|Bid||78.50 x 1200|
|Ask||78.70 x 1200|
|Day's range||77.29 - 78.76|
|52-week range||58.00 - 96.17|
|Beta (5Y monthly)||1.38|
|PE ratio (TTM)||23.11|
|Earnings date||29 Jul 2020|
|Forward dividend & yield||2.60 (3.33%)|
|Ex-dividend date||03 Jun 2020|
|1y target est||90.74|
(Bloomberg) -- Samsung Electronics Co. has begun building a cutting-edge chip production line intended to help it take on Taiwan Semiconductor Manufacturing Co. in the business of making silicon for external clients.South Korea’s largest company said it’s started construction on a 5-nanometer fabrication facility in Pyeongtaek, south of Seoul, dedicated to its made-to-order foundry business, an arena TSMC dominates. Based on the Extreme Ultraviolet Lithography or EUV process, Samsung expects the fab’s output to go toward applications from 5G networking to high-performance computing from the second half of 2021, it said in a statement.Samsung, the world’s largest maker of computer memory, smartphones and displays, in 2019 outlined its aim of spending $116 billion to compete with TSMC and Intel Corp. in contract chipmaking, making silicon for customers like Qualcomm Inc. or Nvidia Corp. Its announcement on Thursday coincides with the announcement of restrictions on the sale of semiconductors made with American gear to China’s Huawei Technologies Co., a constraint that threatens more than a tenth of TSMC’s business.“This will enable us to break new ground while driving robust growth for Samsung’s foundry business,” ES Jung, head of the contract chipmaking division, said in a statement.Read more: Behind Samsung’s $116 Billion Bid for Chip SupremacySamsung first unveiled its expansion blueprint in April 2019, outlining at the time its goal of hiring thousands and ramping up investment in logic chips in the years leading up to 2030. That initiative arose as sales of smartphones and consumer electronics plateaued and competition from Chinese rivals depressed margins.EUV is the latest and most advanced chipmaking method, requiring machines costing tens of millions of dollars and delivering better precision and performance in the chips it produces. TSMC and Samsung, through its spending plan, are the leaders in developing that process and expanding into 5nm and smaller manufacturing nodes.Before the arrival Covid-19, Samsung had begun collaborating with major clients on designing and manufacturing custom chips and that work was already starting to add to its revenue, a Samsung executive has said. The company’s newest fab in Pyeongtaek joins another 5nm facility in Hwaseong that will begin production in the second half of this year.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Xiaomi Corp. reported a quarterly profit that beat analysts’ estimates after the Chinese smartphone maker got half its revenue from outside its home market for the first time.China’s largest smartphone brand after Huawei Technologies Co. said adjusted net income rose 11% in the three months ended March to 2.3 billion yuan ($324 million), compared with the 2.1 billion-yuan average of estimates. Sales rose 14% to 49.7 billion yuan, powered by a 47.8% jump in overseas revenue.Xiaomi managed to grow its global shipments by 6.1% in the past quarter even as total worldwide volume shrank 11.7%, according to research firm IDC. Beijing-based Xiaomi’s strength in online device sales served it well during the coronavirus period, particularly in Western Europe where shipments increased by almost 80%, according to research firm Canalys. In India, the company’s sales increased thanks to new budget phones released before a nationwide lockdown was declared.Revenue from Internet of Things products and online services maintained strong growth in the quarter. Xiaomi has been diversifying its major sources of revenue beyond smartphones, introducing a wide range of connected products from TVs to smartwatches. It also sells online advertising in China.What Bloomberg Intelligence SaysXiaomi’s smartphone gross profit is poised to surge as last year’s brand revamp hurt margin, even as average selling prices likely tanked on lower China sales mix. Higher revenue from online games and other services such as fintech could have lessened the probable advertising sales slump.\-- Anthea Lai, senior analystClick here for the research.Xiaomi faces a difficult second quarter as Covid-19 containment efforts in key markets including India and Spain are poised to dampen sales. “The different levels of lockdown measures adopted in overseas markets are expected to affect our performance in the second quarter of 2020,” the company said in a statement.Geopolitical tensions are also stoking uncertainty for Xiaomi’s supply chain. The Trump administration has moved to prevent chipmakers using U.S. technology from supplying Huawei, and China has vowed to retaliate. Qualcomm Inc., Xiaomi’s most important processor provider, may be among Beijing’s potential targets. The U.S. chipmaker is also one of Xiaomi’s earliest investors and its mobile CPUs power the company’s entire product line.