BINH DUONG PROVINCE, VIETNAM -- A Fittec International EMS site here has been torched and looted, the company said. The extent of the damage remains under investigation and operations are temporarily suspended until further notice. 

---

The events came as local Vietnamese are showing their anger over Chinese drilling in disputed waters.

The company owns the factory at the Vietnam Singapore Industrial Park in southern Vietnam, which manufactures printed circuit board, electronics components and related parts. The Vietnam factory had 16 SMT lines and a production placement capacity of 24.3 billion chips per year, representing approximately 24% of the company's total production capacity.

According to the company the site generated revenues for the six months ended Dec. 31 of HK$59.2 million ($7.64 million), about 11% of the company's overall sales for the period.

"Based on the company’s best available information, the Vietnam Factory was torched and looted by rioters. As at the date of this announcement, the company could not estimate the loss caused by the riot as anti-China protests and riots continue to be carried out in and around [the park]."

Hong Kong-based Fittec has six production sites, most of which are in China, and 2013 sales of 112.1 million ($144.6 million).

 

NEW YORK -- A leading semiconductor analyst says expected 2014 sales growth is 8.4% year-over-year, lower than last month's forecast of 11.9%. Mike Cowan is basing his updated estimate on March global semiconductor sales as reported by the WSTS, which came in at $331.335 billion. March's actual global semi sales, which were released last week, were in at $28.095 billion, much lower than Cowan's LRA Model projections of $31.116 billion. "This lower actual sales number for March (compared to its forecast) corresponds to the model’s monthly momentum indicator, MI, of -9.7%," Cowan said. The MI has gone negative following a five-month string of positive momentum indicators, signaling a potential turning point in the sales growth trend consistent with March’s drop in 2014’s sales growth forecast. Additionally, March 2014’s year-to-date cumulative sales growth came in at 11.4 percent when compared to last year’s equivalent YTD cumulative sales number of $70.449 billion. Finally, the model’s April 2014 actual global semi sales expectation is projected to come in at $24.857 billion which corresponds to a calculated three-month moving average, 3MMA, sales forecast estimate of $26.098 billion which is normally reported by the SIA as part of its monthly published Global Sales Report, GSR, press release The Cowan LRA Model’s forecast is calculated and updated each month, reflecting the latest, actual global semiconductor sales numbers released by the WSTS each month. For more information on the Cowan LRA Model, see this a SLIDE PRESENTATION HERE.

