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Deciphering word spoken by ST Micro CEO Jean-Marc Chery at Citi 2022 Global Technology Conference

jms_embedded

Active member
I'm trying to understand something that CEO Jean-Marc Chery said in the ST Microelectronics session at the Citi 2022 Global Technology Conference, having to do with pricing strategy and inflation. He said this one word twice, but I can't figure out what it is. Context is below, unknown word = [????]. Can anyone help?

Instance 1: "...in my [????] cost, I have inflation" -- https://drive.google.com/file/d/1jJzgGRjYfLlAcIzZ_3QtEC4Tjpfg9PuA/view?usp=sharing

Instance 2: "Because, okay, the inflation of the [????] are very heavy." -- https://drive.google.com/file/d/18-RhsMiINXP-HxezQT1ooFQ380AXeCwh/view?usp=sharing

Broader context (3m 11s): https://drive.google.com/file/d/1sK6dHIQ4TvydGBL5_7mPDEImvDFbczfp/view?usp=sharing

(20:00.5)
Amit Harchandani (Citi):
On that note, maybe let's move on to sort of the second segment and get into some of the broader topics; we have discussed the near term demand picture quite comprehensively. But one of the elements which I want to get into now is pricing, because you have been quite successful in raising prices through tight industry conditions. Now, as these industry demand/supply balance begins to ease a little bit. Are you still able to raise prices today, or, and do you anticipate or return to the annual price declines of the past, starting 2023?

Jean-Marc Chery (ST Micro):
No, the pricing strategy --- but in fact, it's important with the price and mix. So we have always to assess the contribution of product, okay, to the gross margin of the company is price and mix. Now, then again: what is a normal situation? Let's classify what is normal situation. A normal situation is a company of semiconductor, okay, which is, capable to say in my [????] cost, I have inflation, which today is, is clearly quite heavy. Okay? Especially, if we're spoken about energy. Then as an integrated manufacturer, okay, I have the duty with my productivity improvement and my scale increasing to absorb a part of this inflation or to completely mitigate this inflation, okay, and to share with my customer, a part of this productivity improvement.

And then okay, in parallel, I introduce okay, new product, okay. With a superior value proposal, than the legacy, okay, changing the mix and increasing my price. Okay. But today we are not exactly in this normal situation. Why? Because, okay, the inflation of the [????] are very heavy. And when you have a bill of the energy, like for ST, this year, Lorenzo, the bill of electricity will be, how much?

Lorenzo Grandi (ST Micro): Will be closer 400 million dollars.

Chery: Okay. And next year?

Grandi: And next year will be above 500 million dollars.

Chery: Okay. So do you think, okay, we are in a situation where, customer, they can ask you to decrease price? Now, okay, we are in the situation that if they want pieces, okay, for some of them, and they refuse our price, okay, beyond 24 months, we can [leave?]. And it's our duty to warn them that we will allocate capacity to somebody else. So today, of course we are only increasing price, and we are only increasing price when we were convinced that we cannot mitigate completely the inflation.

And we pass a part of this inflation to our customer.
 

jms_embedded

Active member
OK, so I wrote ST's Investor Relations and they wrote back saying

Jean-Marc Chery (ST’s CEO) was referring to “input” costs (power, materials, chemicals, etc.) which are experiencing inflation.

Which makes complete sense... except that I went back and listened, and he's not saying "input".

Or at least not in English: I typed "input costs" into Google Translate, which converted to "coûts des intrants" in French. Which isn't pronounced like "intrant" would be in English, but I give the guy credit for speaking on the fly in a high-visibility situation in what's clearly not his native tongue.

So "intrant" (intending to mean "input") it is.
 
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