(Updates with overseas sales from the first paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Since its founding more than three decades ago, Taiwan Semiconductor Manufacturing Co. has built its business by working behind the scenes to make customers like Apple Inc. and Qualcomm Inc. shine. Now the low-profile chipmaker has landed squarely in the middle of the U.S.-China trade war, an incalculably valuable asset that both sides are vying to control.The Trump administration opened up a new front in the conflict on Friday by barring any chipmaker using American equipment from supplying China’s Huawei Technologies Co. without U.S. government approval. That means TSMC and rivals will have to cut off Huawei unless they get waivers from the U.S. Commerce Dept. TSMC has already stopped accepting new orders from Huawei, the Nikkei newspaper reported Monday.The move threatens to wreak havoc throughout the complex ecosystem that produces technology for consumers and companies around the world. An attack on Huawei threatens not just its workers and its standing as a world leader in making smartphones and telecom equipment, but also hundreds of suppliers. The Chinese government has vowed to protect its national champion, with threats of retribution against U.S. companies that depend on China like Apple Inc. and Boeing Co.“China likely will retaliate, and investors should brace themselves for a possible trade war escalation,” Sanford C. Bernstein & Co. analysts led by Mark Li wrote in a research note on Friday.Read more: U.S. Tightens Rules to Crack Down on Huawei’s Chip Supply Huawei suppliers across Asia fell on Monday, with AAC Technologies Holdings Inc., Q Technology Group Co., Sunwoda Electronic and Lens Technology all sliding 5% or more. TSMC, which gets an estimated 14% of its revenue from Huawei, dropped as much as 2.5%.The U.S. already blacklisted Huawei last year, preventing American companies from supplying the Chinese company unless they got a license. The latest move tightens those restrictions to prevent chipmakers -- American or foreign -- from working with Huawei and its secretive chip-design unit HiSilicon on the cutting-edge semiconductors they need to make smartphones and communications equipment. The Trump administration sees Huawei as a dire security threat, an allegation the company denies.“We must amend our rules exploited by Huawei and HiSilicon and prevent U.S. technologies from enabling malign activities contrary to U.S. national security and foreign policy interests,” Commerce Secretary Wilbur Ross said in a tweet.Huawei countered by accusing the U.S. of ulterior motives.“The so-called cybersecurity reasons are merely an excuse,” Richard Yu, head of the Chinese tech giant’s consumer electronics unit wrote in a post to his account on messaging app WeChat. “The key is the threat to the technology hegemony of the U.S” posed by Huawei, he added.The U.S. decision is likely to hurt not just Huawei and TSMC, but also a clutch of American players including gear-makers Applied Materials Inc., KLA and Lam Research Corp. themselves, Morgan Stanley analysts wrote. Disruptions to Huawei’s production will also hurt U.S. customers from Micron Technology Inc. and Qorvo Inc. to Texas Instruments Inc., they said. But “it bears repeating that any escalation of trade tensions is negative for the stocks overall,” they wrote in a research report.It would have been impossible to imagine TSMC becoming such a coveted chit between the world’s great powers when it was founded in 1987. Morris Chang, born in China and trained in the U.S., started the company as a so-called foundry, manufacturing semiconductors for any customer that didn’t want to construct its own fabrication facility, or fab.At the time, the business wasn’t nearly as glamorous as making chips yourself. Dominating the industry at the time were companies like Intel Corp. and Advanced Micro Devices Inc., which made processors for personal computers. “Real men have fabs,” AMD co-founder Jerry Sanders would say, making clear that was an insult.But in the intervening years, the foundry industry has become far more strategic for the technology industry. Customers from Apple and Huawei to Qualcomm and Nvidia Corp. have found they can innovate more quickly if they focus on chip designs and then turn to foundries like TSMC to produce them. Innovators in emerging technologies like artificial intelligence or the internet of things also depend on foundries to crack open new markets.Today, many of the chips for mobile phones, autonomous vehicles, artificial intelligence and any other key technology are made at foundries. TSMC has become the leading foundry in the world by investing heavily in ever more advanced fabs, with annual capital spending of about $16 billion this year.It can now manufacture at 5 nanometers, about twice the width of human DNA, while China’s top foundry, Semiconductor Manufacturing International Corp., or SMIC, is at 14 nanometers. That makes TSMC’s chips far more powerful and energy