Electronics Manufacturing Daily News November 7, 2019



Electronics Manufacturing Daily News November 7, 2019Headlines TOC \o "1-1" \h \z \u 1)Acer consolidated revenues were N$62.87 billion (US$2.05 billion) for 3Q19, growing 14% sequentially as Net profit for the quarter came to NT$1.18 billion, up 187.8% sequentially and 29% on year PAGEREF _Toc24050252 \h 32)AMS launched a renewed $5 billion takeover bid for Osram PAGEREF _Toc24050253 \h 33)Asscon will be focusing on the significant energy saving potential of its inline vacuum Vapor-Phase Soldering Systems at productronica 2019 PAGEREF _Toc24050254 \h 44)AT&S revenue was € 490.3 million, declined slightly by 5.1% y/y; annual guidance confirmed; increases in sales volume in the IC Substrates and Medical & Healthcare segments were offset by declining figures in the Mobile Devices and Industrial segments PAGEREF _Toc24050255 \h 65)AU Optronics (AUO) October consolidated revenue reached NT$19.98 billion, down by 16.3% on month and 24.6% on year PAGEREF _Toc24050256 \h 86)Camtek Announces Results for the Third Quarter of 2019 PAGEREF _Toc24050257 \h 87)China has officially started researching sixth-generation telecoms technology PAGEREF _Toc24050258 \h 118)China says it has agreed with U.S. to cancel tariffs in phases PAGEREF _Toc24050259 \h 119)China’s manufacturers express mixed outlook amid rising optimism of US trade war deal PAGEREF _Toc24050260 \h 1310)ChipMOS Technologies expects sales growth in 4Q19; reported earnings per share of NT$0.81 (US$0.03) on consolidated revenues of NT$5.4 billion for the third quarter of 2019 PAGEREF _Toc24050261 \h 1511)Cohu announced shipment of its 1000th MT9510 pick-and-place handler to a global semiconductor customer headquartered in the U.S. PAGEREF _Toc24050262 \h 1612)Electronic Chemicals And Materials Market is estimated at USD 56.3 billion in 2019 and is projected to reach USD 81.6 billion by 2024, at a CAGR of 7.7% - MarketsandMarkets PAGEREF _Toc24050263 \h 1713)EMEA IT spending will increase 3.4% y/y to $798 billion in 2020 - Gartner PAGEREF _Toc24050264 \h 1914)European Commission lowered Eurozone Growth Outlook PAGEREF _Toc24050265 \h 2215)European trade and manufacturing slowdown is spreading into the rest of the economy - International Monetary Fund PAGEREF _Toc24050266 \h 2316)Fabrinet (FN) CEO Seamus Grady on Q1 2020 Results - Earnings Call Transcript PAGEREF _Toc24050267 \h 2317)FlexEnable acquired Merck’s portfolio of best-in-class, high-performance Organic Thin-Film Transistor (OTFT) materials, including revolutionary and highly-patented organic semiconductors and dielectrics PAGEREF _Toc24050268 \h 3718)German industrial production output fell 0.6% in September as Manufacturing fueled the decline, while construction and energy increased PAGEREF _Toc24050269 \h 3819)Global semiconductor market likely to grow 6 percent in 2020! PAGEREF _Toc24050270 \h 4020)Global Unichip to see revenues rebound in 4Q19; October revenues were NT$909 million, up 20.1% sequentially PAGEREF _Toc24050271 \h 4221)Hanwha Techwin is highlighting their model HM520 cutting-edge modular mounter PAGEREF _Toc24050272 \h 4222)Himax Technologies, Inc. Reports Third Quarter 2019 Financial Results and Provides Fourth Quarter 2019 Guidance PAGEREF _Toc24050273 \h 4323)IEC Will Host Conference Call to Discuss Fiscal 2019 Fourth Quarter Financial Results PAGEREF _Toc24050274 \h 5624)Koh Young Europe first to Present Full Range Product Line at Productronica PAGEREF _Toc24050275 \h 5725)Lenovo Q2 Momentum Powered By 9th Consecutive YoY Quarterly Revenue Growth, Strong, Positive PTI and Net Income Growth PAGEREF _Toc24050276 \h 5826)NCAB Group AB (publ) Q3 2019 Earnings Call PAGEREF _Toc24050277 \h 6027)NCAB Group Germany appointed Benjamin Klingenberg new Managing Director, responsible for the DACH-R PAGEREF _Toc24050278 \h 6628)NCAB Group Interim report Q3 2019 PAGEREF _Toc24050279 \h 6729)NCAB’s CEO Hans St?hl to retire in 2020 PAGEREF _Toc24050280 \h 6930)North American Relay Market: Sales Off 1%, Bookings Drop 11% for Q1 - Cumulus PAGEREF _Toc24050281 \h 7031)Novatek Microelectronics October revenues were NT$5.64 billion, up 0.4% sequentially and hitting a record high; expects up to 5% sales drop in 4Q19 PAGEREF _Toc24050282 \h 7332)Pegatron mulling more production in Southeast Asia; positive about 5G-induced revenues in 2020 PAGEREF _Toc24050283 \h 7433)Pegatron net profit last quarter surged 122.5 percent to NT$6.29 billion (US$206.9 million), bolstered by strong iPhone sales and an improved product mix PAGEREF _Toc24050284 \h 7434)Plasmatreat GmbH to present live lead frame and surface cleaning at productronica 2019 PAGEREF _Toc24050285 \h 7535)Portugal hopes European tech investment will drive up exports PAGEREF _Toc24050286 \h 7636)Primax Electronics reported consolidated revenues of NT$9.362 billion (US$307 million) for October, increasing 0.18% sequentially and 26.28% on year PAGEREF _Toc24050287 \h 7737)Qualcomm expects between 1.75 billion and 1.85 billion smart devices with modem chips, including 175 million to 225 million 5G handsets, to be sold in 2020 PAGEREF _Toc24050288 \h 7838)Renesas Electronics Reports Financial Results for the Third Quarter Ended September 30, 2019 PAGEREF _Toc24050289 \h 7939)Schweizer Electronic AG: Positive development in the third quarter of 2019 | MarketScreener PAGEREF _Toc24050290 \h 8540)Siemens Quarterly Profit Surge Comes With Cautious Outlook PAGEREF _Toc24050291 \h 8741)Silicon Motion Technology expects its share of the global SSD controller segment to reach 40% over the next three years, up from the current 30% PAGEREF _Toc24050292 \h 8842)Smartphone Rebound Sparks Signs of Life in Asia’s Tech Cycle PAGEREF _Toc24050293 \h 8943)SMTA “Members of Distinction” Award Winners Announced PAGEREF _Toc24050294 \h 9144)Soft robots of the future may depend on new materials that conduct electricity, sense damage and self-heal PAGEREF _Toc24050295 \h 9345)Taiwan top-3 foundries’ sales increased 18.8% sequentially to a record high of US$10.84 billion in the third quarter of 2019 PAGEREF _Toc24050296 \h 9546)Taiwan-based hinge makers are expected to significantly benefit from foldable smartphones slated for launch in 2H20 PAGEREF _Toc24050297 \h 9647)Taiwan-based IC design houses have seen orders from Huawei slow down recently, but remain upbeat that orders from the Chinese vendor will start picking up in 1H20 PAGEREF _Toc24050298 \h 9748)Test Research, Inc. won 2019 Mexico Technology Award at SMTA Guadalajara 2019 PAGEREF _Toc24050299 \h 9749)TPK Holding net profit more than tripled to NT$228 million from NT$54 million in the second quarter, while revenue growth surpassed the company’s estimate PAGEREF _Toc24050300 \h 9850)TPK silver nanowire touch solutions adopted for small-size foldable smartphones PAGEREF _Toc24050301 \h 9951)TV panel prices to stop falling in November as efforts made by panel makers to reduce their output aggressively and demand has started picking up PAGEREF _Toc24050302 \h 9952)Universal Celebrates Milestone 100th Anniversary PAGEREF _Toc24050303 \h 10053)USA, China, Japan and Korea to dominate 5G: Worldwide, 1.57 billion people are expected to adopt 5G by 2025 - or 18% of total mobile users PAGEREF _Toc24050304 \h 10154)Vishay Precision Group, Inc. (VPG) CEO Ziv Shoshani on Q3 2019 Results - Earnings Call Transcript PAGEREF _Toc24050305 \h 10255)Why Taiwan’s role will be crucial in next phase of the US-China tech war PAGEREF _Toc24050306 \h 11056)Wiwynn, a cloud computing server affiliate of Wistron, reported third-quarter consolidated revenues of NT$33.35 billion (US$1.09 billion), down 31.3% on year with net profit of NT$1.37 billion PAGEREF _Toc24050307 \h 11257)Worldwide smartphone shipments increased 0.8% y/y to 358.3 million smartphones in 3Q19 – IDC PAGEREF _Toc24050308 \h 11358)Yageo net profits rebounded 44.25 percent sequentially last quarter, as pricing pressure alleviated amid recovering demand from customers in China and other markets in Asia PAGEREF _Toc24050309 \h 116Acer consolidated revenues were N$62.87 billion (US$2.05 billion) for 3Q19, growing 14% sequentially as Net profit for the quarter came to NT$1.18 billion, up 187.8% sequentially and 29% on year Aaron Lee, Taipei; Joseph Tsai, DIGITIMES Thursday 7 November 2019 Acer has announced consolidated revenues of N$62.87 billion (US$2.05 billion) for the third quarter of 2019, growing 14% sequentially with gross margin of 10.6%. Net profit for the quarter came to NT$1.18 billion, up 187.8% sequentially and 29% on year with EPS reaching NT$0.39.The net profits and EPS were both the highest in eight quarters.Acer has recently released a new wearable, Click to Pray eRosary, in collaboration with the Pope’s Worldwide Prayer Network, targeting the Catholics.Acer has also signed MOU with bio-medical developer Novartis Taiwan to provide its AI systems for use in medical applications. The two firms will also push medical care products and initially target patients with macular degeneration, diabetic retinopathy and cardiovascular diseases.AMS launched a renewed $5 billion takeover bid for Osram NOVEMBER 7, 2019 Kirsti KnolleVIENNA (Reuters) - AMS (AMS.S) launched a renewed $5 billion takeover bid for Osram (OSRn.DE) on Thursday, hoping its latest offer would convince investors with a lower acceptance rate and concessions to the German lighting group’s management and trade unions.The Austrian sensor maker failed with a first offer at the same price of 41 euros ($45.38) per Osram share last month, a setback for Chief Executive Alexander Everke’s plan to form a European leader for integrated sensor and lighting solutions.AMS collected 51.6% of shares, including its own nearly 20% stake, short of the required 62.5%. Some investors had hoped for a higher offer from private equity groups Bain Capital and Advent, which they had signaled but then refrained from after AMS’s miss.After the finance duo’s exit, Everke continued to negotiate with Osram management and labor representatives to overcome their opposition. They had voiced doubts regarding the ability of AMS with 8,500 staff to integrate Osram’s more than 24,000 employees.Everke did not provide a business combination agreement with Osram before launching the new bid as he had planned to. But talks aiming at enhancing “the cooperation between the two companies and expand on Osram’s existing photonics strategy” continue, AMS said.In a move to accommodate trade unions, AMS is ready to apply an employment protection scheme until end-2022 on the sites in Germany, the offer document says.OSRAM BRANDThe document does not say Osram’s digital business should be sold, but that AMS and Osram will jointly reassess every division for its longer-term contribution. AMS had previously said it would seek “the best owner” for the unit.AMS’s plan to relocate production from Osram’s loss-making plant in Kulim, Malaysia to Regensburg, Germany, will be reviewed as well, it said. The Osram brand should also become part of the AMS company name.Osram said it welcomed the ongoing discussions and hoped an agreement could be finalised soon.Everke has lowered the acceptance rate in his new bid to 55% to increase his chances of success. He can hope to secure the around 9% stake of Allianz Global Investors.Less clear are the intentions of new Osram shareholder hedge fund Sand Grove, which amassed a 5.75% stake six days after AMS announced its intention for a renewed offer.It could complicate AMS’s bid or make a quick profit. The hedge fund could cash in about 4 million euros if it successfully tenders the shares, according to Reuters estimates.Around 10% of Osram shares are held by exchange traded funds, which according to German law, are not allowed to sell their stake as long as the takeover is not completed, banking sources say. Retail investors hold 20%-25%, the sources say.Reporting by Kirsti Knolle, Editing by Michael Shields and Emelia Sithole-MatariseOur Standards:The Thomson Reuters Trust Principles.Asscon will be focusing on the significant energy saving potential of its inline vacuum Vapor-Phase Soldering Systems at productronica 2019K?nigsbrunn, 07.11.2019With regards to PCB soldering, electronic manufacturers often have the choice between reflow soldering and vapor phase soldering. Taking the significant increase in energy costs in the future into consideration, Asscon is focusing on the significant energy saving potential of its inline vacuum Vapor-Phase Soldering Systems at productronica 2019.Over the next few years manufacturing companies will face significant changes in energy costs. In order to achieve the climate targets, the Kyoto Protocol has limited the worldwide permitted emission of CO2. However, not only has the amount of CO2 emissions been limited, but also the legitimacy to emit has been limited. In future, emission rights will be issued. These are required for companies to be allowed to release carbon dioxide into the atmosphere and thus produce one ton of CO2 within a certain timeframe. “With our Vapor-Phase Soldering Systems, we are tackling this problem because they consume much less energy than today’s reflow ovens,” explains Axel Wolff, Sales Manager at Asscon GmbH. On average, reflow ovens consume between 15 and 22 kW/hour. “Of course, it depends on the oven and the soldering profile, but users can rely on these numbers when considering a purchase,” says Wolff. A Vapor-Phase Soldering System from Asscon, on the other hand, requires only approx. 4.5 kW/hour. These numbers could have a lasting positive effect on the emission rights of companies in the future.In Vapor-Phase Soldering the Galden fluid is heated to create a vapor blanket. The assembly to be soldered is introduced into the emerging vapor. The vapor condenses around the individual components and forms a closed liquid film. The energy of the liquid film is transferred to the components and the soldering process is activated. This transfer is controlled by the soldering profile, which controls the amount of steam, the amount of liquid to be condensed and the amount of heat to be transferred. The Vapor-Phase operates at lower temperatures than in reflow soldering. This means that an assembly is subject to less thermal stress - one of the many advantages of Vapor-Phase technology.The defined, homogeneous heat input which is achieved by the condensing liquid, and the significantly lower process temperatures reduce production times and energy consumption. “Compared to a reflow oven, the total energy requirement of the Vapor-Phase is significantly lower at a factor of 3-5 with simultaneously higher efficiency. With today’s purchase of a new soldering system, with which the customer will work in the coming years, the total energy consumption should be included in the decision-making process. This is because the topic of energy saving will be a massive concern for industrial companies over the next few decades,” explains Wolff. Therefore, Asscon offers the evaluation of the soldering process, including the listing of the energy demand, in its showroom in K?nigsbrunn. “We gladly use an energy comparison computer to show our potential customers the electricity savings possible with the Vapor-Phase,” says Wolff.Asscon will be presenting its Vapor-Phase Soldering Systems in hall A4, booth 265. ASSCON Systemtechnik-Elektronik GmbHMesserschmittring 3586343 K?nigsbrunnGermanyinfo@asscon.deTel: +49 8231 95991- 0 asscon.deContact person: Florian SchildeinPhone: +49 30 585 846 011Email: fs@butter-and-salt.deAT&S revenue was € 490.3 million, declined slightly by 5.1% y/y; annual guidance confirmed; increases in sales volume in the IC Substrates and Medical & Healthcare segments were offset by declining figures in the Mobile Devices and Industrial segments1st half of 2019/20Well on track at the operating and strategic levelMacroeconomic environment partially burdens earningsMarket for mobile devices was characterised by lower ramp of the new smartphone generationHalf-year revenue down slightly by 5%; EBITDA margin, at 20.6%, in the target rangeManagement Board confirms annual and medium-term guidanceLeoben, 7 November 2019 – In an overall challenging environment AT&S held its ground well in the first half-year. Revenue, at € 490.3 million, declined slightly by 5.1% compared to the previous year: increases in sales volume in the IC Substrates and Medical & Healthcare segments were offset by declining figures in the Mobile Devices and Industrial segments. The Automotive segment maintained the level of the previous year despite the current radical changes in the mobility market.The decline in revenue in the Mobile Devices segment is attributable to a lower ramp of the latest smartphone generation and the changing product mix. Consequently, the Automotive and Industrial segments are currently faced with lower demand and higher price pressure.The general macroeconomic situation also continues to contribute to the currently challenging environment: trade disputes (in particular between the USA and China) and political uncertainties (i.a. Brexit) have led to caution in the industry. Uncertainties in the automotive industry regarding the future powertrain and far-reaching technological change as well as the weak industrial business caused underutilization also at AT&S.The current market situation and investments in the future of AT&S took a toll on earnings: EBITDA amounted to € 101.1 million (previous year: € 138.3 million) and the EBITDA margin to 20.6% (previous year: 26.8%). However, EBIT, at € 29.4 million (previous year: € 71.9 million), picked up significantly again compared with the first quarter of this financial year (€ -0.6 million). Finance costs – net improved from € -0.1 million in the previous year to € 2.8 million. Net profit for the period amounted to € 19.5 million (previous year: € 55.4 million).In preparation for future technology generations and