Tag: components

Vendors to skimp on costs for notebooks

cashManufacturers in the Far East who make notebooks for branded companies and for the OEM market are planning to skimp on costs by using common components across different ranges of machines.

That’s according to Taiwanese wire Digitimes, which said common components will include heatsinks, chassis hinges and more importantly motherboards.

Several factors are influencing this trend.

Those include the cost of labour in mainland China and also the fact that there’s a lack of demand for notebook PCs these days.

Motherboards were usually different because of the number of processors used for different sizes.

But that has led the wire, quoting industry sources, to suggest that the manufacturers will also standardise on similar processors for different models.

That is unlikely to please chip giant Intel, which relies on a range of differently priced microprocessors being used in different machines.

Samsung profits up

Samsung-SSD-ActivatedKorean chaebol Samsung said that it made an operating profit of $5.96 billion in its second quarter with semiconductor business leading the way.

Samsung often makes the press as a manufacturer of smartphones but it is a big company with fingers in almost every vertical pie.

As well as making smartphones, for example, Samsung also makes components for a variety of purposes and has a big flat panel business too.

It also makes memory components and expects bouyant sales in the second half of this year.

But it sounded a warning about its smartphone business as it faces increasing competition from Chinese manufacturers, particularly at the low end.

It said in a regulatory statement that its high end S6 Edge phone is selling so well it’s unable to meet demand.

Dell squeezes suppliers as PC pressure grows

A decline in sales of PCs is affecting multinationals like Dell but that is also putting pressure on Taiwanese manufacturers to cut their costs.

Last week a large number of well known Taiwanese ODMs (original design manufacturers) reported poor results for February.  Taiwan requires listed companies to file their results monthly.

Now it has emerged that companies like Dell are putting pressure on their component suppliers to cut costs in a market where margins are already razor thin.

Taiwanese wire Digitimes reports that Dell is putting pressure on its suppliers to rejig their prices, and inviting tenders from competitors in a bid to gain an extra few points.

US multinationals depend almost entirely on Asian suppliers to build machines, and it is a fragile system at the best of times, with the region subject not only to economic pressures but to natural disasters including earthquakes, floods and tsunamis.

As economic sentiment in the USA and in Western Europe is still more than a little on the downbeat side, companies like Dell become increasingly subject to shareholder pressure.  It is those pressures that have persuaded the board of directors of Dell to come up with a private equity answer, although that process appears to have its own travails.

Watchdog blocks $330 million component company acquisition deal

US authorities have blocked a proposed $330 million acquisition deal, with the buy out of PLX Technology creating a “near-monopoly” for Integrated Device Technology (IDT).
The Federal Trade Commission has put an end to the deal which it ruled would create an unfair advantage in the production and sale of PCIe switches, components which perform connectivity functions in electronic devices.
According to US authorities, IDT and PLX are the two biggest players in the PCIe market, worth $100 million a year globally.
The FTC said that the two companies are currently each other’s closest and most direct competitors. By joining together in a $330 million merger deal agreed in April 2012, the resultant company would own 85 percent of the PCIe market.
In the past customers have capitalised on the rivalry between the two component firms to drive down prices, but the proposed deal would eliminate this competition, potentially affecting value and quality. The rivalry has also resulted in more innovative features and better customer service.
“PCIe switches are important components in many computing, communications and consumer products,” said Richard Feinstein, Director of the FTC’s Bureau of Competition.
“The combination of IDT and PLX would hurt competition and lead to higher switch prices, lower innovation in the marketplace, and reduced customer service.”

Counterfeit electronic components on the rise

Reports of counterfeit components making their way into electronic equipment are on the rise, creating significant risk of costly – even potentially lethal – malfunction.

Research into the proliferation of counterfeit components reaching the US has shown an increasingly problem with more and more fake components being flagged in the supply chain.

According to IHS,  the number of knock off goods is on the increase, in 2011 there were 1,363 verified reports of counterfeit parts, up from 324 in 2009.  Over the past decade this has increased massively by around a factor of 700.

While the number of reports may not immediately sound like much, it is the case that each report could contain thousands of dodgy parts.  This means that there have likely been over a million fake components which have been found just in the last year, leaving the worrying thought that there may be many more which have gone undetected.

President Obama may have signed legislation at the tail end of last year which aims for greater regulations for counterfeit part detection, but it is appears the problem is rife.

And as anyone who has bought goods from a wannabe Del Boy, counterfeit goods are often shoddy at best, and in many cases outright dangerous.   Considering that many applications that the counterfeit component are destined for – from military applications to aerospace applications or consumer electronics – faulty goods could prove hugely damaging, and not just to the companies which have to replace them.

Apparently the US Missile Defense Agency realised that one of its computers had used some phony circuit components, leaving it with a bill for $2.7 million to fix it.

As well as posing potential physical safety threat, the IHS iSuppli report claims that counterfeit integrated circuits could potentially be used as malicious Trojans that can be disabled remotely to attack military defence equipment.

With a global supply chain and the sheer number of components being shipped around the world it seems there are inherent difficulties in detecting faulty goods – though we guess the ‘Trotters Independent Traders’ logo might be a give-away.

