Wed. May 18th, 2022


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The semiconductor shortage plaguing industries, from cars to consumer electronics, is far from over.

The US Department of Commerce just warned that chip inventory held by manufacturers has dropped to an average of just five days ’inventory, down from 2019 levels of 40 days. Since then, pandemic demand for devices and disruptive sanctions imposed against China have caused the chip crisis.

U.S. Trade Secretary Gina Raimondo said some U.S. companies may be forced to temporarily shut down and lay off workers in the event of even minor disruptions. “It tells you how fragile this supply chain is,” she said. “Five days’ supply, no room for error.”

She urged Congress to approve the Chips Act, which came to a halt in the House of Representatives but would unlock $ 52 billion in subsidies to encourage domestic chipmaking.

This is a long-term solution, given the time it will take to build “fabs”, such as the two that Intel announced last week in an investment of more than $ 20 billion in Ohio, subject to subsidies. It will be for high-end processors and more details on the chipmaker that could increase its manufacturing capacity come with its earnings call for the fourth quarter after the market closed today.

More everyday chips are currently in the shortest stock – the kind made by people like Texas Instruments, an unsung manufacturer of silicone. It reported revenue in the fourth quarter last night that was about 10 percent above analysts’ expectations, with gross margins two percentage points better than expected at 69.3 percent. It is increasing spending to increase its capacity, with new production facilities already set up in the second half of this year.

Meantime, #techAsia message China’s semiconductor master plan for self-sufficiency has taken a significant hit. State-backed giant Tsinghua Unigroup has scrapped major memory chip projects in two Chinese cities after the debt-stricken company was hit by US restrictions on access to essential technology, according to this exclusive in Nikkei Asia.

The internet of (five) things

1. Microsoft games are under its cloud
Microsoft’s cloud revenue rose 32 percent to $ 22.1 billion in the last quarter, but game sales rose only 8 percent, compared to revenue that rose six months six months ago when there was a demand for a stay-at-home pandemic. Lex says investors are more interested in the larger-growth enterprise business than Microsoft’s game ambitions with its Activision Blizzard deal.

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2. Amazon’s ambassadors recalled
Amazon has abandoned its highly maligned campaign of paying employees to share positive messages on social media, delete the online posts that were meant to improve the tech giant’s image among the potential workers who need it to achieve continued growth.

3. Meta’s Diem to Die?
Facebook’s former head of digital currency, David Marcus, left at the end of 2021 and predicts that there were still “greatness ahead” for Diem. But Bloomberg reported the project formerly known as Libra is weighing up a sale of its assets and trying to find a new home for the engineers who developed it.

4. LG Energy Solution hopes IPO will boost its batteries
LG’s battery business last week delivered South Korea’s largest initial public offering ever, but can drive a challenge to CATL’s dominance of the industry, asks Song Jung-a in Seoul and Hudson Lockett in Hong Kong.

Bar graph showing market share of global EV battery manufacturers

5. Lynch loses latest legal round
Mike Lynch, the British software entrepreneur, has lose the latest round in a lawsuit against his extradition to stand trial in the US on charges of criminal fraud over the sale of $ 11 billion of his company Autonomy to Hewlett-Packard. British Home Secretary Priti Patel will have to decide by Friday whether to approve Lynch’s extradition of Britain to the US.

Technical tools – Chinese smartphones

The Redmi Note 11 Series

Xiaomi unveils the Redmi Note 11 series

appeal reclaimed the top smartphone retailer in China for the first time in six years, with a 23 percent market share in the fourth quarter, reports Ryan McMorrow in Beijing. Expect household cell phone makers to hit back this year, both at home and abroad. There were three announcements from them today: Huawei was introduced the P50 Pro, Realme has the 9 Pro and 9 Pro + and Xiaomi unveiled the Redmi Note 11 series.

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