to implement the modularization strategy, AT&S heavily invests in research and development. These expenditures also make the company future-proof and increase the earnings potential in the medium term. Andreas Gerstenmayer, CEO of AT&S AG: “We consider the current developments in our markets a great opportunity for significant growth. However, as entrepreneurs we must also be prepared to invest in building the relevant knowledge. As the technology leader, we are best equipped to ensure that the expansion of expertise is implemented successfully.”The financial position remained very solid at the reporting date. The equity ratio decreased to 42.5%, down 2.5 percentage points compared with 31 March 2019, with the balance sheet total increasing slightly. The two main raisons were currency effects (€ -23.6 million) and the dividend payment (€ -23.3 million). Net debt rose by € 83.4 million or 55.5% from € 150.3 million to € 233.7 million. The net gearing ratio increased from 18.7% to 30.4%.Cash and cash equivalents amounted to € 259.6 million. In addition, AT&S has financial assets of € 243.5 million and unused credit lines of € 185.4 million to secure financing of the future investment programme and any repayments due in the short term.Revenue516.9490.3(5.1%)EBITDA138.3101.1(26.9%)EBITDA margin (in %)26.820.6EBIT71.929.4(59.2%)EBIT margin (in %)13.96.0%Profit/loss for the period55.419.5(64.7%)Cash flow from operating activities58.062.27.2%Net CAPEX37.992.0>100%Net debt150.3*233.7**55.5%Earnings per share (in EUR)1.320,40(70.0%)At mid-year, the Management Board adopted additional investments for a targeted capacity increase at the locations in Chongqing and Leoben: in the coming five years, up to € 1 billion will be invested in strengthening the business with IC substrates. The investments will focus on Chongqing. AT&S implements the project in close cooperation with a leading semiconductor manufacturer. In addition to production, the partnership also comprises the technology development of future substrate architectures. The first significant revenue from this investment is expected for the financial year 2022/23. In view of its steady earnings power, AT&S will use existing resources, among other things, to finance the new project.Regarding the background of this investment decision: as a result of the increased use of artificial intelligence, ever greater data volumes are created and have to be recorded and processed at ever greater speed. IC substrates, which act as translators between the micro-world of the printed circuit board and the nano-world of chips, enable the architectures required to do so. Market demand for IC substrates for the application in high-performance computer modules will increase significantly in the years to come. These investments allow AT&S to strengthen its position in the market for IC substrates and to further balance its product portfolio, thus reducing previous dependencies and promoting the diversification of the customer portfolio. Andreas Gerstenmayer: “The trend of miniaturization and modularization addresses many applications in the electronics industry and consequently also the area of microprocessors. We expect the circle of industries interested in our solutions to expand substantially in the coming years.”As after the first quarter, the Management Board also confirms the earnings forecast for the full year after the first half of the financial year: As demand has picked up and capacity utilization is currently good in the Mobile Devices segment, revenue is expected to be at the level of the previous year, with an EBITDA margin in the range of 20% to 25%. This forecast is supported by the further expansion of the customer and application portfolio in the Mobile Devices segment and the investments made so far. They enable AT&S to partially balance out market fluctuations.A volume of € 80 to 100 million is planned for basic investments (maintenance and technology upgrades). Depending on the market development, an additional € 100 million for capacity and technology upgrades may be incurred. For the capacity expansion in the area of IC substrates, expenses for investments of up to € 180 million are planned. Based on the progress of the project, the Group’s capital expenditures will total up to € 340 million.The Management also confirms the medium-term guidance, which was increased after the first quarter: As part of the strategy “More than AT&S”, the Group expects revenue to double to € 2 billion in the next five years (previous revenue guidance at the beginning of the financial year: € 1.5 billion). This corresponds to a compound annual growth rate (CAGR) of roughly 15%. Based on the stronger focus on high-end applications, the historical trend of a continuous and sustainable margin improvement can be continued, and an EBITDA margin in the range of 25% to 30% can be achieved in the medium term. The Group’s medium-term ROCE target is more than 12%.Press contact:Gerald Reischl, Director Communications & Public RelationsTel: +43 3842 200-4252; Mobile: +43 664 88 59 2452Send an e-mailGerda K?nigstorfer, Director Investor RelationsTel:+43 3842 200-5925; Mobile: +43 676 8955 5925AU Optronics (AUO) October consolidated revenue reached NT$19.98 billion, down by 16.3% on month and 24.6% on yearRodney Chan, DIGITIMES, Taipei Thursday 7 November 2019 Taiwan-based LCD panel maker AU Optronics (AUO) has announced its October consolidated revenue reached NT$19.98 billion, down by 16.3% on month and 24.6% on year.Shipments of large-sized panels (10-inch and above) for LCD TV, desktop monitor, notebook PC, and other applications were around 7.95 million units in October, down by 22.9% from the previous month, said AUO.Its small- to medium-sized panel shipments totaled around 12.74 million units, up by 12.0% sequentially, the company said.AUO saw flat revenue growth and net loss in the third quarter despite sequential shipment increases for both the large-size and small- to medium-size panel segments.The panel maker has devoted more efforts to developing products for niche market segments, sucvh as automotive aplications.Camtek Announces Results for the Third Quarter of 2019MIGDAL HAEMEK, Israel, Nov. 7, 2019 /PRNewswire/ -- Camtek Ltd. (CAMT) (TASE: CAMT), today announced its financial results for the quarter ended September 30, 2019.Highlights of the Third Quarter 2019Revenues were at $32.5 million;GAAP gross margin at 46.9%; Non-GAAP gross margin at 47.1%;GAAP operating income was $4.4 million and non-GAAP operating income was $5.3 million, representing margins of 13.5% and 16.2%, respectively;GAAP net income of $4.2 million, or $0.11 per diluted share, and non-GAAP net income of $5.0 million, or $0.13 per diluted share;Operating cash flow of $3.8 million with $83.0 million in cash and short-term deposits at quarter-end; andExpect fourth quarter revenues at similar levels to that of the third quarter, with improved profitability.Management CommentRafi Amit Camtek’s CEO commented, “Camtek’s third quarter results reflect continued solid execution, with revenues in the upper limit of our guidance range despite the current weaker semiconductor market. Our gross margin came in below previous quarters mainly as a result of less favorable product mix in the quarter. We expect an improvement in the gross and operating margins in the fourth quarter.”Continued Mr. Amit, “China has grown to become our largest territory and we expect this to continue into next year. Orders have been for various applications including Advanced Packaging and Front-End Macro inspection, as well as new customers opening facilities and purchasing an initial tool, with the potential for further expansion. Since the beginning of the year we have gained 14 new customers, most of them in China. Furthermore, we have strengthened our position in two key market segments: power devices and CMOS image sensors. During the quarter, we received and installed two multiple machine orders for these segments which are expected to continue growing into 2020.”Concluded Mr. Amit, “Fundamental long-term market drivers remain strong, and Camtek continues to maintain its strong position in the market. Next quarter, we expect revenues at around current levels. This should put us at record revenue level for the year of about $133 million.”Third Quarter 2019 Financial ResultsRevenues for the third quarter of 2019 were $32.4 million. This compares to third quarter 2018 revenues of $32.3 million.Gross profit on a GAAP basis in the quarter totaled $15.2 million (46.9% of revenues), a decline of 6% compared to a gross profit of $16.2 million (50.2% of revenues) in the third quarter of 2018. Gross profit on a non-GAAP basis in the quarter totaled $15.3 million (47.1% of revenues), a decline of 6% compared to a gross profit of $16.2 million (50.4% of revenues) in the third quarter of 2018. The decline in the gross margin is due to less favorable product mix in the third quarter of 2019.Operating profit on a GAAP basis in the quarter totaled $4.4 million (13.5% of revenues), a decline of 21% compared to an operating income of $5.6 million (17.2% of revenues) in the third quarter of 2018. Operating profit on a non-GAAP basis in the quarter totaled $5.3 million (16.2% of revenues), a decline of 15% compared to $6.2 million (19.2% of revenues) in the third quarter of 2018. The decline in the operating margin is due to the lower gross margin in the third quarter of income on a GAAP basis in the quarter totaled $4.2 million, or $0.11 per diluted share, a decline of 18% compared to net income of $5.1 million, or $0.14 per diluted share, in the third quarter of 2018. Net income on a non-GAAP basis in the quarter totaled $5.0 million, or $0.13 per diluted share, a decline of 12% compared to a non-GAAP net income of $5.7 million, or $0.16 per diluted share, in the third quarter of 2018. Cash and cash equivalents, as of September 30, 2019, were $83.0 million compared to $54.9 million as of December 31, 2018 and $85.3 million as of June 30, 2019. During the quarter the Company generated a positive operating cash flow of $3.8 million and paid a cash dividend of $5.7 million. Conference CallCamtek will host a conference call today, November 7, 2019, at 10:00 am ET.Rafi Amit, CEO, Moshe Eisenberg, CFO and Ramy Langer, COO will host the call and will be available to answer questions after presenting the results. To participate, please call one of the following telephone numbers a few minutes before the start of the call.US: 1 888 668 9141 at 10am Eastern TimeIsrael: 03 918 0609 at 5pm Israel TimeInternational: +972 3 918 0609For those unable to participate, the teleconference will be available for replay on Camtek’s website at beginning 24 hours after the call.A summary presentation of the quarterly results will also be available on Camtek’s website.ABOUT CAMTEK LTD.Camtek is a leading manufacturer of metrology and inspection equipment and a provider of software solutions serving the Advanced Packaging, Memory, CMOS Image Sensors, MEMS, RF and other segments in the mid end of the semiconductor industry.Camtek provides dedicated solutions and crucial yield-enhancement data, enabling manufacturers to improve yield and drive down their production costs.With eight offices around the world, Camtek has best-in-class sales and customer support organization, providing tailor-made solutions in line with customers’ requirements.This press release is available at press release may contain projections or other forward-looking statements regarding future events or the future performance of the Company. These statements are only predictions and may change as time passes. We do not assume any obligation to update that information. Actual events or results may differ materially from those projected, including as a result of changing industry and market trends, reduced demand for our products, the timely development of our new products and their adoption by the market, increased competition in the industry, price reductions as well as due to other risks identified in our Annual Report on Form 20-F and other documents filed by the Company with the SEC, that represent our views only as of the date they are made and should not be relied upon as representing our views as of any subsequent date.This press release provides financial measures that exclude: (i) share based compensation expenses; (ii) certain Chroma transaction expenses; (iii) discontinued operations; and (iv) write off costs with regard to the FIT activities, and are therefore not calculated in accordance with generally accepted accounting principles (GAAP). Management believes that these Non-GAAP financial measures provide meaningful supplemental information regarding our performance. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. Management uses both GAAP and non-GAAP measures when evaluating the business internally and therefore felt it is important to make these non-GAAP adjustments available to investors. A reconciliation between the GAAP and non-GAAP results appears in the tables at the end of this press release.China has officially started researching sixth-generation telecoms technologyNovember 07, 2019SHANGHAI (Reuters) - China has officially started researching sixth-generation telecoms technology, state media reported on Thursday, a move it described as aiming to promote the latest wireless innovation. Chinese government ministries and research institutes met this week in a “kick-off” meeting to establish a national 6G technology research and development group, according to a report by the Science and Technology Daily, which is published by China’s Ministry of Science and Technology. Technologies related to ultra-fast mobile services have become a key conflict point between the United States and China in recent months. Countries around the world have been racing to roll out 5G next generation wireless networks, which can provide data speeds at least 20 times faster than 4G and promises to support new technologies such as self-driving cars and augmented reality. In April, Reuters published a story quoting South Korean officials declaring victory over the United States and China as the site of the world’s first commercial launch of a 5G telecoms network. They made their assertion on the basis that the new network connected to an actual 5G phone. U.S. carriers disputed South Korea’s claims to be first. The race has also embroiled China’s Huawei Technologies , the world’s largest telecoms equipment vendor, which is heavily involved in building many of these networks. The U.S. government, fearing that Huawei’s equipment could be used by China for spying, has placed Huawei on a blacklist in May that banned the company from buying American-made parts. The U.S. government led a campaign to convince its allies to bar it from their 5G networks. Huawei has repeatedly denied the claims. Meanwhile, U.S. President Donald Trump in February tweeted that he wanted 6G technology in the United States as soon as possible, urging U.S. firms to step up their efforts or get left behind. Beijing’s move to kickstart research into 6G comes days after the country’s top three telecos rolled out 5G mobile phone services nationwide. China had originally said it would launch the ultra-fast mobile internet service early next year but accelerated its plans as tensions with the United States heated up. Reporting by Brenda Goh, Editing by Sherry Jacob-PhillipsChina says it has agreed with U.S. to cancel tariffs in phasesNovember 07, 2019BEIJING (Reuters) - China and the United States have agreed to cancel in phases the tariffs imposed during their months-long trade war, the Chinese commerce ministry said on Thursday, without specifying a timetable. An interim U.S.-China trade deal is widely expected to include a U.S. pledge to scrap tariffs scheduled for Dec. 15 on about $156 billion worth of Chinese imports, including cell phones, laptop computers and toys. Tariff cancellation was an important condition for any agreement, ministry spokesman Gao Feng said, adding that both must simultaneously cancel some tariffs on each other’s goods to reach a “phase one” trade deal. “The trade war started with tariffs, and should end with the cancellation of tariffs,” Gao told a regular news briefing. The proportion of tariffs canceled for both sides to reach a “phase one” deal must be the same, but the number to be canceled can be negotiated, he added, without elaborating. “In the past two weeks, the lead negotiators from both sides have had serious and constructive discussions on resolving various core concerns appropriately,” Gao said. “Both sides have agreed to cancel additional tariffs in different phases, as both sides make progress in their negotiations.” He did not give a timeline. In what could be another gesture to boost optimism, China’s state news agency Xinhua reported late on Thursday that the Chinese customs and the Ministry of Agriculture are considering removing restrictions on U.S. poultry imports.