a couple of hours, so I guess it wasn’t a full day. No, I’m in Austin and we have been hit by a huge snowstorm the likes we haven’t seen for a hundred years. Many Austinites were without power, heat, water, food. Am I missing any of the Maslow’s Hierarchy? I guess we had air, which was good.

I got off light. I had power and all I have to do boil my water. I ran out of food on Tuesday and took three hours to get some scraps of food because the grocery stores were out of food because trucks weren’t coming in. No, it’s really good to be here. Ended up rescuing my oldest up in Northwest Austin. She hadn’t had power since Monday and no water for three days, either, so I’m just glad to be here.

Daniel Newman: Yeah. Well, I guess it’s those moments when the essentials become scarce that we just realize how good we have it. Now, up here, we’ve had snow almost every day. I have like a 13-foot snow pile in the back of my driveway because it just hasn’t stopped and, of course, it’s freezing, so it never melts. The good news is down there it’s going to get warm next week in the 70s.

Hopefully, they’ll get their act together long term, and there’s a lot of things at play and I don’t think you and I can pretend for a minute to be smart grid experts, but hopefully by the time I get down there next year or later this year, they’re going to have all of this together so I never have to deal with this, which was left for you and the birds.

Patrick Moorhead: Yeah. Listen, we have a lot of pride in Texas, if you haven’t figured that out, and we’re okay dishing it out to California, so we need to be able to take it. This is an embarrassment. This is a black eye, but here’s what I know from living in Texas for over 20 years is that we are resilient people and we fix things. I do believe that we will fix this for the long haul, even if it’s only for a hundred years. We had designated flood areas, hundred-year flood plains, so we do plan for the future, but it’s obvious that we did not plan for this, so-

Daniel Newman: Absolutely, and onwards in that. We’ll kind of talk about a few global tech events that are somewhat interrelated to this throughout the show. We got to get to it. For everyone out there that is new to the show, Six Five, six topics, approximately five minutes each, but sometimes it’s more like the Six Six, Six Seven, but we’ll try to keep things sharp. This wasn’t as big of a tech week for news, but we got some great stories to cover this week and we’re excited about that.

Before we jump in, just a quick reminder. Our show is for information/entertainment purposes only, and while we will be talking about publicly traded companies and opining about their business, occasionally even talking about their stocks and earnings, this show is in no way, form, or manner an investment advice show, so don’t do what we say. Don’t do anything that we say. Listen. Information, entertainment, let’s have some fun.

Pat, speaking of having fun, one company that’s actually they’re earning their next week, speaking of and I’m sure we’ll talk about that, is NVIDIA, and NVIDIA came out with a pretty interesting piece of news yesterday. They happened to hit the trifecta of market timing and it’s related to crypto, it’s related to NVIDIA, and it’s related to chips. I’ll let you dunk into this one.

Patrick Moorhead: Yeah, so appreciate it, Daniel. If you haven’t been living under a rock, which I don’t think you have, particularly if you’re listening to our show, you recognize that there is a huge shortage of electronics, so whether it’s TVs, Xboxes, PCs, Chromebooks, tablets.

They are all hard to find. Daniel and I both addressed the chip shortage, but it’s really related to electronics shortage. I mean, when you have something like the PC market that was supposed to grow 2% and in the fourth quarter it grew 25%, you know things are changing. At the same time, smartphones hadn’t plummeted and there was actually a little bit of growth in the fourth quarter. When you look at even tablets, tablet demand has gone up by 2X, and Chromebook demand has gone up by 5X, and so things are happening.

That has impacted the gaming market as well, and whether it’s Xboxes, PS5s or AMD or NVIDIA cards, these are hard to find. In fact, I saw the latest and greatest 3090 on eBay for 3X of the list price, so it’s crazy. What NVIDIA announced yesterday, there were two announcements. First of all, the RTX 3060, they’re going to decrease the Ethereum cash rate performance by 50% and they are going to create a new line of graphics cards specifically for crypto mining. Let me give you a quick view of what this looks like here. Actually, that’s Daniel and I. I actually have to share the screen first. Imagine that.

Daniel Newman: You look good, though.

Patrick Moorhead: Thank you. Here’s my draft blog that I’m about to publish, but as you can see, NVIDIA brought out four different cards. One thing about these cards that are different from the graphics cards, they have no video out. They also use lower power. They’re lower frequency, which to me from a supply standpoint is going to be a positive thing for gamers because if you have a specific line for crypto miners and a specific line for gamers, NVIDIA can be the arbiter of the volume as opposed to eBay, where people are using bots to go in and buy the cards for gamers. Then, they’re putting them up on third-party sites like eBay that are just driving up the price and decreasing the availability.

