|From: Bill Wolf||6/14/2019 7:31:39 AM|
|BUZZ-Broadcom's shock warning sends chipmakers, Huawei suppliers tumbling|
7:00 AM ET, 06/14/2019 - Reuters
** Broadcom Inc warned of a broad slowdown in chip demand, sending other chipmakers tumbling in premarket trading
** AVGO plunged ~9%, the most among S&P 500-listed companies, and is set for its worst day in a year
** AVGO, which is also an Apple Inc supplier, slashed FY revenue by $2 bln blaming U.S.-China trade conflict and export restrictions on Huawei Technologies Co Ltd
** Shares of the iPhone maker dropped 2%
** Cowen says uncertain macro & Huawei trade implications spreading through the supply chain derails hopes of a H2 recovery
** The biggest decliners among S&P 500 and Nasdaq listed stocks were Xilinx Inc, Micron Technology, Advanced Micro Devices, Nvidia Corp, Qualcom Inc which fell more than 3%
** Dow component Intel Corp fell 2%
** Other Huawei suppliers - Texas Instruments, NXP Semiconductors, Analog Devices, Microchip Technology - fell between 2% and 3%
** AVGO has risen 11% this year, underperforming the broader Philadelphia chip index's 21% jump (Reporting by Amy Caren Daniel in Bengaluru)
Early Premarket Gappers 6:58 AM ET,
06/14/2019 - Briefing.com
Gapping Up: ARQL +35.93%, ETON +9.38%, VNCE +8.20%, JNUG +6.70%, FVRR +6.54%, VRS +5.03%, NUGT +4.91%, AU +3.88%, KL +2.92%, CRWD +2.87%, ASH +2.38%, FNV +2.34%, LPX +2.17%Gapping Down: MCRB -16.96%, AVGO -9.10%, SOXL -8.22%, ITI -6.86%, NIO -5.16%, APRN -4.89%, STM -4.53%, WHF -4.34%, SWKS -4.01%, XLNX -3.92%, WDC -3.86%, SGH -3.77%, QRVO -3.65%, BYND -3.64%, MU -3.54%, AMD -3.47%, AMAT -3.27%, FRO -3.25%, NVDA -3.21%, KZR -3.16%, QCOM -3.03%, LRCX -2.88%, ON -2.88%, TXN -2.68%, SMH -2.64%, MRVL -2.27%, INTC -2.14%, KRNT -1.99%, TSLA -1.83%
UPDATE 3-Broadcom sees chip demand slowing down, shares fall 8%
6:42 PM ET, 06/13/2019 - Reuters
(Adds CEO comments from conference call, segment revenue, updates shares)
By Sayanti Chakraborty and Stephen Nellis
June 13 (Reuters) - Broadcom Inc on Thursday warned of a broad slowdown in chip demand, blaming a trade conflict between the United States and China and export restrictions on Huawei Technologies Co Ltd and the chipmaker cut its revenue forecast for the year by 8%.
Shares of the San Jose, California-based company fell 8% to $258.75 in extended trading and the remarks dragged down stocks of other chipmakers, including Qualcomm, Texas Instruments and Skyworks Solutions.
"It is clear that the U.S.-China trade conflict including the Huawei export ban is creating economic and political uncertainty and reducing visibility," Chief Executive Officer Hock Tan said on a conference call with analysts.
Shares of Broadcom have been under pressure after the U.S. government put Huawei on a trade blacklist last month. Huawei accounted for about $900 million, or 4%, of the company's overall sales last year.
Tan said that if consumer demand for smartphones remains steady, other phone makers could start taking Huawei's market share, and those phone makers are likely to buy chips from Broadcom. However, he cautioned that the process will take up to six months.
"What's the impact of the Huawei ban on a company like us selling components and technology? Well, short term, keep in mind we'll see a very sharp impact simply because (there are) no purchases allowed and there's no obvious substitution in place," Tan said.
Revenue from semiconductor solutions, Broadcom's biggest business unit, fell 10% to $4.09 billion in the second quarter, while revenue from its infrastructure software business came in at $1.41 billion
Demand for enterprise and mainframe software remained stable, mainly in North America and Europe, Tan said.
