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WOODRIDGE, IL – The Morey Corp. today announced a major expansion of manufacturing capacity at its headquarters, with groundbreaking this month and completion projected for next June. The expansion will nearly double the existing facility’s manufacturing space, which, coupled with planned factory automation upgrades, will improve capacity by an estimated 280%.
MORGAN HILL, CA – Flextronics has signed a lease on a 155,520 sq. ft. building in a local business park and will hire 400 workers to build solar panels.
Flextronics officials signed a seven-year sublease for the building. Plans call for workers to begin in 30 to 45 days, the park development director said.
The building is located in the Madrone Business Park.
Flextronics officials signed a seven-year sublease for the building. Plans call for workers to begin in 30 to 45 days, the park development director said.
The building is located in the Madrone Business Park.
SHENZHEN – Wong’s Kong King International reported first-half revenues of HK$2.3 billion ($295 million), up from HK$1.99 billion ($256 million) last year. The operating profit was HK$102 million, up from HK$96 million. The net profit rose to HK$66.7 million, up 20.7%.
SAN JOSE – North America-based manufacturers of semiconductor equipment posted $884 million in orders in August and a book-to-bill ratio of 0.83, says SEMI. It marks the lowest 90-day average order level since 2003.
PRAGUE – Labor rates and operating expenses are rising in the Czech Republic, leading electronics manufacturers to evaluate opportunities in other parts of Eastern Europe, Asia and Africa. This is a change from 2004 to 2007, when the electronics manufacturing industry grew by leaps and bounds. Meanwhile, the country may move to design and other services to make up for any manufacturing losses.
“Rising operating expenses in the Czech Republic have forced a number of electronics manufacturers to consider other possible alternative locations in Europe so that they still save on manufacturing costs without compromising on proximity to the market,” says Frost & Sullivan analyst Harish Natesan. “The Czech Republic is also expected to witness a marked growth in design services against manufacturing in the coming years as there is an increasing demand for localized design activities in the country.”
Frost will discuss the state of the Czech electronics manufacturing market in a free telephone and web briefing Sept. 24. To participate, email Joanna Lewandowska at joanna.lewandowska@frost.com with the following information: your full name, company name, title, telephone number, email address, city, state and country.
BRUSSELS – The EU environmental NGOs, via The International Chemical Secretariat today introduced a list of some 300 chemical substances considered of “very high concern” and suitable for disclosing, says Design Chain Associates.
EL SEGUNDO, CA – Facing dwindling profits, fewer opportunities to expand by taking market share from competitors and a shrinking roster of star performers, the semiconductor industry has entered a period of lowered expectations and diminishing options, forcing chip suppliers to rethink basic strategies for success, says iSuppli Corp.
“Semiconductor profitability has eroded steadily since mid 2004, with quarterly net profits in the single-digit range in 2008, down from 17% to 19% in 2004,” said Derek Lidow, president and CEO of iSuppli. “The industry now is less profitable as a percentage of revenue than the notoriously low-margin PC business, something that hasn't occurred before, except during a short period of the severe market downturn in 2001.
“To a degree, conditions in the semiconductor industry have been impacted by short-term events, such as the market volatility in 2006, due to inventory write-offs and price wars in major product segments like DRAMs and microprocessors,” Lidow observed. “However, the long-term trend indicates the semiconductor industry – which historically has been good at capturing profits in the electronics value chain – seems to have lost its money-making touch.”
As profit has diminished, the industry has segmented itself into new groups, says Lidow. During the period from 2001 to 2004, semiconductor companies seemed to fall into three categories: a small group of firms whose growth outperformed the market; a middle-performing group consisting of most suppliers, and a set of low performers at the bottom, says iSuppli. The top caste of suppliers typically employed predatory business strategies that enabled them to take market share from weaker competitors. The lowest performers often served as the market-share prey for the predators and the middle-range of suppliers.
However, during the just-completed semiconductor business cycle from 2004 to 2007, the prey in the lowest caste of suppliers went extinct – and so did the success of predatory strategies, creating a larger group of middle-performing players, according to the research firm.
“The number of low performing companies decreased by so much that there now are only two major distributions in the industry: a few outstanding performers and the rest,” Lidow said. “The number of competitors achieving growth of more than 100% during the period of 2004 to 2007 declined to nine, down from 19 during the period of 2001 to 2004. This shows semiconductor companies can no longer break out of the pack by taking market share away from weaker rivals.”
So how can semiconductor companies break out of the current market dynamics to outperform the industry?
One proven strategy for success for semiconductor suppliers is to capture value from their customers by designing more of the total system with system-level chips built around proprietary IP, says iSuppli. Examples include Qualcomm, MediaTek and Linear Technology.
Another strategy is to milk established cash-cow products in the industry. Such cash-cow products typically are trailing-edge devices that have passed through their commodity stage, have fairly steady pricing and have a dwindling number of suppliers willing to devote their best people to designing and managing products that most semiconductor cowboys would find boring, says the firm. Sellers of such devices include Microchip, Diodes Inc., Microsemi and Rohm.
Finally, well-heeled semiconductor suppliers can use their resources to massively outspend their rivals in the areas of products and manufacturing, thus maintaining technical and scale dominances in competitive market segments. Companies employing such strategies include Samsung Electronics, Intel and Taiwan Semiconductor Manufacturing, according to iSuppli.
“In this day and age, semiconductor suppliers have the opportunity to outsource any or all of their operations to third-party sources that offer world-class work,” Lidow observed. “Those semiconductor companies that are unable to achieve top-quality and performance in all processes, either through outsourcing or by using internal resources, will be punished in the marketplace.”
Beyond the strategies described above, daring semiconductor managers have another option: building a scalable acquisition process that would allow a semiconductor company to grow by buying other companies or selected parts of companies.
