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From: Bill Wolf10/13/2021 8:14:32 AM
2 Recommendations   of 173613
 
Business Journal Reports: Technology
The China-U.S. 5G Battle Upends a Telecom Industry Consortium
Oct. 12, 2021 10:00 am ET

The competition between the U.S. and China is roiling the previously humdrum process of setting technical specifications for wireless communications.

The O-RAN Alliance, an industry consortium founded in 2018 to develop standards to make cellular equipment interoperable and thus cheaper, found itself dragged into the U.S.-China tensions in late August. That is when Finland’s Nokia Corp. , a major telecom-equipment supplier, told fellow O-RAN participants that it was temporarily suspending its work in the group—over concerns that two of the group’s more than 300 participants were Chinese companies on a U.S. Commerce Department blacklist.

Nokia wanted to ensure it was complying with U.S. laws and regulations, says Tommi Uitto, who runs Nokia’s wireless-equipment division.

U.S. officials said the two companies—Kindroid and Phytium Technology Co.—work on technology that could aid China’s military, among other concerns. Since the revelation, a U.S. congresswoman has introduced legislation to scrutinize whether O-RAN presents national-security risks. And governments in Europe are lobbying the consortium for access to participate in the development of the tech specs, so they can safeguard against security loopholes.

The O-RAN Alliance is the latest iteration of how rivalry between the world’s two largest economies has upended the global telecom industry. Washington has already used diplomacy and export controls to weaken the world’s largest cellular-equipment maker, China’s Huawei Technologies Co., over cybersecurity fears. Such moves have blocked Huawei’s access to the high-end chips the company needs for its products, and have led to some European countries banning the firm’s equipment from their 5G networks.

Such competition threatens to disrupt existing models of global technological cooperation, and create bifurcated systems between the U.S., China and their allies.

The O-RAN Alliance, led by AT&T Inc. T -2.31% and other mobile carriers, aims to create technical specifications so that important pieces of cellular equipment would rely more on software—which lets them get upgrades remotely—and be interoperable. Right now, equipment from different companies won’t work together—imagine if a Dell computer worked with only a Dell monitor and Dell printer.

Industry analysts view the O-RAN Alliance as a way to potentially break up the oligopoly that currently dominates the telecom-hardware business: Huawei, Sweden’s Ericsson ERIC -0.17% AB and Finland’s Nokia. It might also give American players a stronger foothold in the market.

“The O-RAN architecture is particularly useful in this battle for technological supremacy because it plays to the strength of the United States, which is software development,” says Hossein Moiin, who was chief technology officer of Nokia’s wireless division until 2018. Research firm Dell’Oro estimates equipment based on such concepts will account for more than 10% of the $90 billion cellular-equipment market by 2025.

Two of the big three suppliers—Nokia and Ericsson—are among the O-RAN Alliance’s biggest contributors; people close to Ericsson and Nokia say it appears inevitable that the group will achieve at least some of its goals, so it is better to have a voice in the process than not. Huawei, however, has opted out of the alliance, saying that integrated bundles of equipment perform better.

U.S. Commerce Department officials told the alliance members that the participation of American companies in the group was important, and that they had to follow export controls, according to people familiar with the matter.

Since Nokia raised the alarm, Rep. Abigail Spanberger (D., Va.,) introduced telecom-focused legislation that would order the State and Commerce departments to investigate the involvement of Chinese companies in bodies including the O-RAN Alliance, and to determine whether companies that do business in the U.S. should be allowed to collaborate with them in the group.

Phytium and Kindroid, both semiconductor manufacturers, were added in April and July this year to a Commerce Department list that limits companies from exporting U.S.-origin technology to listed firms without a license. Besides the blacklisted Chinese companies, one of the group’s leading board members is China Mobile, which some U.S. officials deem a national-security threat.

British officials have also raised concerns. The U.K. National Cyber Security Centre is pushing the O-RAN Alliance to allow it and similar organizations to participate in deliberations over technical specifications, according to people familiar with the matter. It wants the industry group to increase its focus on the cybersecurity of its specifications—which it hopes will eventually be used in products that replace Huawei equipment in the U.K.—and to monitor how the group’s Chinese participants sway the specifications, the people said.

The U.K. government has banned installation of Huawei’s 5G equipment in the country as of this month, and has demanded operators remove all of such equipment by 2027.