The company, known for communications chips that power Wi-Fi, Bluetooth and GPS connectivity in smartphones, lowered its full-year revenue forecast by $2 billion to $22.50 billion, saying that its customers are actively reducing inventory levels.
Net revenue rose to $5.52 billion in the quarter ended May 5, from $5.01 billion a year earlier, but missed analysts' estimates of $5.68 billion, according to IBES data from Refinitiv.
Net income attributable to ordinary shares fell to $691 million, or $1.64 per share, in the quarter, from $3.72 billion, or $8.33 per share, a year earlier. (https://reut.rs/2F8Mgyt)
Excluding items, the company earned $5.21 per share, beating analysts' estimates of $5.16 per share. (Reporting by Sayanti Chakraborty in Bengaluru and Stephen Nellis in San Francisco; Editing by James Emmanuel)
I Never Cared For You
|RecommendKeepReplyMark as Last Read|
|From: Bill Wolf||6/14/2019 8:08:19 AM|
|Huawei Postpones Launch of Mate X Foldable Phone|
Chinese tech company delays sale of $2,600 device in part to improve the folding screen
By Dan Strumpf
Updated June 14, 2019 5:38 a.m. ET
HONG KONG—China’s Huawei Technologies Co. is delaying the release of its highly touted foldable smartphone to September from a previously announced launch date of June, a company executive said.
The Chinese technology giant is postponing the sale of the $2,600 Mate X in part to improve the quality of the folding screen, the phone’s most intricate technical component, said Vincent Peng, a senior vice president at Huawei, on the sidelines of The Wall Street Journal’s D.Live tech conference in Hong Kong. The move follows the decision by Samsung Electronics Co. to delay the late-April launch of its Galaxy Fold device after reviewers discovered problems with its foldable screen.
“We’re doing a lot of tests,” Mr. Peng said, adding that the company is moving to release the device “as early as we can.”
The delay is another challenge for Huawei, the No. 2 vendor of smartphones world-wide and the leader in telecommunications equipment. The company is reeling following a series of U.S. actions, including the addition of the company to a U.S. export blacklist, on national-security grounds, that restricts the ability of companies to sell Huawei American technology.
Mr. Peng said supply-chain issues weren’t behind the delay, though he said Huawei remains in discussions over whether the Mate X will launch with a license from Alphabet Inc.’s Google that allows the device to run the U.S. company’s popular suite of Android apps. The Mate X was unveiled at a glitzy event at the MWC Barcelona tech conference in February, three months before the U.S. blacklisting. A Google spokesman didn’t immediately respond to a request for comment.
Huawei has been working on its own operating system in the event that it loses access to Android licenses, trademarking it Hongmeng. The operating system could be ready in six to nine months, Mr. Peng said.
Both Huawei and Samsung have poured resources into foldable smartphones as a way to make devices stand out and juice sales in a stagnating handset market. Still, analysts expect the high-price devices to comprise a small share of the total smartphone market in the coming years.
Huawei’s Mate X will feature a wide screen that folds in half when closed. Like the Galaxy Fold, the Mate X will have a folded and unfolded mode and run multiple applications at once. It will contain dual camera lenses on the front and rear of the device.
Like many high-end Huawei smartphones, the Mate X runs on chipsets designed in house by Huawei’s HiSilicon chip business. Huawei executives have said its in-house chips will help insulate it from the effects of the U.S. blacklisting. The device is set to launch in markets that have rolled out next-generation 5G networks, and Mr. Peng said he expects the device to launch first in markets such as China and Europe.
Huawei’s smartphone sales have boomed in recent years, with consumers buying into its formula of low-price phones, sleek design and advanced camera technology. Huawei trails only Samsung in the smartphone market and outsold Apple Inc. in the first quarter, when its shipments rose 50%, according to International Data Corp.
