September 15, 2021 • 25 mins
On the latest episode of Bloomberg Studio 1.0., Emily Chang speaks Qualcomm CEO Cristiano Amon about taking on the top job at the San Diego-based semiconductor company, solving the global chip shortage and diversifying Qualcomm beyond mobile phone chips.
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Speaker 1 (00:00):
If we were in a battle together, he will be
an incredible sniper shooter. I will just shoot into a
run off ammunition. That's Qualcom's new CEO, Cristiano Aman, on
the difference between himself and the chip maker's former CEO,
Steve Mollenkom. Hi everyone, I'm Emily Chang and this is
Bloomberg Studio one point oh, a series where I speak
(00:20):
with the biggest influencers in technology and media. Over the
last decade, I've had in depth conversations with the very
people shaping the future of business, hearing their vision for
what comes next. Today we talk all things chips as
we speak to the newly minted CEO of one of
the leading companies in the semiconductor industry. Their chips are
in so many of the devices we use every day,
(00:41):
but Qualcom is still far from being a household name.
Christiano Aman, Qualcom's new CEO, wants to change that. He
grew up in Brazil, got his first job in Japan
in the mobile industry, and never left. He served at
Qualcom through prolonged legal battles with one of its biggest customers, Apple,
and hopes to USh You're in a new era for
Qualcom that expands beyond mobile, two cars, cloud computing, IoT, VR,
(01:06):
A R and more. How does he plan to do it?
Joining me on this edition of Bloomberg Studio. At one point, Oh,
Qualcom CEO Christiano, I'm on, Christiano. Is so great to
have you here, Very happy to be here. Get to
see you in personal Good to see you in person.
And we talked in person when you were a president.
But things have changed. Lot has changed, but it's good.
(01:31):
Is life different or not that different? So it's a
little bit different. I was busy before, you know, it's
been running into some my conductor business has been present
since a team, but it is different, kind of feel
the weight of the responsibility of the CEO job. Having
fun but busy, especially as the company is transforming. But
I'm still the same guy. I want to talk about
(01:53):
that guy. What was your upbringing? Like, what what kind
of kid were you? You know, I was a very
active kid. I was been somewhat hyperactive. I I I
guess I chose engineering, uh because I think my dad
was an engineer. But my mom would tell me that
we'll break apart all the toys and put them back together.
So I guess was a sign I want to do
(02:14):
something with engineering. But I was a normal kid. I
like as a kid, come back to school, you know,
play on the streets, UH with UH with the other
kids Brazil. A lot of things that you do. You
just play soccer, uh and UH done a lot of that.
But yeah, what's uh? I had wonderful memories off the
time in Brazil. You got your first job out of
(02:36):
college in Japan was at the beginning of the cell
phone and Uh, I got a job. I was hired
by a Japanese company anyc uh, it's one of our
customers today. That was the beginning where they were deploying
analog settler in Brazil. I remember, you know, and I
was working there and I had a cell phone, and
UH it was people said, what is this? You know,
(02:56):
there was a very few people with cell phone at
the time. What I did realize is, you've actually always
been working in the mobile industry since the beginning of
your currents, the beginning of my career, since before mobile
was mobile as we know it. Has it unfolded the
way you imagined? No, I don't think nobody can can
say that we we always knew And this would go
(03:16):
back to I think my early Qualcom career, we always
knew about the incredible potential of the wireless industry. But
you know, if you think about where we started and
in getting everyone a telephone, right, can everybody in the
ward have a telephone without wires? Once you get to that,
you'll think about, well, what if we connect us to
the internet. The Internet was also you know, starting at
(03:39):
that time to think what this wireless industry is. Today
we have a computer in prove of our hands, and
the transformation of this society that created by the smartphone.
I think there's not something we could predict it. That's
incredible and I feel very fortunate to be working in
seller my entire career. You joined Qualcom more than years ago.
(04:01):
How did you rise through the ranks? I guess I
made the right choices to be working on things that
were important. I've been Uh. I always had a passion
for technology. I think one of the things that helped
me within my career Qualcom is UM. I don't know
if it's true they tell me, I do that. Do
we be able to see through corners, think strategically about things?
(04:22):
And uh? But yes, it's Uh. It's an incredible journey
and Uh, I love this company. Quaco's an incredible place
for engineers and for me to get to the CEO,
it's uh an incredible achievement, both professionally and personal. I
think there's also somebody come from Brazil with Latin America
bringing there. They're very few I think of us that
(04:45):
roles to that position. So I also feel an incredible
responsibility off off the weights have been you know, somebody
that people can look at and say, look, we can
do that. What's it like being an immigrant CEO? Do
you think there's something different about your experience when you
have a different upbringing. Uh. You can put that to
(05:06):
your advantage as having a collection of experience that you
can bring to place. It's not easy, um, doing business
in Brazil. You know, sometimes you don't have the same resources.
You have a lot of adversity. Uh. Growing up we
had hyper inflation, you know, after at some point like
(05:26):
a month, and you have to deal with adversity and
you have to you have to make decision when the
odds are not great. I took that with me and
I think it had helped me and my career. Your predecessor,
Steve Molenkov, had a more laid back more cautious style.
