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Tag: Computer hardware manufacturing

  • Japan, Belgium to cooperate in chip production, development

    Japan, Belgium to cooperate in chip production, development

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    TOKYO — A newly founded Japanese semiconductor company aiming to revive Japan’s chip industry signed an agreement on Tuesday to collaborate with a Belgian research organization in developing next-generation chips for production in Japan.

    Economy and Industry Minister Yasutoshi Nishimura told reporters that the new company, Rapidus, which was launched last month by eight Japanese corporate giants including automakers, electronics and chip manufacturers, is teaming up with Imec, a Leuven, Belgium-based research organization known for nanoelectronics and digital technologies key to developing next-generation chips.

    “Cooperation with Imec in the area of semiconductor production at its international research facility, which ranks as one of Europe’s best, is extremely meaningful,” Nishimura told reporters.

    The deal was signed by Rapidus President Atsuyoshi Koike and Imec President and CEO Luc Van den hove, who is in Japan as part of a business delegation led by Belgium’s Princess Astrid.

    Masakazu Tokura, the chairman of Keidanran, an influential Japanese business organization, told the Belgian delegation that the two countries should expand their cooperation as the global security and economic environment becomes increasingly unstable. Tokura said he hopes to expand cooperation in green technology, cybersecurity and next-generation semiconductors.

    Imec, or Interuniversity Microelectronics Center, is known for its expertise and technology needed to make advanced chips that require miniaturization and extremely thin circuitry. The collaboration is aimed at helping Rapidus develop and mass produce 2-nanometer chips by 2027. The tie-up is the first known deal for Rapidus.

    The Japanese consortium was founded with the aim of boosting homemade chip production to reduce Japan’s heavy reliance on imported chips as part of the government’s push to strengthen economic security. Its members include automaker Toyota Motor Corp., electronics makers Sony Group Corp. and NEC Corp., SoftBank Corp., Nippon Telegraph and Telephone Corp. and computer memory maker Kioxia.

    Japan’s government is spending 70 billion yen ($510 million) on measures to promote domestic manufacturing of chips, while working closely with its ally the United States.

    Once a global leader in semiconductor development and production, Japan was slow to collaborate with foreign companies in developing more advanced technologies and fell behind global competitors including the U.S., Taiwan, South Korea and some European countries.

    Rapidus plans to send engineers to Imec and forge ties with other research labs and companies outside Japan.

    The pandemic and escalating U.S.-China tensions have highlighted the risks of Japan’s reliance on foreign suppliers, especially China, prompting the country to focus on building up its own manufacturing capacity.

    Nishimura said at the signing event that he expects the deal will “contribute to establish designs and a manufacturing production base for next-generation semiconductors in the late 2020s, and strengthen semiconductor supply chain resiliency in like-minded countries and regions.”

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  • This Week: Dell earns, Best Buy earns, new home sales

    This Week: Dell earns, Best Buy earns, new home sales

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    A look at some of the key business events and economic indicators upcoming this week:

    SPOTLIGHT ON DELL

    Dell Technologies reports its latest quarterly snapshot Monday.

    Wall Street predicts the computer and technology services -company’s fiscal third-quarter earnings fell compared with the same period last year. That would echo the company’s results in its previous two quarters. Investors will be listening for an update on how Dell’s personal computer sales trends are faring heading into the holiday shopping season.

    ANOTHER DOWNBEAT QUARTER?

    Best Buy has been struggling this year amid weakening consumer demand and rising costs due to supply chain disruptions.

    The nation’s consumer electronics chain has posted lower quarterly profits and revenue through the first half of its current fiscal year, which began in February, as consumers have reined in spending on electronics amid sharply higher prices for necessities like food and gas. Wall Street expects the economic trends continued to weigh on Best Buy in the third quarter. The company serves up its quarterly results Tuesday.

    HOUSING BAROMETER

    The Commerce Department releases its October tally of new U.S. home sales Wednesday.

    Economists project that sales slowed last month to a seasonally adjusted annual rate of 572,500 homes. Sales were running at an annual rate of 603,000 homes in September. The housing market has cooled after a strong start to the year as sharply higher mortgage rates have made homeownership less affordable for many would-be buyers.

