YF Reports: Chip Wars

the chip Wars are intensifying while Nvidia Remains the dominant force in semiconductors competitors are stepping up Intel's lunar Lake claims a 40% reduction in power consumption while amd's Mi 350 boast a 35 Time Performance boost but can these challenges actually close the gap on Nvidia our experts weigh in we keeping close tabs on this one as well Applied Materials forecasting weaker than expected second quarter Revenue the chip manufacturing equipment makers citing the threat of tighter us restrictions on exports to China now the company says export controls that were put in place during the final months of the Biden Administration will result in a $400 million hit to fiscal 2025 Revenue shares right now of Applied Materials are down pre-market by about 5% yeah it's really interesting to watch a company like this because they're a key supplier for companies like tsmc Samsung Intel they use tools from uh Amat to manufacture their own chips they're also heavily tied to the overall semiconductor industry and Global Supply chains on semiconductors something that came up on the call Export regulations as a potential headwind I think it's just really important to take a look at amap because it is indicative of the fact that the chip sector has been significantly under pressure and we're seeing the cycle in the chip sector evolving and it's evolving in a direction that may be negative having said that JP Morgan talking about how yes a at coming in modestly below expectations particularly due to spending declines in China which with tariffs coming in that's only going to continue but the company did report solid results and it Outlook does reflect the company moving away from China revenue and strong earnings power so there Al are some bullish calls still and reactions from analysts to this earnings print but as you can see the stock down nearly 5% ahead of the market open here first up R we want to talk about Intel ping back from its recent rally the stock getting a boost earlier this week after vice president JD Vance said domestic chip production is important to the Trump Administration but it is interesting Intel still on track for one of its best weeks since the 80s and that comes in the context of course as you can even see here on your screen over the last 5 days but much more broadly if we can broaden that out Intel has been under a lot of pressure just because of the transition to uh chips producers outside of the US and of course Nvidia a huge beneficiary of that yeah domestic internationally partnered chip production though is the reality of what we could see for Intel here and specifically calling out from City their own evaluation of a potential Foundry partnership that would potentially go forward between Taiwan semiconductor and Intel that surfaced City ultimately kind of dissecting this basically looking at Three core reasons that this might not work out or at least why it may fizzle here one of them being staff members following commands of semi Taiwan semiconductor Additionally the organizations and their production process ecosystems uh which would require some major adjustments as well and then additionally finally here uh the work culture variation Intel staff members essentially kind of working under some of the same circumstances that the Taiwanese semiconductor employees are held to and so those three things considered reasons why city is kind of pushing back on this partnership at least in the interim period of time but for investors that have been watching Intel no doubt hoping that they continue to catch a bid at least in positive sentiment from the new administration because the larger hangup was the billions of dollars that were earmarked for chip production in the US that there was a larger question mark as to the dispersement and the time scale for that dispersement once you change the guards in Washington DC regardless of whether or not the PC demand cycle and the worst of that is behind us which is what we had been really monitoring towards the third fourth quarter of 2024 it's it's so hard to look at the totality of the data coming in and the policy implications when you've got things like export controls but then you also have tariffs that would be a negative indicator for names outside the US is that a lift for name like intel if you look at today's trade not necessarily so is the street kind of looks past the potential of those tariffs and in negotiation shares of arm Holdings Rising as the company reportedly secures meta as the first customer for its own chip that's according to the financial times Yahoo finances Dan hle joins us now with more now Dan we should probably make clear to viewers right while we sort of refer to many of these companies as chip makers arum is more accurately a chip designer yeah normally I guess until now yeah there uh you would consider so Chip I guess chip maker is is hard because they're not physically making the chip so it's like it's uh I guess designer is more like accurate whereas arm isn't necessarily designing whole chips they're designing uh different uh instruction sets for chips that can then be customized by these other companies uh the apples the the the uh the nvidias uh and uh and whatnot uh when it comes to their uh their CPU in nvidia's case and so now they're actually going to be designing their own full CPU so an actual full-on chip and this is a big deal because Intel is the CPU company and you know there's a reason why Intel's still doing its thing to a degree whether well or bad depends on how you look at it it's bad uh but the the thing that matters here is that uh meta wants to use these arm chips reportedly this is a by by the financial times saying in their data centers and so that's a huge deal for for Intel their chips are usually found in data centers if you have uh an Nvidia card uh or or a server in your data center nine times out of 10 uh there's also going to be some Intel chips in there somewhere if you're not using uh the uh actual Grace chips uh that Nvidia makes so this is a a huge problem potentially for Intel if arm can go ahead and prove that their CPUs are powerful enough and uh efficient enough when it comes to Performance because the big deal here that when you think of a company like meta they're using a lot of gpus those absolutely Hoover up electricity cooling them off is a big deal so they're really just blasting through Power if they can find efficiencies anywhere uh that's a boon to them and if they can use an arm chip which are known for their efficiencies then that could be a big big deal for mea when it comes to total cost of ownership of these huge data uh servers so what's interesting Dan in part what you're saying here too is arm now potentially comes into competition with some of its own with it's literally its own customers I mean look at you know if you look at Apple they're they're built on armed chips if you look at uh a number of these companies that uh use CPUs that are based on arm technology Qualcomm is one of the largest they use Arm Technologies and so you know if they're they're getting into the the CPU space that then becomes a problem for for their own customers but I think it's important to point out that with the meta uh distinction is again the data center so it's not necessarily a problem for you know uh Qualcomm there really um Apple obviously they have their own data centers that they're reportedly working on using their arm-based chips in but that's going to be an apple specific kind of thing it's not going to be uh a a broader data center push uh but when you look at something like like an Intel uh and an AMD which is also in the data center space not to leave them out that's that's where I think that the real problem is and again it comes down to the potential for that efficiency because all we're talking about I mean they're building new power plants for God's sakes for this stuff right if you can make it more efficient that's a huge Bo for them so I mean if arm can pull this off it would be really really interesting all right big story we'll keep watching thank you [Music] Dan Taiwan semiconductor announcing it expects its q1 sales to come in at the low end of its forecasted range after 161 million in losses from a January earthquake that impacted production tsmc upheld its full year outlook though president Donald Trump has threatened tariffs as high as 100% on tin Taiwanese chip Imports uh taking a look at shares here this morning they are still holding on to gains of about 1. 