semiconductor industry

 
 

Sources: US chipmakers quietly lobby to ease Huawei ban

WASHINGTON, June 17 — Huawei’s American chip suppliers, including Qualcomm and Intel, are quietly pressing the US government to ease its ban on sales to the Chinese tech giant, even as Huawei itself avoids typical government lobbying, people…


US-China trade war still clouds M’sian export outlook

PETALING JAYA: Despite Malaysia’s exports registering a 1.1% growth in April, analysts opined that Malaysia’s trade performance will continue to be bogged down by trade tensions.

Affin Hwang Research cautioned that the trade tension between the US and China poses some downside risk to Malaysia’s export growth, especially for the electrical and electronics (E&E) segment. It cited that that last year China’s imports of Malaysian electrical machinery and equipment accounted for 7% of its total electronic imports.

“Besides that, the recent cyclical slowdown in the tech cycle will also weigh on export growth, as reflected in the drop in global semiconductor sales for the third consecutive month in March of 12.9% yoy (-10.6% in February), according to the Semiconductor Industry Association.”

However, the research house said the IHS Markit’s Manufacturing PMI survey highlighted that manufacturers in Malaysia were positive about future output volume as confidence remained at its highest level since October 2013 amid expectations of higher foreign demand, possibly indicating some recovery for Malaysia’s manufactured goods in the months ahead.

For 2019, Affin Hwang expects gross export to expand 2% compared with 6.7% in the previous year while gross import is projected to expand 3.4% this year from 4.9% in 2018.

“As a result, we project Malaysia’s trade surplus at around RM110 billion for 2019, lower than RM120.3 billion in 2018.”

The research house maintain its 2019 GDP growth forecast at 4.5% (4.7% in 2018), which is at the mid-point of the current official government forecast of 4.3-4.8%.

Meanwhile, CGS-CIMB Research expects exports to slip in May as global trade policy uncertainties hurt demand and business sentiment.

It expects manufacturing activity to remain subdued, while deepening trade disputes between the US and China present downside risks to its 2019 GDP growth forecast of 4.7%.”

“While output of surveyed manufacturers remained high, pipeline of new work was depleting, leading firms to remain cautious on hiring and capacity expansion,“ it said.


US eases restrictions on Huawei; founder says US underestimates Chinese firm

NEW YORK, May 21 — The United States has temporarily eased trade restrictions on China’s Huawei to minimise disruption for its customers, a move the founder of the world’s largest telecoms equipment maker said meant little because it was…


ASML falls victim to Chinese corporate espionage

AMSTERDAM, April 11 — Dutch ASML was the victim of Chinese corporate espionage a few years ago, but said the information stolen was not a blueprint for the lithography machines that have made it a world leader in semiconductor equipment. ASML said…


Global headwinds seen continuing to weigh on exports

PETALING JAYA: Analysts remain less optimistic on their outlook for Malaysia’s exports this year on the back of uncertainty in global trade and growth slowdown in the key export markets.

In a note last Friday, PublicInvest Research said it is of the view that the recent export numbers moderated amid unresolved trade disputes that pushed traders to be cautious and calculative in their commercial decisions.

“Trade negotiations are ongoing and given the depth and complexity of the matter, this could last for the entire second quarter (Q2), suggesting that trade may not rebound until then.

“We expect a piece-meal solution at the very least which should be enough to give trade the jolt it needs. Traders and exporters may remain cautious and calculative with their commerce-related decisions until then,” it explained.

Nevertheless, the research house said Malaysia is in the best position to gain from a global trade rebound, thanks to the competitive ringgit and ample capacity in the economy.

Meanwhile, BIMB Securities Research opined that 2019 would be a challenging year for Malaysia’s exports primarily weighed by the trade tension between the US and China, prospect of cooling global growth, China’s slowing economy, a weak EU economy and sluggish demand for commodities.

“There is also expected to be a slower global demand for electrical and electronics (E&E) products,” it said.

According to the Semiconductor Industry Association, the global semiconductor sales were up 13.7% in 2018, but it is forecasted to decline 3%.

Overall, BIMB Securities believes that there will be a general slowdown in the global economy that would impact exports this year and it anticipates the exports growth to slow down to 3.4% in 2019.

“Moving forward, based on the latest manufacturing Purchasing Managers’ Index (PMI) reports, we are cautiously sanguine in the near-term as new exports orders are weakening despite expansion in the region’s manufacturing activity.

“We maintain our view that trade performance would remain subdued going forward. After almost reaching the RM1 trillion mark in 2018 (2018 export: RM998 billion) with a year-on-year growth of 6.7%, it will be tough for exports to achieve the same figure this year with the anticipated slower global growth.”

However, UOB Research said the uptick in recent PMI from US, China and the region in March, alongside signs of constructive US-China talks, could help Malaysia’s exports and industrial activity turn the corner in Q2’2019.


Samsung Elec flags earnings miss as chip prices slide

SEOUL: Samsung Electronics Co Ltd said on Tuesday first-quarter profit would likely miss market expectations due to falls in chip prices and slowing demand for display panels, in an unprecedented statement ahead of its earnings guidance.