    New home sales, seasonally adjusted annual rate, by month:

    May 636,000

    June 571,000

    July 543,000

    Aug. 677,000

    Sept. 603,000

    Oct. (est.) 572,500

    Source: FactSet

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  • Biden to plug tech bill in California, campaign in Illinois

    Biden to plug tech bill in California, campaign in Illinois

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    SAN DIEGO — President Joe Biden on Friday is set to tour a southern California communications company that is expected to benefit from his legislative push to bolster American semiconductor manufacturing — and he’s taking a vulnerable Democratic congressman with him.

    Biden will be joined by Rep. Mike Levin for the visit to Carlsbad-headquartered Viasat as he looks to highlight the CHIPS and Science Act, a $280 billion legislative package, ahead of Tuesday’s midterm elections. The bill is one of the Biden administration’s most significant legislative achievements.

    Levin, a two-term congressman representing a San Diego-area district that was once a GOP stronghold, is locked in a tight race with former San Juan Capistrano Mayor Brian Maryott. Biden headlined a rally Thursday night in Oceanside, California, for Levin.

    Coronavirus pandemic-era supply disruptions and a dearth of domestic chip manufacturing hampered Viasat, which relies on such components for services it provides to industrial customers and the U.S. military. Biden intends to use the event to highlight how the CHIPS act will help companies like Viasat reduce their reliance on overseas chip manufacturers, according to the White House.

    Later Friday, Biden will head to Chicago to participate in a political reception. Biden is heading to the Democratic stronghold amid signs that some House members representing suburban Chicago districts may be facing more competitive than expected reelection battles.

    The Congressional Leadership Fund, a super political action committee, or super PAC, aligned with the GOP House leadership, this week announced a $1.8 million ad buy targeting Democratic Rep. Sean Casten, who represents a district that Biden won by about 11 percentage points in 2020. Rep. Kevin McCarthy of California, the House minority leader, is due to campaign with GOP challenger Keith Pekau in the district Friday.

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  • Hard-drive maker Seagate Tech faces China sanctions warning

    Hard-drive maker Seagate Tech faces China sanctions warning

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    BEIJING — Seagate Technology said Thursday the U.S. Department of Commerce has warned it may charge the computer hard-drive maker with violating restrictions on exports of high-tech products to China.

    The company said in an SEC filing that it rejected the allegations. It says its hard disc-drives are not subject to U.S. Export Administration regulations, but troubles over the issue could affect its business.

    “Seagate believes it has complied with all relevant export control laws and regulations,” it said.

    Seagate said the allegation is over sales between August 2020 and September 2021 to “a customer and its affiliates.” It did not name the customer, however, Seagate is a major supplier of hard drives to telecoms equipment giant Huawei Technologies, a major target of U.S. export controls.

    The other major supplier, Western Digital, stopped sales to Huawei in 2019, not long after it had signed a strategic partnership with the Chinese company, the biggest maker of network gear for phone and internet carriers.

    Huawei did not immediately respond to a request for comment.

    In reporting lower profit and revenues for its fiscal first quarter, Seagate said it was reducing its headcount by 3,000 people as part of a restructuring. It cited global uncertainties and slower demand.

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  • South Korean chipmaker SK Hynix worries about China future

    South Korean chipmaker SK Hynix worries about China future

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    SEOUL, South Korea — South Korean computer chipmaker SK Hynix said Wednesday it might be forced to sell its manufacturing operations in China if a U.S. crackdown on exports of semiconductor technology and manufacturing equipment to China intensifies.

    SK Hynix’s chief marketing officer, Kevin Noh, raised those concerns during a conference call on Wednesday after the company reported its operating profit dropped 60% in the last quarter from 2021, a decline it blamed on a deteriorating business environment.

    Global inflation amplified by Russia’s war on Ukraine and rising interest rates imposed by central banks to counter surging prices have slowed consumer spending on the kinds of high-tech products requiring computer chips. SK Hynix and other semiconductor makers are also navigating new U.S. restrictions on exports of advanced semiconductors and chipmaking equipment to China. Such limits were in part imposed to prevent use of American advanced technology in China’s military development.

