Doug O'Laughlin on the Semiconductor Industry Dynamics and Outlook

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Jan 22, 2025

Delve into the vibrant world of semiconductors as experts discuss how AI is reshaping the industry. Discover the major players in the AI race and the new bottlenecks challenging growth. Explore the intricate needs of data centers for reliable energy sources, alongside innovative company solutions. The conversation touches on the cyclical demands in traditional sectors and geopolitical impacts. Additionally, learn how AI tools can enhance the research capabilities of analysts in navigating this rapidly evolving landscape.

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INSIGHT

AI's Compute Demands

The current data center infrastructure isn't suitable for AI's demands.
AI models require significantly more compute than previous web 2.0 applications.

INSIGHT

AI and Supply-Demand Dynamics

The AI boom is less of a bubble and more of a supply-demand imbalance.
Demand for AI compute is high, but the exact demand curve is unknown, leading to a build-out race.

INSIGHT

AI Chip Deployment and Returns

Deploying AI chips follows a shale-like decline in returns.
Early adopters achieve high returns, while late deployers face poor profitability.

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In this episode, co-hosts Elliot Turner and John Mihaljevic welcome Doug O'Laughlin, President of SemiAnalysis and founder of Fabricated Knowledge. Doug shares his wisdom on the state of the semiconductor industry, on topics like the key questions on how the industry is leading AI forward, the big winners of the AI race, an intriguing investment opportunity in the newest bottleneck for the industry, and the deep recession in the non-AI semi world.

For related research and more see SemiAnalysis (https://semianalysis.com) and Fabricated Knowledge (https://www.fabricatedknowledge.com).

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The primary purpose of this podcast is to educate and inform. The views, information, or opinions expressed by hosts or guests are their own. Neither this show, nor any of its content should be construed as investment advice or as a recommendation to buy or sell any particular security. Security specific information shared on this podcast should not be relied upon as a basis for your own investment decisions -- be sure to do your own research. The podcast hosts and participants may have a position in the securities mentioned, personally, through sub accounts and/or through separate funds and may change their holdings at any time.

About the Co-Hosts:

Elliot Turner is a co-founder and Managing Partner, CIO at RGA Investment Advisors, LLC. RGA Investment Advisors runs a long-term, low turnover, growth at a reasonable price investment strategy seeking out global opportunities. Elliot focuses on discovering and analyzing long-term, high quality investment opportunities and strategic portfolio management. Prior to joining RGA, Elliot managed portfolios at at AustinWeston Asset Management LLC, Chimera Securities and T3 Capital. Elliot holds the Chartered Financial Analyst (CFA) designation as well as a Juris Doctor from Brooklyn Law School.. He also holds a Bachelor of Arts degree from Emory University where he double majored in Political Science and Philosophy.

John Mihaljevic leads MOI Global and serves as managing editor of The Manual of Ideas. He managed a private partnership, Mihaljevic Partners LP, from 2005-2016. John is a winner of the Value Investors Club’s prize for best investment idea. He is a trained capital allocator, having studied under Yale University Chief Investment Officer David Swensen and served as Research Assistant to Nobel Laureate James Tobin. John holds a BA in Economics, summa cum laude, from Yale and is a CFA charterholder.