The announcement came after the Apple Inc supplier and rival told shareholders last week that slack global economic growth and softer demand for memory chips, its core business, would weigh on operations in 2019.

“The company expects the scope of price declines in main memory chip products to be larger than expected,” Samsung said in a regulatory filing pre-empting its earnings guidance due next week.

Samsung did not elaborate on the purpose of its filing. A company official confirmed the global leader in smartphones, televisions and computer chips had not previously provided comment before its official earnings estimate.

The firm was forecast to post a 7.2 trillion won ($6.4 billion) operating profit for the January-March period, according to Refinitiv SmartEstimate, more than 50 percent below the 15.6 trillion won recorded in the same period a year ago.

Its sales were expected to fall to 53.7 trillion won from 60.6 trillion won a year ago, Refinitiv shows.

“Inventories piling up on its memory chip side and the weak performance of its display panels business due to bad sales of Apple’s iPhones are hurting profitability for Samsung,” said Lee Won-sik, an analyst at Shinyoung Securities.

DRAM chip prices fell more than 20 percent on average in the first quarter, according to DRAMeXchange, a unit of Trendforce that traces memory chip prices.

Daiwa Securities forecast Samsung’s display panel division to swing to an operating loss of 620 billion won in the first quarter, while the semiconductor business’s operating profit would shrink.

RECOVERY TIPPED

Uncertainties over U.S.-China trade tensions and China’s sluggish economy are clouding the outlook for global electronics makers, analysts say.

Chipmakers in particular have been hit hard by a glut in the global semiconductor industry triggered by weakening smartphone sales and falling investment from data centre companies.

Samsung told shareholders at its annual general meeting last week that sales of memory products would likely revive in the second half of the year after a tough first half. Investors also took heart when U.S. chipmaker Micron Technology Inc forecast a recovery in the memory chip market around the middle of the year.

Daiwa Securities on Tuesday reaffirmed a buy rating on Samsung, saying it expected demand for memory chips and organic light-emitting diode (OLED) panels to improve from the second half of 2019.

Samsung Electronics shares were down 0.2 percent as of 0237 GMT while the broader market was 0.3 percent higher.

“Samsung is giving a signal to the market so that investors can be prepared and there will be no surprise when Samsung posts its first-quarter earning guidance next week,” said Park Jung-hoon, a fund manager at HDC Asset Management that owns Samsung Elec shares.

“Its shares are not reacting a lot, though, as concerns over its first quarter have been reflected.”


KESM’s earnings plunge in Q2

PETALING JAYA: KESM Industries Bhd’s net profit for the second quarter ended Jan 31 plunged 95.76% to RM474,000 from RM11.18 million a year ago due to a 78% drop in other income during the quarter.

In a filing with Bursa Malaysia, the group said that other income was lower during the quarter due to lower gain on disposal of machinery spares of RM300,000 and absence of government grant of RM300,000.

During the quarter, interest income rose 78% following higher placements of short-term deposits while raw materials and consumables used and changes in inventories of finished goods and work-in-progress rose 59% to support the increased electronic manufacturing services (EMS) revenue from new customers.

Employee benefits expense was lower by 12% following the alignment of staff costs to operational requirements while other expenses were lower by 5% due to lower management fees as well as lower repairs and maintenance as a result of lower revenue from burn-in and testing services.

Revenue for the quarter fell 11.33% to RM81.11 million from RM91.47 million a year ago due to lower demand for burn-in and testing services, offset by higher revenue from rendering of EMS to new customers.

For the six months ended Jan 31, KESM’s net profit fell 86.19% to RM3.12 million from RM22.55 million a year ago while revenue fell 10.71% to RM162.66 million from RM182.18 million a year ago.

Moving forward, the group said it remains well positioned to weather through momentary market softening, despite the weaker performance due to tighter inventory control measures instituted by customers.

It noted that the broad indices of the semiconductor industry and the global growth are pointed towards a softening momentum while global economy for 2019 is projected to grow 3.5%, lower than 2018 by 0.2%.


US, Chinese officials to meet in Washington next week on trade

BEIJING, Feb 15 — Talks between China and the United States to resolve their bruising trade war will continue next week in Washington, with both sides saying this week’s negotiations in Beijing made good progress. Still, Washington appeared…


Samsung Electronics 4Q profits slump along with global demand

SEOUL: Samsung Electronics, the world’s biggest smartphone and memory chip maker, reported a slump in fourth-quarter net profits on Thursday, blaming a drop in demand for its key products. Net profits in the October-December period were 8.46 trillion won (US$7.6 billion), it said, down 31 per cent year-on-year. The firm is the flagship subsidiary of […]


Samsung Electronics Q4 profits slump along with global demand

SEOUL, Jan 31 — Samsung Electronics, the world’s biggest smartphone and memory chip maker, reported a slump in fourth-quarter net profits yesterday, blaming a drop in demand for its key products. Net profits in the October-December period were…