[B9N26I016] China has banned all U.S. poultry and eggs since January 2015 due to an avian influenza outbreak. Beijing’s signal that a ‘phase 1’ trade deal with the United States was close to being sealed helped Europe’s share markets hit a more than 4-year peak on Thursday and bond yields shuffled higher. TRUMP-XI MEETING A source previously told Reuters that Chinese negotiators wanted the United States to drop 15% tariffs on about $125 billion worth of Chinese goods that took effect on Sept. 1. They also sought relief from earlier 25% tariffs on about $250 billion of imports, ranging from machinery and semiconductors to furniture. A person familiar with China’s negotiating position said it was pressing Washington to “remove all tariffs as soon as possible”. A deal may be signed this month by U.S. President Donald Trump and Chinese President Xi Jinping at a yet-to-be determined location. Dozens of venues have been suggested for a meeting, which had originally been set to take place on the sidelines of a now-canceled mid-November summit of Asia-Pacific leaders in Chile, a senior Trump administration official told Reuters on Wednesday. One possible location was London, where the leaders could meet after a NATO summit that Trump is due to attend from Dec. 3-4, the official said. Gao declined to say when and where such a meeting could be. Since Trump took office in 2017, his administration has been pressing China to curb massive subsidies to state-owned firms and end the forced transfer of American technology to Chinese firms as a price of doing business in China. Reporting by Yawen Chen and Martin Pollard; Writing by Ryan Woo; Editing by Kim Coghill, Clarence Fernandez & Simon Cameron-MooreChina’s manufacturers express mixed outlook amid rising optimism of US trade war dealViews on outlook for smaller Chinese manufacturers varies by industry, with high-end factories more optimisticCaixin/Markit manufacturing purchasing managers’ index (PMI) rose for a fourth straight month in October to highest level since February 20177 Nov, 2019He Huifeng South China Morning PostSmaller Chinese manufacturers expressed a mixed outlook for a rebound in activity and a recovery in export orders amid optimism of a trade deal with the United States.October’s Caixin/Markit manufacturing purchasing managers’ index (PMI), which surveys 500, mostly smaller private factories, improved for a fourth straight month to 51.7 in October, its highest since reaching the same level in February 2017, and up from 51.4 in September.This is reflected by an increase in export orders for some firms this year despite the US tariffs, while others said their businesses continued to suffer amid a sharp decline in export demand. In general, producers of high-end products held a more optimistic outlook.Our exports to the United States increased by about 13 per cent last year, and our export revenue continued to grow in the first half of this year,Chen Wei“Actually, our exports to the United States increased by about 13 per cent last year, and our export revenue continued to grow in the first half of this year,” said Chen Wei, deputy general manager of Guangzhou Seagull Kitchen and Bath Products, a large contract manufacturer producing products for brands in the US.The company, which is listed on the Shenzhen Stock Exchange, was forced to issue statements in April and September last year warning investors that the US tariffs could have a sharp, negative impact on the firm’s revenues, since its US sales accounted for over half of the company’s overseas orders and 35 per cent of the firm’s total revenue.But one year later, export orders have risen, with US clients optimist for the development of the trade deal.“Some of our products have been included in the tariff increased by the US government, but these additional costs are mainly borne by US buyers after consultation. That meant American consumers are paying totally unnecessary expenses,” added Chen, who said their clients have been explicitly opposing the increase of tariffs at hearings with the Office of the United States Trade Representative.“We hope that the Chinese and American economies will resume normal development that safeguard the interests of enterprises and consumers of both countries.”But despite the rise in orders from the US, Chen said Seagull Kitchen and Bath Products have made increased efforts to promote itself in the domestic market as well as with countries involved with China’s Belt and Road Initiative in a bid to reduce reliance on the US.Overall, China’s economy grew by just 6.0 per cent in the third quarter of 2019, the lowest quarterly growth rate since records began in March 1992.Shenzhen, China’s hi-tech capital and home to 2.01 million enterprises with over 99 per cent of them small and middle-sized firms, reflected the slowdown.The growth rate for the home city of Huawei and Tencent slowed to 6.6 per cent in the first nine months of 2019 from 7.4 per cent in the first half of the year.I see a totally different situation in the footwear industry than in Caixin’s data. Especially in the second half of this year, many small and medium-sized shoe factories across China have closedSenior footwear factory managerSmall and middle-sized enterprises contribute about 60 per cent of Shenzhen’s gross domestic product, with more than 80 per cent of jobs in the city created by private businessesShenzhen’s private investment growth also plummeted in the third quarter, falling to a rate of only 0.3 per cent year from 12.3 per cent in the first half of the year.“Frankly speaking, I see a totally different situation in the footwear industry than in Caixin’s data. Especially in the second half of this year, many small and medium-sized shoe factories across China have closed,” said a senior manager of a footwear factory employing around 2,000 workers in Fujian province, specialising in production for domestic brands.“A few weeks ago, we just shut down two production lines and dismissed several senior managers and a number of workers because we received few new orders in recent months,” added the senior manager who asked for his identity and the identity of his company to be kept anonymous.“I find no suppliers in the footwear sector have plans to expand production. There is no deal in the [China]-US trade war yet. Who dares to expand production? Very few people are optimistic.”We expect both domestic consumption and exports will continue to decline in the next few years, causing the entire garment industrial chain to shrinkLiu YiThe current lack of a deal between China and the US means some export manufacturers are still trying to move at least some of their production capacity out of China.“Our supplier in Zhongshan city in Guangdong [province] that has a turnover of US$80 million annually in low end outdoor lighting products just established a joint venture factory in Thailand last month. Now the Thai factory is expediting construction and will be put into production before the end of the year.” said Jason Liang, sales manager at a Guangzhou-based exporter of LEDs.Most forecasts put China’s 2020 average growth rate below 6.0 per cent, including the 5.9 per cent predicted by the World Bank and the 5.8 per cent predicted by the International Monetary Fund.“We expect both domestic consumption and exports will continue to decline in the next few years, causing the entire garment industrial chain to shrink,” said Liu Yi, founder of , which matches demand for fabrics with thousands of suppliers across the country.“First of all, the trade war is affecting exports, and actually the impact will spread to all upstream and downstream segments of the industry, whether the factories are export-oriented or for domestic sales. Second, China’s inflation is worsening, so the decline in consumption power is inevitable. With domestic demand is insufficient, who dares to expand production?”ChipMOS Technologies expects sales growth in 4Q19; reported earnings per share of NT$0.81 (US$0.03) on consolidated revenues of NT$5.4 billion for the third quarter of 2019Julian Ho, Taipei; Jessie Shen, DIGITIMES Thursday 7 November 2019 Backend house ChipMOS Technologies expects to post revenue growth sequentially in the fourth quarter of 2019, driven mainly by growing demand for flash memory chips.ChipMOS has seen backend demand for DRAM memory pick up amid clients’ efforts to digest excess inventory, said company chairman SJ Cheng. Meanwhile, demand for NOR and NAND flash chips has been rising at a gradual pace.ChipMOS also specializes in backend services for display driver ICs. Demand for large-size display applications has been weak, whereas driver IC demand for smartphone panels stays robust, Cheng indicated.ChipMOS expects its fourth-quarter gross margin to be similar to the prior quarter’s level.ChipMOS expressed optimism about its overall sales performance in 2020, citing stable growth in demand for TDDI chips, and growing shipments for smartphone-use OLED display driver ICs.ChipMOS is reportedly among the backend partners of memory chipmakers such as Macronix International, and memory module makers including Phison Electronics and Adata Technology. ChipMOS also provides backend services for TDDI chips reportedly from Novatek Microelectronics and other major Taiwan-based LCD driver IC firms, and has obtained new orders for OLED display driver ICs.ChipMOS responded saying it does not comment on specific orders and customers.ChipMOS reported earnings per share of NT$0.81 (US$0.03) on consolidated revenues of NT$5.4 billion for the third quarter of 2019, while gross margin climbed 4.3pp on quarter to 21.4%.ChipMOS’ net profit for the first three quarters of 2019 jumped over 250% from a year earlier to NT$2.05 billion, with EPS reaching NT$2.83. The backend house disclosed its cumulative 2019 revenues through October increased 8.8% on year to NT$16.67 billion.Cohu announced shipment of its 1000th MT9510 pick-and-place handler to a global semiconductor customer headquartered in the U.S. November 7, 2019POWAY, Calif.--(BUSINESS WIRE)--Cohu, Inc. (COHU), a global leader in back-end semiconductor equipment and services, today announced shipment of its 1000th MT9510 pick-and-place handler to a global semiconductor customer headquartered in the U.S. and leader in high-performance analog, mixed-signal, and digital signal processing (DSP). The milestone system is being utilized for testing automotive battery management systems (BMS) for electric (EV) and hybrid electric vehicles (HEV) and precision power regulators. The MT9510 is complementary to Cohu’s high throughput MATRiX pick-and-place handler, with approximately 600 units shipped, which are also utilized for testing automotive microcontrollers and a variety of devices used in advanced driver assistance systems (ADAS). Cohu has the largest installed base of automotive tri-temperature pick-and-place handlers in the industry.The rapidly increasing demand for autonomy, fuel efficiency and connectivity in automobiles are expected to drive semiconductor content growth to about $700 per vehicle by 2022, making it one of the fastest-growing semiconductor market segments.“ADAS and electrification of the powertrain require stringent quality test to ensure semiconductor reliability at cold, hot and ambient use conditions,” said Luis Müller, Cohu President and CEO. “Cohu is the leader in industrial and automotive tri-temperature testing, and our large installed base of thermal handlers provides for long-term recurring and support opportunity to our customers.”Cohu’s MT9510 and MATRiX pick-and-place handlers provide full temperature control during test in extreme environmental conditions from -55?C to +175?C and a variety of options, upgrades and retrofits to configure the product to customer applications. The MT9510 and MATRiX product roadmaps will continue to address evolving requirements for Industry 4.0 and a variety of other features, offering a cost-effective solution for a growing industry.About Cohu:Cohu (COHU) is a global leader in back-end semiconductor equipment and services, delivering leading-edge solutions for the manufacturing of semiconductors and printed circuit boards. Additional information can be found at .Forward-Looking Statements:Certain statements contained in this release and accompanying materials may be considered forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, including statements regarding the value of automotive semiconductor content and growth, long-term recurring and support opportunity, the MT9510 and MATRiX product features and roadmaps, and any other statements that are predictive in nature and depend upon or refer to future events or conditions, or include words such as “may,” “will,” “should,” “would,” “expect,” “anticipate,” “plan,” “likely,” “believe,” “estimate,” “project,” “intend,” or other similar expressions among others. Statements that are not historical facts are forward-looking statements. Forward-looking statements are based on current beliefs and assumptions that are subject to risks and uncertainties and are not guarantees of future performance. Actual results could differ materially from those contained in any forward-looking statement as a result of various factors, including, without limitation: risks associated with acquisitions; inventory, goodwill and other asset write-downs; our ability to convert new products into production on a timely basis and to support product development and meet customer delivery and acceptance requirements for new products; our reliance on third-party contract manufacturers and suppliers; failure to obtain customer acceptance resulting in the inability to recognize revenue and accounts receivable collection problems; revenue recognition impacts due to ASC 606; market demand and adoption of our new products; customer orders may be canceled or delayed; the concentration of our revenues from a limited number of customers; intense competition in the semiconductor equipment industry; our reliance on patents and intellectual property; compliance with U.S. export regulations (including restrictions regarding certain Chinese companies and ongoing U.S.-China trade war); impacts from the Tax Cuts and Jobs Act of 2017 and ongoing tax examinations; geopolitical issues and trade wars; ERP system implementation issues; the seasonal, volatile and unpredictable nature of capital expenditures by semiconductor manufacturers and the late 2018 and 2019 weakened demand in this market; ongoing weakness in Greater China market; and rapid technological change. These and other risks and uncertainties are discussed more fully in Cohu’s filings with the Securities and Exchange Commission, including the most recently filed Form 10-K and Form 10-Q, and the other filings made by Cohu with the SEC from time to time, which are available via the SEC’s website at . Except as required by applicable law, Cohu does not undertake any obligation to revise or update any forward-looking statement, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.Electronic Chemicals And Materials Market is estimated at USD 56.3 billion in 2019 and is projected to reach USD 81.6 billion by 2024, at a CAGR of 7.7% - MarketsandMarketsCHICAGO, Nov. 7, 2019 /PRNewswire/ -- According to the new market research report “Electronic Chemicals and Materials Market by Type (Specialty Gases, CMP Slurries, Conductive Polymers, Photoresist Chemicals, Low K Dielectrics, Wet Chemicals, Silicon Wafers, PCB Laminates), Application, and Region - Global Forecast to 2024”, published by MarketsandMarkets?, the Electronic Chemicals And Materials Market is estimated at USD 56.3 billion in 2019 and is projected to reach USD 81.6 billion by 2024, at a CAGR of 7.7% during the forecast period.Download PDF Brochure: in-depth TOC on “Electronic Chemicals and Materials Market”105 – Tables 44 – Figures 148 – PagesView Detailed Table of Content here: demand from the microelectronics and chip manufacturing industries globally is expected to drive the market.“Silicon wafers segment is estimated to be the largest type of electronic chemicals and materials.”Silicon wafers are a thin slice of semiconductor, which is made out of crystalline silicon and is a key component in the fabrication of integrated circuits and serve as a substrate for the microelectronics devices. The primary use of silicon wafer is in integrated circuits, which are the basic building block of any electronic devices, such as computers and smartphones. Other applications include tire pressure systems and solar cells. The silicon wafers market is expected to grow in tandem with the growth of the integrated circuits and solar markets during the forecast period.“Semiconductor application segment of the electronic chemicals and materials market is expected to register the highest CAGR during the forecast period.”Any semiconductor device contains integrated circuits (ICs) and printed board circuit (PCB). ICs are an assembly of electronic components that are fabricated as a single unit, which includes actives devices and passive devices, such as transistors and capacitors along with their interconnections, which are built on a thin substrate of silicon material. The final circuit formed is termed as chip. A printed circuit board is a circuit where all the components are contained within a mechanical structure. It is built by alternating layer of conductive polymer along with layers of non-conductive insulation material.Request Sample Pages:“APAC accounts for the largest share in terms of the value of the electronic chemicals and materials market.”APAC is the largest semiconductors market due to an increasing proportion of Chinese semiconductor products it’s the memory chip market in China, which generated most of the revenue of the semiconductor industry in the region.The leading players in the Electronic Chemicals and Materials Market are Linde plc (Ireland), Air Products and Chemicals (US), DowDuPont (US), Cabot Microelectronics (US), BASF AG (Germany), Hitachi Chemical (Japan), Air Liquide (France), Solvay A.G. (Belgium), Shin-Etsu (Japan), Covestro (France), and Songwon (South Korea).Get 10% Free Customization on this Report: Adjacent Markets: Specialty Chemicals Market Research Reports & ConsultingRelated Reports :N-Methyl-2-pyrrolidone (NMP) Market by Application (Petrochemicals, Electronics, Paints & Coatings, Agrochemicals, Pharmaceutical) and Region (Asia Pacific, Europe, North America, Middle East & Africa, South America) - Global Forecast to 2022Photoresist Market by Photoresist Type (ArF Immersion, ArF Dry, KrF, I-Line, G-Line), Photoresist Ancillaries Type (Anti-Reflective Coatings, Remover, Developer), Application, and Region - Global Forecast to 2022About MarketsandMarkets? MarketsandMarkets? provides quantified B2B research on 30,000 high growth niche opportunities/threats which will impact 70% to 80% of worldwide companies’ revenues. Currently servicing 7500 customers worldwide including 80% of global Fortune 1000 companies as clients. Almost 75,000 top officers across eight industries worldwide approach MarketsandMarkets? for their painpoints around revenues decisions.Our 850 fulltime analyst and SMEs at MarketsandMarkets? are tracking global high growth markets following the “Growth Engagement Model – GEM”. The GEM aims at proactive collaboration with the clients to identify new opportunities, identify most important customers, write “Attack, avoid and defend” strategies, identify sources of incremental revenues for both the company and its competitors. MarketsandMarkets? now coming up with 1,500 MicroQuadrants (Positioning top players across leaders, emerging companies, innovators, strategic players) annually in high growth emerging segments. MarketsandMarkets? is determined to benefit more than 10,000 companies this year for their revenue planning and help them take their innovations/disruptions early to the market by providing them research ahead of the curve.MarketsandMarkets’s flagship competitive intelligence and market research platform, “Knowledge Store” connects over 200,000 markets and entire value chains for deeper understanding of the unmet insights along with market sizing and forecasts of niche markets.Contact:Mr. Shelly SinghMarketsandMarkets? INC.630 Dundee RoadSuite 430Northbrook, IL 60062USA: +1-888-600-6441Email: sales@Research Insight: Our Website: Content Source: MarketsandMarketsEMEA IT spending will increase 3.4% y/y to $798 billion in 2020 - GartnerGartner Says IT Spending in EMEA to Return to Growth in 2020Analysts Discuss the Outlook for the EMEA IT Market During Gartner IT Symposium/Xpo 2019, November 3-7 in Barcelona, SpainBARCELONA, Spain, November 7, 2019IT spending in EMEA will return to growth at $798 billion in 2020, an increase of 3.4% from 2019, according to the latest forecast by Gartner, Inc.