The Circuit Episode 93: Arm/QCOM Earnings, Trump Presidency Impact on Semis, NVDA Preview
Nov 11, 2024
Recent earnings from Arm and Qualcomm take center stage, revealing intricate market responses and ongoing lawsuits. Qualcomm's shift towards automotive markets unveils new revenue streams amidst supply chain challenges. The potential impact of a second Trump presidency on semiconductor policies raises eyebrows, especially regarding trade dynamics. The discussion also highlights Nvidia's soaring demand amidst supply constraints, showcasing the cyclical nature of the semiconductor landscape and the hurdles that lie ahead.
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Arm's Guidance Strategy
- Arm's Q4 guidance suggests lower numbers, causing stock drops despite good overall performance.
- They strategically manage guidance to ensure beatable targets, prioritizing long-term growth.
Arm's Revenue Model
- Arm's revenue comes from lumpy licenses and predictable royalties.
- They aim to increase dollar content per chip and smooth earnings through pricing adjustments within each architecture version.
Arm's CSS Pricing Model
- Arm's pricing model now includes increases within a single architecture generation (e.g., V9.2, V9.3).
- This is linked to the Core System Supplement (CSS), allowing for increased revenue as more IP layers are adopted within the subsystem.