Was very good at dealing with the thorny legal issues
(05:47):
that Qualcom had to deal with, but didn't love the spotlight.
How are your leadership styles different? We work so well
together because I think we're very complimentary. I think Steve
it's very thoughtful, very analytical. You know. I think if I,
you know, in a positive way, if I use this metaphor,
I think Steve would be uh, if we were in
a battle together, he would be an incredible uh sniper shooter.
(06:11):
I was just I was just shooting to a run
of ammunition and uh. But we work very very well together.
I will say my my style is, um, you know,
I I like doing many things at the same time.
I think that's why I have been successful and been
very focused in driving the versific diversification of Qualcom as
(06:33):
we go to all those different industries. Um, it's uh,
it's not like I it's not like I like the spotlight,
as I think all of us in this industry get
to get used to, you know, to do this. But
I feel I have an incredible opportunity and almost like
an obligation to tell the story about Qualcom companies changing.
We have a new story to tell and I I
(06:55):
feel in the CEO position, I have an opportunity to
do that. You're a lot more Fourth, right, I found
about the competition, and I wonder, is that is that
how you motivate the team? Is that how you motivate engineers?
Our industry changed so fast. Now we've been working, we'll
be working on a chip for four years. Um we
have the four years before the chip, every seed the
light of day, we have to think about what the
(07:17):
market will look. We want at that time, what the
market will be. And then we launched this incredible chip
that we're working for four years and he can get
obsolete in twelve months and we have to do something
else right, So we have to be reinventing ourselves. And
for that, I think the key ingredient for success is
to never be complacent to our being challenged ourselves. Competition
(07:38):
has always been good for Quacom, It's good for everyone.
I think it's keep us honest. He keep us driving
harder and trying to take measure risks to do something
different and to differentiate ourselves and how it's at face
competition that way. This is my conversation with the CEO
of Qualcom Christiano, I'm on coming up, we get a
(07:58):
reality check on where we are in the chip shortage
and when will supply catch up with demand? Plus, after
years of legal battles with Apple, what's the status of
the relationship with Ballcom now? I'm Emily Chang and this
is Bloomberg Studio one point. Oh, stay with us. Qualcom's
(08:27):
last few years were dominated by really big legal challenges.
Are those legal challenges behind you for good? All of
those are behind us right now. I would argue that
we're especially as relate to our licensing business. We have
one of the most stable times in the history of
the company. I've been with a company since the very beginning,
(08:49):
and in the history of company, we never had more
stability in the licensing business. And I'll argue that our
model has been battle hardened by all regulators across the
and UH and I we feel very good about, you know,
having the value for our licensing business recognized, but also
(09:10):
what we bring to the industry and UH and we
feel good about it. Your relationship with Apple in particular
went through a few difficult years, bitter lawsuits. Where is
that relationship today? Relationship is great. You know, we have
a multier agreement with them. There's a lot more to
Qualcom than the Apple relationship. You know. Qualcom has an
(09:31):
incredible opportunity in mobile with five G, especially as new
players are rising. Um it's incredible to see companies like
shell Me becoming the number two in the world in
Europe now they're probably this month their number one in shipments,
which is incredible. And we are becoming the essential ingredient
for all of this cloud economy that is upon us
(09:55):
by connecting everything on the edge, and that's part of
how the company is diversifying. So we're very happy about that.
And I think the company at the very end will
be a company of many relationships. People don't realize that
Qualcom chips power so many of the devices that we
are so dependent on. Do you think Qualcom should be
more of a household name like Apple, like Google, like Facebook. Look,
(10:19):
I'm very partial, so the answer will be absolutely yes.
And Uh, we have this incredible semiconductor crisis which has
been very difficult to get out of it. If I
can point one positive thing that came out of this
crisis is uh, the broader society realized the chips are
very important and the role the semiconductor companies play chips
(10:42):
are important that people are interested to know about chips,
and I think that creates opportunity for people to realize
how broad qualcom presence is. I think beyond funds, where
are we in the chip shortage now? Better? Uh, We're
not out of it. Um. You know, we have said that.
Consider simply to the past two earnings calls that uh,
(11:03):
we see material improvements coming to us at the end
of this year, the calendar year, and we are going
to enter two thousand twenty two with a much more
balanced equation between supply and demand for all chips are
just some chips for the majority of the chips, I
think the except there are going to be stio exceptions. Reality, Emily,
we're short on everything, like on every single product across
(11:27):
every single UH industry that we participate in, we're short.
If SAM conductor companies come in and say we are
not short, you should be worried about them, because I
think the demand is very high across all industry. We
see this accelerated digital transformation happening, and we were able
to be fortunate to have scale to sourcing, multi sourcing
(11:50):
put capacity expansion plans in place, and those are gonna
come to fruition as we get to the end of
the calendar year. So as we enter two thousand twenty two,
we're going to see for the absolutely majority of our business,
supply and demand will start to manage. Which chips are
the biggest exceptions which are going to take the longest
to come back. There has been a very broad industry
(12:12):
shortage of power management. I see also when you think
about electrification electric cars, you know, the batteries use a
lot of power management i c s and those are
capacity was finite. The industry has not been investing in
that capacity. So is that why Elon Musk has been
complaining about this? I think in general everyone is complaining about, uh,
(12:36):
the shortage of legacy technology and uh, but even those
are going to come online and uh, we'll feel good
about where we're going to be in two thousand twenty two.