New regulations have demanded that contractors will have to be eagle-eyed in picking out and knock off components, with greater responsibility for their removal from the supply chain as well as over using reliable suppliers.

Unsustainable cheap labour panics PC industry

A rise in the minimum wage for parts of China has threatened to throw PC component suppliers into chaos, as manufacturers question their reliance on cheap labour.

In a bid to offset domestic inflation, a number of provinces, such as Guangdong and Jilin, will up the wages for cheap labour on 1 January 2012. This has led to concerns that companies which have invested heavily in the area – in a bid to save on cheap labour – could run the risk of bankruptcy, with slowing demand worsening the situation.

According to Digitimessources, the situation is already difficult for many smaller firms which are being forced to shell out roughly 36 percent interest rates on underground loans.  And, with banks unwilling to lend money, this means plenty face going under in the new year.

China has been synonymous with cheap labour over a number of years and has been the go to for cost-effective made products.  Of course, with that comes notoriously appalling conditions and events like the suicides at Foxconn’s factories. Indeed, another worker fell to her death on Sunday, though Foxconn claims it was accidental.  Western mega-corporations such as Apple have come under scrutiny from human rights groups about their role in supporting conditions which would not exactly be condoned domestically.

However, as part of China’s ‘125’ five year plan, worker’s wages are going to head skywards, increasing by 84 percent compared to the 2010 average.

According to chip market analyst Malcolm Penn at Future Horizons, it is inevitable that investors would not be able to fill their pockets with incredibly low labour costs with any long term sustainability.

“It used to be cheaper in Japan and now it has moved over to China, and it could be anywhere after that,” he said, speaking with TechEye.

“Cheap labour is a myth and it goes from place to the next, you bleed it dry and then it will occur somewhere else,” Penn continues. “When it is too expensive in China companies will go somewhere else, that is just the nature of economics.

“It is absolutely no surprise that it is becoming more expensive in China, the only people it is a surprise to is those going to whichever country is next to be used for cheap labour.”

According to a spokesperson for the World Socialist Web Site, rising food and housing prices have caused a situation in China where unrest is growing. Wage rises are a symptom in some of the most disaffected regions, such as Guangdong. 

“There are growing social protests against these conditions. It is notable that it is the province of Guangdong that is raising its minimum wage.

“In June last year, Honda workers in the city of Fonshan struck for better wages and won.”

The WSWS believes that this has created a division among Chinese authorities over whether to enforce a clampdown reminiscent of Tiananmen Square, or to quell unrest with wage increases.

“China functions as the main cheap labour platform for world capitalism,” the spokesperson told TechEye. “Through methods of dictatorship, the Communist Party offers a super-exploited work force, with no industrial or political rights, over to the major corporations. 

“The hypocritical posturing of Western governments on China’s human rights record is severely contradicted when one considers the increase in investment following the massacre of pro-democracy students and workers by government forces in Tiananmen square in 1989.”

Gigabyte unleashes monster motherboard

Gigabyte has unleashed its latest monster performance GA-X58A-UD9 motherboard to the masses.

The GA-X58A-UD9 has a new 24 phase Unlocked Power design, 4-way graphics support including NVIDIA SLI and ATI CrossFireX.

It also has a range of Gigabyte features such as 333 Onboard Acceleration and On/Off Charge as well as the proprietary Gigabyte Unlocked Power technology with all new 24 phase design. The Gigabyte GA-X58A-UD9 provides maximum power delivery for Intel’s latest 1366 socket CPUs including the new Intel Core i7-980X Extreme Edition (6 core) CPUs as well as upcoming extreme performance CPUs from Intel, ensuring utmost system stability and overclockability.

Tim Handley, Deputy Director of Motherboard Marketing at Gigabyte Technology said: “Gigabyte set out to completely redefine what is possible performance and feature-wise on the X58 platform, and the GA-X58A-UD9 truly delivers on both fronts.

“Providing the industry’s highest caliber CPU power delivery with our unique 24 phase Unlocked Power design and including all of the features which set GIGABYTE motherboards apart from the competition, the GIGABYTE GA-X58A-UD9 fits into a whole new first class category all its own.”

The motherboard also has Gigabyte’s Unlocked Power feature, which is said to deliver better durability and longer component lifespan due to what it claims is the industry’s first Dual Power Switching design. When Dual Power Switching is activated, 2 sets of 12 power phases operate in tandem, automatically turning on one set of 12 phases and powering down the other 12, allowing the non active set to rest.

By sharing the power workload between 2 sets of power phases, the Dual Power Switching effectively doubles the lifespan of the power phases. Additionally the feature also has a built-in Auto Failure Protection, so if one power phase is damaged or fails, the motherboard will automatically disable its group of 12 phases, allowing it to still operate using the other set of twelve, unlike a traditional motherboard which would be unable to boot.

And those worried about power needn’t fear this monster as the Gigabyte Dual Power Switching temporarily suspends, and the full 24 power phases are automatically unlocked, allowing for maximum power delivery. For overclockers and power users, this means the full 24 power phases can be activated to deliver the highest amount of CPU power currently available on any desktop motherboard.