What I wanted to do, Daniel, is go through some of the things that I’m seeing on Twitter, the debate about it, and kind of the plus in it. First thing I’ve heard is this is bad for miners, and quite frankly, my response to that is, “So what?” Gamers are what makes NVIDIA great, not miners who are in and out based on the latest currency variant or ASIC. I mean, Bitcoin mining left GPUs and went to ASICs. Really, what we’re talking about here are primarily Ethereum vendors.

Daniel Newman: The Ether.

Patrick Moorhead: Sorry?

Daniel Newman: I just said the Ether as-

Patrick Moorhead: Yeah.

Daniel Newman: … they used to call it.

Patrick Moorhead: Well, it’s definitely smaller, for sure, and also I’m hearing some talks that said, “Hey, larger mining operations write their own drivers in BIOS and are going to circumvent this.” What NVIDIA told me is there has got to be a handshake between the driver, the RTX Silicon, and the BIOS that prevents the removal of the hash rate limiter. Hey, we’ll see. I think it’s going to kind of be like cat and mouse like in security where you’ll see some back-and-forth, but in the end, if the CMP line is any good, then that would be a net positive for the miners anyways and they don’t have to worry about using a gaming… The final thing I want to hit, Daniel, and I think you’ll appreciate this, is people are saying it’s bad because, “Hey, this is just spill off. We’re using defective GForce chips. I’m like, “So what? It’s brilliant.”

The name of the game in semiconductors is about maximizing a known good dive, the highest price possible, and I’m speculating that’s what NVIDA’s doing here because they didn’t pass voltage frequency or some other GForce gaming test. That doesn’t make this silicon lesser. I think it’s a smart move.

Daniel Newman: Yeah. I’ll keep it short because you covered all of the meat here, Pat, but look, the NVIDIA momentum is strong. There’s going to be a year ahead of them and I don’t want to dive too deep into it, but with the Arm deal on the fringe, the company needs to continue to show its prowess despite what’s going on with that, that it’s innovating, it’s breaking barriers and it’s dealing with this shortage effectively. NVIDIA’s momentum is legitimate.

Two, crypto is hot. I mean, look, besides the cold spell in Austin this week or in Texas, Austin is Texas [crosstalk], there wasn’t much news other than GameStonks and Bitcoin. That was it.

Patrick Moorhead: Did you say Stonks?

Daniel Newman: Yeah, that’s what Elon called them.

Patrick Moorhead: All right, man. I’m just… Okay.

Daniel Newman: They were all the memes, Stonk memes or whatever. I’m being a little funny, but look, that’s what is on the 50,000 Bitcoin. Well, there’s a whole ecosystem of cryptocurrency and NVIDIA has an opportunity. It’s a nine-figure business for NVIDIA using their GPUs for mining. Having a set of specific products to deal with this is great, and by the way, three, this showed a genuine empathy for its gaming community, which as you said, Pat, is where the money is for NVIDIA. Their gamers love them. Telling their gamers they can’t have chips or that “greedy miners” can be out there mining their Ether on a temporary basis where they’re just going to dispose of these cards once the algos have been shifted or the frameworks have changed, they’re doing the right thing.

All right, let’s jump onto number two. Should be a fast and ferocious one, but Qualcomm had some interesting updates over the last two weeks on it’s new fixed 5G wireless. Let me just start off by saying we hear a lot about 5G, and the lens is through the mobile device. We think about 5G, whether it’s an iPhone, a Samsung device, something that we’re using in our pocket, but 5G is a big ecosystem. Even if you’re hearing about 6G, just wave that off for a minute and just realize that 5G is the next horizon of connectivity that will complement and also, in some cases, augment and displace traditional Wi-Fi and other connectivities that we’ve been using. It’s ultra-fast, it’s highly reliable, but you need to have infrastructure in order to do that. That’s something that we call fixed 5G or fixed 5G wireless access.

Last week, Qualcomm basically introduced a second generation of its 5G fixed wireless access. It uses their X65 5G modem RF system, another really class-leading technology that comes from Qualcomm. It’s their 5G fixed and their modem RF system, which Pat, you and I could talk about this all day, but the complexities of making the modem RF system work together is very unique to something that Qualcomm can do. This platform is now basically breaking some real speed barriers that are going to enable some next-level Edge applications.