But are you saying that chips in cars in particular
are going to be have more difficulty? Uh? What happened
to the pandemic and you caught you know, you had
disconnect between supply and demand. But the percentage of digital
(13:00):
in course are increasing at a very fast space. I
think the car industry. Restaurants, forming electronics in the car
become extremely important. That's part why our automotive business is
growing so fast. And I think the car in generous
is consuming more I see more silicon, and that's why
this industry is going to take a little longer to recover.
But you know, even in general, say globally across all industries,
(13:24):
we're going to be out of this uh crisis as
we get to the second half two two. I think
the automotive industry is probably gonna take throughout two thousand
twenty two to recover uh. We We also see pockets
within consumer electronics that there's also going to take longer
to recover. But in general, as we get to the
(13:45):
first half of twenty two, I think this entire crisis
is behind us. You help bring the industry together on
five G. Five G is now here. Is this more
than just a speed bump or a six G around
the corner. It's much more than a speed bump. It
starts with phones. Phones. I would argue that transition is
(14:05):
almost already done from the premium and the high tiers.
The biggest features of five G are not yet uh
uh in scale and they're gonna be very transformative. Think
about companies now moving to hoteling and people have work
from anywhere. That's more than a speed bump. Is about
(14:27):
bringing the power of the cloud to every device. So
when six G how far away is that? We are
already working on six G. We you know, we measure
every decade you have a new G. Five G was
originally scheduled to launch in two thousand twenty. We accelerated
by one year, were launched a nineteen. You should think
about by two thousand thirty, you should be the time
(14:50):
for six G uh to come to the spotlight. But
we have some ways to go. You've told us that
part of what we'll define your tenure and Qualcom success
in it is moving into new markets, whether it's cars, PCs, networking.
What's going to break out first and what will take longer.
We are definitely already there with auto. We have a
(15:13):
ten billion dollars contracted pipeline, we have one billion into revenues.
We're scratching the surface on COYOT, and we have some
new opportunities that could materialize any moment, like the conversions
of phones and PCs. Meantime ARM which is of course
best known for its mobile ship technology, hugely important part
(15:34):
of the ecosystem. Qualcom is a big customer. ARM has
been a neutral party up to this point. In videos
trying to buy ARM and the CEO of Nvidio, Jensen
Wong says, doesn't plan for that neutrality to change. But
you've said you don't think that change of ownership is
a good thing. Why not? We don't any question Orm
already one. If you think about phones day one, it's
(15:56):
all powered by ARM, CPUs, compute euters, it's coming. You
look at what Apple did with the M one moving
to ARM. We're bringing ARM to the Windows ECO system.
So they they're winning in the PC space. Automotive already won.
It's an ARM. I will argue that in Vidia without
acquiring ARM, they announced CPU ARM for the data center,
(16:19):
Amazon with ARM on Graviton, Google working on ARM. So
I would argue that if you step back and you
look ARM already one and the one, because they're independent,
it's not like you need one company to buy ARM
to invest in ARM for them to win. Wom participate
in a consortium to buy ARM to keep it usual,
(16:39):
we said before, I reiterated, and any of those options
become available. I think Qualcom is going to be right
there and it's gonna it's gonna be interested in participating.
And many other companies that across different UH sectors, across
the automotive sector, the cloud companies had indicated similar concerns.
We all we all want an independent arm I know
(17:00):
that you've traveled to China a lot. Qualcom has a
big business um in China. Are you being impacted at
all by the US China trade tensions that the ratcheting
up of rhetoric between the two governments, Not at all?
I you know, I said that many times before, and
our rate to rate. I think our business with China
(17:20):
is expending. We have growing and vibrant business with China.
But it's important to understand the fundamentals of that. We
provide technology to a lot of the China companies. They
are growing in within technology within their domestic market as
well as their global ambitions. We're working with companies like
the g I for drones. We're working for companies on
(17:42):
network and an ILT that continue to expand. At the
end of the day, I still believe that strong business
cooperation between the private sector in the United States and
China it is probably going to continue to be a
stabilizing force and the relations between the two countries. And
I feel that, uh, it's the right ward and the
(18:04):
conversation should be strategic coupling off the two economies and
especially what we do. It's great for United States to
have leadership in semi and in across the industry that
we operate in. And I think that's good for United
States and it's good for China. So no concern that
longer term as an American company, Qualcom could become a
(18:27):
target for retaliation in a in a US China trade war. Look,
we can't. We can't really predict you know, the outcomes.
You know you can you can take the glasses have food,
the glasses half empty. I always take the glasses have full.
I think we add so much value to the Chinese companies.
The number of Chinese companies they're now depending on Qualcom
(18:49):
technology is bigger today than it was yesterday, and it
was going to be much bigger tomorrow. And I think
that provides stability to our presence and business in China.