But there are signs that the U.S. actions are hurting sales: A Huawei executive said this week that the company is delaying its goal of becoming the No. 1 smartphone vendor. Huawei also canceled the launch of a new laptop and paused production in its personal-computer business because of the restrictions on buying U.S. components.
Write to Dan Strumpf at email@example.com
|RecommendKeepReplyMark as Last Read|
|To: Bill Wolf who wrote (158516)||6/14/2019 8:17:18 AM|
|From: Bill Wolf|
|Explainer: Why is Huawei seeking $1 billion patent deal with Verizon?|
By Jan Wolfe
Reuters14 June 2019
By Jan Wolfe
WASHINGTON (Reuters) - Huawei is demanding Verizon Communications Inc pay $1 billion to license the rights to patented technology, signaling a potential shift in the embattled Chinese company's strategy for the U.S. market.
A Huawei executive made the demand in a February letter, a person briefed on the matter told Reuters. The Wall Street Journal first reported on the letter on Wednesday. The fee would cover licensing of more than 230 patents.
Verizon spokesman Rich Young declined to comment “regarding this specific issue because it’s a potential legal matter.”
However, Young said, “These issues are larger than just Verizon. Given the broader geopolitical context, any issue involving Huawei has implications for our entire industry and also raise national and international concerns.”
Huawei did not respond to a request for comment.
The following explains why the patent dispute is not unusual and how it could be resolved.
How common is patent licensing?
Patent licensing is very common, particularly in complex industries like telecommunications. As technology has advanced, it has become harder to avoid violating — or "infringing" — patent rights. There are millions of U.S. patents in force, and a typical smartphone implicates hundreds of thousands of them.
Companies like Apple Inc, Nokia Inc and Qualcomm Inc own many thousands of patents issued by governments around the world.
It is not unusual for these firms to try to make money from their massive patent portfolios. Nokia, for example, routinely brings in more than $1 billion a year from licensing its patents to others.
Large companies like Verizon will try to identify patents they might be violating, said Gaston Kroub, a patent lawyer in New York. But that can be a challenge because so many patents are granted every year, Kroub said.
"Sophisticated companies like Verizon understand that they could be approached by licensors of any stripe at any time," Kroub said. The philosophy of wireless carriers and smartphone companies, Kroub said, can be "let's deal with these claims as they arrive, because we don't know who will knock on our door next."
Tom Cotter, a professor of patent law at the University of Minnesota, said it was possible Huawei executives believe Verizon has been infringing their U.S. patents for some time but for business reasons waited until now to seek compensation.
Patent owners "may not enforce their patents for a period of time, but they can choose do to so whenever they want to," Cotter said. "It happens all the time."
What happens if Verizon does not pay?
Huawei may end up going to a U.S. court and suing Verizon for alleged patent infringement.
While some licensing disputes are resolved without lawsuits, litigation is fairly common. Huawei and Samsung Electronics Co recently settled a global legal battle on confidential terms.
A defendant in a patent case typically argues that it does not actually infringe the asserted patents, or that they were mistakenly issued and should be revoked.
In a lawsuit, a patent owner can ask a judge to block sales of infringing products. While such injunctions are rarely granted in the United States, the threat of one can motivate a defendant to settle with the patent owner.
Legal experts said Huawei is likely prepared to go to court.
"I don't know how you can make a demand of $1 billion and not be prepared for the answer to be no, at least at first, and for the need to litigate," Kroub said.
Has Huawei been an aggressive enforcer of its patents?
Huawei has long been known for defending itself against U.S. patent infringement claims, rather than bringing them. But that could be changing.
George Koomullil, a patent analyst at Pleasanton, California-based technology company Relecura, said that 10 or 15 years ago Huawei applied for a relatively modest number of patents. But the company has been more aggressive about applying for patents since around 2007, and particularly in recent years, Koomullil said.
Huawei may be more inclined to monetize its U.S. patents now that the U.S. government has limited its ability to sell products in the country, Kroub said.
The National Defense Authorization Act last year placed a broad ban on the use of federal money to purchase products from Huawei, citing national security concerns.
Last month, the Trump administration banned Huawei from buying vital U.S. technology without special approval and effectively barring its equipment from U.S. telecom networks.