Now, if you just need to censor data off of a stalk of corn to know whether it’s wet or not, you don’t need super high-end. You can use low-power Edge semiconductors that can report data back, but some of the applications that we’re hearing about, Pat, say, for instance, video for facial recognition in large cities where you have thousands of people walking down a street concurrently and you need a million cameras, not really, but thousands of cameras in a city to have bandwidth, throughput, backhaul to be able to analyze data, send it back to the cloud. 5G and what they’re doing with their fixed wireless access networks is going to be a true differentiator here.

The specifics here are going to fall into all kinds of different areas, but in industrial IoT applications. Think about robotics inside of an Amazon warehouse where you need really smart, intelligent machines, and you need flexibility, Pat. That’s the other thing that’s really big about what they’re doing with 5G fixed wireless, is that these chips, this X65 platform enables for on-the-fly updating. You can actually keep these chips on the leading edge of what you need them to be doing for your application.

It’s a big thing, Pat. Improving accessibility, giving ultra 5G broadband in all kinds of areas, and, of course, tapping into millimeter wave, which is another thing that I’ll just leave before I give you a chance to at least take a little tiny bit at this apple is not all 5G is created equal. We don’t maybe even talked about that enough here on this show, but there is a 5G that is millimeter wave which is in very large markets right now mostly and it’s super-fast. Then, there’s sub-6 5G, which is really going to function and perform a little bit more equivalently to your standard or really nice 4G LTE experiences. It’s not going to be that different, and so not all 5G’s created equal.

For this millimeter wave platform, you really do get this next-level, next-generation speed, so Qualcomm’s working on this, building the hardware and then rolling out the platforms to be able to democratize 5G as a service in fixed wireless applications.

Patrick Moorhead: Yeah, I’ve gotten to know Qualcomm really well over the last decade and, to me, this is more of what Qualcomm does best, which is, first of all, invest a ton into research, R, not to be confused with R&D, to go out there and set the standard and work with the industry to then pull everybody together, which by the way, then, gives them a headstart on everything. Then, they’re typically the first to drop the fastest. You know, they chronicled almost every speed advance they had for 4G LTE, and this is classic Qualcomm. They’re doing a rinse and repeat of what they did on 3G, 4G, and now 5G.

I in particular, like you, Daniel, really appreciated the FWA, fixed wireless access, because it really is a new business opportunity for the company. The only other terrestrial type of internet was satellite, which that was basically terrible as it really hasn’t improved that much and it’s super expensive for those who are out there. More competition is 99 out of a hundred times better, and by enabling bigger, better, faster internet technology to the home and to business, I think this is going to be really good.

Daniel Newman: Yeah. It’s going to bring new levels of speed to the public. Just a quick touch, despite what Citigroup’s analysts said about the late cycle, and this is not going to see any major margin decreases anytime soon, sorry, had to throw that in there, but in all seriousness, think of it this way. We’re extending 5G reach, we’re improving the data and capacity at the network Edge, which is really what’s going to be critical for some of these Edge applications that we keep hearing about. Freely, it doesn’t just work because you have phone cell signal. You need really high-speed throughputs and backhaul.

This 10 gigabeat, gigabyte peak speed really will bring next-level speed into some high-rises, buildings, apartments, places that often have had trouble maximizing the potential using wireless technologies. Pat, we could talk about this all day as well, but we can’t. Talk about something I want to talk about all day, let’s talk about some notebooks. Let’s talk about a really great article that you put out that I’m sure was met with a combination of love and disdain, because that’s how life functions when you write about Apple, but I thought you wrote a great piece. Having the chance to have talked to you about it through the process a little bit, you wrote a very balanced piece. We can be critical of Apple because I think we expect so much of the company, and Intel has certainly done a lot of wonderful things with its Evo and vPro platform to build some next-generation notebooks. They are competing head to head. You did the takedown, the breakdown. I’ll let you lead this one and I’ll follow along with some comments.

Patrick Moorhead: No, it’s… Thank you, Daniel, and this is really the second installment. I did my first set of reviews back in November on the first products that came out with the initial version of Rosetta 2. I think there was one update, and kind of did the pros and cons in it. What I wanted to do was do a comparison to the latest and greatest Intel Evo-based notebooks. A disclosure here, Intel did send me the hardware to do some of this testing, so I need to put that out there, but what I did, Daniel, is I wanted to make it as fair as I possibly could because I’ve no beef with Apple. In fact, they brought some pretty incredible technology out there. What I did was I first talked about, “Hey, what are some of the things that I wish these Evo laptops could do that it can’t that the new M1-based MacBooks can do?”