2% uh the company said within its release though that there was no structural damage to their Fabs the water supply power workplace Safety Systems Operations still functioning normally but uh what they said was a certain number of Wafers were impacted and had to be scrapped due to the earthquake and aftershocks as well as a result the revenue forecast for the first quarter of 2025 now anticipated to be towards the lower end of the guidance range $25 billion and $25. 8 billion was that range yeah certainly we are seeing uh obviously a little bit of clarity just in terms of the impact that those earthquakes is having on tsmc and obviously it wasn't just something that happened uh in January clearly it's going to have a material impact here over the next several months there was also the report out from reuter this morning saying open AI set to finalize the first custom chips design I bring that up because they're expected to send the new chips for fabrication at tsmc so again another story that is moving the stock a little bit here this morning but when you take a look at the earnings results and what we are getting there taking a look at the forecast there planning to invest a record $ 42 billion this year in AI demand their major tech companies including Microsoft alphabet meta also announcing some of those significant AI Investments last week so again when you take into account some of that initial uh hesitation or worry surrounding deep seek very much seems to be in the rear view mirror at least for now also I think there's been the shift just in terms of how the industry and more broadly how Wall Street is looking at it just in terms of more that wide that Main Street adoption widespread adoption and and how ultimately it's going to turn into a larger driver here for the industry moving forward yeah tsmc shares Still Holding Onto gains here pre-market sure's a super micro Rising after the company gave a bullish long-term Revenue Outlook easing some investor concerns saying that it quote believes it will meet a NASDAQ deadline to file audited Financial results so though the near-term forecast and reported results coming in just shy of some of those expectations let's bring in syia jablonsky she's Defiance ETS CEO and chief investment officer syia it's it's great to have you back here on Yahoo finance so let's talk about SM SMC because because since the last time we talked it looks like at least things might be headed in the right direction for the company I'm curious how you're thinking about this update here today yes good morning uh yeah let's hope so I I think you know the market liked what it heard with the stock initially we saw the stock fall after the earnings announcement you know they were kind of shy on Revenue expectations and then shy on on the 2025 Outlook but when we heard that potential you know 40 40 billion um going into 2026 I I think that's really what perked up investors and they have a unique story here right I mean they pretty much provide um da data center servers liquid cooling technology for some of the top um data center AI companies like Nvidia and and AMD and so you know they have this key relationship with the leader of AI um and I think that you know they have this unique product that that essentially no one else on the market has and so they're well positioned to be a top player as AI continues to grow and with this company as we know it's just all about um some of the accounting and Reporting things that that have spooked the market but it seems like you know if we get good news that they're coming out of that and projections for 2026 are good uh you know it could be smooth sailing for for super micro does it seem like there's just two much of the moves around super micro that have been hinging upon will they or won't they file in time to make it a a very an extremely viable business investment at this juncture yeah I I think so I think what holds investors for fully coming into the stock and you know kind of like fully adopting their their technological prowess and leadership in in the AI space is is just that right because of the Hindenburg um you know kind of report that came out what came after that I think February 6 February 26 is going to be a key date if we see that you know they're able to file their updated statements and and everything is sort of koser there you know I think that that's something that ends up being a tailman for the stock and it could potentially you know climb higher but uh the market still wants Clarity on that I think and and so you know we need to see what happens in the next week or two is there Sylvia is is there still any sort of risk or is there any risk that this could affect the relationship with Nvidia well I think February 26 will be telling right I I think if if you get a situation where the audit and financial statements are not acceptable and it kind of comes off of the the NASDAQ I think Nvidia would have to do their due diligence and kind of you know weigh their options I mean the one good thing is that it seems as though they they're a leader in a space that doesn't have as many you know cooling technology um server options as as Nvidia needs for their black wheil Chip and so you know I think a lot of it again is just making sure we just get clean reporting and that the market is comfortable with all of you know kind of what the company's doing as a whole once we get past that hurdle that the technology and the growth story is certainly there what type of Outlook do you need to hear from Super Micro even after they file with the NASDAQ and and and their kind of vision into the future about how they kind of sustain the business but also the Partnerships like sha was bringing up that are going to look to them to be able to deliver upon deadlines that they set forth yeah I I think part of this will be again just kind of getting you know past February 26 and having a a steady run of of clean reporting and filing on time and things like this and then I think if we actually see those revenues start to bump up on the second half of the year making it feasible that you know we we get that 2026 projection I think that's something that will really you know bode well for the stock and for the market and then in terms of um that stability being there if you have a leader like Nvidia in the space you know you have to think that and and AMD you have to think that all of the other trip providers will start to step in perhaps utilize their services once they have a clean slate Sylvia jablonsky we're going to be watching closely as they stun to file these reports appreciate it super Michael computer updating its second quarter guidance now saying it sees adjusted earnings per share coming in between 58 and 6 cents so look at the stock there about 710 of a percent we're higher uh let's get to the numbers Julie so Q2 adjusted EPS 58 to 60 they had seen 56 to 65 the street was looking for 64 uh the Top Line they're saying Q2 net sales are calling for between 5.

6 billion to 5. 7 billion they had seen between 5. 5 and 6.

1 and then looking at full year net sales they're calling for between 23.