In a week where the new coronavirus and it’s impact has dominated the news, here is my weekly summary of the key semiconductor and technology news from around the world that you should know but may have missed.
The new coronavirus in China and worldwide is already causing an impact for the electronics supply chain, potentially affecting everything from wafers and assembled parts as well as supplies of raw materials and consumables to non Chinese plants. Everybody is scrambling to get clarity on the current and future impact on the supply chain as many factories in China have either been running on reduced staff or have not restarted after the Chinese New Year yet due to the travel restrictions on their staff. Hopefully next week after the 10th once a lot of people are allowed to return to work there will be more clarity. However the impact is expected to last anything from 3 to 6 months with most experts saying best case it will take until the end of April for things to return to normal. In addition to the impact on the supply chain, many companies have put in place travel bans and many semiconductor events are being cancelled in SE Asia. SEMI has cancelled Semicon Korea in February and Semicon China in March due to the virus.
The EEtimes has an article with some advice on how to optimise your supply chain to have a resilient supply chain, to mitigate the risk from such outbreaks and natural disasters.
If you are not sure what companies are in Wuhan then here is a guide to some of the major high tech companies located in the region.
Taiwan foundry TSMC said this week at a investor conference that despite the outbreak of the new coronavirus in China, their Q1 sales forecast remains unchanged and said that production at it’s plants in Nanjing and Shanghai remain normal.
Similarly Taiwan foundry UMC also said it expects no impact on Q1 revenue from the virus but if the issue prolongs there could be some impact. UMC reported its best quarterly profit in one-and-a-half years, with revenue jumping to US$127million in Q4 2019, due to strong demand for computer and communications chips. Other Taiwanese companies have also come out to say they see the impact of the coronavirus was limited.
Qualcomm said in it’s investor conference that the new coronavirus in China poses a potential threat to the mobile phone industry with a possible impact on manufacturing and sales.
In other news.
In 2019 leading original equipment manufacturers reduced their semiconductor spend by 11.9% on average according to Gartner. Apple took the top rank from Samsung, driven by its success in wearable products, namely Apple Watch and AirPods. Huawei retained the third position, having performed well through 2019 despite the US-China trade war. Apart from the slowing economy part of the reason for the reduced spend was lower memory prices which allowed companies to reduce the memory expenditure form 45% of their total spend to 36%.
SEMI reported that worldwide silicon wafer area shipments decreased 7% in 2019 but revenue remained above US $11billion.
Whilst NAND and DRAM volume is expected to be one of the growth areas in 2020, the outlook for the memory pricing is expected to be flat or maybe even down for DRAM. Also due to the price pressure, there seems little incentive to transition to new memory options in 2020.
Reuters is reporting that the US will meet this month to discussing further curbing technology exports to China and Huawei. Talks between high level officials are currently scheduled for February 28th.
Lam Research has selected the Batu Kawan Industrial Park in Penang, Malaysia as the location for a new advanced technology production facility. The new facility will be 700,000-square-feet at the initial phase with the opportunity to expand in the future. Construction is expected to begin in early 2020, with the first shipments by 2021.
Irish fabless semi-conductor company Decawave, has announced it will be acquired by Qorvo. The acquisition will advance market penetration of IR-UWB and enable broad global adoption of this transformational technology. Decawave specializes in precise location and connectivity applications, whilst Qorvo is a leading provider of innovative RF solutions that connect the world.
Skyworks reported Q4 revenue grew more than 8% sequentially to US$896 million driven by smartphone sales. This was down 7.8% on Q4 a year ago as skyworks has been impacted by the US ban on sales to Huawei.
Osram reported a return to profitability in fiscal Q1 which ended in December, with revenue growing 5.5% to US$971million due to significant recovery in its semiconductor business. Looking ahead to fiscal 2020, Osram’s Managing Board confirmed its existing forecast for revenue to be between minus and plus 3 percent compared to the previous year.
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