I point out things like battery life on M1-optimized applications, its near-fanless operation on the Pro and its fanless operation on the air. I really like the new keyboard, especially how they’ve perfected the backlighting that has no leakage that quite frankly drives me crazy with premium Windows laptops. I also talk about, hey, the ability to run iOS apps. Now, there aren’t a lot there and I didn’t find a lot that I found that were on my iPhone, but I did find two of them and I think that will get better.

Finally, what you think really surprised people and, by the way, Daniel, over a hundred thousand people have read this article so far, so it’s definitely touching a nerve out there, is the amount of promotions that I get with Windows laptops. You know what I’m talking about, whether it’s McAfee, Dropbox, ExpressVPN, for warranties, for market research, for pretty much everything, I just didn’t get those on the M1-based MacBook.

Now, let’s dive in. Obviously, more controversial to the Mac lovers out there, but things that I wish I could do with an M1-based MacBook that I can’t… Sorry, things that I wish I could do with the M1-based MacBooks that I just can’t but I can do with the Evo laptops. First thing is visual login. How do you log into these Evo notebooks? You look at them and it lets you in. It’s not that Apple doesn’t have the technology because they do, they have Face ID, but they just have decided not to implement it. It’s super easy to log in with that.

The other thing is a lack of ports. Both new M1-based MacBooks have one open port, two USBC, one is for power. That’s really difficult for the way that I work, and sure, you can go out and buy an external hub, but I’m thinking that a 1299 laptop, having to do that is suboptimal. Now, related to that is the inability to connect to more than one display. As I’m sitting here right now, I have four external displays natively. Now, you can rig through a display link up to six displays to work, but you will not get the resolution, the frequency rate, and connect all of the features like you put your notebook down and the displays turn off. You open it and they turn on, stuff like that.

Other thing is peripheral compatibility. I can’t use an external GPU and the external GPU that I set up gave me a 3X gaming performance bump and, more importantly, turned games that I couldn’t normally play that might have been getting sub-30 frames per second into 60 and 120 frames per second. It really was the difference between being able to play a game and not being able to play a game.

The last thing I’ll touch on, and you can read my article if you want, is the volumetric difference, and I think the best way to show this is to go through and show you the difference between… This is a Dell XPS 13 sitting on top of the new M1-based MacBook Air. As you can see, Apple really didn’t work too hard on the form factor and making it smaller. The first point is these massive black bands that are around the display, but it’s primarily because Intel wanted to leverage the same chassis as they do with Intel, I believe, for operational efficiency and maybe some risk mitigation not knowing exactly how the silicon was going to look when it came in.

Hopefully, it’s provided some insights to the readers and there will be more to come in the future. I already have one request to do a side-by-side with Surface, so, no, like, “Why didn’t you do a Surface comparison?” Well, Surface isn’t supporting Evo right now. It’s as simple as that. I’ve got a couple of requests out there to do that and I think I’ll do that.

Daniel Newman: Well, this podcast is, at least on my end, being run on a Surface right now, so-

Patrick Moorhead: Yeah.

Daniel Newman: … I can truly say I use them off. I have a 27-inch iMac that sits on one desk. I have an HP, a Dell. Just like you, I’ve got a MacBook. I have not used the M1 yet, so I’m a little bit jealous that you had the chance to spend some time with it. What I can say is I continue to be impressed with the moves that Intel has made with Evo. It was a good quarter, by the way, for Intel’s client business for the first time in several quarters, regaining a little bit of market share. That was according to the Mercury research data. By the way, that’s just a side note. Nothing to really do with what you wrote about, Pat, but what I will say is his articles are balanced. It’s a dive. Some people are a little bit hypercritical about, “Oh, you wrote articles because Apple fans or Apple fans.” In their eyes, they see no wrong.

Wanting things like a port to connect additional devices to is not an unreasonable request. By the way, I think the Arm architectures will continue to advance. In fact, future of my teams, we’re actually deeply working on some research that’s going to come out and look at what the future holds for architecture on shift because Apple is building its own homegrown, but it’s building on Arm’s mainly. A lot of other OEMs are, so we’re going to see more diversity in the market and we’re going to see a lot more, and Pat, thanks for the coverage. It was a great piece.