efficient.Huawei and HiSilicon will have few good options if they are cut off from TSMC. One possibility is to procure off-the-shelf chips from Taiwan’s MediaTek Inc. and South Korea’s Samsung Electronics Co., an option Huawei’s rotating Chairman Eric Xu mentioned in late March. But even that may no longer be viable under the new Commerce restrictions.SMIC itself is keen on moving up the technology ladder, eyeing a secondary share listing that could raise more than $3 billion on top of a large capital infusion from the state.Read more: China Injects $2.2 Billion Into Local Chip Firm Amid U.S. CurbsBut that’s a longer-term endeavor and Huawei’s products meanwhile are likely to suffer, putting them at risk of falling behind those of rivals like Apple or Xiaomi Corp.For TSMC, it’s growing ever more difficult to remain neutral amid the growing tensions between the U.S. and China. The company brands itself “everybody’s foundry,” effectively the Switzerland of the tech industry. It supplies Chinese customers like Huawei and the American military, while relying on U.S. producers of semiconductor-making equipment like Applied Materials and Lam Research.TSMC did take one step closer to the U.S. last week, saying it would build a $12 billion chip plant in Arizona. The Department of Defense has expressed concern that overseas fabs may be vulnerable to cyberattacks and domestic manufacturing would assure a more reliable supply of chips.The proposal appears to be carefully calculated to address such security issues without too much damage to profits or its political balancing act. Suppliers to the military, such as Xilinx Inc., would be able to use the U.S. fab, but the facility would likely account for less than 5% of revenue so margins won’t be compromised.It’s not clear if the plans for a U.S. plant will win TSMC leniency in supplying Huawei, however.“TSMC will not be granted or granted a license based on their intent to build a 5 nanometer fab here in the United States. That’s not part of it at all,” Keith Krach, undersecretary for economic growth, energy and the environment at the State Department, told reporters on a call. “There’s no assurance on that and we don’t anticipate that.”Meanwhile, China appears to be preparing to retaliate for the new restrictions on Huawei. On Friday, the Global Times -- a Chinese tabloid run by the flagship newspaper of the Communist Party -- reported Beijing was ready to initiate countermeasures, including imposing restrictions on Apple, suspending the purchase of Boeing airplanes and putting U.S. companies on an ‘unreliable entity list.’The list will cover “foreign entities that cause actual or potential damage to Chinese companies and industries,” the newspaper said.(Updates with Nikkei report in second paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Taiwan Semiconductor Manufacturing Co. plans to spend $12 billion building a chip plant in Arizona, a decision designed to allay U.S. national security concerns and shift more high-tech manufacturing to America.TSMC said Friday it will start construction of its next major fabrication facility in 2021, to be completed by 2024. While the investment falls short of its previous expenditure on cutting-edge factories, it’s a shift for a company that now makes semiconductors for major names like Apple Inc. and Huawei Technologies Co. mainly from its home base of Taiwan.As the world’s largest and most advanced maker of chips for other companies, TSMC plays a crucial role in the production of devices from smartphones and laptops to servers running the internet. Its decision to situate a plant in the western state comes after White House officials had warned repeatedly about the threat inherent in having much of the world’s electronics made outside of the U.S. TSMC had negotiated the deal with the administration to create American jobs and produce sensitive components domestically for national security reasons, according to people familiar with the situation.The Asian chipmaker’s U.S. investment underscores the delicate balance it needs to strike between its huge roster of American clients and China, which views independently governed Taiwan as part of its territory. Beijing’s ambition of creating a world-class domestic semiconductor industry has unnerved Washington, which fears the country’s technological ascendancy may pose a longer-threat. Executives at TSMC, which operates plants in Nanjing and Shanghai and makes chips that go into everything from 5G networks to American fighter jets, have emphasized the company is neutral.