FRAMINGHAM, MA – Worldwide IT spending will increase by 4.1% in constant currency this year, IDC said, down from its previous forecast of 4.6%. The good news is the worst is likely over, and pentup demand will accelerate overall IT sales through the rest of the year, the research firm said. The market grew 4.5% last year. According to the new report, IT spending has been volatile since the beginning of the year, with macroeconomic wild cards including the crisis in Ukraine and the slowdown in China adding to the general sense of uncertainty which continues to impact business confidence and investment. Pent-up demand should, however, drive a more positive capital spending cycle in the second half, IDC said. In mature economies, organizations will take advantage of a more stable business climate to replace ageing infrastructure including servers, storage and network equipment. In some emerging markets, stabilization of the economy after the slowdown that began in mid-2013 could drive a period of catch-up spending, especially in China where IT spending has cooled significantly over the past 12 months. Aside from macroeconomic wild cards, the other weak spot in the IT market since the previous quarter has been slowing growth in mobile devices (smartphones and tablets), due partly to price erosion and a more mature installed base. IDC has lowered its forecast for total IT spending growth this year from 4.6% to 4.1% in constant currency, primarily as a result of downward revisions to mobile device forecasts. Based on average exchange rates from the first quarter 2014, this will translate into US dollar growth of just 3.4% as currency volatility continues to negatively impact US-based IT vendors. In 2013, the IT market increased by 4.5% in constant currency, but just 2.5% in US dollars. Excluding mobile phones, growth in 2014 will accelerate slightly from 2.9% to 3.1% (constant currency) due to the expected pickup in infrastructure investment and the related downstream effect on IT services revenues. “As smartphone growth continues to cool from the phenomenal expansion of the past few years, tablet shipments have performed weaker than expected over the past couple of quarters,” said Stephen Minton, vice president in IDC’s Global Technology & Industry Research Organization. “This volatility, coupled with the macroeconomic uncertainty in many emerging markets, is somewhat masking a more positive underlying foundation for enterprise IT spending, with firms continuing to invest in working off that pent-up demand to replace old servers, storage and network gear. Some of that spending is also driving IT services, despite the fact that an increasing number of businesses are moving more of their traditional IT budget to the cloud.” Around 10% of software spending will have moved to the cloud by the end of 2014, while infrastructure as a service will represent 15% of all spending on servers and storage. While this is creating significant disruption for IT vendors targeting traditional IT budgets, it is also driving equally significant short-term opportunities for those vendors that successfully capture mindshare for their Cloud-based solutions. Meanwhile, both Cloud and traditional spending will be driven by the underlying pent-up demand for server and storage capacity, driven in turn by the previous, explosive growth of mobile devices that are now generating an ever-increasing volume of data. The opportunity to extract value from this data is driving strong demand for analytics tools and Big Data solutions. Many organizations will choose a gradual approach for their journey to the Cloud, with security, reliability and regulatory factors in mind, implementing hybrid and private cloud solutions. As a result, both Cloud and traditional IT spending will benefit from these drivers in the next 2-3 years. Western Europe will post growth of 2% in constant currency terms as most countries continue to shake off the debt crisis and return to a more stable business climate. Similarly, business confidence is gradually improving in the US, after the sequester and government shutdown of last year. Server and storage spending will rebound to positive growth after last year’s slowdown, while IT services growth will accelerate to more than 2%. In Canada, IT spending growth will accelerate from 3.3% last year to 5% in 2014, due to stronger spending on PCs, servers and storage. Japan is a different story; the pent-up demand was largely worked off in 2013, when the government’s deflation-busting policies boosted business confidence and when IT buyers moved to take advantage of lower prices before new taxes came into effect at the beginning of 2014. As a result, IT spending in Japan increased by 3.4% last year, but will decline by 1% in 2014. “Over the past year, most of the surprises on the upside have come from mature markets,” said Stephen. “Japan had a strong year in 2013, and a similar pattern is expected this year in North America and Western Europe. We still expect that businesses will choose to fix the roof while the sun is shining in the second half of 2014, as part of a general infrastructure investment cycle.” Emerging markets are more volatile, with macroeconomic forecasts having been lowered since January. In Central & Eastern Europe, the crisis in Ukraine has added to the sense of business uncertainty, and IDC now expects IT spending in Russia to decline by almost 1% this year after a similar decline in 2013. The slowdown in Russia will inevitably continue to have an impact on other countries in the region, although the recovery in exports to Western Europe is a positive factor. Inflation remains problematic in many emerging markets, including Latin America, India, Indonesia and Turkey. China remains a wild card. On the one hand, there is significant pent-up demand for IT spending after the slowdown of 2013. On the other hand, some economists are now forecasting that GDP growth could dip below 7% in 2014 and 2015. A hard landing in the real estate sector could yet derail the expected short-term recovery in IT spending, if businesses choose to once again delay their capital spending upgrade and expansion plans. Assuming the economy remains relatively stable, however, the pent-up demand will drive IT spending growth back to 10% in 2014, before another likely slowdown in 2015. “China still has a lot of room for growth, and the slowdown in tech spending last year means that a period of catch-up is inevitable,” said Stephen. “As long as the economy remains fairly stable in the rest of 2014, the market should perform better than last year, although growth will likely cool again after that pent-up demand has been dealt with.”

TAIPEI – Hon Hai Precision Industry has instructed its Vietnam staff to take a three-day leave of absence starting Saturday, according to reports.

---

Vietnam is currently experiencing vandalism, factory closings, and deaths as a result of anti-China protests that originated with a dispute in the South China Sea, say reports.

Hon Hai is the parent company of contract manufacturer Foxconn.