“If stuff with bad security gets deployed in a country, and then the phrase ‘O-RAN’ becomes a bad word and is banned by everyone because it’s not secure, that’s the wrong outcome,” says Ian Levy, the National Cyber Security Centre’s technical director. “We’re trying to help it so it can flourish.”

Germany’s cybersecurity officials have relayed similar concerns to the group, according to people familiar with the matter.

O-RAN officials didn’t respond to requests for comment.

Since Nokia raised the concerns, the O-RAN Alliance has decided to overhaul its processes and procedures. The group, which is governed by a board with representatives of 15 wireless carriers from around the world, agreed to give telecom-equipment makers more influence, according to people familiar with the matter. It is also considering ways to let governmental agencies, such as Britain’s National Cyber Security Centre, participate, the people said.

The consortium is also working to make its technical specifications, which are currently confidential to only its participants, more public, according to people familiar with the plans. U.S. export controls generally don’t affect technology that has been made public. Three weeks after sounding the alarm, Nokia said in a statement that it was resuming work with the group, thanks to the recent changes.

Still, the recent chaos at the O-RAN Alliance may be the first sign that a once-unified global telecom industry may be splitting into a U.S.-backed one and a Chinese-backed alternative. “It’s a moment of bifurcation,” Mr. Moiin says. “It might no longer be possible to move forward as one global ecosystem. That’s definitely in trouble because of the China-U.S. political challenges.”

Mr. Woo, a Wall Street Journal reporter in London, can be reached at stu.woo@wsj.com. Ms. Lin, a Wall Street Journal reporter in Singapore, can be reached at liza.lin@wsj.com.

Appeared in the October 13, 2021, print edition as 'Geopolitical Drama Over Tech Specs.'

wsj.com

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From: Bill Wolf10/13/2021 8:16:45 AM
3 Recommendations   of 173613
 
Car Companies—Including Porsche, GM and Toyota—Have Big 5G Plans
Among the possible uses: updates on the go, alerts about road conditions, and cars that talk to one another
Oct. 11, 2021 1:14 pm ET

Fast 5G cellular networks are rolling out—and auto makers are figuring out what they can do with all that speed.

On a test track in Weissach in southwestern Germany, sports-car maker Porsche AG has been running its Taycan electric sports cars to see how 5G equipment built into the vehicles allows them to exchange data.

Porsche is one of a handful of auto makers that have teamed up with telecom carriers to build small, local 5G networks to try out the technology as they develop new car models. High-speed networks are so new that auto makers still need to test, or in some cases design, the equipment they need.

But they have big ambitions for the technology: Manufacturers aim to use the high-speed networks to do a host of things, including downloading crucial software updates on the go, updating digital maps with greater speed, and sounding alerts about road conditions. The cars might also communicate with smart infrastructure such as traffic lights and buildings, so that a self-driving taxi would know that the stoplight at the next intersection is red. And they might talk to each other, perhaps to alert another car that a pedestrian is jaywalking or that there is some obstacle in the road.

Porsche Chief Executive Oliver Blume says that data the company is gathering from its test vehicles will help it design chips for autonomous vehicles and advanced driver-assistance programs.

“It’s really important for us to show how this works, especially for product development in the future,” Mr. Blume says. “It’s important for the development of processors that we’ll use in the future, to make sure they are 5G-ready.”

In the chips

The development of faster cellular networks is dovetailing with a fundamental shift in automotive technology. In the past, cars contained dozens of computer chips with software embedded that controlled single functions such as the lights, engine controls or windows. Unlike a smartphone or computer, which can be constantly updated with new features and functions, the software on these chips couldn't be updated until the next generation of the vehicle with new parts arrived.

But in 2012, Tesla launched its Model S—which replaced the distributed software with centralized computers that can be constantly updated over the air, completely shifting the automotive design paradigm.

The ability to update the vehicle’s software allows auto makers to continually improve the vehicle and even offer drivers on-demand features such as a heated steering wheel in the winter, or additional horsepower from the electric motor during a planned skiing vacation in the mountains.

Like a smartphone, the car has become another device connected to the internet. By 2025, analysts estimate that there will be 100 million connected cars on the road world-wide.

To make all of that updating fast and reliable, though, car makers need a superfast network to send information to individual vehicles—and that is a big reason why car makers are plunging into 5G.