“The scale & technology is similar to what TSMC did in China, suggesting a balance between the U.S. & China,” Sanford C. Bernstein & Co. analysts led by Mark Li wrote after the announcement. “Overall, this is probably the minimal price to stay neutral. TSMC needs both U.S. & China to maintain scale & stay competitive and this is probably the minimal cost to keep this strategy.”Read more: Huawei Warns of ‘Pandora’s Box’ If U.S. Curbs Taiwan SupplyThe envisioned facility represents a small step in global industry terms. Upon completion, it will crank out 20,000 wafers a month, versus the hundreds of thousands that TSMC’s capable of from its main home base. And it will employ 5-nanometer process technology, a current standard that will likely become a few generations old by the time output begins in a few years.The higher cost of operating in America may have been a factor ahead of the decision. A true cutting-edge fab is expensive to build: The company spent NT$500 billion ($17 billion) to build an advanced facility in the southern Taiwanese city of Tainan that will supply new iPhones this year. It plans another $16 billion in capital spending in 2020. The Arizona plant still requires approval from TSMC’s board, which may hinge on incentives.“There is a cost gap, which is hard to accept at this point. Of course, we have -- we are doing a lot of things to reduce that cost gap,” TSMC Chairman Mark Liu said on a recent analyst conference call.U.S. Won’t Tolerate Tech Fence-Sitters Any Longer: Tim CulpanIf the federal government provides cash for a U.S. plant, it’ll mark a shift in policy and rhetoric from a Republican administration. Trump’s White House has rarely supported such direct industrial intervention, favoring market dynamics. A similar government-backed effort with Foxconn -- Apple’s main iPhone assembler -- in Wisconsin has so far not created as many jobs as expected.However, emerging trends may be forcing a reconsideration. The U.S. government is already giving or lending billions of dollars to keep companies afloat in the midst of a pandemic-fueled recession. The crisis has also highlighted how vulnerable global supply chains are to such shocks.The White House may also be motivated by broader political factors. Trump has attacked international trade deals and tried to limit China’s access to semiconductor technology, seeking to contain the country’s technological ascent. TSMC said its Arizona facility will create 1,600 jobs and a deal to bring highly skilled work to Arizona may help Trump’s re-election prospects this year.“TSMC’s plan to build a $12 billion semiconductor facility in Arizona is yet another indication that President Trump’s policy agenda has led to a renaissance in American manufacturing and made the United States the most attractive place in the world to invest,” U.S. Secretary of Commerce Wilbur Ross said in a statement.By producing chips for many of the leading tech companies, TSMC has amassed the technical know-how needed to churn out the smallest, most efficient and powerful semiconductors in the highest volumes. It manufactures important components designed by Apple and most of the largest semiconductor companies, including Qualcomm Inc., Nvidia Corp., Advanced Micro Devices Inc. and China’s Huawei. Shares of Applied Materials Inc., Lam Research Corp. and KLA Corp. rose on optimism that these U.S.-based providers of chipmaking equipment may face fewer export controls when supplying TSMC.Concentrating such valuable capabilities in the hands of one company in Asia is a concern for the U.S., especially when, across the Strait of Taiwan, China is rushing to develop its own semiconductor industry.TSMC’s local rival, GlobalFoundries Inc., has given up on advanced manufacturing and Intel Corp., the world’s largest chipmaker, mainly manufactures for itself. Its attempt to become a so-called foundry for external clients has failed to gain major customers. TSMC’s only other significant challenger is South Korea’s Samsung Electronics Co., which is investing more than $116 billion in its effort to keep up with the leader.“TSMC welcomes continued strong partnership with the U.S. administration and the State of Arizona on this project,” the company said in a statement. “This project will require significant capital and technology investments from TSMC. The strong investment climate in the United States, and its talented workforce make this and future investments in the U.S. attractive to TSMC.”Read more: Foxconn Factory Subsidy Estimate Slashed by Wisconsin Agency(Updates with analyst’s comment from the fourth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- Less than three years after Wisconsin won a beauty contest to lure Taiwanese manufacturer Foxconn Technology Group to the state, local leaders and voters have been left with buyers remorse. Founder Terry Gou’s stated plans to build a $10 billion plant making flat screens were illogical from the start, and taxpayers there now realize it.There’s another Taiwanese company that might be looking for a new American foothold. And this time, such a project makes complete sense.Taiwan Semiconductor Manufacturing Co. is the world’s most important chip company. It makes high-end components using the best technology for clients including Apple Inc., Qualcomm Inc., Nvidia Corp. and Advanced Micro Devices Inc. Yet it produces the bulk of its chips at three locations in Taiwan with additional capacity in China. TSMC has barely any footprint in America, owning one old factory in Washington