    SK Hynix said this month that the U.S. Department of Commerce granted the company a one-year exemption from such requirements, allowing it to provide equipment and other supplies to its Chinese factories making memory chips.

    Other major chip and chip-manufacturing equipment makers like Samsung and Taiwan’s TSMC are thought to have also gotten exemptions.

    SK Hynix may find it difficult to equip its manufacturing line in the eastern Chinese city of Wuxi with the most advanced chipmaking machines, including extreme ultraviolent lithography (EUV) systems, Noh said. He said SK Hynix doesn’t expect major disruptions at the plant at least until the late 2020s, but things could quickly turn for the worse if Washington refuses to extend temporary exemptions at some point and begins to fully enforce its export controls.

    “If it becomes a situation where we would have to obtain (U.S.) license on a tool-by-tool basis, that will disrupt the supply of equipment … and we could face difficulties in operating (Chinese) fabrication facilities at a much earlier point than the late 2020s,” Noh said.

    “If we face problems that make it difficult for us to operate our Chinese fabrication facilities including the Wuxi plant, we are considering various scenarios, including selling those fabrication facilities or their equipment or bringing them to South Korea,” Noh said.

    He said those contingency plans would apply to a “very extreme situation,” and the company hopes to avoid such problems and operate as normal.

    Citing an “unprecedented deterioration” in market conditions, SK Hynix said it would cut its investment next year by more than 50% as it anticipates supply will continue to exceed demand for the time being. The country’s operating profit for the three months through September was at 1.65 trillion won ($1.16 billion), compared to 4.17 trillion won ($2.92 billion) during the same period last year. Revenue fell 7% to 10.98 trillion won ($7.7 billion).

    Some experts say that the U.S.-China technology standoff could force SK Hynix and Samsung Electronics, another major South Korean chipmaker, to significantly modify their Chinese operations over the next few years.

    According to market analysis firm TrendForce, SK Hynix’s Wuxi plant accounts for about 13% of the world’s total DRAM production capacity. About 40% of Samsung’s NAND flash chips are reportedly produced from its factory in the Chinese city of Xi’an, accounting for around 10% of global production.

    “The existing (principles) we accepted as common sense, such as finding a certain region where we could produce most efficiently at the cheapest cost and shipping those products globally, are becoming increasingly uncertain as (our) decision making is being influenced by various layers of factors beyond just business,” Noh said.

    Samsung, the world’s largest provider of memory chips, is widely believed to have received a similar exemption from the U.S. restrictions, although the company has not publicly confirmed it. Noh during the call said SK Hynix’s “competitors” have also been granted the U.S. waivers, in a possible reference to Samsung and Taiwan’s TSMC.

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  • Stocks rise as investors await inflation, earnings updates

    Stocks rise as investors await inflation, earnings updates

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    NEW YORK — Stocks shook off an early stumble and rose broadly on Wall Street in afternoon trading Tuesday as investors wait for updates on inflation and corporate earnings this week.

    The S&P 500 rose 0.4% as of 1:44 p.m. Eastern, on pace to snap a four-day losing streak. The benchmark index fell as a much as 1.2% earlier after a dour forecast from the International Monetary Fund stoked recession fears.

    The Dow Jones Industrial Average rose 348 points, or 1.2%, to 29,551 and the Nasdaq was 0.1% higher.

    Health care companies and retailers made some of the strongest gains. Johnson & Johnson rose 2% and Walmart rose 3.2%.

    Technology stocks remained the weakest area of the market. Chipmakers continued slipping in the wake of the U.S. government’s decision to tighten export controls on semiconductors and chip manufacturing equipment to China. Qualcomm fell 3.3%.

    Markets in Europe and Asia slipped.

    Uber fell 8.2% and Lyft slumped 9.8% following a proposal by the U.S. government that could give contract workers at ride-hailing and other gig economy companies full status as employees.

    U.S. crude oil prices fell 1.9%.

    Bond yields were mixed. The yield on the 10-year Treasury, which influences mortgage rates, edged higher to 3.89% from 3.88% late Friday. The yield on the 2-year Treasury, which follows Federal Reserve action, held steady at 4.30%. Bond markets were closed on Monday for a holiday.

