Tag: chips

  • Foxconn eyes development of $319 million workers housing

    Foxconn eyes development of $319 million workers housing

    Taiwan’s Foxconn wants to build housing for workers in northern Vietnam and has made a proposal to the government. The world’s largest contract manufacturer, a contractor for Apple and other global giants seeks to develop three housing projects at a cost of about VND7.4 trillion (nearly $319 million), and has apprised the Ministries of Construction and Planning and Investment of its interest.

    Foxconn wants to build them near industrial parks where it has its plants so that its own workers can also be housed in them.

    If approved by authorities, a project in Viet Yen District in Bac Giang Province will be the largest at 16.7 hectares and have the highest investment of VND3.42 trillion (about $147.4 million).

    Up to VND2.93 trillion ($126.3 million) will be invested in a 6.3-hectare project in Bac Ninh Province’s Que Vo District and the rest of the total investment will be poured into a 9.9-hectare project in Vinh Phuc Province.

    The company said besides apartments they would also have healthcare facilities, schools and shops.

    Since current policies pose certain hurdles, it plans to sell the houses to companies in the industrial zones for them to lease or sell to their employees.

    Foxconn came to Vietnam in 2007, and has been operating mainly in the northern provinces of Bac Ninh, Bac Giang and Vinh Phuc, manufacturing computers and other electronic products and car parts. Last year it expanded to the northern province of Quang Ninh.

    Last week it said for the first time that Vietnam is its largest manufacturing hub in Southeast Asia.

    This year Foxconn expects its exports from Vietnam to double to $6 billion.

  • Apple spends $1 billion to buy most of Intel’s smartphone modem chip business

    Apple spends $1 billion to buy most of Intel’s smartphone modem chip business

    Apple announced that it has agreed to purchase the majority of Intel’s smartphone modem chip business in a transaction that is being valued at $1 billion. Besides the patents, equipment, and leases that will move from the chipmaker to Apple, 2,200 Intel employees will now work for the iPhone manufacturer. The deal is expected to close in the fourth quarter and goes a long way toward helping Apple design and manufacture its own modem chips. Intel will still have the right to produce modem chips for PCs, IoT and self-driving cars.

    The 2018 iPhones all exclusively use Intel’s 4G LTE modem chips and Intel was originally slated to deliver a 5G modem chip to Apple in time for use with the 2020 iPhones. But a settlement between Apple and Qualcomm announced last April allowed both companies to bury the hatchet and end a feud that had kept Apple from sourcing Qualcomm’s 5G modem chips. Apple paid an undisclosed amount of money to Qualcomm, rumored to be $4.5 billion, in exchange for a six-year licensing pact (with an option for two additional years) and a multi-year chip supply agreement. So starting next year we should see a Qualcomm 5G modem chip inside the iPhone models that support the next generation of wireless connectivity. Based on the early rumors, that would be the 5.4-inch iPhone 12 and 6.7-inch iPhone 12 Max.

    Even though Intel said that it would ship its 5G modem chip in time for use inside the 2020 iPhones, it appeared that Apple didn’t fully trust Intel’s design. In February, there was talk about Apple designing its own 5G modem chip and it shifted around personnel in an effort to get the ball rolling on this project. All that Apple seemingly needed was a reliable supplier to get it from 2020 to 2022 or 2023 when the first Apple-designed 5G modem chip could start rolling off the assembly lines. That might have been the impetus behind Apple’s settlement with Qualcomm.
    But with the purchase of the majority of Intel’s smartphone modem chip business, Apple will soon be able to control its own destiny in terms of obtaining this key component. The 2019 iPhones will continue to use Intel’s 4G LTE modem chips; these units will ship before Apple and Intel close on the transaction.
    The bottom line is that even with this purchase, there is still a good chance that Apple relies on Qualcomm to supply it with 5G modem chips for the next few years. But this deal has to make the brass in Cupertino feel relieved. Things were looking desperate at times for Apple. Back in January, during the FTC v. Qualcomm trial, Apple supply chain executive Tony Blevins admitted that the company had talks with Samsung and MediaTek about working out a supply agreement for 5G modem chips.
    The $1 billion price paid by Apple makes this deal one of the most expensive purchases in Apple’s history. The most amount of money that Apple has paid to buy a company is the $3 billion it shelled out for Beats Audio back in 2014.
  • Qualcomm might be able to continue its anticompetitive chip selling policies

    Qualcomm might be able to continue its anticompetitive chip selling policies

    Last month, Judge Lucy Koh finally issued a ruling in a case that could force Qualcomm to change the way it does business. The case, known as the FTC (Federal Trade Commission) v. Qualcomm was originally heard during a ten-day period at the beginning of this year. With no jury seated, the FTC essentially put Qualcomm’s business practices on trial in front of the judge. Qualcomm’s “no license, no chips” policy, the collection of royalties based on the retail price of a phone, and its refusal to license its standard-essential patents were some of the company’s anticompetitive behaviors that were brought up by the FTC.