“2020 will be a recovery year for IT spending in EMEA after three consecutive years of decline,” said John Lovelock, research vice president at Gartner. “This year declines in the Euro and the British Pound against the U.S. Dollar, at least partially due to Brexit concerns, pushed some IT spending down and caused a rise in local prices for technology hardware. However, 2020 will be a rebound year as Brexit is expected to be resolved and the pressure on currency rates relieved.”Gartner analysts are discussing the macroeconomic trends affecting the IT spending market in EMEA this week during Gartner IT Symposium/Xpo, which is taking place in Barcelona until today.November 7, 2019In 2019, EMEA spending on devices (including PCs, tablets and mobile phones) is set to decline 10.7% (see Table 1). Higher prices — partly due to currency declines and a lack of new “must have” features in mobile phones — have allowed consumers to defer upgrades for another year. Devices spending will not rebound in 2020, but instead fall by 1.3%, as both businesses and consumers move away from spending on PCs and tablets.After 2019, the communications services segment will achieve long-term growth despite fixed-line services in both the consumer and business spaces declining every year through 2023. While mobile voice spending is flat — mainly due to price declines — mobile data spending increases 3% to 4% per year, which is keeping the overall communications services market growing in 2020.Enterprise software will remain the fastest-growing market segment in 2020. EMEA spending for enterprise software will increase 3.4% and 9.2% in 2019 and 2020, respectively. Software as a service (SaaS) will achieve 14.1% growth in 2019 and 17.7% in 2020.Table 1. EMEA IT Spending Forecast (Millions of U.S. Dollars)?2019 Spending2019 Growth (%)2020 Spending2020 Growth (%)Data Center Systems42,052-3.842,9492.1Enterprise Software109,3513.4119,3779.2Devices116,346-10.7114,833-1.3IT Services282,8850.4297,9855.3Communications Services221,523-6.3223,1020.7Overall IT772,156-3.2798,2463.4Source: Gartner (November 2019)Regulatory Compliance Fuels SpendingThe complex geopolitical environment across EMEA has pushed regulatory compliance to the top of the priority list for many organizations. EMEA spending on security will grow 9.3% in 2019 and rise by 8.9% in 2020.“Globally, security spending is increasing and being driven by the need to be compliant with tariffs, trade policies and intellectual property rights. In EMEA, privacy and compliance concerns, further driven by GDPR, take precedence,” said Mr. Lovelock.The U.S. is leading cloud adoption and accounts for over half of global spending on cloud, which will total $140.4 billion in 2020, up 15.5% from 2019. In terms of cloud spending, the U.K. holds the No. 2 position behind the U.S. The U.K. spends 8% of IT spending on public cloud services, which will total $US 16.6 billion in 2020, up 13.2% from 2019. In EMEA, the overall spending on public cloud services will reach $57.7 billion in 2020, up from $50 billion in 2019.Gartner predicts that organizations with a high percentage of IT spending dedicated to the cloud will become the recognized digital leaders in the future.“Organizations in Europe, regardless of industry, are shifting their balance from traditional to digital — moving toward “techquilibrium,” a technological balancing point that defines how digital an enterprise needs to be to compete or lead,” said Mr. Lovelock. “Not every company needs to be digital in the same way or to the same extent. This move towards rebalancing the traditional and digital is clearly visible amongst EMEA companies.”More detailed analysis on the outlook for the IT industry is available in the complimentary webinar “IT Spending Forecast, 3Q 2019 Update: The Next Generation of Cloud.”Gartner’s IT spending forecast methodology relies heavily on rigorous analysis of sales by thousands of vendors across the entire range of IT products and services. Gartner uses primary research techniques, complemented by secondary research sources, to build a comprehensive database on which to base its forecasts.The Gartner quarterly IT spending forecast delivers a unique perspective on IT spending across the hardware, software, IT services and telecommunications segments. These reports help Gartner clients understand market opportunities and challenges. The most recent IT spending forecast research is available to Gartner clients in “Gartner Market Databook, 3Q19 Update.” This quarterly IT spending forecast page includes links to the latest IT spending reports, webinars, blog posts and press releases.About Gartner IT Symposium/ITxpoGartner IT Symposium/Xpo is the world’s most important gathering of CIOs and senior IT executives, uniting a global community of CIOs with the tools and strategies to help them lead the next generation of IT and achieve business outcomes. More than 20,000 CIOs, senior business and IT executives worldwide will gather for the insights they need to ensure that their IT initiatives are key contributors to, and drivers of, their organization’s success. Follow news and updates from the events on Twitter using #GartnerSYM.Upcoming dates and locations for Gartner IT Symposium/Xpo include:November 11-14: GoaNovember 12-14: TokyoMarch 2-4, 2020: DubaiMay 11-14, 2020: TorontoAbout GartnerGartner, Inc. (NYSE: IT), is the world’s leading research and advisory company and a member of the S&P 500. We equip business leaders with indispensable insights, advice and tools to achieve their mission-critical priorities today and build the successful organizations of tomorrow.Our unmatched combination of expert-led, practitioner-sourced and data-driven research steers clients toward the right decisions on the issues that matter most. We are a trusted advisor and objective resource for more than 15,000 organizations in more than 100 countries — across all major functions, in every industry and enterprise size.To learn more about how we help decision makers fuel the future of business, visit .European Commission lowered Eurozone Growth Outlook11/7/2019By RTTNews The European Commission downgraded its growth projections for the euro area as the economy faces a period of very high uncertainty.In the Autumn forecast, the EC said on Thursday that the European economy has entered a protracted period of subdued growth amid weak global growth, trade tensions and uncertainties over Brexit.The single currency bloc is forecast to expand 1.1 percent this year instead of 1.2 percent estimated previously. Growth is seen at 1.2 percent each in 2020 and 2021. The outlook for 2020 was downgraded from 1.4 percent.Inflationary pressures are set to be more moderate than expected in spring, lowering the inflation forecast for 2019 and 2020 to 1.2 percent, followed by slight uptick to 1.3 percent in 2021, the commission said.Germany’s economy is expected to see muted growth over the forecast horizon. GDP is expected to increase by only 0.4 percent this year, and by just 1 percent in 2020 and 2021.Spain’s growth forecasts were revised downward due to both data revisions and a weaker growth momentum amid increased uncertainty. In 2019, the economy was forecast to climb 1.9 percent. For 2020, growth was forecast at 1.5 percent and at 1.4 percent in 2021.France’s real growth is set to decrease in 2019 before leveling out a rate close to the economy’s potential. Underpinned by domestic demand, GDP is forecast to grow by 1.3 percent in 2019 and 2020 and then by 1.2 percent in 2021.The EU said Italy still shows no signs of a meaningful recovery. GDP is expected to edge up 0.1 percent this year. In 2020, growth is set to pick up moderately to 0.4 percent on the back of rising external demand and moderate household spending. For 2021, growth is seen at 0.7 percent.Amid Brexit uncertainty, UK’s pace of economic growth has been volatile in 2019. The growth is seen at 1.3 percent this year. Then growth is forecast to be 1.4 percent in 2020 and 2021.In the latest Economic Bulletin, released Thursday, the European Central Bank said incoming economic data and survey information continue to point to moderate but positive growth in the euro area in the second half of this year.The International Monetary Fund on Wednesday warned that there are signs that slowdown in European trade and manufacturing is spreading into the rest of the economy.According to IMF’s Regional Economic Outlook for Europe, euro area is forecast to grow 1.2 percent in 2019 before improving marginally to 1.4 percent in 2020.European trade and manufacturing slowdown is spreading into the rest of the economy - International Monetary Fund 11/6/2019RTTNews The International Monetary Fund said there are signs that slowdown in European trade and manufacturing is spreading into the rest of the economy.According to the latest Regional Economic Outlook for Europe, the region is set to grow at the slowest pace in six years in 2019.The lender forecast 1.4 percent growth this year, the weakest since 2013. Growth is expected to rebound to 1.8 percent in 2020.Euro area is forecast to grow 1.2 percent in 2019 before improving marginally to 1.4 percent in 2020. Germany is expected to grow only 0.5 percent this year and 1.2 percent next year.A no-deal Brexit could have a sizeable impact on activity in the UK and the European Union. The UK economy is projected to expand 1.2 percent in 2019 and 1.4 percent in 2020.The IMF noted that amid high uncertainty, risks to the outlook remain to the downside, with a no-deal Brexit the key risk in the near term.The lender advised countries with ample fiscal space to take measures to boost potential output, while countries with elevated debt and deficit levels to generally proceed with fiscal consolidation.“Given elevated downside risks, contingency plans should be at the ready for implementation in case these risks materialize, not least because the scope for effective monetary policy action has diminished,” the IMF said.Subdued inflationary pressures and slowing economic activity in many European countries call for monetary policy to remain accommodative, the lender noted. The pickup in wage growth is likely to have a more muted impact on inflation.Fabrinet (FN) CEO Seamus Grady on Q1 2020 Results - Earnings Call TranscriptFabrinet (NYSE:FN) Q1 2020 Earnings Conference Call November 4, 2019 5:00 PM ETCompany ParticipantsGaro Toomajanian - Investor RelationsSeamus Grady - Chief Executive OfficerTS Ng - Chief Financial OfficerConference Call ParticipantsJohn Marchetti - StifelAlex Henderson - NeedhamJoe Cardoso - JPMorganTim Savageaux - Northland Capital MarketsOperatorGood day, ladies and gentlemen and welcome to Fabrinet’s Financial Results Conference Call for the First Quarter of Fiscal Year 2020. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions on how to participate will be given at that time. As a reminder today’s call is being recorded.I would now like to turn the call over to your host Garo Toomajanian, Investor Relations. Sir, you may begin.Garo ToomajanianThank you, operator, and good afternoon, everyone. Thank you for joining us on today’s conference call to discuss Fabrinet’s financial and operating results for the first quarter of fiscal year 2020, which ended September 27, 2019.With me on the call today are Seamus Grady, Chief Executive Officer; and TS Ng, Chief Financial Officer. This call is being webcast and a replay will be available on the Investors section of our website located at investor.. Please refer to our website for important information, including our earnings press release and investor presentation, which include our GAAP to non-GAAP reconciliation.I would like to remind you that today’s discussion will contain forward-looking statements about the future financial performance of the company. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from management’s current expectations. These statements reflect our opinion only as of the date of this presentation, and we undertake no obligation to revise them in light of new information or future events except as required by law.For a description of the risk factors that may affect our results, please refer to our recent SEC filings in particular the section captioned risk factors in our Form 10-K filed on August 20, 2019. We will begin the call with remarks from Seamus and TS, followed by time for questions.I would now like to turn the call over to Fabrinet’s CEO, Seamus Grady. Seamus?Seamus GradyThank you, Garo, and good afternoon, everyone. We delivered a strong performance in the first quarter with revenue and earnings that were above our guidance. Demand trends appear to be stabilizing in most of the end markets we serve and we’re optimistic that we are positioned to deliver strong results in the second quarter.Revenue in the first quarter was $399 million, a slight decrease from the record fourth quarter as expected, with a 6% increase from a year ago. Non-GAAP net income was $0.86 per share exceeding the high end of guidance as gross margins improved to 12% in the quarter.Looking at our business by end markets, optical communications revenue of $302 million was up about $2 million from the fourth quarter and represented 76% of total revenue. Within optical communications telecom revenue of $230 million increased 7% from the fourth quarter and represented 76% of optical revenue. This growth is particularly notable considering we had expected telecom revenue to be flat at best. Further, we expect this momentum to continue in Q2.Datacom revenue was $73 million in the quarter, an expected decrease from Q4 of 15%. Datacom represented 24% of optical communications revenue. We believe this decline is primarily the result of broader industry trends and not due to execution or competitive issues. In fact based on anticipated near-term demand, we believe datacom trends could be nearing the bottom and we expect datacom revenue to be roughly flat in Q2.By technology, silicon photonics based optical communications revenue decreased from the fourth quarter to $77 million and represented 25% of optical communications revenue. Revenue from QSFP28 and QSFP56 transceivers was $45 million down slightly from fourth quarter.By data rate, 100-gig programs continued to represent nearly half of optical communications’ revenue at $147 million. And products rated at speeds of 400 gig and above were up strongly from the fourth quarter of $38 million, or 13% of optical communications revenue.Looking at our non-optical communications business, revenue moderated sequentially as expected to $97 million from $105 million in Q4. As anticipated revenue from industrial lasers declined from the fourth quarter and was $41 million compared to $53 million in Q4. These same demand trends seem to be persisting so we anticipated industrial laser revenue to be roughly flat in Q2.Longer term, we remain optimistic about our potential to further penetrate the industrial laser market as more manufacturers inevitably turn to outsourcing to better compete in this global market that is in fact larger than the optical communications market. Automotive and sensor revenue were both stable at $24 million and $3.5 million respectively.Finally, revenue generated from other non-optical applications grew 15% sequentially to $28 million mainly from Fabrinet West. Fabrinet West has been a great success for winning business for our offshore volume manufacturing sites. We have seen numerous programs migrate from early prototyping in Fabrinet West to volume production in Thailand. At the same time. Fabrinet West has been an enabler for us to win business in new markets and with new customers that might have otherwise gone to competitors.As such, we have been focused on establishing a similar model to Fabrinet West in Israel. We already have a number of customers there and