The production capacity shortage in global semiconductors “appears to be a long-term phenomenon” spanning many industries but seems worst in the automotive sector, Himax CEO Jordan Wu told a quarterly call Thursday. “The shortage has become more severe.” The integrated circuit maker “engaged early,” leveraging its “long-term business relationships” with foundries and “back-end suppliers,” and “successfully secured more capacity for 2021, compared to the level of Q4," he said (see Q4 materials here). The company’s “aim” is to “fully utilize the capacity accessible to us” through its network of foundries. There’s little likelihood of a “significant” industry capacity increase “anytime soon,” he said. “Strong demand is likely to persist longer than expected.” Another “impressive quarter of high growth” is expected for notebooks, said the executive, citing "persistent remote working and e-learning.”
Consumers are benefiting from some tech trends the pandemic accelerated, and while the impact on movie theaters may reduce that sector's societal influence, it could still mean higher prices to go to the movies. Those were among predictions from MoffettNathanson's Michael Nathanson, speaking with us on C-SPAN Wednesday. The analyst noted many can save money by cutting the cord while watching new films at home rather than in theaters, a trend he expects to continue post-coronavirus crisis. The traditional pay-TV bundle "will serve sports, news, live event customers," he said on a Communicators episode to be televised later and posted online here. "If you're a fan of the NFL, the bundle brings all to you," Nathanson said: "It’s the only option for people who are passionate sports fans," though some sports are moving over the top. Older viewers haven't "pivoted away" from MVPDs "as quickly as you might think," while younger people moved to virtual MVPDs for good in a "faster erosion" of traditional subscription video, the analyst said. NCTA declined to comment. Amid new streaming products from companies that also own studios like AT&T, Comcast and Disney, "you’re seeing a real collapse" in some film revenue, Nathanson noted. "There’s going to be less movie theaters in the world." The likes of Netflix and AT&T's HBO Max bring "better and better quality films through streaming," so theaters may need to improve service and raise prices to pay for the better features, Nathanson said: If theaters raise prices and don’t innovate quickly enough, they could face consumer backlash, like MVPDs have over high prices. "Consumers seem to really, really value the optionality of watching a premiere in the living room." Nathanson foresees ‘"generations of people down the road" who "won't experience the joy" of seeing a film on a big screen with an audience. The National Association of Theatre Owners didn't comment. Meanwhile, platform usage keeps rising, even as lawmakers increasingly scrutinize the sector, indicating consumers aren't much worried about content moderation, privacy, election meddling and other hot-button policy issues, Nathanson noted. "I don’t think the average consumer is as concerned" about such topics "as people might think."
Black History Month “is a time to honor the heroes who sacrificed in service of equality and equal opportunity for African Americans,” said the Office of the U.S. Trade Representative Tuesday in the agency's first media statement under the Biden administration. The new administration “is committed to building back a better economy that advances racial justice and equity, beginning with an inclusive pandemic recovery,” it said. The Senate Finance Committee hasn’t scheduled a confirmation hearing for Katherine Tai, President Joe Biden’s nominee to succeed Robert Lighthizer as USTR.
On Semiconductor's new CEO Hassane El-Khoury won't make a "short-term decision” about U.S. semiconductor production “based on politics that will hinder us from potentially achieving our maximum value creation,” he said Monday on a Q4 call. He was asked about federal incentives under the National Defense Authorization Act to promote U.S. semiconductor manufacturing and R&D (see 2101030002). He entered the role vowing to cease investments in product sectors or markets with low potential for revenue or margin growth, with a comprehensive plan of possible divestitures due by late summer. “If at the end of that first tranche" of decisions there's "alignment with where the administration is going or what state we are in, that’s great,” said El-Khoury, the former Cypress Semiconductor chief. On stock was up 6.6% to $36.77.