You're listening to my conversation with Christiano Amant, Qualcom CEO.
Up next, how Aman is leading the semiconductor industry into
(19:11):
the future, a r VR five, gene glasses, the metaverse,
plus how do muscle cars and martial arts play into
his story. I'm Emily Chang and this is Bloomberg Studio
one point out stay with us. I'm told that you're
(19:37):
kind of like a networker on steroids. I think it's
a kid's a compliment. But how would you describe yourself
or what do you think of that? Well, it's uh, well,
I think that as a compliment. I think it's um
maybe more than me um. I will say, uh. Qualcom
has an incredible role in the eco system, uh, within
(19:58):
the wordless industry. I think company needs recognized that we
can we can put this together. I think looking at
the fact that we provide technology across all companies, whether
you're infrastructure company, whether their device company, where our application developer. Uh,
that's a common thing and that creates an ecosystem all
companies over shared goal. But how do you, I mean,
are you like constantly picking up the phone to Tim
(20:20):
Cook or Andy Jase or sat Adela or some Look.
I have built a lot of relationship over the years,
and I I will say one of my assets is
I think an incredible network because I was able to
reach out to a number of companies and create a
win win partnership. So I won't deny it. I have
(20:40):
I had built incredibly strong relationship. I think relationships is
always based on if they're successful, is based on trust
and based on ability to have you know, win win
partnerships and UH. And that's reflected also beyond five G.
You've been saying quite nice things about Intel's pacl Singer
(21:01):
when you know, obviously with their foundry business, they could
look like a competitor. Is that genuine sentiment? Absolutely? Look
the way. Here's how I think about it. And I
think Pat and I UH, I think we're both part
of the class of the one c H. I think
Qualcom in Intel are two incredible UH technology companies in
(21:25):
America and UH and I think we have been at
odds with each other in the past, and I think
Pat and I had an opportunity to redefine this relationship.
Everything is conversion. I think mobile technology is everywhere. So
when you look at that, it's really about coopetition. It's
no different than a relationship with Samsung, relationship with Sandsung.
It's UH. If anything is an incredible, great relationship. It's complex. Uh,
(21:49):
we are a supplier, we're a customer, we're a competitor
all at once. There's nothing more important right now for
this in my conductor industry to have a resilient Uh
say my conductor supply chain its clock. I'm gonna be
in the metaverse or your chips going to be in
the metaverse. We have start working early with augmented reality
and virtual reality. You know, we now those are becoming
(22:12):
a meaningful business. We have an incredible relationship with Facebook
on auclus I think that's what VR will be working
with companies like Microsoft on augmented reality. I think mixed
reality is going to be a reality, uh for us
pun intended. I feel that the next phone, it's going
to be immersive glasses, and we're gonna have glasses that
(22:32):
we're gonna wear, and it's gonna be pair with our phone.
And eventually we're just gonna have glasses. Our phones are
going to be glasses, augmented reality glasses. Think about this,
You're gonna get glasses that look like this. You'll be
able to have five G modem and computation in your glasses.
You're gonna bring their own demanding computing of the cloud,
and you'll be able to with those glasses, we'll be
able to look at everyone, look at everything, and if
(22:56):
you look at somebody, and then we'll say, I'm going
to re facehip. Recogn should go to the cloud, check
on Instagram, linked in everything, get all information you need
UH in real time, as well as objects and things
that you want to research upon. That's no longer a
technology issue. It's just a matter of having the ecosystem
to mature. I think there's an incredible opportunity, UH, to
(23:18):
change healthcare, to change education productivity as we bring full immersive,
augmented reality and two glasses. You live in San Diego,
work qualcom is based. I know you're a dad um.
I also hear you're a car nut, right you refurbish
old cars. I have a two restoration projects that I'm
working on. I'm very excited about them. But UH, it's
(23:40):
contrary to what we're doing in automotive. All that we're
doing an automotive is about the latest and greatest digital
transformation of the car. I don't know if my cars
have any electronics at all, other than UH, the ignition
I doing restoration and muscle cars. I really like muscle
cars and from the seventies era. And uh I I
love my two projects. And what about the martial arts
(24:02):
that can't be that's got to be more than a
midlife crisis. Mark. You are very skilled in martial arts. Well,
I've been. Uh. I'm a protection of Japanese traditional karate.
The reason that's important for me, Emily is give me
a moment that I can disconnect from everything. He helped
me keep balance, help me trying to do something else
to put my mind on. And uh and I think
there's a lot of lessons that you can bring from
(24:25):
I think a traditional martial arts to business. There's a
lot you can bring to business. And you know, one
of the things about uh, uh you know you learn
in martial arts, especially the traditional Japanese one about spirit.
I thank you you win the fight in spirit before
the fights and uh and I take that to the
(24:46):
to the workplace, how we think about things and about
the new challenges and opportunities. UH for Qualcom Christianoman, thank
you so much for joining us. It's really great to
have you here on the show. It's great to have
you here in person. My pleasure. Bloomberg Studio One pointo
is produced and edited by Kevin Hines and Lauren Ellis.