Quick hit, because this last one was not a quick hit, and by the way, said Six Five, it was like the Six 15. Terrible, but this one will go pretty quickly. We’ve been keeping track and just with what’s been going on the last few weeks. I don’t know whether we can get adverse weather events credit to climate and climate change. Pat, you know I’m all about doing things to help our globe, our society, our people, and improve lives of the world. I’m not going to proclaim to be a scientist like most of my friends do on Facebook when it comes to climate change, but what I will say, I do like to see companies that are making big investments in trying to the difference makers and trying to improve the quality of the air and trying to improve the carbon footprint that they leave behind.

Amazon, as many of you are aware, has been very busy and active with what it calls its Global Climate Pledge, or The Climate Pledge. It’s working with some group called Global Optimism. The idea of this pledge is really to accelerate the pace of which carbon emissions will be neutralized, and so just as a quick thing, everybody that’s part of this pledge agrees to three things.

One is to measure and report greenhouse gas emissions on a regular basis. Two is to implement decarbonization strategies in line with the Paris Agreement through real business changes and innovations. There’s more to it than that, but I’ll leave it at that. Then, three is neutralize remaining emissions with additional quantifiable real permanent and socially beneficial offsets to achieve net zero. Whoo, that was a lot in one breath, but the thing.

Patrick Moorhead: Good job, man.

Daniel Newman: One thing that came out about this is the Paris Agreement was all about 2050. This pledge is all about 2040, and so over the past several months, we’ve seen Amazon releasing just different companies that have been getting involved, and that was really what happened this week is it wasn’t any major changes foundationally, but another 20 major global companies around the world decided to get involved. Probably the one that caught my attention, there was new ones like Johnson Controls join, but was IBM. IBM, following Microsoft, and it’s always, Pat, really interesting to me when multiple companies that are competing are willing to work together on something.

With what’s going on this past week with Texas freezing over, with all of the talk about what is climate change and what isn’t, it’s… By the way, just the political landscape of our past like, I don’t know, 20 years, it is really just great to see when people can agree on something. I think doing good for the Earth and trying to help make the quality of life better for everybody is something that even the biggest companies can agree upon, so kudos to Amazon, kudos to the newest 20 companies that are pledging to participate in this effort.

Patrick Moorhead: Daniel, I mean, what else am I going to say? I mean-

Daniel Newman: Nothing, but you know I have to leave the ball in the air. I got to let you…

Patrick Moorhead: Here’s what I do want to add is, and some people are sometimes forgetting this, Amazon actually is pledging to hit the Paris Accord numbers 10 years early, and that’s what this group is all about. You might be wondering, “Why does Amazon need to start something new?” Is they’re actually getting ahead of it by a decade, and I think that is kudos to Amazon on that.

Daniel Newman: All right, you want to go down under, mate?

Patrick Moorhead: Let’s go down under, baby. Here we go.

Daniel Newman: I don’t do Australia accents very well, but I did want to say mate, and I could say it’s 5:00 somewhere, so maybe it’s time for a Foster’s?

Patrick Moorhead: Yeah, let’s do that Dan-

Daniel Newman: For beer.

Patrick Moorhead: … let’s do that.

Daniel Newman: Anyway, so Google and Facebook have been under the microscope down in Australia and it seems that this is starting to come to a head, so Pat, your turn.

Patrick Moorhead: Yeah, so while Daniel and I don’t cover social media, and when it comes to the business of media, we don’t do a lot of coverage there, but we think it’s important to bring this topic up because it really can be groundbreaking. It’s funny, some people say that, “Hey, Facebook is free, Twitter is free, Google search is free.” If you’re watching this show, you probably know that that’s not true. There is a cost, and as consumers we trade our privacy for a service that they give to us, and that’s how Google and Facebook make most of their money.

In an interesting piece that’s going on, Australia passed some laws that basically said that, “Hey, Google, or any social media, whenever you want to use or leverage a piece of news coming out of Australia, you have to pay for it.”

Some obviously are on one side of the camp that says, “Hey, this is just a social media tax or a link tax that some people have been trying to get for a while,” while others are saying, “Hey, this is just extra money to keep the news folks in business.” This is really central. Sorry, I was getting confused. This is really ground central for this discussion, and Google and Facebook decided to take radically different ways.

Google is writing a big, fat check to folks like Rupert Murdoch with the ability to put their news and their links, where Facebook essentially cut off all media access. There is no Australia news media. You can’t share it. Well, the only way they can share it is by taking a picture of it, and surprisingly the press has taken different sides on it. One says, “Hey, Google is setting a precedent for a global shakedown of folks.” Others are saying, “Hey, it’s about time. We need news to stay alive and we can’t rely on social media, so this is a good thing.”