we believe we have the opportunity to grow our business with these customers as well as attract new ones.We have signed a lease for a building in Ra’anana, which is a former semiconductor manufacturing facility. It is already equipped with most of the infrastructure we need for a new product introduction center. We are currently in the process of setting up SMT lines, advance packaging and a failure analysis lab similar to what we have to support NPI in our Bangkok facilities. We have hired a General Manager for Fabrinet Israel and we are targeting to be up and running early next year.In summary, we believe we are off to a good start to the fiscal year with revenue and earnings that meet our guidance ranges and return to gross margins that were within our target range. We’re optimistic that our telecom strength will continue and the datacom trends appear to be bottoming.In addition, we’re excited to have achieved important milestones toward establishing a second new product introduction facility at Fabrinet Israel. Combined with our continued leadership as a contract manufacturer for the most complex products, we are very excited about our future.Now let me turn the call over to TS to discuss the details of our first quarter performance and our outlook. TS?TS NgThank you, Seamus, and good afternoon everyone. I will provide you with more details on our performance by end market and our financial results for Q1, as well as our guidance for Q2 for fiscal year 2020.Total revenue in the first quarter of fiscal year 2020 was $399.3 million and above the upper end of our guidance range. Non-GAAP net income was $0.86 per share and was also above our guidance range even after a foreign exchange headwind of $1.9 million and the mark-to-market loss on interest rate swap contracts of $1.7 million. These losses accounted for approximately $0.09 per share.Now turning to the details of our P&L. A reconciliation of GAAP to non-GAAP measures is included in our earnings press release and investor presentation, which you can find on our website. We were pleased to see non-GAAP gross margin in the first quarter improve to 12%, a 20 basis point increase from the fourth quarter as efficiency more than offset the impact of merit increases.Non-GAAP operating expense was $11.6 million in the first quarter. As a result non-GAAP operating income was $36.2 million and non-GAAP operating margin was 9.1% flat with the fourth quarter.Taxes in the quarter were $2.2 million and our normalized effective tax rate was less than 5%. We expect our effective tax rate to be 5% to 6% for the full year. Non-GAAP net income was above our guidance range at $32.2 million in the first quarter, or $0.86 per diluted share as I indicated earlier. On a GAAP basis, which includes share-based compensation expenses and amortizations of debt issuing costs net income for the first quarter was $25.9 million, or $0.69 per diluted share also above the high end of our guidance.Turning to the balance sheet and cash flow statement. At the end of the first quarter, cash, restricted cash and investments were $436.4 million compared to $444.7 million at the end of the fourth quarter. Operating cash flow in the quarter was $2.6 million and with CapEx of $6.3 million, free cash flow was an outflow of $3.7 million in the first quarter.During the quarter, our working capital increased to higher than normal level in support of major new program transfer. This will begin to self-correct in the second quarter as we start to consume the transfer inventory and collect receivables.We did not repurchase any shares during the first quarter. As such $62.2 million remains in our share repurchase program and we will continue to evaluate market condition to opportunistically repurchase shares when possible. I would now like to turn to our guidance for the second quarter of fiscal year 2020.As Seamus described, we expect a strong second quarter and anticipate that revenue will be between $408 million and $416 million. From a margin perspective, we are optimistic that we will see efficiency continue to drive incremental improvements in non-GAAP gross margin within our target range of 12% to 12.5%. From an EPS perspective, we anticipate non-GAAP net income per share in the second quarter to be in the range of $0.91 to $0.94 and GAAP net income per share of $0.74 to $0.77 based on approximately $37.7 million fully diluted shares outstanding.In conclusion, we are excited with our strong performance in the quarter. We remain very positive about our long-term prospects for continued leadership in the marketplace. Operator, we will now like to open the call for questions.Question-and-Answer SessionOperator[Operator Instructions] Our first question comes from the line of John Marchetti of Stifel.John MarchettiThanks very much. I appreciate you taking my question. A quick one first off Seamus. I was curious if in this quarter there was any revenue associated with that transfer program coming in. And if there is some of that in the guidance for next quarter as well?Seamus GradyHi, John. Yes. We had some revenue from the transfer program. As you may notice from our cash, we did burn cash in the quarter. And in large part that was due to inventory that we purchased in the early part of the quarter and then our shipments as you can appreciate with a big transfer like that, we did have some revenue but it was pretty much back-end loaded in the quarter.So we have some receivables that fell into this quarter. So yes, we did have some revenue in the quarter and we continue in our guidance for this quarter as well. And we think it will be probably largely ramped, I think by the end of this quarter. We’re a little bit ahead of schedule. I know previously we mentioned we thought it will be out into Q3. We think it will be largely ramped by the end of this quarter.John MarchettiSo just to be clear, by the end of this quarter you expect that whatever you’re shipping for that program will be actually coming out of your production and not just out of inventory that you purchased?Seamus GradyYes. We didn’t purchase. The only inventory we purchase was raw material. We didn’t purchase any finished goods or semi-finished goods or anything like that. So everything that was in our revenue last quarter was product we produced that will stay in this quarter. There’s a little bit more of it this quarter and we expected to be fully ramped up this quarter.John MarchettiAnd then if I can switch gears. You had a pretty significant sequential increase in the 400 and above speed check there. I’m wondering if you can talk about, if that was with existing customers and is more demand-related if there is some new customer activity mixed in there. Just any color you can give us behind sort of that ramp, that’s fairly steep in that 400 and above?Seamus GradyIt’s a combination John of both existing and new customers. I would say, the majority of that revenue came from existing customers. So as you can appreciate any volume from new customers will be small in nature, but the majority of the revenue increase on the 400 gig came from existing customers.John MarchettiAnd then lastly if I can, just curious about your comments about the datacom business getting a little bit better. What sort of visibility do you have there? And I guess what’s changed over the last quarter or so to make you feel a little bit better about that? Thanks very much.Seamus GradyNo problem, John. I think we feel like both datacom business, we think has maybe bottomed out/flattened. It was down last quarter as we said there. As expected our datacom revenue was down. We think it’s kind of bottoming out this quarter. We think last quarter was probably a low point and we think it’s flattening. So we’re not exuberant, I would say. We’re not guiding any huge increases on datacom, but we do feel I think our telecom business we think is quite strong and will be up. But our datacom business we think is still a little bit flat I would say. And that’s really based on the forecast in orders we have from our customers. We have about typically 13 weeks rolling visibility. So we have some pretty good visibility and that’s—so that’s based on the visibility we get from our customers John. Thank you, John.John MarchettiGot it. Thank you.OperatorThank you. Our next question comes from the line of Alex Henderson of Needham. Your line is open.Alex HendersonYou talked a little bit about this program that you’re moving over from Berlin. Obviously, you’ve given guidance here for the full year fiscal year and in 2020 that this could be 10% plus of your revenues. It doesn’t sound like in the first half, it’s anywhere near that. Can you talk a little bit about the cadence of when you think it can achieve or exceed that full year mark? But I would assume that at some point it has cross over and be more than 10% to get to that level for the full-year?Seamus GradyYes, Alex. The 10% comment that we made previously was in relation to Infinera as a customer in total, which will be the combination of the previous if you like existing Infinera business that we already have plus the transfer business from Berlin. So the 10% comment was not related to the Berlin business alone, the Berlin businesses in addition to the existing Infinera business so that may explain the disconnect there. I’m not sure if that’s helpful.Alex HendersonWell so I am assuming that it still isn’t over 10% at this point in time or anywhere close to it. So the comment still stands. When do you think that that program gets to a point where it’s driving the type of revenues that would put them at over 10% as a customer?Seamus GradyWell again—again we just reported 10% customers at the end of the fiscal year. We think we’ll be ramped on the transfer business by the end of this quarter. That should put us at that run rate we think for the full year.Alex HendersonRight. So a second question if I could. On the ROADMs versus ACO DCO, there seems to be a shift fairly significant shift at that between what I would call optical switching and transmission in several companies’ commentary. Can you talk to what extent you have exposure to a flattening market and the switching market and to what extent you think the acceleration in transmission can offset that?TS NgSo Alex this is TS. Again, as you know most of these ROADMs we build for one customer. And if you listen to the earnings call they—essentially they are saying for the short term it’s pretty flat. And in the long run, they still believe that it’s going to go up. So basically, whatever they say applies to us because we only have one customer on the ROADMs.Alex HendersonRight. But the question really was to what extent can you use transmission to offset that over the next couple to three quarters. Do you have enough visibility on transmission and do you sustain your share of the business when that shifts between those two segments?Seamus GradyI would say I think we do. I think the shift between let’s say transport and transmission, we have a number of customers in that space that should help us offset. But we don’t have visibility two, three quarters out. We really just have that kind of rolling 13-week visibility. But we hope to be able to capitalize on that as they—as that shift begins to unfold over the next few quarters. We have a good number of customers in that space. So we hope to be able to capitalize on that.Alex HendersonOne last question then I’ll see the floor. You indicated in past quarters that you were experiencing some lack of availability on some passive components and other fairly low cost, but critical components that are part of your production sets. Has the supply constraints on those products ameliorated, so that’s no longer a drag? Or are we still absorbing that?Seamus GradyYes. I think that if you’re like passive supply constraint that was plaguing the whole industry. If I go back maybe three quarters ago or something like that that seems to have abated ameliorate at this stage. It’s pretty much behind us. We think there’s always—we start every quarter with some challenges that our supply chain team has to go and secure. But that’s just kind of normal course of business. But at overall I think industry-wide passive constraint that was there nine months ago, a year ago that seems to have abated at this stage. There’s always certain charges here and there but nothing of any significance.Alexander HendersonGreat. Thank you very much.Seamus GradyThanks Alex.OperatorThank you. Our next question comes from Samik Chatterjee of JPMorgan. Your line is open.Joe CardosoHi, this is Joe Cardoso on for Samik Chatterjee. So, for my first question I wanted to dig in on the gross margin. I think last quarter you guided for moderation from Q4 to 1Q. And so I was just curious if we can double-click there and just figure out what has changed or what the variance was in when you guys initially guided there and what changed from what you guys reported in the first quarter.TS NgHi, this is TS. For the first quarter as in my prepared remarks, we see the efficiency more than offset the merit increase. Typically July August September we start giving merit increase for the whole year. So, that resulted about 20 basis points better than the previous quarter June quarter. So, June quarter was 11.8% and then moving to 12%.And moving forward, Q2, we don’t guide gross margin. But if you just look backward based on the guidance it showed improvement from 12%. So, we are very happy that we are back to the 12% to 12.5% range and we’ll continue to maintain that.Seamus GradyYes. Let me just maybe add a lot of the good result we have in gross margin Q1, it’s really down to a very tight cost control and efficiency gains from our team. Our internal team, the operations team, our supply chain team really do an excellent job keeping our costs under tight control and realizing efficiency gains. So, it’s mostly driven by like I say efficiency gains and cost containment.Joe CardosoAnd then—thank you. And then for my second question, relative to your commentary around the industrial laser market, it kind of seems like you guys are suggesting a little bit more of headwind or continuation of the headwinds that have been impacting that market while one of your biggest customers in the last earnings call kind of suggested that that market was dropping off if not actually improving.So, can you kind of explain what you guys are seeing there? Are you guys expecting it to trough in December and then improvement after there? Or whatever visibility you can provide will be helpful.Seamus GradyYes, I think that’s probably a fair assessment. That industry is going through a tough time right now. The competition is fierce. Spending seems to be tightening up. So that whole industry is going through a pretty turbulent time.We have a number of customers. We have probably four customers in that space right now; one customer being our bigger one. And really our shape and size in that market is a function of what’s going on with our customers, so we’re not immune from what’s happening with our customers.So, it’s pretty flat I would say. The laser market is pretty flat. Longer term we do remain quite optimistic as I might have mentioned in my prepared remarks. We do remain quite optimistic about the laser market because we think that some of the price pressure that the big companies in that space that the Western world companies if you like are feeling.We believe they will turn to outsourcing as a way to offset that pressure and will outsource more and more because to a large extent a lot of the companies in that space, they insource quite heavily they don’t outsource that much.So, we think we’re very well-positioned with the capabilities and experience we have. We think we’re pretty well-positioned to capitalize as that industry looks to outsourcing. But overall demand, I’d say short-term is kind of flat as some of our customers have indicated.Joe CardosoAll right. Thanks guys. And congrats on the results.Seamus GradyThank you.TS NgThank you.OperatorThank you. [Operator Instructions] The next question comes from the line of Tim Savageaux of Northland Capital Markets. Your line is open.Tim SavageauxHi, good afternoon and congrats on the results.Seamus GradyThanks Tim.Tim SavageauxFirst question is on the 10% customer side, do you have any 10% customers outside of your traditional customer large customer in the quarter?Seamus GradyWell, as we said, we only reported 10% customers at the end of the year. We think we’re probably tracking—we’ve mentioned Infinera will likely be a 10% customer. There’s a chance there’s another one or two who could become a 10% customer for the full year, but it’s probably too early to start flagging that at this stage. But we certainly feel we’ll have two by the end of the year, yeah.Tim SavageauxOkay. Appreciate that. And looking at telecom growth in the quarter, especially on the context the things that silicon photonics line down pretty reasonably. I wonder if you can characterize that 7% sequential growth in telecom. And then also I guess I’ve mentioned that in the context of your commentary on 400 gig growing so strongly and mostly from existing customers. But can you characterize the sequential growth either in the results or outlook or both in the context of contribution from new programs your ramp with your new customer versus existing business or existing customers?Seamus GradyYeah. A lot of the growth in telecom in the quarter, a lot of that did come from our new customers, big portion did come from our new customer. 