Our managing editor is Daniel Culbertson, with production assistants from
(25:08):
Mallory Abelhausen. If you like our show, please share it
or write a review on Apple Podcasts or wherever you
get your podcasts. I'm Emily Chang, your host and executive producer.
This is Bloomberg
If we were in a battle together, he will be
an incredible sniper shooter. I will just shoot into a
run off ammunition. That's Qualcom's new CEO, Cristiano Aman, on
the difference between himself and the chip maker's former CEO,
Steve Mollenkom. Hi everyone, I'm Emily Chang and this is
Bloomberg Studio one point oh, a series where I speak
(00:20):
with the biggest influencers in technology and media. Over the
last decade, I've had in depth conversations with the very
people shaping the future of business, hearing their vision for
what comes next. Today we talk all things chips as
we speak to the newly minted CEO of one of
the leading companies in the semiconductor industry. Their chips are
in so many of the devices we use every day,
(00:41):
but Qualcom is still far from being a household name.
Christiano Aman, Qualcom's new CEO, wants to change that. He
grew up in Brazil, got his first job in Japan
in the mobile industry, and never left. He served at
Qualcom through prolonged legal battles with one of its biggest customers, Apple,
and hopes to USh You're in a new era for
Qualcom that expands beyond mobile, two cars, cloud computing, IoT, VR,
(01:06):
A R and more. How does he plan to do it?
Joining me on this edition of Bloomberg Studio. At one point, Oh,
Qualcom CEO Christiano, I'm on, Christiano. Is so great to
have you here, Very happy to be here. Get to
see you in personal Good to see you in person.
And we talked in person when you were a president.
But things have changed. Lot has changed, but it's good.
(01:31):
Is life different or not that different? So it's a
little bit different. I was busy before, you know, it's
been running into some my conductor business has been present
since a team, but it is different, kind of feel
the weight of the responsibility of the CEO job. Having
fun but busy, especially as the company is transforming. But
I'm still the same guy. I want to talk about
(01:53):
that guy. What was your upbringing? Like, what what kind
of kid were you? You know, I was a very
active kid. I was been somewhat hyperactive. I I I
guess I chose engineering, uh because I think my dad
was an engineer. But my mom would tell me that
we'll break apart all the toys and put them back together.
So I guess was a sign I want to do
(02:14):
something with engineering. But I was a normal kid. I
like as a kid, come back to school, you know,
play on the streets, UH with UH with the other
kids Brazil. A lot of things that you do. You
just play soccer, uh and UH done a lot of that.
But yeah, what's uh? I had wonderful memories off the
time in Brazil. You got your first job out of
(02:36):
college in Japan was at the beginning of the cell
phone and Uh, I got a job. I was hired
by a Japanese company anyc uh, it's one of our
customers today. That was the beginning where they were deploying
analog settler in Brazil. I remember, you know, and I
was working there and I had a cell phone, and
UH it was people said, what is this? You know,
(02:56):
there was a very few people with cell phone at
the time. What I did realize is, you've actually always
been working in the mobile industry since the beginning of
your currents, the beginning of my career, since before mobile
was mobile as we know it. Has it unfolded the
way you imagined? No, I don't think nobody can can
say that we we always knew And this would go
(03:16):
back to I think my early Qualcom career, we always
knew about the incredible potential of the wireless industry. But
you know, if you think about where we started and
in getting everyone a telephone, right, can everybody in the
ward have a telephone without wires? Once you get to that,
you'll think about, well, what if we connect us to
the internet. The Internet was also you know, starting at
(03:39):
that time to think what this wireless industry is. Today
we have a computer in prove of our hands, and
the transformation of this society that created by the smartphone.
I think there's not something we could predict it. That's
incredible and I feel very fortunate to be working in
seller my entire career. You joined Qualcom more than years ago.
(04:01):
How did you rise through the ranks? I guess I
made the right choices to be working on things that
were important. I've been Uh. I always had a passion
for technology. I think one of the things that helped
me within my career Qualcom is UM. I don't know
if it's true they tell me, I do that. Do
we be able to see through corners, think strategically about things?
(04:22):
And uh? But yes, it's Uh. It's an incredible journey
and Uh, I love this company. Quaco's an incredible place
for engineers and for me to get to the CEO,
it's uh an incredible achievement, both professionally and personal. I
think there's also somebody come from Brazil with Latin America
bringing there. They're very few I think of us that
(04:45):
roles to that position. So I also feel an incredible
responsibility off off the weights have been you know, somebody
that people can look at and say, look, we can
do that. What's it like being an immigrant CEO? Do
you think there's something different about your experience when you
have a different upbringing. Uh. You can put that to
(05:06):
your advantage as having a collection of experience that you
can bring to place. It's not easy, um, doing business
in Brazil. You know, sometimes you don't have the same resources.
You have a lot of adversity. Uh. Growing up we
had hyper inflation, you know, after at some point like
(05:26):
a month, and you have to deal with adversity and
you have to you have to make decision when the
odds are not great. I took that with me and
I think it had helped me and my career. Your predecessor,
Steve Molenkov, had a more laid back more cautious style.
Was very good at dealing with the thorny legal issues
(05:47):
that Qualcom had to deal with, but didn't love the spotlight.