    Qualcomm has asked for a stay of the ruling so that it can appeal it, although Judge Koh has yet to make a decision on the request. The chip maker points out that if it starts renegotiating contracts as ordered by Judge Koh and then wins on appeal, it might not be able to reverse these deals once again. And Reuters reports that an FTC official thinks that Qualcomm has a good chance at overturning the ruling. FTC Commissioner Christine Wilson, appointed by President Donald Trump, wrote in the Wall Street Journal last week that the ruling against Qualcomm “radically expanded a company’s legal obligation to help its competitors,” and was based on a flawed 1985 Supreme Court decision (more on that later).

    Wilson’s op-ed might give Qualcomm an idea on how to win an appeal of Koh’s decision, according to several antitrust attorneys. Others believe that the appeals courts will find it hard to overturn Koh’s ruling, which some say was based on the judge’s strong fact-finding abilities and her determination about the credibility of those who testified before her.

    The aforementioned 1985 Supreme Court decision ruled that a company that drops a business arrangement that has proven profitable over time could be guilty of violating competition law. How does this relate to Qualcomm? The company once licensed its standard-essential patents to rival chip firms. These are patents that manufacturers need to license to make sure that their products are in compliance with technical standards. As a result, they must be offered to rivals on a fair, reasonable and non-discriminatory (FRAND) basis. In the early 2000s, Qualcomm stopped offering these patents to other chip makers and only licensed them to smartphone manufacturers.

    During the trial, the company denied that it had ever offered full licenses to other chip makers and says that if forced into doing so by Koh’s decision, it would be a new business arrangement, not the resumption of an old one. And that dovetails with Wilson’s op-ed in the Journal in which she wrote that Koh’s decision means that if a company sells a product to a competitor, it would have to sell every product it makes to every competitor or else be charged with violating antitrust law. The FTC commissioner also said that Judge Koh misapplied the 1985 Supreme Court decision.  University of Southern California law professor Jonathan Barnett agrees with Wilson and says that the Supreme Court ruling was supposed to be “very narrow.” He says that there is a good chance that Qualcomm will be able to reverse Judge Koh’s ruling.

    Many investors are hoping the same thing. On April 15th, the day before Qualcomm and Apple reached a settlement on their legal issues, Qualcomm’s shares closed at $57.18. Following news of the settlement, the stock soared peaking on May 1st at $89.29. The day before Judge Koh released her decision, Qualcomm’s shares had already declined to $77.75. Following the ruling, the stock dropped to $65.37. The company’s shares closed last week at $66.82.

  • Apple had a Plan to end Qualcomm’s licensing policies

    Apple had a Plan to end Qualcomm’s licensing policies

    When Apple agreed to use only Qualcomm’s modem chips for the iPhone, it worked out an annual $1 billion “incentive fee” that it would receive from the chip maker. But there was an important condition. If Apple decided to use a second modem chip supplier, it would have to pay Qualcomm back the “incentive fees” it received. Apple then attended a hearing held by the South Korea Fair Trade Commission and spoke out against Qualcomm’s chip licensing practices. As a result, the $1 billion checks stopped. At the same time, Qualcomm learned that Apple was planning on using Qualcomm and Intel modem chips for the iPhone 7.

    In January 2017, Apple sued Qualcomm over the $1 billion checks it was no longer receiving, setting off a chain reaction of lawsuits filed by both sides against each other. But that is all water under the bridge following the settlement that both companies agreed to last week. All lawsuits are dropped, and Apple will pay Qualcomm an undisclosed amount. Apple now has a six-year licensing agreement with Qualcomm and a multi-year pact that will guarantee it modem chips from the San Diego based chip maker. According to one analyst, Apple could be paying Qualcomm as much as $9 per iPhone for the component.

    During the two years before the settlement, Apple publicly derided the quality of Qualcomm’s modem chips while in private it called them “the best.” These complementary comments were made by Apple executives in memos that also praised Qualcomm’s “unique patent share” and “significant (intellectual property) holdings.” The memos were obtained by Qualcomm during the discovery process. That is when both parties in a lawsuit hand over evidence to each other before a trial starts.

    Apple called Qualcomm’s chips worthless in arguments it made to lawmakers, regulators, judges, and juries while privately raving about the company’s components. This has many wondering how deeply Apple believed what it was saying when it tried to get courts to change the methods that Qualcomm uses to sell its chips. Apple’s true feelings about Qualcomm might explain why it might be paying Qualcomm as much as $9 per iPhone for its chips.

    Previously, Apple derided Qualcomm’s royalty deals that force phone manufacturers to pay a percentage of the retail price of each phone sold. In fact, just before the settlement was announced, Apple and Qualcomm were squaring off in a San Diego courtroom with billions of dollars in play. On Tuesday, during his opening statements, Apple’s attorney (Ruffin Cordell from Fish & Richardson) was trying to prove that the iPhone didn’t rely on Qualcomm’s component. He did this by pointing out that an iPhone can function using a Wi-Fi connection. And Apple has wondered in the past why Qualcomm should receive royalties for parts of a phone that it has nothing to do with.

