April 20, 2022
Photo illustration: Igor Golovniov/SOPA Images/LightRocket via Getty Images
Hello and welcome to Protocol Enterprise! Today: IBM’s solid earnings report still needed a lot of help from an old friend, consider donating your old washing machine to a needy industrial behemoth near you, and why natural-language processing isn’t ready for clinical prime time.
What’s old is new again: Demand for low-end chips built on older process technologies has increased so much during the chip shortage that Semi expects chip manufacturers to increase the number of chips built on 200mm wafers — a generation beyond the current 300mm wafers — by 21% from 2020 to 2024.
IBM enjoyed one of its best days in recent years Wednesday, high on the feedback from the stock market after reporting earnings Tuesday afternoon that exceeded Wall Street’s expectations. But as the smoke clears, it’s not clear how much of the company’s momentum can be attributed to actual growth and how much is the result of external factors.
The numbers certainly were good, by IBM’s standards: Overall revenue was up almost 8%, excluding currency effects, and while net income declined 23%, earnings per share exceeded analyst expectations once the one-time factors were excluded.
Yet it’s impossible to ignore how much of IBM’s growth was driven by currency effects and its continuing relationship with Kyndryl, the managed IT services provider it spun out last year as an independent company.
Still, IBM executives remained bullish that they’ve figured out a way for the company to return to steady growth after years of flat-to-down revenue results.
“IBM is now a very different company,” CEO Arvind Krishna said, a statement that has been said many times, many ways, by a parade of IBM executives over the last decade.
In a complex technological environment, when a business needs to pivot quickly in reaction to external forces, the “as-a-service” model of delivery for IT hardware, software and services offers companies of all sizes the ultimate flexibility to stay competitive with a scalable, cloud-like consumption model and predictable payment options for hardware and service inclusions.
Anyone who has tried to buy a car or home appliance lately knows the chip shortage is still pretty bad. But it has become so dire that large industrial companies are buying washing machines in order to rip out the chips and repurpose them, according to ASML CEO Peter Wennink.
“Now, we could say that’s an anecdote,” he said on the company’s earnings call Wednesday. “But to be honest, it happens everywhere — it is 15-, 20-, 25-year-old semiconductor technology that is now being used everywhere.”
Wennink said that the Internet of Things is likely driving the demand for these older chips found inside home appliances.
The Dutch company makes lithography tools that chip giants such as TSMC, Intel and Samsung use to manufacture their most advanced processors. Wennink has a unique view of the semiconductor supply issues since ASML deals with a wide range of businesses around the world. And business is good: It reported a net profit of €695.3 million ($754.3 million) on sales of €3.53 billion.
ASML itself is struggling to build all of the tools its customers want, and is trying to figure out how to produce just over 700 lithography tools in total every year. Wennink said in the earnings call that he would be happy if he could fulfill 60% of the orders ASML has received this year. According to Bernstein analyst Mark Li, it is likely ASML will struggle to fulfill demand through 2023.
3M incorporates speech recognition and natural-language processing (NLP) in tools it provides that transcribe doctors’ conversations with patients, and help detect when keywords in those discussions correspond with disease classification codes used for insurance purposes.
But the company does not use those forms of AI to automate clinical notes, as companies including Microsoft’s Nuance do.
At this stage, NLP and speech recognition is not accurate enough to be used that way, said Jim Graham, director of AI sciences at 3M. “I don’t see a silver bullet out there today,” he told Protocol. In the future, if AI improves enough, the company might consider using it to automate clinical notes related to specific medical conditions or specialties, but there are no plans for that at 3M now, he said.
“We want to make sure that we are as accurate as [possible],” Graham said.— Kate Kaye (email | twitter)
Okta said a final accounting of the Lapsus$ security incident affected just two customers, compared to the “hundreds” of customers it said were impacted last month.
Lenovo’s broad portfolio of end-to-end solutions provide organizations with the breadth and depth of services that empower CIOs to leverage new IT to achieve their strategic outcomes. Organizations also have the flexibility to scale and invest in new technology solutions as they need them.
Thanks for reading — see you tomorrow!