Kroub said Huawei's licensing demand could reflect a "desperation to come up with ways of generating revenue in the U.S. market, especially considering the traditional ways of offering products and selling things to business is closed to them."
Franklin Turner, a government contracts lawyer at McCarter & English in Washington, said the patent licensing demand may also be a way for Huawei to "retaliate" against the United States.
Republican Senator Marco Rubio said on Twitter on Thursday that the demand against Verizon was an "attempt by (Huawei) to retaliate against the U.S. by setting the stage for baseless, but costly, patent claims."
(Reporting by Jan Wolfe; Additional reporting by David Sherpardson and Karen Freifeld; Editing by Cynthia Osterman)
|RecommendKeepReplyMark as Last Read|
|From: Bill Wolf||6/14/2019 8:31:57 AM|
|The current U.S./China clash is about telecom supremacy.|
The U.S. has decided that it needs to contain China, and its great comparative advantage is technology. They’re going to take Huawei down. That could really turn around and—excuse my French—bite you in the ass. If Apple can’t produce in China, or can’t sell what it produces in China back to the U.S., or if China starts blockading its product, you’ve destroyed one of your biggest companies. Samsung Electronics [5930.Korea] will pick up the pieces. Technology is one of the biggest parts of the U.S. stock market. U.S. investors are as exposed to U.S. stocks as they were in 1999. The big difference between then and today is that the average U.S. investor is much older. When you’re 30 years old, a bear market gives you the opportunity to buy more stocks cheaply. When you’re 65, it is more problematic. There will be casualties in tech at a time when you can’t really afford a bear market. I like to make the comparison with the Battle of Agincourt, where the French had five times as many troops as the English and were so sure of our superiority, and the English slaughtered us.
|RecommendKeepReplyMark as Last ReadRead Replies (2)|
|From: Bill Wolf||6/14/2019 8:46:46 AM|
|Chip demand for 5G phones ramping up|
Cage Chao, Taipei; Jessie Shen, DIGITIMES
Friday 14 June 2019
Taiwan-based IC design houses have seen brand handset vendors slow down their pace of orders for 4G models, but start ramping up demand for new-generation 5G devices, according to industry sources.
5G commercial runs immune to trade war, says Accton president
Aaron Lee, Taipei; Willis Ke, DIGITIMES
Friday 14 June 2019
The US trade sanctions on Huawei will not slow down global 5G commercial launches, as telecom operators worldwide are still regularly moving to build communications networks though they may change suppliers of telecom equipment, according to CC Lee,...
Highlights of the day: Optimism for 5G development
Friday 14 June 2019
The US ban on Huawei does not seem to have dampened the industry players' interests in 5G, with many still expecting explosive growths to come soon. Handset vendors remain as keen as ever on rolling out 5G smartphones sooner rather than later. The networking/communications device sector also remains optimistic about 5G. In Taiwan, development of the 5G sector has received a boost from a multi-million US dollar government plan.
Chip demand for 5G phones ramping up: Taiwan-based IC design houses have seen brand handset vendors slow down their pace of orders for 4G models, but start ramping up demand for new-generation 5G devices, according to industry sources.
5G commercial runs immune to trade war, says Accton president: The US trade sanctions on Huawei will not slow down global 5G commercial launches, as telecom operators worldwide are still regularly moving to build communications networks though they may change suppliers of telecom equipment, according to CC Lee, president of Taiwan-based Accton Technology, a provider of networking and communication solutions.