    Apple’s attorney also pointed out Tuesday that licensing deals Apple made with Ericsson and Huawei were for twice the number of patents that Apple licensed from Qualcomm, but for a small percentage of what Apple was paying the chip supplier. However, an internal Apple document later obtained by Qualcomm showed that Apple licensed less expensive patents on purpose in order to create evidence that showed how much more Qualcomm was seeking to license its patents.-

    “While it’s very common for companies who are engaged in legal disputes to play hardball, the disclosure of these documents is very unsettling. It potentially reveals that Apple was engaging in a bad faith argument both in front of antitrust enforcers as well as the legal courts about the actual value and nature of Qualcomm’s patented innovation.”-Adam Mossoff, law professor at George Mason University, director of the Center for the Protection of Intellectual Property

    Documents received by Qualcomm during discovery revealed that Apple had planned on suing Qualcomm as far back as 2014; the tech giant decided to wait so it could continue to collect the billion-dollar payments from the chip maker. One document, produced by Apple six months before it lobbed the first salvo in their court battles, revealed Apple’s game plan to reduce the amount of the royalties it was paying to Qualcomm. Apple would “hurt Qualcomm financially,” and “put Qualcomm’s licensing model at risk.”

    Qualcomm’s licensing model is at risk, but not necessarily because of Apple. Earlier this year the Federal Trade Commission and Qualcomm squared off in a non-jury trial held before Judge Lucy Koh. Apple did have some executives testify against Qualcomm’s licensing practices, but other phone manufacturers did so as well. If Judge Koh, who presided over the Apple v. Samsung patent trial, rules in favor of the FTC, Qualcomm might have to change the way it sells its chips.

  • SoftBank arranges to buy ARM for $31b

    SoftBank arranges to buy ARM for $31b

    SoftBank has entered a deal to buy chipmaker ARM for a whopping $31 billion to help cement the company’s future in the burgeoning IoT sector.

    The boards of both SoftBank and ARM have unanimously recommended the proposed deal to buy out 100% of ARM and turn the company into a wholly-owned SoftBank subsidiary.

    The proposed buyout of UK-based ARM is the third largest proposed corporate merger of the year, and the first major deal in the UK since the Brexit vote, which has pushed down the value of the British pound to make the prospect more enticing for SoftBank.

    ARM’s core business of designing chips for mobile devices alone does not justify the high purchase price, which is more than 70 times the company’s net earnings for 2015. The company generated a mere $1.5 billion in revenue last year.

    But to counter slowing smartphone sales, ARM has been seeking to diversify into other sectors by designing chips for IoT devices, and this is where SoftBank’s interest in the company lies.

    Speaking at a press conference announcing the proposed merger, SoftBank CEO Masayoshi Son said the IoT is expected to be the “biggest paradigm shift in human history,” and that the investment marks a move to enter at the ground floor of this shift.

    Presentation materials prepared for the deal indicate that 14.8 billion ARM-powered SoCs shipped in 2015. The company is particularly targeting the consumer electronics, enterprise infrastructure, automotive and embedded intelligence segments.

    The deal still requires approval from ARM shareholders and English courts, but subject to these approvals is expected to close in the current calendar quarter.

  • Calbee’s famous fried chips & made before your very eyes

    Calbee’s famous fried chips & made before your very eyes

    Japanese snack brand Calbee has joined with Four Seas Mercantile Holdings to open its first overseas concept store “Calbee Plus” in Hong Kong, where customers can buy its famous potato chips straight from the deep fryer.

    Located in Lee Tung Street in Wan Chai, the Okashi Galleria x Calbee Plus store offers customers potato chips and potato sticks that are deep fried on the spot.

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    For snack lovers, it doesn’t get more indulgent than this: the crisps out of the fryer will be drizzled with chocolate sauce, and served with Japanese fresh milk 3.5 soft serve ice-cream on the side.

    More than 10 different kinds of freshly fried chips and potato sticks are available, including normal and wave-cut chips in four flavours: barbecue, double cheese, chocolate, and Hong Kong’s exclusive flavour: typhoon shelter spicy – which is inspired by the city’s famous typhoon shelter spicy crab.

    Customers can also purchase limited edition Japanese confectioneries in the store.

    On its opening day, it saw long queues snake outside the freshly fried-in-front-of-you potato chips store.

    Peggie Lau, associate director of communications at Four Seas Mercantile Holdings, toldMarketing that Calbee Plus is more than a retail store, and aims to bring a holistic experience to customers.

    “By watching the making of those freshly made products through the glass wall open kitchen, we want to bring fresh and delicious products to customers which also aligns with the brand philosophy: making tasty and joyful snacks,” she said.

    Calbee

    Besides targeting snack lovers, the snack maker also wants to attract families to the store.

    “We want to take customer loyalty to the next level. In addition to trying the fresh potato chips, we also want them to experience the service, to witness how we make the products in front of them, and more importantly, to get feedback from them for product research and developments.”

    Lau said the store was aiming to attract 1,000 visitors every day, with plans to open four more stores within five years in Hong Kong to become an attraction for food lovers and overseas visitors.