400-gig growth is predominantly from an existing customer. And then the decline in silicon photonics, some of our silicon photonics business is telecom-related, but some of those actually is datacom related. So the overall, I suppose the two are a possible telecom growth and a decline in silicon photonics in the sense that the decline in silicon photonics is mostly for the datacom customers.Tim SavageauxAll right. Understood. And any—realizing you don’t guide by these specific segments, but I wonder if you have any kind of anecdotal commentary as you look forward to that telecom growth continuing. Do you have any similar thoughts around what you expect out of the silicon photonics as you head into next quarter and throughout the year? Do you expect that to return to growth at some point?Seamus GradySilicon photonics, I think a lot of that I think on the telecom side, we think it’s going to remain strong. And also on the datacom side with several of our customers one or two of our customers have experienced a little bit of softness in the data centers so that does affect us on the silicon photonics side. But overall we think—and again we only guide a quarter at a time. But overall I think the sentiment out there that we hear is the telecom will be quite strong and datacom is a little bit flat and will continue to be flat we think.Tim SavageauxGreat. Thanks very much. I’ll pass it on.Seamus GradyThank you, Tim.OperatorThank you. Our next question comes from Alex Henderson of Needham. Your line is open.Alex HendersonThanks. I was hoping you could give us the geographic split?TS NgIn terms of shipments, no more changes. North America shy of 50%. And the rest are split between China, the rest of the world. Southeast Asia is also a big portion. We ship quite a bit to Southeast Asia country.Alex HendersonAnd can you tell me what you said about the growth going forward in telecom again? I’m not sure I got it right in my notes. What was your expectation for telecom growth sequentially into the fourth—CY 4Q, FY 2Q?Seamus GradyWell, we haven’t guided specific growth for telecom I guess the discussion was really more around overall sentiment. The sentiment we hear from our customers is that telecom will remain, we think quite strong. Datacom is flat but we haven’t given any specific guidance for our telecom revenue forward. We think we will do in next quarter.Alex HendersonI see. And one more question if I could. Around the Israel operation when would you expect to be able to actually generate some revenues from that facility? Is that six, nine months out? Or how far out does that take?Seamus GradyI think we’ll be—we’re targeting to be up and running and ready to rock and roll in the early part of next year, so the kind of January to March time frame, so we’ll be ready to do business. But it takes a little bit of time then to when the business grows the business, but I think it should be contributing to a certain extent in the, I would say in the June quarter. We would expect to see some revenue emanating from there in the June quarter, maybe a little bit earlier but that’s what we’re thinking right now.So right now we’re fitting out the building and we’re fortunate that the building we got has a lot of the infrastructure, because it was a semiconductor manufacturing facility originally. It has a lot of the facilities infrastructure already in place. So that shortens the time line for us. And we’re planning to install the full suite of equipment, SMT equipment, optical packaging equipment and very importantly for our customers full failure analysis capability there. So we’ll replicate all these on a smaller scale, the same set of capabilities that we have in Bangkok actually.Alex HendersonDo you see that facility as being roughly comparable sized to Fabrinet West?Seamus GradyIt’s a smaller facility. In terms of square footage it smaller. The Fabrinet West facility it’s a great location it’s a great facility. The building itself is probably a little bit bigger than what we would actually need. So it’s a smaller facility. I think terms of square footage it’s about...TS Ng20,000.Seamus GradyRoughly 20,000 square feet. So it’s an ideal size actually for what we need. And similar to Fabrinet West, it’s not going to be a huge revenue generator in and of itself. The main purpose of Fabrinet Israel will be to win customers that we then transfer to Bangkok. So we’ll try and replicate the success we’ve had in Fabrinet West in Israel.Alex HendersonI see. Can you give us any sense of what’s going on in terms of your factory utilization in your facilities when you might need to start moving on the next facility? Can you give us an update on that?Seamus GradyYes. So we continue to create additional space at our main campus in Pinehurst and win new business in Chonburi. It’s hard to say Alex really because we’ve been very successful. We probably surprised ourselves how successful we’ve been at gaining efficiencies and freeing up space in Pinehurst. So we’re growing our Pinehurst facility our Pinehurst revenue on the same footprint. We’re adding our new business into Chonburi.It’s really hard to say at this point when we’ll be ready to—I’ll put it this way if everything we have in the pipeline lands we’ll be hurrying up but not everything will land. So I think we’re still very optimistic I would say, about the need for us to grow Chonburi.And like I say if everything we have in the pipeline lands, we’ll have to get going quickly. But it’s very hard to put a date on that. I’m not being evasive it’s just it’s quite hard to put a date on it because like I say a lot of the growth with our existing customers will be in Pinehurst whereas Chonburi will be really more for the newer customers.Alex HendersonAll right. One last question if I could since it sounds like you don’t have too many in the queue. The 400 gig commentary, can you talk a little bit about whether that’s on the telco side whether that’s 400 gig or 600 gig? I assume that’s mostly 600-gig product within that mix for telco. Is that correct?Seamus GradyIt’s a mixture of 400.Alex HendersonIn Datacom?Seamus GradyYes, yes mostly 400 gig, yes.Alex HendersonIn datacom that’s 400 gig but what about on the telecom side?Seamus GradyOn the telecom side yes, that will be 400 gig.TS NgMajority 400 gig, yes. Excluding the 600 gig that 1.2 terabytes that’s excluded from the number Seamus just quoted.Alex HendersonThank you.Seamus GradyThanks, Alex.OperatorThank you. Our next question is a follow-up from John Marchetti of Stifel. Your line is open.John MarchettiThanks very much. Seamus, if I can just follow-up a little bit on that Israel site. It seems a little bit of a departure from the last couple of quarters, where it seemed like you had actually been backing off a little bit on the expectation there. Curious, if something changed in the environment or you just found an opportunity that or even just decided itself that made sense to kind of move forward your—that sort of changed at least what I perceived to be the trajectory of that business. And just secondarily, if you can comment at all about the mix expected in there. I’m curious if this is mostly non-optical type of revenue that you think you’re going to go after in this market or if it’s a similar to the Fabrinet West, where it’ll be a little bit of a mix of everything.Seamus GradyGood question. I think on the timing on the trajectory, we’ve always been I would say quite bullish on the need for us to bring up our facility in Israel. The hold up really John was just frankly being able to find the right location. We think Israel is a great location we have three or four existing customers there, so we’ll be looking to service their needs and also grow our business there.So the customers we have, we’ve spoken to them and they’re very supportive of the idea. Our hold up if you like was just it’s literally finding the right location. There’s a lot of let’s say, incentives, government incentives to build in locations that would not be ideal for us.We’re—if you look at what we’ve done in Fabrinet West, we were right in the middle of Silicon Valley. Location is very important and it’s the same in Israel. So it was really about just finding the right location and we’ve done that we’ve managed to find the right location. As to the mix, I mean our existing customers, let me just think for a moment are all optical communications companies.TS NgAnd mostly datacom.Seamus GradyYes. And mostly datacom. Our existing Israeli customers are all optical communications companies mostly datacom. So, we would be looking to obviously continue to grow business with those companies and add other communications companies, but also other non-communications companies that are in our technology sweet spot if you like of precision complex products, it’s just LIDAR and other applications. And we’re not limiting ourselves to optical, but we are limiting ourselves to high-technology complex infrastructure type products that was transferred to Thailand.John MarchettiThanks, very much Seamus.Seamus GradyThanks, John.OperatorThank you. We have a follow-up question from Tim Savageaux of Northland Capital Markets. Your line is open.Tim SavageauxThanks. Wanted to focus back on your commentary on the pipeline, and I wonder if you can give us an update as to what extent kind of customers OEMs moving supply chains out of China is contributing to that pipeline I guess. In past calls, you characterize that is a tailwind, but pretty far out. I wonder if now that another quarter has passed, if you can give us an update on kind of what type of opportunities you might be seeing from this kind of shifts in global supply chain. Thanks.Seamus GradySo that’s—I would say that’s still a tailwind, but still quite slow to move. Some of the pipeline that I referenced earlier is both a function of that, but it’s really more a function of just continuing to grow our business with our existing customers and also adding new customers. We have a few big, I would say big opportunities in the pipeline and some of the things that we’re quite excited about are some of the opportunities really moving up the food chain for us, moving up into the full system build full network systems.With the business, we have transferred from Berlin that gives us experience now with that full network system. We have some other business in that same space. So, we think we’re kind of uniquely positioned that goes in our industry and that we’re approaching the full system build from the—if you like from the bottom up. We are producing the most complex high-technology components within the network system, so we think it makes sense for us to move up the food chain and produce the modules in the full system that goes with that. So, that’s in large part what we’re targeting Tim. And like I say, we have some pretty exciting opportunities there that we’re pursuing.Tim SavageauxIf I could just follow up on that quickly. In your—I imagine that comment in terms of moving up to the full systems level remains focused on optical communications, optical transport or are there kind of other parts of the networking universe where you see as opportunities?Seamus GradyIt’s mostly as you said the optical infrastructure equipment that the networking equipment. We’re not planning to become, if you like a general large system producer for like the storage equipment or anything like that. That’s just not in our sweet spot. It really only makes sense for us when we’re producing a large portion of the high-technology components and content that goes into those systems.So—and it also make sense for us. Let’s say, it doesn’t make sense for us to produce large systems, but we’re not producing any of the content if you know what I mean. So, we would not see ourselves as just as an assembler. We will see ourselves as a high-technology producer of the industry’s most complex technology and components. Therefore it makes sense for us to produce the full system. Does that makes sense Tim?Tim SavageauxSure, it does. Thanks very much.Seamus GradyThank you, Tim.OperatorThank you. At this time, I’d like turn the call back over to Seamus Grady for any closing remarks. Sir?Seamus GradyThank you, operator. Thank you all for joining our call today. We’re excited to deliver strong results and a positive outlook as we continue to position the company for continued growth and diversification over the longer term. And we look forward to speaking with you again soon. Thank you and goodbye.OperatorLadies and gentlemen, this concludes today’s conference call. Thank you for participating. You may now disconnect.FlexEnable acquired Merck’s portfolio of best-in-class, high-performance Organic Thin-Film Transistor (OTFT) materials, including revolutionary and highly-patented organic semiconductors and dielectricsFlexEnable is the first company to offer a complete solution - materials and processes - for the production of low-cost, large-area flexible displays and OTFT devicesCAMBRIDGE, England, Nov. 7, 2019 /PRNewswire/ -- FlexEnable, the leader in the development and industrialisation of flexible organic electronics, has acquired Merck’s portfolio of best-in-class, high-performance Organic Thin-Film Transistor (OTFT) materials, including revolutionary and highly-patented organic semiconductors and dielectrics. The deal makes FlexEnable the first company to offer display manufacturers both the only OTFT materials which are proven to have higher performance than amorphous silicon, and an entire package of industrially-proven manufacturing processes needed for production of flexible organic liquid crystal displays (OLCD) of any size. With this material set and manufacturing IP, flat panel display companies can produce low-cost, area-scalable flexible displays, sensors and devices for mass-market applications such as consumer electronics, automotive, retail and beyond.The acquisition of Merck’s OTFT materials – now branded as FlexEnable FlexiOM? – includes over 300 patents covering materials, processes and devices. This brings FlexEnable’s total number of organic electronics patents to over 1,000. FlexiOM? materials, together with FlexEnable’s proprietary low-temperature processes, allow glass TFT backplanes to be replaced with flexible OTFT backplanes enabling thin, lightweight, shatterproof and flexible devices. The deal includes all of the trailblazing IP and know-how developed by Merck over nearly 20 years, as well as the necessary materials supply chain. FlexEnable is now employing key members of technical staff responsible for the development of the materials and intends to continue to advance and broaden this materials platform going forward.“Across industries such as consumer electronics and automotive, flexible displays are the catalyst for the next generation of experiences and products,” said Chuck Milligan, CEO of FlexEnable. “We have been working closely with Merck’s organic materials portfolio and team for many years and we saw here a unique synergy with our expertise that would put us ahead of the competition to replace flat glass displays in what is currently a $100 billion addressable market. The addition of FlexiOM? materials to our industry-leading processes will significantly increase our revenue opportunity and further strengthen our business model, while providing a rapid route for display makers to commercialise large-area flexible displays needed now for many applications.”“We are delighted to be able to offer our customers the world’s strongest organic electronics materials set, and also to welcome our new team members coming from Merck. We are also excited to welcome new customers requiring these high-performance organic materials for a broad spectrum of applications outside of displays.” added Chuck Milligan.The addition of the FlexiOM? OTFT materials to the FlexEnable portfolio lowers the barrier to entry for flexible OLCD production in existing LCD factories. Display manufacturers and OEMs can for the first time license technical processes and the requisite materials as a complete solution, accelerating the adoption of OLCD on existing flat panel display production lines with minimal capital expenditure, while still utilising the rest of their existing LCD supply chains. FlexEnable’s FlexiOM? OTFT materials are available immediately to customers worldwide for any organic electronics applications.About FlexEnableWith over 1000 patents and more than 1000 engineering years in the development of organic materials and manufacturing processes, FlexEnable is the worldwide leader in organic electronics. We have developed and industrialised a complete low-temperature manufacturing process for small and large-area organic electronics on ultra-thin plastic substrates. FlexEnable also owns the best-in-class, highest-performance organic materials - FlexiOM? - making us the only company to offer both materials which are better than amorphous silicon and industrially-proven enabling manufacturing processes. FlexEnable is bringing organic electronics technology to market in a fabless business model. Our processes and solutions have been developed to be run on existing flat panel display lines, leveraging existing assets and supply chain. Applications for FlexEnable’s technology include flexible displays for consumer electronics and automotive interiors, flexible sensors and optics. FlexEnable supplies FlexiOM? materials and transfers and licenses its unique technology platform to display manufacturers. We also work directly with OEM and Tier 1 companies on developing next generation products, from design to prototyping and product qualification all the way to volume production.For more information please visit or contact info@.Media Contact: pr@, 0208 811 2474SOURCE FlexEnableGerman industrial production output fell 0.6% in September as Manufacturing fueled the decline, while construction and energy increasedProduction fell 0.6% in September vs. estimated 0.4% dropFactory orders rebounded in sign worst of slump may be pastNovember 7, 2019By Yuko TakeoBloombergGerman industrial production continued to worsen, putting a damper on recent signals of improvement in the euro area and its largest economy.Output fell 0.6% in September, compared with economist estimates for a slide of 0.4%. Manufacturing fueled the decline, while construction and energy increased. The reading follows reports showing German factory orders rose more than expected and a gauge for private-sector activity in the euro area edging up.German economy is on brink of recessionAny road to recovery will be long. While Siemens AG’s Chief Executive Officer Joe Kaeser told Bloomberg TV he expects the downturn to “level out over the next six months,” the company warned that weakness in the auto and factory equipment industries will lead to a decline in some business volumes next year.German industry output was down an annual 4.3% at the end of the third quarter, when the country probably sank into a technical recession.What Bloomberg’s Economists Say“September production data complete the picture for the third quarter and show industry acted as another big drag on economic growth. Assume growth in services was a little slower as well, and it seems likely the economy contracted slightly in the third quarter—that would mark a technical recession.”Jamie Rush. Read the GERMANY REACTChancellor Angela Merkel’s economic advisers lowered their growth forecasts for this year and next, warning that the protracted industry slump threatens to draw down the broader economy.