Anyways, I like the discussion, I like the debate, and I’m glad that we have Google in one corner and Facebook in another, so we’re not having some, I don’t know, theoretical conversation. We can actually react to what’s really going on. Why this matters is first of all, potentially it elongates the life or the business model of news. You can imagine this on a global basis, and second of all, it’s got to be cutting into the profitability of social media and search sites. How does that impact their valuations? How does that impact their stock prices?

Daniel Newman: Yeah, it’s going to be a bit of a fallout as we watch this, but we’ve seen how global regulation is a snowball. We’ve seen it with all kinds of different things, licensing agreements. We’ve seen it with search. We’ve seen it with software packaging. Europe has historically been a leader in drafting [inaudible] American innovation through regulation.

I think there’s been a rotation of lawsuits against Facebook, Google, Amazon, and then the chip makers, and so that’s surely is finding a way, but I also do think there’s a discussion that needs to be had about what information and how that information gets prioritized and it’s the various control that it can have over what people are able to see because that doesn’t create an informed society, that creates a bought and paid for society. I mean, it’s just pretty logical.

Politics aside, all right, Pat, we are on the slow boat to Texas this week, trying to finish up this show.

Patrick Moorhead: Yeah.

Daniel Newman: Let’s finish where we started. Austin is a sheet of ice, but it’s melting. It’s going to be back in the 60s, so Texas is going to be in the 60s, 70s, probably even 80s down near Houston not too long from now. Galveston will once again be a beach, but we have this global chip crisis, and you and I did a special extra show on this topic. We went all over the news cycles, big, big, big topic, Pat. Chip makers, as if they needed another problem-

Patrick Moorhead: Exactly.

Daniel Newman: … saw their fabs here domestically taken down with Samsung, Infinia, I’m sorry, Infineon, and NXP, which manufacture down there in Texas, all having to at least temporarily shut down operations because of the storm.

Patrick Moorhead: Crazy stuff, and just because we needed to make a long show go longer, I just want to do a very quick review on what’s going on here. PCs up 25%. Forecast was for them to go down for the year. Look at Chromebooks. Look at the curve on tablets. Completely insane. Oh, at the same time, smartphones didn’t crater. Oh, and TV demand went up as well, and then you saw our last show, automotive companies pulling their production down. That’s where this is coming from and we have some pretty large fabs here in Samsung, sorry, here in Austin. I would estimate that around 5% of global semiconductors are made here. Samsung has some very sizable memory and storage fabs here and the same in Infineon.

NXP, to your things can actually get worse, is a very large supplier to these automotive companies, so essentially what they did is there was no power and water and they asked them to shut it down. One thing I can tell you from my experience in the chip industry is that you can’t just turn a fab on and off like a light switch. You have to have a very controlled turn-off and you have to have a very controlled turn-on, and there’s a lot of risk that is around that. A single molecule getting into the process can completely screw up a chip manufacturing.

Yet some more bad news for the semiconductor industry. It’s not about leading edge, but there’s a lot of memory and there’s a lot of auto parts in here.

Daniel Newman: Yeah. From bad to worse, if you have an extra onslaught of vehicle chips, you could probably do very well. The theme has gotten out there. You heard about the NVIDIA CMPs. Chips for making GPUs for gamers. Those are in short supply, auto is in short supply. Country’s freezing over. Our global relations in supply chain is not fixed. Demand has not leveled and this chip shortage story will not be going away anytime soon, that which means something for us to talk about here, but here is not going to be now because this show has to end. We have effectively done the sixth 6.5, but we do appreciate everybody out there. We do want to say thank you for tuning in. Thank you to all our loyal subscribers, the tens of thousands of you that listen in to our show every week. You are appreciated. If you’re just-

Patrick Moorhead: Yeah…

Daniel Newman: … for the first time, hit that subscribe button. Check out the show notes. Pat’s great article on the M1 can be found down there. We’ll certainly have links to either our favorite articles or our own articles on all of these topics where we provide our analysis, or at the very least, news that we find worthy of your attention.

Patrick Moorhead: Yeah, Daniel, and I just wanted to add there were some comments that came in that, unfortunately, I was having some technical difficulties adding, so my apologies on the questions. We had about four questions come in that I couldn’t add, but I really appreciate and we’re going along, but we’ll try to not do that, at least until next week. Anyways, with that said, thank you for tuning in. We really appreciate you. Have a wonderful weekend.

Daniel Newman