Topic: Components
Toshiba Agrees to Sell Memory Group to Bain for $18bn, with Funding from Apple (Sep 28, 2017)
This has been a long-running saga with several false starts in reporting a conclusion of the deal, but Toshiba has now finally announced an agreement on the sale of its memory business to a consortium led by Bain Capital for two trillion yen, or roughly $18 billion. Apple is among several companies providing funding for the deal, and it looks like it’ll end up paying about $1.5 billion for its stake. Ensuring that Toshiba’s memory business remained a going concern and that it secured its share of its output was paramount to Apple given the constraints and competitiveness in the global memory market, which has pushed up costs and prices over recent months while boosting Samsung’s memory business enormously. Given the frustrations Apple has experienced in having to rely on Samsung as a supplier for OLED screens in an equally constrained market, this long-term imperative will have taken on even greater significance lately. There are additional complexities in the deal because Western Digital, which owns several joint ventures with Toshiba, continues to oppose it, but it looks like it should now go ahead.
via Bloomberg
★ Apple Reportedly Siding with Bain in Toshiba Memory Bid (Sep 14, 2017)
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★ Samsung Reports Full Q2 Results: Semi and Mobile Drive Growth and Profits (Jul 27, 2017)
I’ve already commented this quarter on Samsung’s preliminary results, which let us know that it would report record high revenues and operating income. But we had to wait until its final and full results for the quarter were out to know the contributions made by its various divisions, though I’d had a good guess in that first comment. As expected, the Semiconductors division (which includes memory, ASICs, and Samsung’s new separate foundry business) was by far the strongest performer in the quarter, growing 47% year on year and contributing 57% of operating income for the company on just 27% of its revenue. That was driven, as expected, by a combination of market growth and price increases, with memory making up nearly 80% of sales. But the IT & Mobile division, which has been stagnant or declining in recent quarters, also contributed to revenue growth, up 17% year on year, the best in several years. A big contributor was the shift of the company’s Galaxy S launch from Q1 to Q2 this year, which had sent Q1 revenues down 15% year on year but boosted the year on year comparison this time around. Profits and margins, though, were both down on last year in the mobile division, suggesting perhaps because of the expenses associated with the launch shifting from Q1 to Q2 as well, and perhaps because the company is making a big marketing push around one of its most compelling flagships in several years. My bet is that the rest of Samsung’s year will go as well as its first half, based largely on the combination of higher chip prices, growing components shipments, and a big boost from Apple OLED orders for its new phones. Some of those drivers will ease next year, especially if other suppliers are able to ramp up OLED production to help meet Apple’s needs in the next generation of phones, but Samsung’s on a pretty healthy trajectory right now and there’s not much sign of that stopping. The biggest short term question is how it will position the Note 8 that’s due to launch next month, given the increases in usable screen size in the Galaxy S line and last year’s troubles, and how competitive it and the Galaxy S8 will be versus the new iPhones launched a month later by Apple.
via Samsung (PDF)
Imagination Tech Begins Formal Sale Process as a Result of Apple Pullout (Jun 22, 2017)
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★ Apple is Developing a Dedicated AI Chip (May 26, 2017)
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Apple Allocates First Money from US Manufacturing Fund to Corning (May 12, 2017)
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Samsung Splitting Chip Division Into Foundry and System Units (May 12, 2017)
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HP Laptops with Conexant Secretly Maintain Log of Keystrokes (May 12, 2017)
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Imagination Technologies Looks to Escalate Patent Argument with Apple (May 4, 2017)
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Intel Reports Good Growth and Higher Margins, But Data Center Falls Short (Apr 28, 2017)
Intel had a pretty good quarter for the most part, expanding margins as several of its divisions performed better off the back of rising prices and lower unit costs. The only division that didn’t grow was the security division (home of McAfee), which Intel has already announced it intends to spin off. Client Computing, home of Intel’s traditional PC business but also newer areas like tablets, phones, modems and so on, grew by 6%, though in large part because of rising prices (up 7% year on year) rather than volumes (down 4% year on year). The trend in Data Center, which makes up a little under a third of revenue, was similar, with volumes down 1% but prices up 6%, driving overall growth, though at a slower rate than in the past, and its margins have also fallen recently as it invests in new processes which should pay dividends over the longer term. Intel’s non-volatile memory group benefited from the release of Intel’s new Optane memory products, which have contributed to very rapid growth, but which has also plunged that division into the red because of heavy investment in the new processes and technology. IoT is also growing at a decent clip, though it’s much smaller than the two big divisions. One other division is Intel’s Programmable Systems Group, which was formed when it acquired Altera, which made filed-programmable gate array (FPGA) technology. That’s growing at a decent clip and is also now profitable, which is good progress from when the acquisition closed. Overall, Intel’s two main businesses are performing well for it at the moment, though the fact that it’s having to invest heavily to remain competitive in several key areas has held margins down below where they might be.
via Intel (PDF)
★ Samsung Reports Record Operating Margin Thanks to Semiconductor Strength (Apr 26, 2017)
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KGI Reports High-End 2017 iPhone Production May Be Delayed (Apr 24, 2017)
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Huawei Uses Sub-Par Memory in Some Phones Due to Supply Shortage (Apr 21, 2017)
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Why The LG G6 Won’t Have Snapdragon 835 – Forbes (Jan 24, 2017)
This is sourced reporting from a Forbes contributor who (as far as I am aware) doesn’t have a long track record in scooping news like this, so take it with a pinch of salt. But on the face of it, this makes sense – Qualcomm’s 835 chip is brand new, and Samsung would logically need bucketloads of them for its next Galaxy S phones, potentially gobbling up all the supply available and squeezing other OEMs out in the short term. Apple is famous for securing long-term access to the components it needs and squeezing others out in this way, and given the timing and Samsung’s scale in smartphones, it makes sense that it would be able to secure all the available supply of 835 chips on a short-term basis too. That’s going to be tough for other OEMs launching handsets in the first half of 2016 – even though the article downplays the jump from the 821 to the 835, there are some significant additions in the new chip which will create better performance in areas like battery life, VR/AR, and so on.
via Forbes