state which it bought 20 years ago.U.S. national security concerns, protectionis, and a growing need to diversify have led me to conclude that a new American facility for TSMC is inevitable. A plan is now under discussion, but not yet confirmed, according to a report by the Wall Street Journal this week.The only question — beyond when, and how much — is where TSMC will put it.State governors need to pay attention. They’ve been burnt before, or at least Wisconsin’s Scott Walker has. His decision to push ahead with the Foxconn facility in 2017, at the cost of up to $3 billion in taxpayer-funded subsidies, is a major reason that the Republican governor lost reelection the following year.When then-presidential candidate Donald Trump started talking up a renaissance in U.S. manufacturing in 2016, Foxconn’s Gou put his team to work. The company is famous for assembling iPhones using hundreds of thousands of factory workers, mostly in China. As he built his empire, Gou accumulated decades of experience pitting local and national governments against each other with the promise of jobs and economic prosperity. Quite often, the plans never came to fruition, no matter how willing the locals were to make him a sweetheart deal. Within months of Trump’s victory, Gou had governors of rust-belt states — including Michigan, Ohio, Pennsylvania, Illinois and Indiana — eager to land what was described as a once-in-a-generation opportunity. In the end, Wisconsin’s package convinced Foxconn to break ground in Racine County as preparation for a massive flat-panel display factory that would provide 13,000 manufacturing jobs.I wrote back then, many times, that these plans didn’t add up. Flat screens aren’t native to American industry and the country lacks the trained personnel to staff such a facility. There’s already a global oversupply and little chance of strong growth. The product is too fragile to ship long distances. Foxconn has since scaled back its plans and failed to hit some employment targets required to receive incentives. But just 60 miles away from Foxconn’s Taipei headquarters sits TSMC, a company that would be a much better fit for the U.S. With tensions rising between Beijing and Washington, and the Covid-19 pandemic highlighting the risks to America having much of its technology supply chain overseas, TSMC is facing increasing pressure to boost its U.S. presence.At first thought, California might seem the obvious place to host a new factory. After all, that’s where TSMC’s largest clients are based. Ironically, given that it’s home to Silicon Valley — a name derived from the metal used to make integrated circuits — the state has relatively few chip manufacturing facilities. The big names of three decades ago have either merged, or gone fabless — meaning they design without making their own chips.In fact, America’s semiconductor production sector is spread across at least a dozen states around the country, according to my analysis of company data and press reports. (1)That could make a new TSMC facility in the U.S. up for grabs. And if making high-end display panels was a bad fit for Wisconsin, a chip factory fits well in the current and future structure of American industry. To this day, the U.S. remains the global leader in semiconductor design, development and manufacturing, with its universities churning out the best electrical and electronics engineers. TSMC founder Morris Chang is an alumnus of the Massachusetts Institute of Technology and Stanford, while the current chairman, Mark Liu, got his Ph.D from the University of California, Berkeley. Exactly how many jobs a U.S. fab might create is hard to predict. Earlier this year, Liu told investors that any factory there would deploy the company’s most advanced technologies, which work best at scale.As a comparison, TSMC employs over 10,000 people at its Tainan facilities, which utilize leading-edge manufacturing processes for Apple’s iPhone chips, and expects to add another few thousand in coming years. Given that semiconductor manufacturing engineer salaries in America can top $100,000, luring even half that number of jobs would be a boon for any state.The eagerness with which communities chased Amazon.com Inc. for the e-commerce company’s second headquarters shows that many local leaders are as eager to chase high-paid employment as they are factory jobs.With the prospect of the world’s eighth-largest tech company by market value looking for a new place to set up shop, U.S. governors are likely to find themselves back in the chase.(1) Data was collated from company statements, annual reports, and press reports for the past 5 years.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The Qualcomm Inc (NSQ:QCOM) share price has risen by 12.4% over the past month and it’s currently trading at 78.42. For investors considering whether to buy, h8230;
As the corporate sector scrambles for cash to weed off the liquidity crisis, various firms are looking beyond short-term funding avenues to bridge temporary cash shortfalls.
