Category: Chips

Mobile Dialog expects good revenue growth

 

The maker of chips for Apple and Samsung said it expected “good revenue growth” in 2017, indicating a bumper year for high end consumer devices.

Dialog Semiconductor depends for about three quarters of its revenues on smartphone makers, in January already reported a five percent rise in fourth quarter sales to $365 million.

Dialog on Thursday said it expected sales of $255-$285 million in the first quarter of 2017, up from the $241 million it made in the year-earlier quarter.

Hopes for strong chip deliveries to Apple’s iPhone and Samsung’s Galaxy have lifted the stock to a 17-month high, gaining 19 percent so far, this year and more than doubling from the 23.21 euro it hit in June.

Apple and Samsung are launching their new smartphones in the coming weeks. Expectations are high, especially for the 10 year edition of the iPhone, contains Dialog’s power management chip.

 

Intel soups up its Atoms

Intel has souped-up its Atom chip, which is more famous for being an underperforming low-end chip for mobile devices.

The latest Atom C3000 chips have up to 16 cores and are more sophisticated than ever. Of course these are not going into smartphones – Intel has given up on that market. Instead they are made for storage arrays, networking equipment, and internet of things devices.

To be fair,  networking and storage devices don’t require much grunt, so a low-power Atom chip will work. Few Intel server chips have more than 16 cores. In this case though, the number of Atom cores means the chip can handle more streams of data.

Under the bonnet of the C3000 is RAS (reliability, availability, and serviceability) capabilities, which is mostly found on high-end Xeon chips. The feature corrects data errors on the fly and prevents networking and storage equipment from crashing.

Intel is also providing development kits for writing storage and networking applications for the chips.

The new chips are already shipping to testers and will become available in the second half of this year.

The Atom C3000 succeeds the C2000 which were originally targeted at microservers and networking and storage equipment. The Atom C2000 is currently in the centre of a row over a flaw that could crash servers and networking equipment. Apparently the C2000 came with a flaw which caused it to die after two years. Intel has provided a temporary fix, but the company is working on a permanent fix.

The Atoms are not the only thing that Intel is making for networking gear. It also has the new Xeon D-1500 chips for networking and storage gear that require quicker turnover of processed data. The chips integrate 10-gigabit ethernet controllers and have a technology called QuickAssist to drive throughput of compressed data up to 40Gbps (bits per second).

Tosh will flog off most of its chip business

Troubled Toshiba will raise $8.8 billion by selling most of its flash memory chip business, seeking to create a buffer for any fresh financial problems.

Tosh has been talking about flogging off part of its successful Flash memory business for a while because that would sort its problems out a bit quicker.

But it decided to abandon that cunning plan to sell just 19.9 percent at the instigation of its main creditor banks which are worried about potential writedowns that may come on top of $6.3 billion hit to its US nuclear unit.

Prioritising its need to raise capital, Toshiba said last week it is now prepared to sell a majority stake or even all its prized chip business.

Toshiba has not decided on the size of the stake to be sold, preferring to focus on the amount that can be raised although it would like to retain a one-third holding that would give it a degree of control over the business, sources in the outfit have leaked.

The sale is the best and the only way Toshiba can raise a large amount of funds and wipe out concerns about its credit risk. The sale should be completed by the end of March next year.

It wants to restart the sale process as soon as possible and may sell to multiple buyers rather than one bidder with interest already received from investment funds, other chipmakers and client companies, he also said.

Other potential financial risks that Toshiba may have to deal with include Landis+Gyr AG, an unlisted German meter maker it acquired in 2011 and whose earnings have not matched expectations.

When Toshiba was offering 19.9 percent of its chip unit, it received offers ranging from $1.8 billion to $3.5 billion.

Western Digital is still interested in buying a stake in Toshiba, two sources said without specifying how big a holding it would be prepared to buy. The California-based firm and Toshiba jointly operate a NAND flash memory plant in Japan.

Troubled Toshiba getting $1.8-3.6 billion bids for its chips

Toshiba Corp President and Chief Executive Officer Hisao Tanaka attends a news conference in TokyoTroubled Toshiba has received bids ranging $1.8-3.6 billion for a 19.9 percent stake in its flash memory business.

Tosh needs to raise around $3 billion from the sale to make it worthwhile. The outfit needs to offset a multi-billion-dollar write down on its US nuclear power business.

Buyers for the Japanese company’s chip unit include SK Hynix and Micron and data storage firm Western Digital and financial investors such as Bain Capital.

Tosh would prefer bids from investment funds because it could conclude a deal quicker than with industry peers that may have to seek permission from competition regulators before any acquisition.

A Toshiba executive has said the company will consider not just the offer price when selecting a bidder but other conditions as well.

A Toshiba spokeswoman said the company could not comment on specifics of the sale process.

The Nikkei Business Daily reported market concerns that Toshiba could delay its third-quarter earnings release, without citing sources. On reporting earnings, Toshiba also plans to reveal the write down on its US nuclear business.

Boffins to build real large scale quantum computer

schrodingers_catAn international team, led by a scientist from the University of Sussex, has today unveiled the first practical blueprint for how to build a quantum computer.

