The Six Five team discusses the Best Announcement of 2022.
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Transcript:.
Daniel Newman: Pat, ’21 brought a ton of strain on the supply chain, and nothing was more touted as a problem for the supply chain than the chip shortage. Vehicles, PCs, servers, gaming consoles, refrigerators, ovens, basically you name it, you could not get it.
That was because we had a massive problem with our chip manufacturing. Over the course of the year, the semiconductor industry, the CEOs of many of our clients, customers, policymakers had all come together to basically try to put a bill forward. Pat, as much as it seemed obvious for the sake of national defense, for the supply chain resiliency, for technology leadership, there was a period of time where it really didn’t look certain that we were going to get this bill passed.
The CHIPS and Science Act, over $50 billion plus another couple 100 billion potentially for other innovation, R&D. We talk a lot about lack of the research part of research and development, to help the United States build a greater resiliency in the semiconductor space, finally passed. Now, this was the great news. I’m going to be a little bit of a Debbie Downer on my best of, and just say sadly the passage was really the beginning, not the end. There’s so much work left to be done.
I expect Intel to step up in a big way to add to the manufacturing capacity. But of course, Intel has had a tough couple of years and the market is not as bullish on Intel as it might want to be. We see TSM, we see Samsung, we see a number of fabulous all with hands out looking for money. We’ve got the likes of IBM global foundries. But in the end, the passage is the beginning. It was a great start. I’m very excited. We need to make more chips here and more chips outside of Asia. What’s going on in Taiwan and China is scary. You should be afraid of what’s going on.
Don’t be distracted by Russia and Ukraine. The real scariest conflict in our world right now is in China, but the passage of the act is the beginning. We’re two to three years away from really seeing a benefit. We do want to see the money go to companies that will keep it here domestically in safe parts of the world. That will add real resiliency to both leading and lagging edge. Because a lot of our continued delays are actually 14 nanometer and higher, but we really haven’t solved that problem yet at scale. Pat, what’s your best announcement?
Patrick Moorhead: Yeah. First off, we didn’t collaborate on this going in, so I didn’t know what you were going to pick until, I don’t know, a few hours ago.
Daniel Newman: That was the fun.
Patrick Moorhead: That was a really good one. I almost wish I would’ve chosen it. But you know me, I’m a product person so I thought product announcement, like what products were announced.
Daniel Newman: Yeah. Yeah. Yeah. Maybe I was cheating. I came up with something that was easy, fun and broad.
Patrick Moorhead: No, no, no, no, no, it’s good. For a second, I thought you were going to pick TSMC’s disaster Arizona announcement event that they did out there. They got hijacked by POTUS for his union talk but anyways, no, I chose a different one. I always say one of the things I enjoy most about being an industry analyst, is I get to do what I really enjoyed a lot and a lot more when I was in the business. That’s participate and be part of a bunch of announcements.
That can either be part of an advisory role up front or a market education role outbound in outside voice. I really liked IBM’s Quantum roadmap at Think. Well, wait a second, Pat. That’s like not reality or blah, blah, blah, but best announcement to me, it uncovers things that I was always wondering about the company or about the technology. IBM has chosen a technology on Quantum that people are like, “Hey, how do I scale this thing? That’s a challenge. And B, how do I increase the quality of the qubits?”
Quite frankly, they answer both of those questions. It was just an aha moment. They talked about the research on increasing the quality of the qubits, which I think has been a challenge for IBM, particularly for scaling. Because if you don’t have the quality of the qubits, then you have to create a bajillion more qubits to get there. The other thing and answered for me was on scalability. That’s not only scalability inside of the, I don’t know if you want to call it a trap or something like that, but it’s more of the chip.
Whether it was Flamingo, Kookaburra or something like that, Heron and Crossbill, they showed not only how you could scale on a smaller version. I’ll call it the semiconductor version, but also connecting multiple systems together. That’s why I choose IBM’s Quantum announcement that they did at Think for my best announcement of 2022.
Daniel Newman: Hey, and listen, Pat, bringing some real world and real life to Quantum is a big deal. In ’21, it felt like there was a lot of Quantum bullshit. Uh oh, now we got the advisory sticker beep. Anyways, but there was a lot of like we’re going to go all.
But in ’22, I think as the market gets more practical, getting more practical matters. It was a really big announcement. I think don’t undersell it because Quantum is going to become a very important part of our world in the next two to 35 years.
Author Information
Daniel is the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise.
From the leading edge of AI to global technology policy, Daniel makes the connections between business, people and tech that are required for companies to benefit most from their technology investments. Daniel is a top 5 globally ranked industry analyst and his ideas are regularly cited or shared in television appearances by CNBC, Bloomberg, Wall Street Journal and hundreds of other sites around the world.
A 7x Best-Selling Author including his most recent book “Human/Machine.” Daniel is also a Forbes and MarketWatch (Dow Jones) contributor.
An MBA and Former Graduate Adjunct Faculty, Daniel is an Austin Texas transplant after 40 years in Chicago. His speaking takes him around the world each year as he shares his vision of the role technology will play in our future.