Taiwan government to spend NT$20.4 billion on 5G development in 2019-2022: Taiwan's government has approved a budget of NT$20.4 billion (US$647.72 million) for facilitating the development of various value-added and verticalized application services under the 5G networks in the next four years, according to officials.
|RecommendKeepReplyMark as Last Read|
|From: Bill Wolf||6/14/2019 8:55:39 AM|
|With the US trade ban, Huawei’s wholly owned chip design company, HiSilicon, is anticipated to supply alternative semiconductor products, from those provided by the likes of Qualcomm and Intel Corp, for use in Huawei’s smartphones and network equipment. Huawei is now looking to boost production of its own Kirin chipsets and roll out its “Hongmeng” operating system to replace Google’s Android.|
|RecommendKeepReplyMark as Last ReadRead Replies (1)|
|From: Bill Wolf||6/14/2019 9:09:45 AM|
|Tech Players Confront Long List of Challenges in U.S.-China Trade Fight|
At the WSJ Tech D.Live conference, top investors and company leaders emphasize how unpredictable the global economy has become
By Timothy W. Martin
June 14, 2019 8:54 a.m. ET
HONG KONG—The U.S.-China feud is challenging the technology industry in areas including financial deals, supply chain and talent recruitment, though some players are finding bright spots, executives said on Friday.
At The Wall Street Journal’s WSJ Tech D.Live conference, top investors and company leaders in the industry emphasized how unpredictable the global economy has become as Washington and Beijing battle over trade and technological dominance.
“Quite frankly, right now the list of things to be very worried about is long—longer than it’s actually ever been in my career,” said Jennifer Nason, global chairman of investment banking at JPMorgan Chase & Co. “Some of it is pretty scary stuff.” She said the uncertainty has made it trickier for some company boards to feel confident about taking on big deals.
The U.S. last month put Huawei Technologies Co. on a trade blacklist that bars sales of components to China’s leading producer of smartphones and telecom equipment without a Commerce Department license. That move has created pain for some tech suppliers, including Micron Technology Inc., one of the world’s largest makers of memory chips.
Huawei is one of Micron’s biggest customers, and the U.S. action against the Chinese company has brought uncertainty and some turbulence to the semiconductor industry, Micron Chief Executive Sanjay Mehrotra said at Friday’s conference.
The Boise, Idaho-based company is conducting a legal review of what can or can’t be shipped to Huawei, Mr. Mehrotra said. He didn’t specify the financial impact of the export ban, saying he would do so later this month on Micron’s earnings call.
“We will always focus on following the laws and regulations,” Mr. Mehrotra said. “However, there are details to be pursued and to be studied. That’s what our team continues to do.”
Another U.S. chip company, Broadcom Inc., said Thursday that it would make $2 billion less in annual sales than expected as a result of Washington’s export restrictions on Huawei, news that sent shares in Broadcom and other chip companies lower.
Kyum Kim, co-founder and head of U.S. operations for Teamblind, said the trade fight hasn’t directly affected the South Korean startup. But the battle has colored discussions on its anonymous forums.
In a recent survey of its users, Chinese citizens reported that they felt threatened by the trade dispute. “Chinese nationals were actually feeling threatened by the trade war, especially in hardware companies like Qualcomm , ” Mr. Kim said.
Others are seeing some new opportunities despite the cloud created by the U.S.-China fight—or even because of it.
The tensions are benefiting China in that tech professionals and investment that might have gone from China to the U.S. is returning home, said Ben Harburg, managing director of MSA Capital. “There’s a lot more talent coming to China now that would’ve stuck around the U.S. previously,” he said.
One Chinese tech company doing well in the U.S. despite the bilateral strains is Bytedance Ltd., whose TikTok video app has soared in popularity among American users.
Jared Grusd, chief strategy officer at social-networking company Snap Inc. said Bytedance is one of the first China-based companies to scale its consumer platform in the U.S. and other parts of the world. “Their ability to chime consumer awareness outside of its core market is really interesting,” he said.
Smartphone sales have cooled as consumer spending pulled back because of global economic concerns over Beijing and Washington’s protracted trade disagreement. But Samsung Electronics Co. saw strong initial demand for its 5G-enabled handset, an optimistic sign for the next-generation mobile network.
Samsung started selling a 5G variant of its Galaxy S10 phone in April in South Korea.
“The initial response we got was overwhelming,” said Junehee Lee, who heads Samsung’s technology strategy team. “It’s surpassing any expectations we may have had.”
Write to Timothy W. Martin at firstname.lastname@example.org
|RecommendKeepReplyMark as Last Read|