Powered by cats who may, or may not be dead, the computer will be the most powerful on Earth and has calculated the existence of rice pudding even before it has been built.

According to the journal Science Advances, which we get for the spot the quark competition, the blueprint includes a new invention which uses connections created by electric fields that allow charged atoms (ions) to be transported from one module to another. This new approach allows 100,000 times faster connection speeds between individual quantum computing modules compared to current state-of-the-art fibre link technology.

Previously, scientists thought of using fibre optic connections to connect individual computer modules.

The project’s top boffin Prof Winfried Hensinger, head of Ion Quantum Technology Group at the University of Sussex said the availability of a universal quantum computer may have a fundamental impact on society.

“Without doubt it is still challenging to build a large-scale machine, but now is the time to translate academic excellence into actual application building on the UK’s strengths in this ground-breaking technology. I am very excited to work with industry and government to make this happen.”

The computer’s possibilities for solving, explaining or developing could be endless. However, its size will be anything but small. The machine is expected to fill a large building, consisting of sophisticated vacuum apparatus featuring integrated quantum computing silicon microchips that hold individual charged atoms (ions) using electric fields.

Still anything that involves getting dead cats to do the ioning is almost certain to be a winner.

 

 

Memory chips destined to be a load of old Tosh

ToshibaToshiba has approved plans to make its core memory chip business a separate company and seek outside investment for it.

The company is desperately trying to avoid being crippled by an upcoming multi-billion-dollar write-down for its US nuclear business.

The proceeds are set to cover part of the charge for cost overruns at a newly acquired US power plant construction business which is thought to be about $6 billion.

Toshiba’s memory chip business is its crown jewel, accounting for the bulk of its operating profit.

Toshiba is looking to sell roughly 20 percent and potential investors include private equity firms, business partner Western Digital Corp and the government-backed Development Bank of Japan, sources have said.

It wants to complete the sale by the end of the financial year in March to stop shareholder equity from being wiped out by the charge.

However, the move is seen as a band-aid for the sick company as the NAND business is the only one with value, as it makes up all of the semi-conductor profits, which comprise 75 percent of the overall company’s profit.

Even if the deal pans out Tosh will probably have to sell more bits of the company in the future.

A raft of private equity funds, including Silver Lake and Permira, have signed non-disclosure agreements with Toshiba, sources said.

Western Digital, which operates a NAND plant in Japan with Toshiba, may seem like a natural buyer of a large stake in the chip business, a sale might be difficult to pull off before March as it would attract a lot of snuffling from anti-trust watchdogs.

Toshiba estimates the value of its memory chip business at $9-13 billion.

Toshiba Chief Executive Satoshi Tsunakawa recently told the company’s main creditors of its plans and that Tosh will flog off other businesses.

Japanese business weekly Toyo Keizai reported that Terry Gou, chief executive of Foxconn, the world’s largest contract electronics maker, is interested in either taking a stake in or buying some of Toshiba’s businesses.

Intel reports strong finish to record year

Databroker_scrooge_mcduck-346x260Chipzilla’s supreme dalek Brian Krzanich said that Intel’s last quarter for 2016 was a strong finish to a record year.

He reported that data centre growth was good, Cloud service provider revenue was up 24 percent, and communications service provider revenue grew 19 percent. Internet of Things revenue was also strong.

Krzanich claimed that data growth would continue to skyrocket, creating demand for Intel’s processors. He said that a connected car could generate 4,000 gigabytes of data per day.

He noted that the company has good design wins in connected cars with BMW, Baidu, and Delphi. In artificial intelligence, Krzanich said Intel processors are used in more than 90 percent of machine learning applications.

Client computing sales, which include processors for desktops and laptops, had strong execution and higher average selling prices (up seven percent from a year ago) as customers opted for more gaming computers and high-end PCs, Krzanich said. During the quarter, Intel saw that the worldwide PC supply chain remained healthy and had inventory get used during the three months, said chief financial officer Bob Swan.

However, over all the figures appear to be mixed. Intel misted its target on earnings per share but beating estimates for revenues. The results were driven by revenues from desktop and laptop computer chips, data centre chips, and the Internet of Things. The latter was up 15 percent for the full year.

The cocaine nose jobs of Wall Street had expected Intel to report earnings per share of 75 cents on revenue of $15.8 billion for the fourth quarter. For the full year, they were expected earnings per share of $2.67 on revenue of $58.9 billion. Fourth quater earnings came in at $3.6 billion, or 73 a share, on revenue of $16.4 billion. A year ago, earnings per share were 74 cents, with revenue at $14.9 billion.

Next year though things might change for Chipzilla. AMD is expecting to be more competitive against Intel in 2017 as it readies its new Zen processors for PCs, laptops, and servers and Qualcomm is expecting to put more of its ARM based chips into PCs.

Net income for the year was $10.3 billion, while overall revenue for the year was $59.4 billion. A year ago, net income was $11.3 billion on revenue of $55.4 billion. Intel cut about 12,000 jobs during the year as it restructured to get behind the company’s focused priorities. This includes spinning off McAfee, formerly Intel Security, as a separate business.