“Semiconductor profitability has eroded steadily since mid 2004, with quarterly net profits in the single-digit range in 2008, down from 17% to 19% in 2004,” said Derek Lidow, president and CEO of iSuppli. “The industry now is less profitable as a percentage of revenue than the notoriously low-margin PC business, something that hasn't occurred before, except during a short period of the severe market downturn in 2001.
“To a degree, conditions in the semiconductor industry have been impacted by short-term events, such as the market volatility in 2006, due to inventory write-offs and price wars in major product segments like DRAMs and microprocessors,” Lidow observed. “However, the long-term trend indicates the semiconductor industry – which historically has been good at capturing profits in the electronics value chain – seems to have lost its money-making touch.”
As profit has diminished, the industry has segmented itself into new groups, says Lidow. During the period from 2001 to 2004, semiconductor companies seemed to fall into three categories: a small group of firms whose growth outperformed the market; a middle-performing group consisting of most suppliers, and a set of low performers at the bottom, says iSuppli. The top caste of suppliers typically employed predatory business strategies that enabled them to take market share from weaker competitors. The lowest performers often served as the market-share prey for the predators and the middle-range of suppliers.
However, during the just-completed semiconductor business cycle from 2004 to 2007, the prey in the lowest caste of suppliers went extinct – and so did the success of predatory strategies, creating a larger group of middle-performing players, according to the research firm.
“The number of low performing companies decreased by so much that there now are only two major distributions in the industry: a few outstanding performers and the rest,” Lidow said. “The number of competitors achieving growth of more than 100% during the period of 2004 to 2007 declined to nine, down from 19 during the period of 2001 to 2004. This shows semiconductor companies can no longer break out of the pack by taking market share away from weaker rivals.”
So how can semiconductor companies break out of the current market dynamics to outperform the industry?
One proven strategy for success for semiconductor suppliers is to capture value from their customers by designing more of the total system with system-level chips built around proprietary IP, says iSuppli. Examples include Qualcomm, MediaTek and Linear Technology.
Another strategy is to milk established cash-cow products in the industry. Such cash-cow products typically are trailing-edge devices that have passed through their commodity stage, have fairly steady pricing and have a dwindling number of suppliers willing to devote their best people to designing and managing products that most semiconductor cowboys would find boring, says the firm. Sellers of such devices include Microchip, Diodes Inc., Microsemi and Rohm.
Finally, well-heeled semiconductor suppliers can use their resources to massively outspend their rivals in the areas of products and manufacturing, thus maintaining technical and scale dominances in competitive market segments. Companies employing such strategies include Samsung Electronics, Intel and Taiwan Semiconductor Manufacturing, according to iSuppli.
“In this day and age, semiconductor suppliers have the opportunity to outsource any or all of their operations to third-party sources that offer world-class work,” Lidow observed. “Those semiconductor companies that are unable to achieve top-quality and performance in all processes, either through outsourcing or by using internal resources, will be punished in the marketplace.”
Beyond the strategies described above, daring semiconductor managers have another option: building a scalable acquisition process that would allow a semiconductor company to grow by buying other companies or selected parts of companies.
“Developing such a process would allow a company to achieve unprecedented scale and vast wealth,” Lidow said. “With semiconductor processing becoming increasingly commoditized, such an endeavor is becoming practical.”
WELLESLEY, MA — The global market for home theater
technologies and services will grow at a compound annual growth rate of 6.9%
through 2013, a new report says.
The market, worth $1.9 billion in 2006, is expected to reach $2.1 billion this year and $2.9 billion by 2013, BCC Research said.
JACKSON, MI – Sparton Corp. reported a net loss of $13 million on sales of $229.8 million for the fiscal year ended June 30. Sales were up 15%, but the net loss widened 68%. Operating losses declined from a $12.2 million loss in fiscal 2007 to a $6.9 million loss in 2008.
GLENVIEW, IL – Illinois Tool Works today reported operating revenues rose 10.1% for the three months ended Aug. 31, on the back of translation and acquisitions.
CHANDLER, AZ – Isola USA today filed orders against TUC and ITEQ, demanding the companies cease all acts that would infringe on the firm’s patents.
Isola filed a cease and desist against TUC, claming its TUC662 and TUC752 products violate China patent no. 123529 covering fillers for improved epoxy laminates.
Isola further claims ITEQ’s ITEQ 200DK violates China patent no. 142122.
In both cases, Isola also filed Injunctions in China’s IP court to prohibit the companies from manufacturing, using or exporting or importing the products.
“Isola has experienced significant growth in low DK materials over the last few years and we are initiating this legal action to protect our Intellectual property rights,” said Ray Sharpe, CEO of Isola Group.
Isola filed a cease and desist against TUC, claming its TUC662 and TUC752 products violate China patent no. 123529 covering fillers for improved epoxy laminates.
Isola further claims ITEQ’s ITEQ 200DK violates China patent no. 142122.
In both cases, Isola also filed Injunctions in China’s IP court to prohibit the companies from manufacturing, using or exporting or importing the products.
“Isola has experienced significant growth in low DK materials over the last few years and we are initiating this legal action to protect our Intellectual property rights,” said Ray Sharpe, CEO of Isola Group.
PALO ALTO, CA – Tech giant Hewlett-Packard said it would cut 24,600 jobs worldwide – about half in the U.S. – during the next three years, in response to its acquisition and integration of Electronic Data Systems.
The computer maker purchased the Texas-based business services outsourcer last month as part of a $13.9 billion deal .
The cuts will affect 7.5% of the combined workforce, and HP will record a charge of $1.7 billion in the fourth quarter fiscal 2008 as a result of the restructuring program.
Once completed, the program is expected to result in annual cost savings of approximately $1.8 billion, HP said.
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