Global semiconductor sales reached $439 billion in 2020, up 6.5% from 2019, reported the Semiconductor Industry Association Monday. Sales of $117.5 billion in Q4 were 8.3% higher than the 2019 quarter and up 3.5% sequentially. Sales in 2020 were up “moderately” from 2019, “weathering a challenging macroeconomic environment brought on by the pandemic and other factors,” said SIA CEO John Neuffer. Though global semiconductor demand is on the rise, U.S. share of worldwide chip production declined to 12% in 2020, from 37% in 1990, he said: “That disparity will only intensify without U.S. government action to level the global playing field. It’s imperative the federal government fully fund incentives for domestic chip manufacturing and investments in chip research.”
The State Department should provide evidence justifying creating a new bureau focused on cybersecurity and emerging technology, GAO recommended Thursday. State informed Congress of its plans in 2019, and Secretary Antony Blinken approved the new bureau this month. Briefing slides didn’t “show that State used evidence to justify its proposal or explain how it would address any challenges,” the auditor said. The slides and a memo didn’t “sufficiently demonstrate that it used data and evidence in developing its proposal,” the report said. The department instead “presented four options for the organizational placement of the new bureau, with ‘pros’ and ‘cons’ listed for each option,” the report said. The department said it disagreed with the characterization. It said it provided appropriate material detailing options the department has for establishing the Cyberspace Security and Emerging Technologies Bureau, options the report didn’t closely examine. State said a draft report noted only one potential downside to the proposal: separating cyber and digital policy between different undersecretaries, which could pose coordination challenges. The department agreed that evaluating relevant data and evidence, “when available,” could be useful in determining program effectiveness.
Nearly 80,750 “qualified” industry attendees from 167 countries visited the all-virtual CES 2021 during its Jan. 11-14 run, said CTA Tuesday. Fifty-four percent of attendees were U.S.-based, but 58% of media visitors were from overseas, it said. The association offered no insights about attendees' engagement, including how many conferences and workshops they viewed or exhibitors they visited. About three-quarters of the 1,900+ exhibitors were from outside the U.S. and represented 48 “countries, territories & regions,” it said. The physical CES 2020 in Las Vegas drew 170,000 attendees and 4,400 exhibitors.
Intel invested $475 million in its Vietnamese subsidiary, in addition to the $1 billion it spent more than a decade ago to build a chip assembly and test manufacturing facility in Ho Chi Minh City, it blogged Tuesday. Intel Products Vietnam shipped more than 2 billion units of components to customers globally through the end of 2020, it said. It’s the largest U.S. tech investment in Vietnam, it said. The Office of the U.S. Trade Representative under the Trump administration found Vietnam’s allegedly improper devaluation of the dong against the dollar actionable under the Trade Act Section 301, leaving it to the next USTR to decide whether to impose tariffs on Hanoi (see 2101150052).
The “unprecedented speed” of digital transformation for remote work and learning will cause global IT spending to rise 6.2% this year, to $3.92 trillion, after declining 3.2% in 2020, reported Gartner Monday. It’s forecasting additional 4.6% growth in 2022 to $4.1 trillion. Communications services will be the biggest IT sector, with spending expected to rise 4.5% to $1.4 trillion this year. Spending on IT devices declined 8.2% in 2020 but is expected to increase 8% in 2021 to $705.4 billion. Chief information officers “have a balancing act to perform in 2021 -- saving cash and expanding IT,” said Gartner. “With the economy returning to a level of certainty, companies are investing in IT in a manner consistent with their expectations for growth.”
The Chinese Foreign Affairs Ministry was unfazed Thursday by White House criticism of China’s sanctions against 28 former Trump administration officials, including ex-Secretary of State Mike Pompeo, prohibiting them and their immediate families from visiting China, Hong Kong and Macao, and restricting companies they work for from doing business with the Chinese (see 2101200027). A National Security Council spokesperson called the sanctions “unproductive and cynical,” but a ministry spokesperson defended them as “a legitimate and necessary response.” China has warned “multiple times that these anti-China politicians will pay for their crazy acts,” she said. “We hope the new U.S. administration will view China and China-U.S. relations in an objective and rational manner” and help bring those relations “back onto the track of sound and stable development,” she said.