Intel expects 2017 to be flat in terms of revenue. Krzanich said the company is taking a conservative view of 2017 PC unit sales than other analysts, but he noted there was record demand for Intel PC chips in Q4. Unit sales for 2017 could decline in the mid-single digit percentages, Krzanich said. Intel is positioning itself to lower its costs during the coming year.

BT losing a pizza the action after Italian accounting scandal

banner_pizza_The BT Group is facing two shareholder lawsuits in the United States, after a fifth of the telecommunications company’s market value was wiped out in a single day amid a growing accounting scandal in Italy.

The lawsuits accusing the British company and three top executives of securities fraud were filed in the US District Courts in Manhattan and in nearby Newark, New Jersey.

Both lawsuits were brought by individuals seeking class-action status, and named Chief Executive Gavin Patterson, his predecessor Ian Livingston, and Finance Director Tony Chanmugam as defendants.

A spokeswoman for BT declined to comment on behalf of the defendants. BT had launched an internal probe into its Italian business after a whistleblower flagged concerns.

The price of BT’s shares in London and American depositary receipts in New York fell nearly 21 percent.

BT wrote-down its Italian division to £530 million from £145 million after Patterson expressed disappointment with the “inappropriate behaviour” uncovered.

BT reported slowing demand from government and corporate customers following last June’s vote by Britons to leave the European Union. It said that slowdown, together with the accounting problems, would weigh on results for two years.

But the lawsuits accuse BT of having concealed or made misleading statements about the accounting practices in Italy, causing it to inflate earnings and its stock price.

Companies are frequently sued in the United States after releasing negative news that investors say they did not expect.

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Qualcomm defends its licensing and bottom line

siege_of_Troy_2Chipmaker Qualcomm has reported a lower than expected 3.9 percent rise in quarterly revenue and defended its licensing model.

The US Federal Trade Commission and Apple have sued Qualcomm accusing it of resorting to “anticompetitive” tactics to maintain a monopoly over chips used in smartphone.

The Apple tactic appears to be designed to force Qualcomm to reduce its already discounted pricing by jumping on the bandwagon of anti-trust actions in the US and Korea.

The fruity cargo cult also filed a lawsuit against Qualcomm in Beijing, alleging that the chip supplier abused its clout and is seeking $145.32 million in damages.

Qualcomm executives firmly defended the company’s licensing model on its quarterly conference call, and said its revenue forecast did not include any impact from the dispute with Apple.

Qualcomm president Derek Aberle said that Apple’s attack on Qualcomm’s business model is not only an attack on Qualcomm, but also an attack on the smartphone competition that Qualcomm’s business model enables.

Qualcomm said it expects to continue to supply to Apple during the dispute, and that the company’s contracts with the iPhone maker’s suppliers were still valid.

Analysts on average were expecting a profit of $1.20 per share and revenue of $5.90 billion so they are slightly disappointed.

Revenue rose to $6 billion from $5.78 billion, but missed analysts’ estimate of $6.12 billion.

Qualcomm’s shares have risen nearly 20 percent in the past 12 months, compared with the 62.1 percent gain in the broader Philadelphia Semiconductor index.

Samsung makes record chip earnings

scrooge-mcduckSamsung Electronics saw record chip earnings which meant it could gloss over the Note 7 smartphone fiasco in the fourth quarter.

The outfit, which is involved in an influence-peddling scandal surrounding President Park Geun-hye, said it expects profit growth in 2017, despite challenges arising from political uncertainty.

The political uncertainty appears to be whether the South Korean government will make Samsung executives accountantable for the scam. So far, the smart money is that it will probably not do that.

Samsung Electronics said in a statement that all this was creating an “uncertain business environment” although it did hint that there was also a changing political landscape abroad too.

All this poses a challenge to the execution of mid- to long-term business strategies, such as M&A and investment decisions and developing new growth engines.

Even so, it flagged higher earnings this year after a slow first quarter, when steeper marketing costs will eat into its bottom line as it tries to rebuild its reputation from the failure of its latest flagship phone.

The world’s top manufacturer of smartphones, memory chips and flat-screen televisions is counting on the booming chip market to continue driving growth and give the mobile business breathing space to rebuild its premium lineup.

The company forecast “stable demand” in 2017 for memory chips, which hit an all-time earnings high in the October-December period.

Fourth-quarter operating profit jumped 50 percent $7.93 billion which was its highest in over three years and matching its prior guidance. Earnings from the chips business soared 77 percent year-on-year. Revenue were flat.

In its mobile business, operating profit rose 12 percent in the fourth quarter as models such as the Galaxy S filled the void following the discontinuation of the fire-prone Note 7 in October.

Samsung claimed that defective batteries caused the Note 7 handsets to overheat and catch fire, and indicated that it may delay the launch of its next premium Galaxy S smartphone as it overhauls its product safety systems.

While the mobile business is struggling, the positive outlook for memory chips used in mobile devices and OLED televisions propelled Samsung’s shares to a series of record-highs this month.