00:00Hwang Ji, DC's speech was over two hours long, he made a lot of big announcements,
00:04but what would you say is the biggest takeaway in your view?
00:07So, let's first talk about what he did not talk about.
00:10So, no new product announcements in the data center, nothing about Feynman architecture,
00:15which was something that investors did not anticipate, but still.
00:19You know, data center is the major driver for NVIDIA, so to not see any new announcements on that front,
00:24that was something to take note of.
00:26What it mostly took away, though, is that NVIDIA remains very focused on the most important metric for them,
00:33which is tokens per watt.
00:35Over the last year or so, that has really evolved into the metric that investors and the broader industry pay
00:41attention to.
00:42And on that front, NVIDIA is still leading by a mile compared to their competitors.
00:48So, in our estimates, they're, on that metric token per watt, they're three to fifteen times as efficient as an
00:55AMD, for instance.
00:57And this really comes down to the level of integration that NVIDIA can deliver.
01:01So, those seven chips that they combine into the Vera Rubin rack, that drives that level of performance delta.
01:09Another big theme was AI infrastructure, what Huang is calling AI factories, these massive data centers used to run and
01:17train AI models.
01:18But what do you see as the biggest obstacle for scaling these in the next few years?
01:23So, for NVIDIA, but also for all of their peers, what remains a real bottleneck is silicon.
01:28So, whether it is N3, so three nanometer capacity coming out of TSMC,
01:35or high bandwidth memory chips coming from SK Hynix, Samsung, Micron,
01:39all of those chips, all of that silicon is still in short supply.
01:43And this remains the main bottleneck.
01:44Now, for NVIDIA, in particular, that is not necessarily a negative for the industry as a whole.
01:51It smoothens the cycle, ensuring that we don't end up in a situation in which the sector overbuilds
01:58and ends up with a situation where we see a big downturn.
02:03And for NVIDIA, it ensures that buyers really focus on that performance per watt metric.
02:10If your silicon is constrained, if your power is constrained, you're going to want to put in the most efficient
02:16chip.
02:17And that is NVIDIA.
02:18Another big announcement NVIDIA had was it's pushed deeper into the PC market.
02:23Why this move now?
02:25And do you see the PC market becoming a big area for growth for the company in the next few
02:29years?
02:30So, computer access, as you know, has always been fairly PC-centric.
02:35So, they saved that announcement for this particular conference rather than announcing it a few months ago
02:41at their own conference on the West Coast.
02:44At the end of the day, for NVIDIA, PCs is a smaller market compared to the data center.
02:49But the cooperation that they have with Microsoft, with MediaTek, with ARM,
02:53there is a lot of ecosystem backing to this initiative.
02:57And that is something that is probably necessary.
02:59Because in the end, we've had several initiatives over the last decade of PC manufacturers trying to break into ARM
03:07-based Windows PCs.
03:09What NVIDIA is trying to do today.
03:12And all of those have failed.
03:13The only ARM-based alternative that we have in the market is Apple.
03:18Because Apple can so tightly control its ecosystem.
03:22Now, NVIDIA, with all of its peers, tried to deliver a similar proposition today.
03:26But we'll have to see whether they succeed.
03:28And we don't really know yet.
03:31Because what we have not seen is benchmarks versus Intel and AMD.
03:35We haven't seen any type of price point, any type of performance difference.
03:39So, the jury is still out on that front, I would say.
03:41As NVIDIA deepens its presence in Taiwan, which Taiwanese companies, besides TSMC, do you see being able to benefit the
03:48most?
03:49So, obviously, TSMC is the main beneficiary, absolutely.
03:54But apart from that, the ecosystem in Taiwan is very rich.
03:57There are dozens of companies that stand to benefit here.
04:01Chen Sun-Huang mentioned 10% GDP growth, potentially, for Taiwan, which is an astounding figure.
04:06I think companies such as ASC, that do packaging, Foxconn, that does server assembly, those companies stand to benefit.
04:13But there's companies, for instance, such as Kingslide, that do the rails for NVIDIA RX.
04:17And that is something that, it is amazing that the company that manufactures rails that go into racks,
04:22runs gross margins at the similar level of NVIDIA, so in the 70%.
04:27That just really demonstrates that the solutions that companies supply here are very differentiated.
04:32And the market positions that they have in their respective segments can be very strong.
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