Who could possibly blame SoftBank for walking away last month from its $3 billion tender offer for WeWork shares? Still, the Chinese conglomerate could face an uphill battle in its fight to get out of the contract.
(Bloomberg Opinion) -- Ever since Donald Trump fired the first shot in the U.S. trade war with China, one technology company has been sitting in the middle, trying to avoid the crossfire. It’s wonderful to be able to sell weapons to all sides, until one forces you to choose.Taiwan Semiconductor Manufacturing Co. is in the enviable position of being a critical supplier to both countries. The company, headquartered in famed Hsinchu Science Park, makes the world’s most advanced chips for the likes of Apple Inc., Qualcomm Inc., Nvidia Corp. and Huawei Technologies Co. The U.S. fear, as portrayed by the White House, Pentagon and Commerce Department, is that allowing China to procure the world’s best semiconductors while America is unable to make them at home is an urgent and critical national security threat. That’s spurred a two-pronged strategy in recent years: Limit Chinese access to and development of chip technology, and bolster domestic prowess.TSMC’s strategy has been to stay neutral. It has most of its capacity in Taiwan, one new and one not-so-new factory in China, and an old facility in Washington state. A year ago, I wrote that chairman Mark Liu had politely pushed back against pressure to expand in America, citing the steep costs. I concluded: “TSMC won’t be able to sit on the fence forever. While Liu may want to just make chips, he’ll eventually have to make a choice.”That day has come. The coronavirus pandemic has highlighted Washington’s need to protect supply chains from disruption, and heightened concerns about reliance on Taiwan, as the Wall Street Journal reported over the weekend. To that end, the administration is pushing hard to get chipmakers, including Intel Corp., TSMC and Samsung Electronics Co., to expand in the U.S., and to use their best technology, the WSJ wrote.Unsurprisingly, Intel is making the case that the U.S. should strengthen its domestic production for “geopolitical” reasons. The company has most of its staff, and more than half its plants and equipment, in the U.S., including manufacturing in Arizona, New Mexico and Oregon.While best-known for supplying processors used in PCs and servers under its own name, Intel also operates a foundry business that does contract manufacturing using clients’ own designs. Once the world leader in chip production, the Santa Clara, California-based company has fallen behind and now trails TSMC and South Korea’s Samsung.Intel clearly sees an opportunity. If it can convince defense and commerce officials that it’s in the interest of national security to mandate that at least some chips be made domestically, then it may have a shot at getting back into the foundry game. TSMC has been trying to push back, or at least to get a seat in the policy discussions. It recently hired former Intel lobbyist Peter Cleveland to coordinate its efforts in Washington. As the old saying goes, “If you’re not at the table, then you’re on the menu.”But the other aspect of American strategy may be harder for the Taiwanese company to negotiate. Beyond expanding domestic capacity, Washington wants to limit Chinese access. To do so, the Trump administration is considering new rules to curb the use of U.S. equipment and materials in making chips for the likes of Huawei, arguing that the Chinese company is a conduit for Beijing’s espionage.That’s put TSMC and numerous other companies in a difficult position. The American market accounted for 59% of its sales last year, against 19% for Chinese clients. Yet the growth momentum clearly favors the world’s largest country, which is focused on developing components used in artificial intelligence, 5G communications, surveillance and possibly weaponry. TSMC has attempted to play Switzerland. A year ago, the company was sticking with the line