How are your leadership styles different? We work so well
together because I think we're very complimentary. I think Steve
it's very thoughtful, very analytical. You know. I think if I,
you know, in a positive way, if I use this metaphor,
I think Steve would be uh, if we were in
a battle together, he would be an incredible uh sniper shooter.
(06:11):
I was just I was just shooting to a run
of ammunition and uh. But we work very very well together.
I will say my my style is, um, you know,
I I like doing many things at the same time.
I think that's why I have been successful and been
very focused in driving the versific diversification of Qualcom as
(06:33):
we go to all those different industries. Um, it's uh,
it's not like I it's not like I like the spotlight,
as I think all of us in this industry get
to get used to, you know, to do this. But
I feel I have an incredible opportunity and almost like
an obligation to tell the story about Qualcom companies changing.
We have a new story to tell and I I
(06:55):
feel in the CEO position, I have an opportunity to
do that. You're a lot more Fourth, right, I found
about the competition, and I wonder, is that is that
how you motivate the team? Is that how you motivate engineers?
Our industry changed so fast. Now we've been working, we'll
be working on a chip for four years. Um we
have the four years before the chip, every seed the
light of day, we have to think about what the
(07:17):
market will look. We want at that time, what the
market will be. And then we launched this incredible chip
that we're working for four years and he can get
obsolete in twelve months and we have to do something
else right, So we have to be reinventing ourselves. And
for that, I think the key ingredient for success is
to never be complacent to our being challenged ourselves. Competition
(07:38):
has always been good for Quacom, It's good for everyone.
I think it's keep us honest. He keep us driving
harder and trying to take measure risks to do something
different and to differentiate ourselves and how it's at face
competition that way. This is my conversation with the CEO
of Qualcom Christiano, I'm on coming up, we get a
(07:58):
reality check on where we are in the chip shortage
and when will supply catch up with demand? Plus, after
years of legal battles with Apple, what's the status of
the relationship with Ballcom now? I'm Emily Chang and this
is Bloomberg Studio one point. Oh, stay with us. Qualcom's
(08:27):
last few years were dominated by really big legal challenges.
Are those legal challenges behind you for good? All of
those are behind us right now. I would argue that
we're especially as relate to our licensing business. We have
one of the most stable times in the history of
the company. I've been with a company since the very beginning,
(08:49):
and in the history of company, we never had more
stability in the licensing business. And I'll argue that our
model has been battle hardened by all regulators across the
and UH and I we feel very good about, you know,
having the value for our licensing business recognized, but also
(09:10):
what we bring to the industry and UH and we
feel good about it. Your relationship with Apple in particular
went through a few difficult years, bitter lawsuits. Where is
that relationship today? Relationship is great. You know, we have
a multier agreement with them. There's a lot more to
Qualcom than the Apple relationship. You know. Qualcom has an
(09:31):
incredible opportunity in mobile with five G, especially as new
players are rising. Um it's incredible to see companies like
shell Me becoming the number two in the world in
Europe now they're probably this month their number one in shipments,
which is incredible. And we are becoming the essential ingredient
for all of this cloud economy that is upon us
(09:55):
by connecting everything on the edge, and that's part of
how the company is diversifying. So we're very happy about that.
And I think the company at the very end will
be a company of many relationships. People don't realize that
Qualcom chips power so many of the devices that we
are so dependent on. Do you think Qualcom should be
more of a household name like Apple, like Google, like Facebook. Look,
(10:19):
I'm very partial, so the answer will be absolutely yes.
And Uh, we have this incredible semiconductor crisis which has
been very difficult to get out of it. If I
can point one positive thing that came out of this
crisis is uh, the broader society realized the chips are
very important and the role the semiconductor companies play chips
(10:42):
are important that people are interested to know about chips,
and I think that creates opportunity for people to realize
how broad qualcom presence is. I think beyond funds, where
are we in the chip shortage now? Better? Uh, We're
not out of it. Um. You know, we have said that.
Consider simply to the past two earnings calls that uh,
(11:03):
we see material improvements coming to us at the end
of this year, the calendar year, and we are going
to enter two thousand twenty two with a much more
balanced equation between supply and demand for all chips are
just some chips for the majority of the chips, I
think the except there are going to be stio exceptions. Reality, Emily,
we're short on everything, like on every single product across
(11:27):
every single UH industry that we participate in, we're short.
If SAM conductor companies come in and say we are
not short, you should be worried about them, because I
think the demand is very high across all industry. We
see this accelerated digital transformation happening, and we were able
to be fortunate to have scale to sourcing, multi sourcing
(11:50):
put capacity expansion plans in place, and those are gonna
come to fruition as we get to the end of
the calendar year. So as we enter two thousand twenty two,
we're going to see for the absolutely majority of our business,
supply and demand will start to manage. Which chips are
the biggest exceptions which are going to take the longest
to come back. There has been a very broad industry
(12:12):
shortage of power management. I see also when you think
about electrification electric cars, you know, the batteries use a
lot of power management i c s and those are
capacity was finite. The industry has not been investing in
that capacity. So is that why Elon Musk has been
complaining about this? I think in general everyone is complaining about, uh,
(12:36):
the shortage of legacy technology and uh, but even those
are going to come online and uh, we'll feel good
about where we're going to be in two thousand twenty two.