“The weakness in industry is not yet overcome,” the economy ministry said in a statement Thursday. “But the recent slight improvement in orders and business expectations brightened the outlook for the fourth quarter somewhat.”SEPTEMBERAUGUSTManufacturing-1.3%0.8%? ?basic goods-1.3%0.9%? ?investment goods-1.5%1.3%? ?consumer goods-0.5%-0.9%Energy2.0%-0.6%Construction1.8%-1.1%The continued frailty puts further pressure on governments to step up fiscal spending, a message pushed by former ECB President Mario Draghi before his term ended last week and is expected to be continued by his successor Christine Lagarde. The central bank announced a contentious new monetary-stimulus package in September in an attempt to revive growth and inflation.Yet governments have been reluctant, with Germany sticking to its stance that Europe’s economic engine will pull through its current trough without a spending jolt. Finance Minister Olaf Scholz said Wednesday there’s no immediate need for a fiscal stimulus package to pump up growth.Momentum may pick up in coming months as uncertainty recedes. China and the U.S. have agreed to proportionally roll back tariffs on each other’s goods in phases, suggesting the trade war that’s cast a shadow over the world economy might finally de-escalate.Any such deal would be good news for export-reliant Germany, where trade has been a drag on output in four of the past five quarters for which data are available.Global semiconductor market likely to grow 6 percent in 2020! November 07, 2019By Pradeep Chakraborty EMSNowGiven the depressing run, so far, in 2019, how is the global semiconductor industry going to perform in 2020? The mid-year global semiconductor sales was down 14.5 percent, compared to 2018, as per the Semiconductor Industry Association (SIA).Recently, SIA reported that the global semiconductor sales had increased 3.4 percent month-to-month in September 2019. Q3 sales were 8.2 percent higher than Q2, but 14.6 percent less than Q3 of 2018. Are there any hopes for a better 2020? Let’s find out!I asked Len Jelinek, senior director, Semiconductor Manufacturing at IHS Markit, the key question regarding the global semiconductor industry’s performance in 2020.Hold it, recovery in sight!Indeed, there are hopes! Len Jelinek said, “In 2020, IHS Markit now anticipates that the market will rebound slightly and achieve a 6% YoY revenue growth.” Now, that’s excellent news for everyone in the global semiconductor industry!Regarding the noticeable trends next year, he added that the market in 2020 will be driven by two significant factors. One, the return to growth for global server expansion, and two, the introduction of 5G handsets.“The first factor will drive stabilization in memory pricing, while the second factor is very likely to drive TSMC’s revenue for advanced component manufacturing to record levels. As next-generation handsets become available and at lower prices, the consumer is very likely to transition very quickly to the next generation of technology.”Automotives key?How is automotive going to be a significant application in future? What other segments are likely to grow?Jelinek said: “Any automotive discussion needs to start with the fact that the automotive semiconductor represent approximately 10-12 percent of the total chip market. As the automotive industry recovers from the disastrous year in 2019, the trends in the industry will be for smarter, safer and more ecologically friendly cars. These consumer-driven demands will help to drive component suppliers in power, discrete and analog.“Beyond automotive, the wireless and the server markets are expecting to see modest growth in the industrial market segment. Security, medical and other markets are forecast to rebound.”As for the emerging new opportunities in automotive, IoT, AI and AR/VR, he added: “In automotive, the most exciting new technology is the silicon carbide (SiC) used in high-voltage applications targeting HEVs. In AI and AR/VR, it’s all about the enablement of development through advances in chip technology.”As per Rohm, SiC is emerging as the most viable candidate for a next-generation, low-loss semiconductor element due to its low ON resistance and superior high temperature, high frequency, and high voltage performance as compared to silicon.What about foundries?Foundries are said to be performing a bit below par. Are they? Let’s see how are China and Taiwan are driving the growth of foundry services.He replied: “TSMC is the dominant pure-play foundry company. With its leadership position in advanced manufacturing, including next-generation packaging, no other foundry is likely going to challenge TSMC in 2020.“In China, growth of the domestic foundries is being supported by the government initiatives for ‘Made in China.’ More specifically, China wants to guarantee the availability of semiconductors. Although the Chinese foundries are behind the Taiwanese foundries, they are rapidly closing the technology gap.”Miniaturization of electronic componentsAnother trend has been the rising demand for miniaturization of electronic components.He added: “If you are meaning advanced packaging (heterogeneous packaging or chiplets), advances here will allow designers to bring together dissimilar technologies within the same package for more optimal results. This is one of the most exciting areas within the industry.“Advanced packaging technologies are providing the industry with a roadmap to continue Moore’s Law by improving the system performance, without only focusing on lithography shrinks.”Memory recovers, finally?Lastly, it has been quite a distressing time for memory, recently. Yole Développement said that in Q2 2019, the memory business was approaching the bottom. So, how will the memory market perform well in 2020?Jelinek replied: “In 2020, the overall memory market is forecast to make a strong recovery. Although we will not surpass the record revenue on 2018, total memory will grow by 12% after a disastrous 2019, where revenue is forecast to decline by 30.3%. DRAM is forecast to grow by 9%, while NAND will grow by 17% in 2020.”Global Unichip to see revenues rebound in 4Q19; October revenues were NT$909 million, up 20.1% sequentiallyCage Chao, Taipei; Jessie Shen, DIGITIMES Thursday 7 November 2019 IC design service company Global Unichip is expected to see monthly revenues rebound to over NT$1 billion (US$32.9 million) for both November and December, with revenues for the fourth quarter likely to jump at least 30% sequentially, according to market observers.Significant growth in revenues generated from orders for non-recurring engineering (NRE) designs, as well as orders for ASIC design services, will be fueling Global Unichip’s overall sales momentum in the fourth quarter, said the observers.Global Unichip has disclosed October revenues of NT$909 million, up 20.1% sequentially. The company saw its NRE business revenues climb 94.6% on month to NT$224 million, while revenues generated from its ASIC design services grew 11.8%.Fellow company Alchip is also expected to enjoy revenue growth of 20-30% sequentially in the fourth quarter, market observers indicated. Both Alchip and Global Unichip are partnering with TSMC, and have landed a ramp-up in orders mainly those demanding sub-16nm process manufacturing from China-based fabless chipmakers, the observers said.Robust sub-16nm chip demand from China will be buoying revenues and profits at both Global Unichip and Alchip in the first half of 2020, the observers continued.Hanwha Techwin is highlighting their model HM520 cutting-edge modular mounterCYPRESS, CALIFORNIA – November 7, 2019 - Hanwha Techwin Automation Americas, formerly Samsung C&T Automation, is highlighting their model HM520 cutting-edge modular mounter, which features mixed production capabilities to maximize floor space by multiplying setup and changeover efficiency.With the HM520, single or dual-lane operation is standard configuration. Dual-lane provides non-stop production capability with independent setup and changeover of either lane without stopping production of the opposite lane. Mixed sized and different product PCBs are fully supported. Single sourced line solutions are available through Hanwha complete with mixed production printers, reflow and other peripheral machinery.Schedule a demonstration at Hanwha’s Center of Excellence in Cypress, CA or at select satellite demonstration facilities throughout North America.An HM series Mixed Production Line will be on exhibit in booth 1645 at IPC APEX 2020 in San Diego, CA, February 4-6, 2020.For more information on Hanwha Techwin, please visit .About Hanwha TechwinHanwha Techwin provides synergized SMT assembly solutions combined with world-class service and support throughout North America. Solutions include state-of-the-art printing, placement, reflow and board handling technologies to achieve high quality and price-performance without compromising flexibility and growth path on demand. All systems include installation, training, warranty, 24/7 technical phone support, next business day onsite support, next business day shipment of emergency spare parts, and free MMI software upgrades for life on select gear.Contact:Jonny NicholsDirector of Sales & MarketingHanwha Techwin Automation Americas, Inc.6000 Phyllis DriveCypress, CA 90630Ph: 714-373-4200E-mail: jonny.n@Web Site: Himax Technologies, Inc. Reports Third Quarter 2019 Financial Results and Provides Fourth Quarter 2019 GuidanceCompany Meets Q3 2019 Revenue, Gross Margin and EPS Guidance Provides Q4 2019 Guidance Revenue to be around Flat Sequentially, Gross Margin to be Slightly Up Sequentially, IFRS Loss per Diluted ADS to be around 3.0 to 4.5 Cents, and Non-IFRS Loss per Diluted ADS to be around 2.7 to 4.2 CentsQ3 revenue decreased 3.0% sequentially to $164.3M, in line with the Company’s guidanceProduct sales: large driver ICs, 30.5% of revenue, down 15.6% QoQ; small and medium-sized driver ICs, 46.9% of revenue, down 5.6% QoQ; non-driver products, 22.6% of revenue, up 31.1% QoQQ3 IFRS gross margin was 19.5%, flat sequentiallyQ3 IFRS loss was $7.2M, or 4.2 cents per diluted ADS, down from loss of $5.2M, or 3.0 cents per diluted ADS in Q2 2019Q3 Non-IFRS loss was $6.9M, or 4.0 cents per diluted ADS, down from loss of $4.8M, or 2.8 cents per diluted ADS in Q2 2019Q3 IFRS gross margin declined 390 bps year-over-year largely due to pricing pressure and high material cost in LDDIC and smartphone TDDI segments as well as significantly more shipments of lower end TDDI, offset by higher margin from increased WLO shipments which led to higher capacity utilization2H19 smartphone TDDI growth below Company’s target: New FHD+ TDDI project opportunities did not materialize due to accelerating adoption of AMOLED display adoption and TDDI adoption is shifting more towards mid- to low-end models where the Company has low market share. Furthermore, TDDI pricing pressure fueled by the increased competition negatively impacting its marginsExpects automotive and tablet DDIC sales to grow in Q4Q3 WLO revenue increased substantially due to a pickup in shipments to fulfill an anchor customer’s higher seasonal demand. Expects a slightly lower shipment volume sequentially in the fourth quarter Company has adjusted structured light-based 3D sensing development to focus on applications for non-smartphone segments; actively pursuing smartphone makers’ ongoing time-of-flight (ToF) 3D sensing projects with ecosystem partners by providing WLO opticsCompany’s strategy is to focus on delivering P&L improvement by executing on the technologies it already developed for both DDIC and non-DDIC areaCompany remains positive on its long-term business outlookTAINAN, Taiwan, Nov. 07, 2019 (GLOBE NEWSWIRE) -- Himax Technologies, Inc. (HIMX) (“Himax” or “Company”), a leading supplier and fabless manufacturer of display drivers and other semiconductor products, announced its financial results for the third quarter ended September 30, 2019.SUMMARY FINANCIALSThird Quarter 2019 Results Compared to Third Quarter 2018 Results (USD in millions) (unaudited)?Q3 2019Q3 2018CHANGENet Revenue$164.3$188.4-12.8%Gross Profit$32.0$44.1-27.5%Gross Margin19.5%23.4%-3.9%IFRS Profit (Loss) Attributable to Shareholders($7.2)$0.9-907.6%Non-IFRS Profit (Loss) Attributable to Shareholders($6.9)(1)$4.5(2)-254.3%IFRS EPS (Per Diluted ADS, USD)($0.042)$0.005-907.6%Non-IFRS EPS (Per Diluted ADS, USD)($0.040)(1)$0.026(2)-254.3%?(1)?Non-IFRS Loss attributable to common shareholders and EPS excludes $0.1 million of share-based compensation expenses, net of tax and $0.2 million non-cash acquisition related charge, net of tax. In 2019, Himax did not issue restricted share units (RSU), part of the Company’s share-based compensation, to employees in September like previous years.(2)?Non-IFRS Profit attributable to common shareholders and EPS excludes $3.1 million of share-based compensation expenses, net of tax and $0.5 million non-cash acquisition related charges, net of tax.Third Quarter 2019 Results Compared to Second Quarter 2019 Results (USD in millions) (unaudited)?Q3 2019Q2 2019CHANGENet Revenue$164.3$169.3-3.0%Gross Profit$32.0$32.9-2.8%Gross Margin19.5%19.5%-IFRS Profit (Loss) Attributable to Shareholders($7.2)($5.2)-39.4%Non-IFRS Profit (Loss) Attributable to Shareholders($6.9)(1)($4.8)(2)-44.0%IFRS EPS (Per Diluted ADS, USD)($0.042)($0.030)-39.4%Non-IFRS EPS (Per Diluted ADS, USD)($0.040)(1)($0.028)(2)-44.1%?(1)?Non-IFRS Loss attributable to common shareholders and EPS excludes $0.1 million of share-based compensation expenses, net of tax and $0.2 million non-cash acquisition related charge, net of tax.?In 2019, Himax did not issue restricted share units (RSU), part of the Company’s share-based compensation, to employees in September like previous years.(2)?Non-IFRS Loss attributable to common shareholders and EPS excludes $0.02 million of share-based compensation expenses, net of tax and $0.4 million non-cash acquisition related charge, net of tax.?2019 Year-to-Date Results Compared to 2018 Year-to-Date Results (USD in millions) (unaudited)?2019 YTD2018 YTDCHANGENet Revenue$496.9$532.6-6.7%Gross Profit$101.8$122.5-16.9%Gross Margin20.5%23.0%-2.5%IFRS Profit (Loss) Attributable to Shareholders($14.7)$0.1-13920.8%Non-IFRS Profit (Loss) Attributable to Shareholders($13.6)(1)$4.2(2)-425.0%IFRS EPS (Per Diluted ADS, USD)($0.085)$0.001-13919.5%Non-IFRS EPS (Per Diluted ADS, USD)($0.079)(1)$0.024(2)-425.0%?(1)?Non-IFRS Loss attributable to common shareholders and EPS excludes $0.1 million of share-based compensation expenses, net of tax and $1.0 million non-cash acquisition related charge, net of tax. In 2019, Himax did not issue restricted share units (RSU), part of the Company’s share-based compensation, to employees in September like previous years.(2)?Non-IFRS Profit attributable to common shareholders and EPS excludes $3.3 million of share-based compensation expenses, net of tax and $0.8 million non-cash acquisition related charges, net of tax. “2019 has been a challenging year for Himax. Uncertainty in the global economy continues to overshadow the marketplace, where we are seeing waning demand in all industries that consume display. This, combined with prevailing LCD industry capacity oversupply, has led to severe pricing pressure for panels which inevitably affected the sales and margin of display driver IC across all of our major product segments including TV, smartphone and automotive,” said Mr. Jordan Wu, President and Chief Executive Officer of Himax.