Together with Vodafone Group PLC, Porsche has built two local 5G networks: one at its research-and-development center in Weissach to test the technology in cars, and one at its main plant in Zuffenhausen to develop applications for high-speed data transfer in manufacturing.

The pilot networks became operational in September, and Porsche is building another test network in Italy. Porsche hasn’t said when it will launch a 5G-ready vehicle.

General Motors Co.
, meanwhile, is working with AT&T Inc., which operates a large 5G cellular network in the U.S. The car maker said in August that it would launch 5G technology in select models in 2024. Before the technology is rolled out more widely, car owners will have to rely on 4G and LTE networks, which they can already use today for connected car services such as GM’s OnStar service. The auto maker updates OnStar’s maps, traffic-information and infotainment systems over the air.

In a statement, GM said: “This technology will mean faster speeds for downloading music, videos and various maps for navigation services, but it also extends to vehicle updates. As over-the-air technology becomes mainstream, GM vehicles will be able to download new updates quicker than ever as its brands launch new features for their cars, trucks and SUVs.”

Stellantis NV, which owns Chrysler, said in May that it had formed a joint venture with Hon Hai Precision Industry Co. , known as Foxconn. The new operation, Mobile Drive, will develop digital dashboards and displays, what auto makers now call digital cockpits, and other connected-car technologies for future models that will take advantage of 5G’s faster data transmission.

Stellantis hasn’t yet announced when 5G technology would be included in the models of any of its 15 brands, which also include Peugeot, Jeep, Fiat, Alfa Romeo and Maserati.

Toyota Motor Corp. has formed a venture with Japanese telecom carrier Nippon Telegraph & Telephone Corp. to build high-capacity data networks and technology that will include creating 5G standards for use in the company’s connected vehicles. Toyota envisages a range of applications for 5G networks including over-the-air software updates and remote monitoring of autonomous vehicles that could allow a person to take control of the car remotely, as well as in-car multimedia applications.

Toyota hasn’t said when it would launch a 5G-ready car.

Safety first

Michael Hafner, a Mercedes-Benz executive in charge of developing the company’s core vehicle-operating system, MB.OS, says Mercedes already offers cloud-based warning services with existing cellular networks, such as alerting other drivers about a pothole or an accident ahead by sending data to the cloud which is then distributed widely. The alert time is so fast that 5G wouldn’t make much of a difference, Mr. Hafner says.

But with 5G and its direct vehicle-to-vehicle communication it would be possible for one car to warn others cars of immediate dangers in the road ahead. The difference is 5G’s shorter latency, or the time it takes to send the data from car to car.

“With 5G availability you could even warn from a vehicle in a crossing scenario,” Mr. Hafner says. “And it’s not limited to cars. If you equip children’s backpacks with chips, you could also warn of such a scenario.”

Mr. Boston is a Wall Street Journal reporter in Berlin. He can be reached at william.boston@wsj.com.

wsj.com

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To: JeffreyHF who wrote (168891)10/13/2021 8:22:31 AM
From: sbfm
2 Recommendations   of 173613
 
My understanding of most state/fed employment law is, absent a contract stating otherwise, employment is at-will. Under an at-will contract, an employee can be fired for any reason - other than a firing predicated on a being a member of a protected class (e.g., race, nat origin, etc.).

Vaccine status is not a protected class. (Neither would a person who insists in coming to the office naked, drunk, stoned, shirtless, shoeless or late.)

In other words, there is no inherent right to any particular employment - absent recognized carveouts.

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From: Bill Wolf10/13/2021 9:53:13 AM
1 Recommendation   of 173613
 
AT&T Laying Groundwork for Projected Ramp in IoT Deployments

Wed, October 13, 2021, 9:30 AM

finance.yahoo.com

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To: Rightsaidfred who wrote (168892)10/13/2021 10:34:59 AM
From: Art Bechhoefer
13 Recommendations   of 173613
 
Qualcomm makes less profit selling its modem separately to Apple than when it sells the combined modem and processor to firms like Samsung, Xiaomi, Oppo, Divo, etc. Apple, regardless of whether it makes its own modem or buys another from a different supplier, like Mediatek, still owes royalties in line with its licensing agreement with Qualcomm. For the moment, it appears that Apple, faced with other component shortages, may be ordering fewer modems from Qualcomm, but that is a fairly minor issue when it comes to overall QCOM revenues and profits. If Apple is delaying the shipment of phones because of supply shortages, then the estimated royalty payments, due when the items are shipped, will also be less but will be compensated by increasing demand from other phone manufacturers.