that “We are everybody’s foundry.”Washington increasingly wants TSMC to be its foundry alone. Pressure has ramped up significantly over the past year, with the long list of U.S. clients and significant revenue contribution being used as a battering ram to make the point that America is the side to choose. Ten years ago, when Taipei-Beijing relations were friendlier, companies may have leaned toward China. Today, with China showing increasing belligerence and the U.S. supporting a greater global voice for Taiwan, the mood has shifted.It’s true that China is an important and growing market — Beijing has used that momentum to bring global companies to its shores — yet it won’t replace the U.S. in terms of size or technology leadership in the next 20 years. To assuage concerns, and win a reprieve on restrictions about supplying to China, TSMC has little choice but to offer something to the Americans. After years of delay and resistance, it’s time for TSMC to build a shiny new factory in America. Expect to hear the company announce concrete plans, and large dollar figures for U.S. investment, in the next year or so.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Like a puppy chasing its tail, some new investors often chase 'the next big thing', even if that means buying 'story...
While Qualcomm (QCOM) beats on second-quarter fiscal 2020 earnings driven by the ramp-up in 5G-enabled chips, Arista (ANET) beats on first-quarter 2020 earnings despite muted demand.
(Bloomberg) -- Regulators are moving to let U.S. companies participate in technology standards-setting bodies alongside Huawei Technologies Co., despite the Chinese firm being blacklisted in the U.S. over security concerns.The Commerce Department is writing a regulation to make clear that restrictions on dealing with Huawei don’t bar involvement in international processes in which the Shenzhen-based maker of telecommunications equipment also is taking part, said two people briefed on the matter.The rule could be released within days for a review by other agencies and may not be final for some time, said the people who asked not to be identified because the change hasn’t been made public.The Commerce Department declined to comment.The Trump administration last year said it would cut off Huawei’s access to crucial American components, and has waged a campaign to get allies to shun the company’s telecom equipment because it is a security risk. Huawei has denied it is a security risk.Standards-setting bodies designate technology to be used widely in manufacturing, for instance ensuring that photos from a Samsung Galaxy phone can be viewed on an Apple iPhone.Tech advocates have said shifting rules have led U.S. companies to shun some standards-setting forums.“Confusing and unclear U.S. policies have inadvertently caused many U.S. companies to lose their seat at the table to competitors from other countries, namely China,” said Naomi Wilson, senior director of policy for the Information Technology Industry Council, a policy group that includes Qualcomm Inc. and Intel Corp. as members. “It is critical that the U.S. Department of Commerce address these ambiguities.”Doug Brake, telecom policy director for the Information Technology and Innovation Foundation, said U.S. companies’ participation “is crucial to making sure American technology is incorporated in basic technology around the world.”Six U.S. senators in an April 14 letter raised the issue, saying they were concerned about “risks to the U.S. global leadership position in 5G wireless technology.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
For much of the past five years, it's been an open secret that Apple (NASDAQ: AAPL) is developing cellular connectivity technology. As its key modem supplier, Qualcomm (NASDAQ: QCOM) is very well aware of Apple's ambitions, particularly as the latter has been aggressively poaching modem engineers from Qualcomm for years. Apple has even set up shop in Qualcomm's backyard in San Diego.
