Sen. Susan Collins, R-Maine, backs advocates in the Senate and the U.S. business community who want temporary “deferrals” of the Section 301 tariffs on Chinese and European imports during the COVID-19 pandemic, she wrote Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer Friday. The tariffs’ economic impact has been “of particular concern to companies in Maine,” said Collins. “The response to COVID-19 has now added another layer of pressure as businesses are facing severe cash flow problems.” She wants the Trump administration to immediately defer tariffs “for at least 90 days, or until the crisis passes,” she said. Treasury and USTR didn’t comment Monday.
Inconsistencies abound in the List 4A Section 301 tariff exclusions that the Office of the U.S. Trade Representative granted to Chinese smartwatch imports classified under the 8517.62.00.90 product code. The exclusions are retroactive to Sept. 1 when the tariffs took effect and expire after one year, said a USTR notice Thursday. The exemptions apply to devices “suitable for wearing on the wrist” with “time-display functions” and the ability to link to a “network." USTR granted exclusions to the Apple Watch and a range of Fitbit smartwatches and fitness trackers, but also to Tile for a Bluetooth tracking device that has no wrist-worn or time-display component. The Tile device links to a smartphone app for finding misplaced items like keys or glasses. Sonos also landed exemptions for the wireless mesh network speakers and audio components it imports from China under the same 8517.62.00.90 classification as smartwatches. But exclusion requests for wireless speakers from Bose, Sound United and others remain in a Stage 2 administrative review at USTR, as do smartwatches from Fossil. A wide range of additional 8517.62.00.90 goods also remain in a Stage 2 hold, including Apple AirPods and JLab Bluetooth headphones. USTR didn’t comment Friday.
The Commerce Department extended comments on future temporary general license extensions under export administration regulations by about a month to April 22, says Thursday's Federal Register. The feedback will determine “continuing need” and scope for future extensions for the temporary general license for Huawei, the department said Wednesday. Thursday, Reuters reported senior administration officials agreed to new measures to further restrict foreign exports of chips to Huawei. It's unclear if President Donald Trump will OK the change. The White House and Commerce Department's Bureau of Industry and Security didn't comment.
Global governments need to define semiconductors as an “essential” industry that must be “allowed to continue operations” during COVID-19 lockdowns, blogged Semiconductor Industry Association President John Neuffer Wednesday. Semiconductors “underpin vital sectors of the economy, including health care and medical devices, telecommunications, energy, finance, transportation, agriculture, and manufacturing,” he said. They run information technology systems “that enable remote work and access to essential services across every domain,” he said. “Ensuring the continuity of semiconductor and related supply chains is necessary to support the even greater range of services that will be digitized in the coming weeks and months.”
The global smart speaker market grew 53% year on year in Q4, driven by Eastern Europe (705%) and Asia Pacific (116%), said Futuresource Monday. Asia Pacific had 39% of global shipments. Smart sound bars grew 60% year-on-year worldwide, it said, though still a small percentage of the overall smart speaker market. Smart display shipments are growing as their screen sizes increase, said Futuresource, with some 14.5 million units shipping last year vs. 3 million in 2018. “The demand for larger screen sizes, improved Wi-fi technology and enhanced audio quality commands a premium cost, despite the average price of home audio devices declining once again in Q4,” said analyst Guy Hammett: Vendors will need to adopt aggressive pricing strategies and offer giveaways to gain market share.
Disney Plus is set to become Europe’s third largest streaming service behind Netflix and Amazon Prime Video after it launches Tuesday in eight major markets, blogged Futuresource Friday. COVID-19's “stay-at-home directive,” plus new distribution partnerships, will drive “subscriber uptake” to reach “even higher levels than previously anticipated,” it said. But Futuresource predicts pent-up Disney Plus demand at launch in Europe will be lower than in the U.S., where the service signed on nearly 30 million paid subscribers in the 13 weeks after the Nov. 12 debut (see 2002040068). “The key challenge for Disney across all markets will be maintaining its growth in new subscriptions after such quick traction, whilst retaining its existing monthly subscribers,” said Futuresource. Its research found slightly more than half of Disney Plus European subscribers will be on monthly plans.
The global mobile device market had “mass disruption” to its production and supply chains due to labor shortages and inactive logistics resulting from the COVID-19 pandemic that hit China last month, reported ABI Research. The U.S. imported 214.6 million smartphones last year, 74.6% from China, said Census Bureau data we accessed through the International Trade Commission. China was 75.8% of the 14.4 million smartphones imported to the U.S. in January. Import data from February and March are expected to show a COVID-19 impact on reduced Chinese cargo. Supply chain partners such as Qualcomm, Broadcom, Qorvo and Skyworks faced shrinking smartphone demand; first half production could drop by as much as 30%, ABI forecast Wednesday. The 5G rollout will feel adverse effects from the disruptions, which will suppress near-term growth of the next-generation handsets, said the report. A move to lower price tiers was expected to be a key driver for boosting 5G smartphone shipments this year, but now it’s expected that shipment volume for 5G smartphones will be “much lower than previously expected, slowed by a stagnant supply chain and crippled demand,” it said. The market is expected to face disruptions and delays. Global business smartphone units will ship 12% fewer smartphones to enterprises in 2020, Strategy Analytics predicted.
The FCC can take several steps to help with the coronavirus, including acting on an E-rate petition “clarifying that schools can wirelessly extend E-Rate subsidized connections to students at home,” Microsoft officials told an aide to Commissioner Geoffrey Starks, said a filing posted Wednesday in docket 02-6. The FCC should also act on changes to the technical rules for TV white space devices provide an expected waiver of citizens broadband radio service transition requirements (see 2003160049).
Broadcom withdrew 2020 financial guidance “until ... visibility returns to pre-COVID-19 levels,” said CEO Hock Tan on a fiscal Q1 call Thursday. Its Q4 release Dec. 12 predicted an 11% revenue increase for fiscal 2020 ending early November. Its Q1 ended Feb. 2. Tan said he hasn’t seen “a meaningful impact” on Broadcom semiconductor bookings from the coronavirus and thinks “the fundamentals of the business remain very much intact.” But there’s “no doubt COVID-19 has created a high level of uncertainty,” and that’s sure to hurt operations, especially in the year’s second half, he said. The stock closed up 7.1% Friday at $234.22. As consumer spending declines from the coronavirus, “the confidence level among businesses, enterprises might erode,” said Tan. That would “delay or push out spending by enterprises,” but that’s “all speculation,” he said. “We're trying to understand the impact of COVID-19 on our ecosystem,” but it’s at “a very early stage in the whole process,” he said. Broadcom, which put its wireless chip business up for sale last year, now has no interest in getting rid of it, said Tan. “Continuing to invest in and operate our wireless assets will create the most value.” Recent chip-supply agreements position Broadcom as “more closely and strategically aligned with our largest smartphone customer,” said Tan. The customer is known to be Apple. The agreements are for three-year terms, he said. They require Broadcom to “provide technology and road map alignment” in RF components for the “next three generations of 5G phones,” he said.