A shortage of components, traced not only to some suppliers of components but to a lack of containers for shipping those components to OEM's, can and probably will have significant impacts in the current quarter, which is Qualcomm's first quarter for the fiscal year 2022. Take, for example, GM, which is curtailing production of certain cars and trucks because of a semiconductor shortage, among other things, may end up buy less ADAS modules from Qualcomm for the limited number of models that will feature these advanced driving features. Again, that delay in shipping parts from QCOM to GM will show up in the current and possibly future quarters, but not so much, if at all, in the fourth quarter FY 2021, which just ended.

This supply bottleneck is global, caused at least partly by pandemic disruptions. That means consumers in other countries, who might be potential customers for devices using Qualcomm components or patents, might have trouble buying what they want, and might also be constrained in their buying by the inflation that is tied to parts shortages. The end result is a general slowing down of the pandemic recovery and lower than expected corporate profits, which will in turn affect stock prices.

Suppose, for example, that these shortages and disruptions affect QCOM revenues, causing them to be less than anticipated, not just for phones but for automotive and other sectors. Suppose that, instead of an estimated $10 per share net income for fiscal 2022, Qualcomm gets only $9.00 per share (I'm using round numbers, not actual estimates). Those data are what we might anticipate from the current 1.16 billion shares outstanding. If Qualcomm spends $10.9 billion to buy back shares beginning now, probably at prices below $130, the estimated 2022 net income will be spread over about 7% or 8% fewer shares, making the earnings per share look steady, if not higher than for 2021. The share repurchase also reduces net dividend payments, leading to less drain on cash reserves.

Another company with excess free cash flow, Apple, may also end up buying back some if its shares in order to raise the resulting earnings per share, or at least keep the earnings per share from falling as much as they might, given their delays in shipping new phones.

Finally, going back to Warren Buffett's oft repeated advice, if a company believes the return from buying its own shares will be greater than the return from increasing sales and net profits, then buying back shares is a proper solution. That's probably part of Qualcomm's strategy.

Art

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To: Bill Wolf who wrote (168899)10/13/2021 1:56:35 PM
From: voop
5 Recommendations   of 173613
 
Looking at Bill's article, a company called Blue Wireless has created a "Note Card" to connect to IoT devices on ATT network.

A little digging showed that they are part of the Qualcomm Developer's Network

developer.qualcomm.com

From the Qualcomm link:

"One company that has simplified the IoT development process is Blues Wireless, member of our Qualcomm® Advantage Network. The Blues Wireless Notecard is a system-on-module (SOM) that provides high-performance cellular connectivity. It draws as little as ~8µA while idle and comes with a 10-year global data plan with 500MB of data included in the cost of the device."

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From: Bill Wolf10/13/2021 2:06:29 PM
2 Recommendations   of 173613
 
Micron, Qualcomm, and 12 More Stocks to Play the Chip Shortage
By Al Root
Updated Oct. 12, 2021 7:48 am ET / Original Oct. 12, 2021 4:30 am ET

The global semiconductor shortage that’s been a pain in many people’s necks throughout this year is going to last 2022. So as the saying goes: If you can’t beat them, join ’em.

A lack of chips has led to shortages of products ranging from electronics and computers to cars and higher prices. However, on balance, the chip shortage hasn’t hurt the semiconductor sector. The iShares Semiconductor exchange-traded fund (ticker: SOXX) is up about 18% year to date, in line with comparable gains of the S&P 500.

The sector has kept up even as shares of the largest companies in the ETF— Intel (INTC) and Broadcom (AVGO)—have underperformed. That pair is up about 9% and 14% year to date, respectively, lagging behind the industry and broader market.

The shortage isn’t going away soon. Only Monday, auto parts supplier Aptiv (APTV) cut sales and earnings guidance for 2021. About 3 million cars that were expected to be built and sold aren’t going to roll off assembly lines because of a lack of chips, the company said.

Investors can make the persisting shortage work for their portfolios by looking at Wall Street’s favorite chip-sector stocks. There are 14 stocks in the chip sector with above-average Buy-rating ratios and are trading with at least 30% upside compared with their average analyst target price.