(Bloomberg) -- Facebook Inc.’s Oculus division is building a new version of its Quest standalone virtual reality headset, but the device is facing potential delays due to the impact of Covid-19 on product development and the global supply chain.The social-networking giant is working on multiple potential successors to the Quest. Some models in advanced testing are smaller, lighter, and have a faster image refresh rate for more realistic content, according to people familiar with the matter. These headsets also have redesigned controllers, said the people, who asked not to be identified discussing unannounced products.The company hasn’t finalized which new version of the Quest it will release, and the final product may have different features. Facebook originally planned to launch the new model at the end of 2020, around its annual Oculus Connect conference, but the coronavirus pandemic could delay the headset from shipping until 2021, the people said.Some versions in testing are 10% to 15% smaller than the current Quest. That, in addition to being lighter, makes them more comfortable to wear, one of the people said. The existing model weighs about 1.25 pounds, which is too heavy for some users wearing the device for extended periods. The models in testing are closer to a pound, the person said.The company could sell the new model alongside the current Quest, or choose to fully replace it. A Facebook spokeswoman declined to comment on future products.Facebook acquired Oculus in 2014 for $2 billion as a bet on VR as the future of digital communication. Chief Executive Officer Mark Zuckerberg predicted people would use the technology to connect with each other online through shared experiences, such as immersive video games and other 3-D entertainment.That vision has not fully materialized yet, partly due to a lack of broad consumer adoption and sometimes limited content. However, with millions of people stuck at home during the pandemic, VR usage has increased.Zoom Parties Are So Five Weeks Ago: Hello Virtual RealityOculus is also healthier as a part of Facebook than some other companies in the field. Startup Magic Leap Inc. has struggled to perfect its augmented-reality technology, slashed jobs and is considering selling itself. North, another AR company, was also seeking a buyer earlier this year.For the new Quest device, Facebook is testing the removal of the fabric from the sides and replacing it with more plastic like the current Oculus Rift S. It’s also considering changing the materials used in the straps to be more elastic than the rubber and velcro currently used, according to the people familiar with the matter.The Oculus Quest line is Facebook’s mid-range VR headset that doesn’t require a connection to a smartphone or PC. At $399, the current model is cheaper than Facebook’s most-powerful headset, the Rift S, which connects to a computer. Facebook also still sells the Oculus Go, an entry-level headset that runs on a smartphone chip. The Quest line uses a higher-end part made by Qualcomm Inc.Facebook’s current Quest had been in and out of stock for several months, partly due to supply chain constraints caused by the pandemic. However, stock has slowly increased in recent days. On the company’s April earnings call, Zuckerberg said the product “surpassed our expectations” and that the company wishes it “could make more.” The company also said its Other Revenues segment grew 80% last quarter, “driven primarily by sales of Oculus products.”Facebook was the No. 2 seller of VR headsets last year with about 28% of shipments, trailing Sony Corp., according to data compiled by Statista. Virtual reality encompasses users almost entirely for watching movies and sports and playing games. Augmented reality meshes the real world with virtual images.Oculus is also building an AR headset. Software and app work for this product continues, but the virus has slowed hardware development with some employees losing access to lab facilities, the people said. It’s unclear yet if this has delayed the planned product time line, which included a 2023 launch.Apple Inc. has been aiming to ship a VR headset in 2021 or 2022. An AR device is slated for 2023, according to people familiar with the situation.The updated refresh rate of the new Quest VR headset is at least 90Hz, up from the current model’s 60Hz for movies or 72Hz for most VR tasks, making video and games appear smoother. The company is testing some Quests with screens capable of displaying up to 120Hz, but the company could cap this at 90Hz to preserve battery life, the people familiar with the matter said.Some models of the new headset in testing also continue to have a physical switch for adjusting interpupillary distance, or IPD, which is the distance between the headset’s internal displays. That mechanism is important because it helps users adjust the displays to fit their eyes to avoid headaches.Facebook is also working on a redesigned controller that is more comfortable and fixes a problem with the existing controller, which has a battery cover that sometimes slides off. The new controller will be compatible with the current Quest, the people said.The headsets in testing have four external cameras, versus five on the Rift S, and six degrees of freedom, which lets users look around in any direction and walk through virtual space as they would in reality. The new model will also still support the Oculus Link, a cable that lets a user connect the headset to a PC for improved performance.(Updates with detail on entry-level model in 10th paragraph. A previous version of this story corrected the price of the Quest.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.