But are you saying that chips in cars in particular
are going to be have more difficulty? Uh? What happened
to the pandemic and you caught you know, you had
disconnect between supply and demand. But the percentage of digital
(13:00):
in course are increasing at a very fast space. I
think the car industry. Restaurants, forming electronics in the car
become extremely important. That's part why our automotive business is
growing so fast. And I think the car in generous
is consuming more I see more silicon, and that's why
this industry is going to take a little longer to recover.
But you know, even in general, say globally across all industries,
(13:24):
we're going to be out of this uh crisis as
we get to the second half two two. I think
the automotive industry is probably gonna take throughout two thousand
twenty two to recover uh. We We also see pockets
within consumer electronics that there's also going to take longer
to recover. But in general, as we get to the
(13:45):
first half of twenty two, I think this entire crisis
is behind us. You help bring the industry together on
five G. Five G is now here. Is this more
than just a speed bump or a six G around
the corner. It's much more than a speed bump. It
starts with phones. Phones. I would argue that transition is
(14:05):
almost already done from the premium and the high tiers.
The biggest features of five G are not yet uh
uh in scale and they're gonna be very transformative. Think
about companies now moving to hoteling and people have work
from anywhere. That's more than a speed bump. Is about
(14:27):
bringing the power of the cloud to every device. So
when six G how far away is that? We are
already working on six G. We you know, we measure
every decade you have a new G. Five G was
originally scheduled to launch in two thousand twenty. We accelerated
by one year, were launched a nineteen. You should think
about by two thousand thirty, you should be the time
(14:50):
for six G uh to come to the spotlight. But
we have some ways to go. You've told us that
part of what we'll define your tenure and Qualcom success
in it is moving into new markets, whether it's cars, PCs, networking.
What's going to break out first and what will take longer.
We are definitely already there with auto. We have a
(15:13):
ten billion dollars contracted pipeline, we have one billion into revenues.
We're scratching the surface on COYOT, and we have some
new opportunities that could materialize any moment, like the conversions
of phones and PCs. Meantime ARM which is of course
best known for its mobile ship technology, hugely important part
(15:34):
of the ecosystem. Qualcom is a big customer. ARM has
been a neutral party up to this point. In videos
trying to buy ARM and the CEO of Nvidio, Jensen
Wong says, doesn't plan for that neutrality to change. But
you've said you don't think that change of ownership is
a good thing. Why not? We don't any question Orm
already one. If you think about phones day one, it's
(15:56):
all powered by ARM, CPUs, compute euters, it's coming. You
look at what Apple did with the M one moving
to ARM. We're bringing ARM to the Windows ECO system.
So they they're winning in the PC space. Automotive already won.
It's an ARM. I will argue that in Vidia without
acquiring ARM, they announced CPU ARM for the data center,
(16:19):
Amazon with ARM on Graviton, Google working on ARM. So
I would argue that if you step back and you
look ARM already one and the one, because they're independent,
it's not like you need one company to buy ARM
to invest in ARM for them to win. Wom participate
in a consortium to buy ARM to keep it usual,
(16:39):
we said before, I reiterated, and any of those options
become available. I think Qualcom is going to be right
there and it's gonna it's gonna be interested in participating.
And many other companies that across different UH sectors, across
the automotive sector, the cloud companies had indicated similar concerns.
We all we all want an independent arm I know
(17:00):
that you've traveled to China a lot. Qualcom has a
big business um in China. Are you being impacted at
all by the US China trade tensions that the ratcheting
up of rhetoric between the two governments, Not at all?
I you know, I said that many times before, and
our rate to rate. I think our business with China
(17:20):
is expending. We have growing and vibrant business with China.
But it's important to understand the fundamentals of that. We
provide technology to a lot of the China companies. They
are growing in within technology within their domestic market as
well as their global ambitions. We're working with companies like
the g I for drones. We're working for companies on
(17:42):
network and an ILT that continue to expand. At the
end of the day, I still believe that strong business
cooperation between the private sector in the United States and
China it is probably going to continue to be a
stabilizing force and the relations between the two countries. And
I feel that, uh, it's the right ward and the
(18:04):
conversation should be strategic coupling off the two economies and
especially what we do. It's great for United States to
have leadership in semi and in across the industry that
we operate in. And I think that's good for United
States and it's good for China. So no concern that
longer term as an American company, Qualcom could become a
(18:27):
target for retaliation in a in a US China trade war. Look,
we can't. We can't really predict you know, the outcomes.
You know you can you can take the glasses have food,
the glasses half empty. I always take the glasses have full.
I think we add so much value to the Chinese companies.
The number of Chinese companies they're now depending on Qualcom
(18:49):
technology is bigger today than it was yesterday, and it
was going to be much bigger tomorrow. And I think
that provides stability to our presence and business in China.
You're listening to my conversation with Christiano Amant, Qualcom CEO.
