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16 August 2018

Computer Virus Hits TSMC

tsmcA computer virus that struck TSMC (Taiwan Semiconductor Manufacturing Company) is expected to cost the chip manufacturer in the region of £130 million.

The virus hit the firm’s computer network late last week and quickly spread to the machinery used to manufacturer chip and processors, TSMC said in a statement on Monday.

The press release went on to say that the virus caused equipment to crash or enter a reboot cycle, and was a variant of the WannaCry ransomware that made global headlines last year.

TSMC said the disruption in production is likely to knock 2% off its 3Q revenue, which was previously projected to be in the region of £6.5 billion.


15 August 2018

SK Hynix to invest in new £2.4 billion fab

skhynix-200South Korean memory manufacturer SK Hynix plans to spend £2.4 billion on the construction of a new DRAM fab at its headquarters in South Korea.

Building work is expected to begin later this year, with completion set for late 2020.

This comes at a time when the market for memory products – and DRAM especially – is undergoing something of a boom period. With demand outstripping supply, the DRAM market grew by 76% last year and is predicted to grow by a further 33% this year.

This announcement came the day after SK Hynix reported strong second-quarter results, with sales of £7 billion, a 55% year-on-year increase.


14 August 2018

Outlay on semiconductor design to top £240 billion

amd-1310766_640By the end of the year, the world’s leading electronic and technology companies will have spent over £240 billion on designing the next generation of semiconductors.

Figures released in a new IHS Markit report puts the projected figure at £243.7 billion, a new record that eclipses the total spent last year of nearly £229 billion.

The United States leads the way in terms of market share, accounting for 28% of global spend. However, this is slightly down from 2017’s market share of 29%, due to declining sales in the wireless sector, caused by slowing consumer demand for smartphones and media tablets.

Driven by heavy investment by Samsung and LG Electronics, South Korea’s projected spending is expected to increase by 13% this year, up to £22 billion. Two other fast-growing nations are India and Germany, with both countries posting increases of nearly 10%.


13 August 2018

Infineon explored takeover of STMicro

InfineonInfineon held preliminary discussions with STMicroelectronics about a possible takeover last year.

According to an article on Bloomberg, Infineon hired the French international banking group BNP Paribas to study and advise them on the viability of such a deal.

A combined Infineon-STMicro entity would have created the biggest European semiconductor group with sales of around £13.5 billion.

It is not known if STMicro were open to a merger and it is understood that no talks have taken place after those preliminary discussions last summer.

Industry analysts cite political implications and the fear of job losses in France and Italy as potential barriers to the merger, which is perhaps why talks never got off the ground.


11 August 2018

US and China announce further trade tariffs

usa-china660

The ongoing trade war between the United States and China escalated this week as both nations rolled out a new wave of tariffs. This conflict shows no sign of slowing down.

After a period of consultation, the Trump administration confirmed that a second round of tariffs would come into force later this month.

Starting Thursday 23rd August, the US will impose a further 25% tariff on $16 billion worth of Chinese goods coming into America.

Again, many types of electronic components have been targetted, with integrated circuits and diodes featuring on this second list.

In response, the Chinese Ministry of Commerce struck back, announced that China would place an equal 25% tariff on $16 billion of US imports

Speaking on Beijing’s decision to retaliate, the White House press secretary, Sarah Sanders, said that China’s leadership should instead address “the longstanding concerns about its unfair trading practices.”

With further tariffs under consideration and the Trump administration hinting that it is thinking about raising the proposed levy from 10% to 25%, this situation is likely to only intensify


10 August 2018

The US hits Russia with trade sanctions

trade-1The United States has announced it will place restrictions on the export of sensitive technology to Russia after determining it used a banned nerve agent in an attempt to poison the former spy, Sergei Skripal.

The sanctions will come into effect later this month and will curb Russia’s ability to import US goods and technologies.

Under the terms, anything with a national security purpose – including electronic devices and integrated circuits – will not be allowed to be exported to Russia from the US.

In a statement made on Wednesday (9th August) night, the US State Department said that further “more draconian” sanctions would follow if Russia failed to give suitable assurances that it would no longer use chemical weapons.