The 14 stocks, listed by descending order of upside, are: specialty gas services provider Ultra Clean (UCTT), wafer equipment maker FormFactor (FORM), processing materials company CMC Materials (CCMP), chip designer Cirrus Logic (CRUS), equipment maker MKS Instruments (MKSI), light-emitting diode technology company Universal Display (OLED), semi-test company ASE Technology (ASX), memory maker Micron Technology (MU), mobile chip giant Qualcomm (QCOM), semi test and robot equipment maker Teradyne (TER), chip fabrication giant Taiwan Semiconductor Manufacturing (TSM), mobile chip makers Skyworks Solutions (SWKS), Qorvo (QRVO), and equipment maker Lam Research (LRCX).

Chips With Upside

The majority of analysts have Buy ratings on these chip stocks---and think shares can climb at least 30%.

Chips With UpsideThe majority of analysts have Buy ratings on these chip stocks---and think shares can climb at least 30%.

Name / Ticker Buy-rating Ratio Recent Price Target Price Upside
Lam Research / LRCX70.40556.82725.1530
CMC Materials / CCMP57.10121.55159.2931
Cirrus Logic / CRUS84.6080.52105.8331
Taiwan Semi / TSM70.00111.22146.9532
Skyworks / SWKS62.10161.39213.6832
Qorvo / QRVO71.40165.81219.4832
Teradyne / TER68.80109.28145.7333
FormFactor / FORM77.8036.2048.8935
Qualcomm / QCOM74.30125.89175.7540
Micron / MU81.8069.9698.3241
ASE Technology / ASX66.706.809.7043
Universal Display / OLED75.00171.89251.0046
MKS Instruments / MKSI80.00143.84213.0048
Ultra Clean / UCTT100.00%$43.07$71.3366%
The average Buy-rating ratio for the 14 stocks is about 75%. The average upside is almost 40%. Wall Street is more bullish today than it was a year ago. Before the chip shortage was daily news, the average upside for the group of 14 was about 12%.

Accelerating earnings growth is one reason for optimism. For the group, earnings are expected to grow about 18% a year on average, up from about 12% average annual growth posted over the past three years.

While these stocks in the chip sector look like they still have to run despite supply chain woes, a stock screen is just a starting point for more research.

Write to Al Root at allen.root@dowjones.com

barrons.com

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To: Art Bechhoefer who wrote (168900)10/13/2021 2:16:44 PM
From: RoseCampion
6 Recommendations   of 173613
 
....estimated 2022 net income will be spread over about 7% or 8% fewer shares, making the earnings per share look steady, if not higher than for 2021. The share repurchase also reduces net dividend payments, leading to less drain on cash reserves.
Art, thanks for this kernel of analysis, as it (maybe) answers a question I woke up with this morning: why would the QCOM Board approve/announce a big $10B stock repurchase program, when for only 10% of that, they could have increased the dividend by nearly a third? (*). It seemed to me that the latter action would have better shown the market their confidence in the ongoing business and cash flow pictures.

The answer has to partly what you've described, that by reducing the float, they goose the EPS going forward. (Of course, another aspect is that the timing of outlays for stock buybacks can be done whenever it's most advantageous, or suspended entirely for awhile; in contrast, a dividend increase is basically forever and there's no wiggle room in the timing of payouts.)

Commentary / analysis from my betters welcomed here. /RC/

(*) my back-of-the-envelope: increasing dividend by .22 (32%) to .90 = .22 x 4 quarters x 1.1B shares = $968M/year in higher dividend payouts

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To: RoseCampion who wrote (168903)10/13/2021 2:32:34 PM
From: Wildbiftek
6 Recommendations   of 173613
 
Plus you're double taxed on the dividends at the corporate and personal income level. (As is well known, the price of a stock drops by the amount of the dividend on the ex-dividend date, so you're essentially automatically liquidating some of your holdings for cash and being taxed on it as well.)

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To: RoseCampion who wrote (168903)10/13/2021 2:33:58 PM
From: Art Bechhoefer
8 Recommendations   of 173613
 
Rose -- Note as well that your statement ". . . by reducing the float, they goose the EPS going forward . . ." also suggests that with fewer shares to worry about, they can more easily raise the dividend.

Art

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