Up next, how Aman is leading the semiconductor industry into
(19:11):
the future, a r VR five, gene glasses, the metaverse,
plus how do muscle cars and martial arts play into
his story. I'm Emily Chang and this is Bloomberg Studio
one point out stay with us. I'm told that you're
(19:37):
kind of like a networker on steroids. I think it's
a kid's a compliment. But how would you describe yourself
or what do you think of that? Well, it's uh, well,
I think that as a compliment. I think it's um
maybe more than me um. I will say, uh. Qualcom
has an incredible role in the eco system, uh, within
(19:58):
the wordless industry. I think company needs recognized that we
can we can put this together. I think looking at
the fact that we provide technology across all companies, whether
you're infrastructure company, whether their device company, where our application developer. Uh,
that's a common thing and that creates an ecosystem all
companies over shared goal. But how do you, I mean,
are you like constantly picking up the phone to Tim
(20:20):
Cook or Andy Jase or sat Adela or some Look.
I have built a lot of relationship over the years,
and I I will say one of my assets is
I think an incredible network because I was able to
reach out to a number of companies and create a
win win partnership. So I won't deny it. I have
(20:40):
I had built incredibly strong relationship. I think relationships is
always based on if they're successful, is based on trust
and based on ability to have you know, win win
partnerships and UH. And that's reflected also beyond five G.
You've been saying quite nice things about Intel's pacl Singer
(21:01):
when you know, obviously with their foundry business, they could
look like a competitor. Is that genuine sentiment? Absolutely? Look
the way. Here's how I think about it. And I
think Pat and I UH, I think we're both part
of the class of the one c H. I think
Qualcom in Intel are two incredible UH technology companies in
(21:25):
America and UH and I think we have been at
odds with each other in the past, and I think
Pat and I had an opportunity to redefine this relationship.
Everything is conversion. I think mobile technology is everywhere. So
when you look at that, it's really about coopetition. It's
no different than a relationship with Samsung, relationship with Sandsung.
It's UH. If anything is an incredible, great relationship. It's complex. Uh,
(21:49):
we are a supplier, we're a customer, we're a competitor
all at once. There's nothing more important right now for
this in my conductor industry to have a resilient Uh
say my conductor supply chain its clock. I'm gonna be
in the metaverse or your chips going to be in
the metaverse. We have start working early with augmented reality
and virtual reality. You know, we now those are becoming
(22:12):
a meaningful business. We have an incredible relationship with Facebook
on auclus I think that's what VR will be working
with companies like Microsoft on augmented reality. I think mixed
reality is going to be a reality, uh for us
pun intended. I feel that the next phone, it's going
to be immersive glasses, and we're gonna have glasses that
(22:32):
we're gonna wear, and it's gonna be pair with our phone.
And eventually we're just gonna have glasses. Our phones are
going to be glasses, augmented reality glasses. Think about this,
You're gonna get glasses that look like this. You'll be
able to have five G modem and computation in your glasses.
You're gonna bring their own demanding computing of the cloud,
and you'll be able to with those glasses, we'll be
able to look at everyone, look at everything, and if
(22:56):
you look at somebody, and then we'll say, I'm going
to re facehip. Recogn should go to the cloud, check
on Instagram, linked in everything, get all information you need
UH in real time, as well as objects and things
that you want to research upon. That's no longer a
technology issue. It's just a matter of having the ecosystem
to mature. I think there's an incredible opportunity, UH, to
(23:18):
change healthcare, to change education productivity as we bring full immersive,
augmented reality and two glasses. You live in San Diego,
work qualcom is based. I know you're a dad um.
I also hear you're a car nut, right you refurbish
old cars. I have a two restoration projects that I'm
working on. I'm very excited about them. But UH, it's
(23:40):
contrary to what we're doing in automotive. All that we're
doing an automotive is about the latest and greatest digital
transformation of the car. I don't know if my cars
have any electronics at all, other than UH, the ignition
I doing restoration and muscle cars. I really like muscle
cars and from the seventies era. And uh I I
love my two projects. And what about the martial arts
(24:02):
that can't be that's got to be more than a
midlife crisis. Mark. You are very skilled in martial arts. Well,
I've been. Uh. I'm a protection of Japanese traditional karate.
The reason that's important for me, Emily is give me
a moment that I can disconnect from everything. He helped
me keep balance, help me trying to do something else
to put my mind on. And uh and I think
there's a lot of lessons that you can bring from
(24:25):
I think a traditional martial arts to business. There's a
lot you can bring to business. And you know, one
of the things about uh, uh you know you learn
in martial arts, especially the traditional Japanese one about spirit.
I thank you you win the fight in spirit before
the fights and uh and I take that to the
(24:46):
to the workplace, how we think about things and about
the new challenges and opportunities. UH for Qualcom Christianoman, thank
you so much for joining us. It's really great to
have you here on the show. It's great to have
you here in person. My pleasure. Bloomberg Studio One pointo
is produced and edited by Kevin Hines and Lauren Ellis.
Our managing editor is Daniel Culbertson, with production assistants from
(25:08):
Mallory Abelhausen. If you like our show, please share it
or write a review on Apple Podcasts or wherever you
get your podcasts. I'm Emily Chang, your host and executive producer.
This is Bloomberg
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