09 August 2018

Oversupply of NAND flash will see prices tumble

graphstock1250In some good news for buyers, DRAMeXchange has predicted that average selling prices of NAND flash lines will drop quarter-on-quarter by 10% in both Q3 and Q4 2018.

In previous years, Q3 has traditionally been peak season for the sales of consumer electronics. However, with sales of smartphones and tablets expected to be slow heading into 2019, the need for NAND flash is much weaker than originally planned.

At the same time, many memory manufacturers are ramping up output, leading to an oversupply of parts on the market. And with supply greater than demand, prices are tumbling.


06 August 2018

A Big Problem in the Land of Discretes

stmicro-logoDemand for discrete semiconductors increased by 11% last year, four times greater than the average over the two decades. According to the research firm IC Insights, overall market sales will touch £22 billion by 2022.

However, this growth comes at a price for OEMs.

In a recent interview, STMicroelectronics’ Andrea Tranchida stated that the chipmaker is “seeing huge demand across all discrete product lines.”

Worryingly for the industry, that demand is showing no sign of slowing down and STMicroelectronics isn’t the only manufacturer suffering.

As a result, lead times have been steadily growing throughout 2018.

Our research shows that average lead times for discrete semiconductors (across all manufacturers) through now stands at 32 weeks. This represents a rise of 20% since January.

To make things worse, broadline distributors are also warning of impending price increases due to the escalating cost of raw materials.

Because of these factors, we encourage buyers to expand their supply network and work with independent distributors when sourcing discrete products.


03 August 2018

MLCC Shortage to Continue

mlccsmallBuyers can expect both prices and lead times for multi-layered ceramic capacitors (MLCCs) to rise in the coming months.

Demand for MLCCs was extremely strong in 2017, contributing to worldwide shortages earlier this year. But that demand has only increased in 2018, with AVX’s Robert Salazar predicting that the sector could well grow by a further 22-25%, placing more stress on already constricted supply network.

We have already seen that some European franchised distributors are unable/refusing to quote out Vishay’s VJ series of surface mount MLCCs until next year, in response this demand.

Capacitor manufacturers are taking steps to increase production. Some, like Murata, are building new factories altogether while others, such as AVX and Kyocera, are focusing their efforts on improving manufacturing capabilities for certain product lines.

However, this additional and much-needed capacity is unlikely to come online until late 2019.

This leaves industry buyers with the prospect of extending lead times and higher per-unit pricing for at least another eighteen months.


02 August 2018

Southeast Asia Comes Up Trumps

seasiastocks

When one door shuts another door opens.

That’s what electronics companies in Southeast Asia are finding out first hand.

With trading relations between China and the United States frosty at best (and almost glacial at worst), businesses with operational bases in the likes of Malaysia, the Philippines and Thailand are taking advantage in this new, tariff heavy world.

A $12 billion fund to help farmers affected by China’s retaliatory tactics has just been announced, hinting that the U.S. is beginning to feel the pinch. But, as the President keeps saying to his domestic supporter base, the short-term pain will be worth long-term gains.

But across the Pacific, businesses are enjoying immediate benefits. As Simon Shen, CEO of the Taiwanese electronics producer New Kinpo Group, said in an interview late last month: “President Trump is helping us a lot.” And with New Kinpo’s Philippine unit expecting to double its revenue on the back of the U.S.-China dispute, he’s not lying.

Shen’s company – and many like it – are riding the crest of a wave straight over Trump’s hastily erected trading barriers. Whereas the giants of the Chinese tech world are stuck with the prospect of a 25% import levy on their goods, manufacturers elsewhere in Southeast Asia can skirt around these tariffs.

Investors are already taking note. Thailand’s electronics component sub-index has risen by nearly 15% in the past month, compared to 5% for the broader market. It’s a similar story in Vietnam too, where stocks in Viettronics Binh Hoa, a major sub-contractor and manufacturer, doubled.

Over in the Philippines, tech firms are too filled with optimism. An entire region is buoyant.

Donald Trump may be cranking up the pressure on China and other historically powerful trading nations. But supply chains will always find a way and as an independent distributor. It’s our job to help our customers find the path of least resistance when it comes to global trade.


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