    Recession fears have been weighing heavily on markets as stubbornly hot inflation burns businesses and consumers. U.S. stocks are coming off of four straight losses. Economic growth has been slowing as consumers temper spending and the central banks globally raise interest rates.

    Wall Street is closely watching the Fed as it continues to aggressively raise its benchmark interest rate to make borrowing more expensive and slow economic growth. The goal is to cool inflation, but the strategy carries the risk of slowing the economy too much and pushing it into a recession.

    The International Monetary Fund on Tuesday cut its forecast for global economic growth in 2023 to 2.7%, down from the 2.9% it had estimated in July. The cut comes as Europe faces a particularly high risk of a recession with energy costs soaring amid Russia’s invasion of Ukraine.

    Investors have a busy week ahead of economic and corporate earnings reports that could provide a clearer picture of inflation’s impact, while also raising questions about whether the Fed should continue with its aggressive rate hikes.

    Investors still expect the Fed to raise its overnight rate by three-quarters of a percentage point next month. It would be the fourth such increase, which is triple the usual amount, and bring the rate up to a range of 3.75% to 4%. It started the year at virtually zero.

    The Fed will release minutes from its last meeting on Wednesday, possibly giving Wall Street more insight into its views on inflation and next steps. The government will also release its report on wholesale prices, which will help provide more details on how inflation is hitting businesses.

    The closely watched report on consumer prices will be released on Thursday and a report on retail sales is due Friday.

    The latest round of corporate earnings will ramp up this week with reports from PepsiCo, Delta Air Lines and Domino’s Pizza. Banks, including Citigroup and JPMorgan Chase, will also report results.

    ———

    Yuri Kageyama contributed to this report.

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  • Japan to pay up to $320M for US company’s chip production

    Japan to pay up to $320M for US company’s chip production

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    TOKYO — Japan is providing a major U.S. chipmaker a subsidy of up to 46.6 billion yen ($322 million) to support its plan to produce advanced memory chips at a Hiroshima factory, the Japanese trade minister said Friday.

    The announcement to subsidize Micron Technology comes on the heels of U.S. Vice President Kamala Harris’ visit in Japan as the two countries step up cooperation on expanding manufacturing and supply chains for critical materials.

    “I hope the deal will contribute to further expansion of cooperation between Japan and the United States in the area of semiconductors,” Japan’s Economy and Trade Minister Yasutoshi Nishimura said.

    He said the government approved the deal Friday under a law related to economic security.

    Japan has set up its own fund to support semiconductor production, and Friday’s agreement is its third deal.

    During her trip to Asia this week, Harris met with Japanese officials and semiconductor company executives to seek greater cooperation in strengthening semiconductor development and production amid China’s growing influence.

    Micron was among the companies that participated in the meeting with Harris, along with Tokyo Electron, Nikon, Hitachi High-Tech Group, Fujitsu Ltd.

    Micron said in a statement it will use the subsidy to strengthen production capacity and speed up development of the company’s 1-beta DRAM — memory chips that are key to advanced data facilities — as well as technology for a 5G network upgrade and artificial intelligence.

    The United States is working to solidify its technology cooperation with Japan, South Korea and Taiwan, while trying to increase its domestic semiconductor manufacturing, amid China’s own investment in computer chips.

    The deal Friday “symbolizes the investment and integration of our two economies and supply chains,” said U.S. Ambassador to Japan Rahm Emanuel, who has been promoting economic security between the two allies. “And that will only accelerate from here forward.”

    Nishimura has stressed the U.S.-Japan alliance on semiconductors, energy and other areas.

    Japan was once a world leader in computer chip manufacturing, but its status has eroded over the last two decades, and the country is increasingly worried about falling behind.

    Japan has allocated 476 billion yen ($3.3 billion) in subsidies for a new factory in Japan’s southern prefecture of Kumamoto being built in a partnership between the Taiwan Semiconductor Manufacturing Co., Sony Group and Denso Corp.

    Japan is also providing up to 92.9 billion yen ($644 million) to another facility in central Japan’s Mie prefecture jointly built by Western Digital Corp. and Kioxia Corp.

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