“As we look forward, although at this time we have limited visibility, we do not anticipate the business environment to improve in the near term. Our strategy is to focus on delivering P&L improvement by executing on the technologies we already developed for both driver IC and non-driver IC areas,” concluded Mr. Jordan Wu.Third Quarter 2019 Revenue Breakdown by Product Line (USD in millions) (unaudited)?Q3 2019%Q3 2018%% ChangeDisplay drivers for large-sized panels$50.130.5%$66.335.2%-24.5%Display drivers for small/medium-sized panels$77.146.9%$85.045.1%-9.2%Non-driver products$37.122.6%$37.119.7%-0.1%Total$164.3100.0%$188.4100.0%-12.8%??Q3 2019%Q2 2019%% ChangeDisplay drivers for large-sized panels$50.130.5%$59.335.0%-15.6%Display drivers for small/medium-sized panels$77.146.9%$81.748.3%-5.6%Non-driver products$37.122.6%$28.316.7%+31.1%Total$164.3100.0%$169.3100.0%-3.0%??????2019 Year-to-Date Revenue Breakdown by Product Line (USD in millions) (unaudited)?2019 YTD%2018 YTD%% ChangeDisplay drivers for large-sized panels$179.436.1%$186.335.0%-3.7%Display drivers for small/medium-sized panels$226.445.6%$245.946.2%-7.9%Non-driver products$91.118.3%$100.418.8%-9.2%Total$496.9100.0%$532.6100.0%-6.7%The Company recorded net revenues of $164.3 million, a decrease of 3.0% sequentially and a decrease of 12.8% year-over-year. The sequential decline was mainly due to the anticipated lower sales into TV and smartphone segments. Gross margin was flat sequentially at 19.5%. IFRS loss per diluted ADS was 4.2 cents. Non-IFRS loss per diluted ADS was 4.0 cents.Revenue from large display drivers was $50.1 million, down 15.6% sequentially, and down 24.5% year-over-year. Clouded by panel makers’ ongoing inventory correction driven by weak TV demand and industry-wide oversupply, Himax’s large panel driver ICs continued to experience lower shipments and pricing erosion in the third quarter. Large panel driver ICs accounted for 30.5% of the Company’s total revenues for the quarter, compared to 35.0% in the second quarter of 2019 and 35.2% a year ago.Revenue for small and medium-sized display drivers came in at $77.1 million, down 5.6% sequentially and down 9.2% year-over-year. The segment accounted for 46.9% of total sales for the third quarter, as compared to 48.3% in the second quarter of 2019 and 45.1% a year ago. The sequential revenue decrease was mainly due to lower smartphone TDDI and tablet sales, while automotive segment recorded better-than-expected sales. The year-over-year decline was mainly due to lower automotive and tablet driver IC sales. Automotive sales worldwide declined sharply since Q4 2018 over worries of economic slowdown and trade conflicts.Sales into smartphones were down 7.7% sequentially but up 32.8% year-over-year. The sequential decline was mainly due to lower TDDI shipments. As indicated in the last quarter’s earnings call, the Company’s TDDI sales were challenged by accelerating AMOLED display adoption and rapid ASP erosion caused by increased competition. On a year-over-year basis, Himax’s TDDI shipment doubled as its fulfillment was capped last year by capacity constraint. Sales of the traditional DDICs declined by 1.9% sequentially but increased 6.4% from last year. Display drivers for tablet and other consumer products were down 16.1% sequentially, better than the Company’s guidance of decrease by around 25%, because of customers’ inventory replenishment and more sales into white-box market on the backdrop of a shrinking global tablet market. Year-over-year sales of this segment declined 33.9%.Driver IC revenue for the automotive application was up 6.1% sequentially. It was down 19.7% from the same period last year due to the declining auto shipments for the reasons stated above.Revenues from non-driver businesses were $37.1 million, up 31.1% sequentially and flat year-over-year. Non-driver products accounted for 22.6% of total revenues, as compared to 16.7% in the second quarter of 2019 and 19.7% a year ago. The sequential increase was mainly due to higher WLO and CMOS image sensor shipments, offset by lower timing controller sales.Gross margin for the third quarter was 19.5%, flat sequentially but down 390 basis points from the same period last year. The year-over-year decline can largely be attributed to smartphone TDDI ASP erosion due to increased competition and significantly more shipments of TDDI for the low-end market. Moreover, the Company’s large panel driver IC businesses continued to experience pricing pressure caused by industry-wide TV panel oversupply and high material cost. Nevertheless, the gross margin of the WLO business improved from the same period last year because the increased shipments to an anchor customer have led to higher capacity utilization. Likewise, on sequential basis, the gross margin improvement delivered by more WLO shipments was offset by the slowdown in sales and downward price trends for smartphone TDDI and LDDIC.IFRS operating expenses were $39.7 million in the third quarter, up 2.0% from the preceding quarter but down 8.5% from a year ago. The sequential increase was caused by increased salary expenses. The year-over-year decrease was mainly a result of reduced restricted share units (RSU) as the Company did not issue RSU like it did in the previous years. RSU is part of the Company’s share-based compensation which it usually rewards employees at the end of each September. Non-IFRS operating expenses for the third quarter were $39.3 million, up 2.3% from the previous quarter and up 1.2% from the same quarter 2018.On September 23, 2019, Himax’s compensation committee approved an employee stock option plan of up to 3,000,000 units for the same number of Himax ADSs with exercise price being the fair market value of the grant date. On September 30, 2019, the Company granted 2,226,690 units of stock option to certain employees at an exercise price of $2.27. The remaining 773,310 units of stock option can be granted to employees by September 6, 2022 when the current long-term incentive plan will expire. For the portion which has been granted, the Company expects to recognize stock option related compensation expense of $0.33 million in each of Q4 2019 and Q1 2020, and additional $0.12 million in each of Q2 and Q3 2020.IFRS operating margin for the third quarter was -4.7%, down from 0.4% in the same period last year and down from -3.5% in the prior quarter. The sequential decrease was primarily a result of lower sales and higher operating expenses. The year-over-year decline was a result of lower sales and gross margin, offset by lower operating expenses due to reduced RSU expenses as mentioned earlier.Third quarter non-IFRS operating loss was $7.3 million, or -4.4% of sales, versus non-IFRS operating income of $5.4 million, or 2.9% of sales, for the same period last year and down from -3.2% a quarter ago. The sequential and year-over-year declines were for the same reasons stated above.IFRS loss for the third quarter was $7.2 million, or 4.2 cents per diluted ADS, compared to loss of $5.2 million, or 3.0 cents per diluted ADS, in the previous quarter and IFRS profit of $0.9 million, or 0.5 cents per diluted ADS, a year ago.Third quarter non-IFRS loss was $6.9 million, or 4.0 cents per diluted ADS, compared to non-IFRS loss of $4.8 million, or 2.8 cents per diluted ADS last quarter and non-IFRS profit of $4.5 million, or 2.6 cents per diluted ADS the same period last year.Balance Sheet and Cash FlowHimax had $128.0 million of cash, cash equivalents and other financial assets as of the end of September 2019, compared to $102.9 million at the same time last year and $122.4 million a quarter ago. The cash position increased $5.6 million from last quarter due primarily to operating cash inflow of $24.0 million and additional unsecured borrowings of $13.6 million, offset by a capex of $31.2 million. On top of the cash position, restricted cash was $164.0 million at the end of the quarter, almost the same as the preceding quarter and a year ago. The restricted cash is mainly used to guarantee the secured short-term borrowing for the same amount. The Company had $90.6 million unsecured short-term loan at the end of Q3 versus $77 million a quarter ago.Himax’s inventories as of September 30, 2019 were $167.6 million, down from $188.5 million a quarter ago but up from $145.8 million a year ago. Accounts receivable at the end of September 2019 were $157.3 million, down from $176.2 million last quarter and $187.6 million a year ago. DSO was 86 days at the end of September 2019, as compared to 96 days a year ago and 96 days at the end of the last quarter. As highlighted in the last earnings calls, in response to capacity shortage of foundry and certain packaging material, the Company had to keep the inventory level higher than usual last year. Given the prevailing uncertain market conditions and easing of foundry capacity, the Company has started to control its inventory level since the first quarter of cash inflow from operating activities for the third quarter was $24.0 million as compared to an inflow of $2.2 million for the same period last year and an outflow of $17.7 million last quarter. The QoQ and YoY cash flow change was mainly a result of lower receivables and inventory.Third quarter capital expenditures amounted to $31.2 million, versus $8.2 million a year ago and $5.7 million last quarter. The majority of the third quarter capex, totaling $29.2 million, consisted of $27.5 million payment for land purchase, and ongoing payments for the new building’s construction and WLO capacity expansion. The remaining $2.0 million was the investment in design tools and R&D related equipment for the Company’s traditional IC design business. By the end of Q3, Himax has concluded substantially all the capex payments for the new land, building and 3D sensing project with just $1.6 million left to be made in the fourth quarter.Share Buyback UpdateAs of September 30, 2019, Himax had 172.2 million ADS outstanding, little changed from last quarter. On a fully diluted basis, the total ADS outstanding are 172.6 million.Q4 2019 OutlookAs the Company mentioned last quarter, 2019 has been a challenging year for Himax. Uncertainty in the global economy continues to overshadow the marketplace, where the Company is seeing waning demand in all industries that consume display. This, combined with the prevailing LCD industry capacity oversupply, has led to severe pricing pressure for panels which inevitably affected the sales and margin of display driver IC across all major product segments including TV, smartphone and automotive. As the Company looks forward, although at this time it has limited visibility, the Company does not anticipate the business environment to improve in the near term. The Company’s strategy is to focus on delivering P&L improvement by executing on the technologies it already developed for both driver IC and non-driver IC areas.One of Himax’s major focus areas for business during 2019 has been TDDI for smartphone. This business was negatively impacted by the severe foundry capacity shortage that occurred during 2018 and resulted in the Company’s inability to meet customers’ delivery requirements. Although the capacity constraint was resolved toward the end of 2018, the delay eliminated the Company’s ability to participate in major design-in opportunities that would have driven the business in 2019. While it expects the 2019 smartphone TDDI sales to increase more than 40% against last year, the growth will be below the target the Company set for itself. Even the outlook for smartphone TDDI remain weak in Q4, the Company does anticipate a strong rebound for Q1 2020 and robust growth for 2020.Display Driver IC MarketLDDICThe current market for television sales is weak, driving an overcapacity of LCD display. As a result, since the Company’s last earnings call in August, many large-panel makers have cut back their production output. The combination of weak TV sales and reduced production output, as well as relatively high upstream material costs, has put pressure on driver IC demand, negatively impacting its results for the third quarter. For the fourth quarter, the Company expects business to remain flat sequentially for its large display driver IC segment. At this time, Himax is seeing continued concern in the industry over display capacity oversupply extending into 2020. Conversely, Himax and some of its major panel customers foresee a potential foundry capacity shortage of 8-inch silicon wafers for display driver ICs. Anticipating the 8-inch foundry capacity constraint, the Company has already prepared to provide 12-inch foundry capacity and backend packaging and testing to cover the potential 8-inch capacity shortfall for large panel driver ICs. The Company is working closely with panel customers as well as its foundry and backend partners to secure production plans for 2020. The Company’s design project coverage is strong across all leading panel makers. This provides Himax with good ongoing opportunities for 2020.SMDDICAs stated in previous earnings calls, in 2018, limited by capacity constraints, Himax chose to focus its shipments of smartphone TDDI to higher-end FHD+, as opposed to HD+ projects in an effort to yield higher revenue and better margin. As the Company entered 2019, equipped with its newly developed foundry capacity, the Company expected significant TDDI growth from these FHD+ projects during the second half of this year. Unfortunately, the strong growth from FHD+ projects it expected did not materialize due to accelerating adoption of AMOLED displays that, unlike TDDI displays, are able to take advantage of under-display fingerprint sensing technology. Facing the AMOLED competition, TDDI adoption is shifting more towards mid- to low-end models with HD+ resolution. Since the Company chose to focus on FHD+ in 2018, it passed on many HD+ opportunities and started 2019 with very low market share of HD+ solutions. As a result, it has not benefitted from the shift in the HD+ marketplace. The combined result was weaker than expected smartphone TDDI growth during the first nine months of 2019 and a muted outlook for the fourth quarter. That said, the Company expects to record more than 40% growth in this segment for the full-year 2019. Since these missteps Himax has worked hard to raise its visibility in the HD+ market and has already begun HD+ mass production with a top-tier end customer earlier this year. Himax has also expanded the HD+ coverage to further customers. Based on the current pipeline, its Q1 TDDI smartphone shipments will include significant amount of both FHD+ and HD+ products. The Company anticipates a strong rebound for Q1 2020 and robust growth for the whole of 2020. For the fourth quarter, it expects TDDI revenue to decline by more than 30% from the previous quarter.Regarding TDDI for other applications, the Company’s solutions for tablet and automotive continue to make good progress. While it expects only small volume shipments in 2019, both represent better ASP and margin for its TDDI solutions long-term and the tablet products, in particular, are expected to deliver strong volume starting next year.The Company’s traditional discrete driver IC sales into smartphones posted a slight sequential decline for the third quarter, versus its original expectation of a substantial decline, due to a Chinese smartphone maker’s delivery pull-in request. Despite this, it continues to see the traditional discrete driver ICs’ addressable market being quickly replaced by TDDI and AMOLED in smartphone. The Company expects traditional discrete driver ICs for smartphone to decrease substantially in the fourth quarter of bining TDDI and discrete drivers, Himax’s Q4 sales into the smartphone market is expected to decrease by around 25% sequentially.A major development Himax is seeing is increasing utilization of the OLED display for smartphone, triggered by the growing AMOLED capacity and the under-display fingerprint technology which is only applicable in the AMOLED display for the time being. Himax has been collaborating closely with leading panel makers across China for AMOLED product development. While the Company does not expect revenue contribution anytime soon, it does believe AMOLED driver ICs will be one of the long-term growth engines for its small panel driver IC business.In the automotive display segment, the slowing economy and rising concern over tariff have caused subdued new car sales across all major markets, particularly in China. However, Himax’s automotive business delivered a modest sequential growth in the third quarter as reported earlier. The Company expects the positive momentum will carry into the fourth quarter, attributable to market share gains of a certain of its customers. Q4 sales for this segment will increase by more than 15% sequentially. Looking forward, the overall automobile display market is forecast to increase from 2020 onward as the number of displays per vehicle continues to rise. While the Company does not expect the same kind of growth that it enjoyed in the past several years due to saturation in the automotive space, it believes that by capturing the demand for display specification upgrades the Company will deliver its automotive sales growth going forward. The market is quickly shifting towards a number of new technologies including higher resolution, in-cell touch, slim border, giant pillar-to-pillar screens, local dimming for higher contrast, and plastic AMOLED for free form design, all of which play to Himax’s advantage in advanced automotive display technologies. Himax is working closely with major automotive panel makers and leading tier-1 vendors over all of the technologies mentioned above.Although the overall markets remain weak, Himax expects the tablet business to increase by around 35% in the fourth quarter mainly due to major earlier design-wins for high-end tablet going into mass production with a number of leading end customers. The design-wins include display driver IC with COF packaging for large-sized tablets with narrow borders and the Company’s world leading in-cell TDDI with active stylus functionality for tablet. Combining tablet and other consumer electronics businesses, the Company expects sales to increase by around 20% sequentially in the fourth quarter. The shipment momentum for these high-end design-wins will carry into next year.For fourth-quarter, revenue for the small and medium-sized driver IC business is expected to be around flat sequentially.Non-Driver Product CategoriesWLOAs anticipated, the third quarter WLO revenue increased substantially thanks to a pickup in shipments to fulfill an anchor customer’s higher seasonal demand. The sequential shipment increase has led to higher capacity utilization, also resulting in positive contribution to Himax’s Q3 gross margin. Based on the customer’s shipment forecast, Himax expects a slightly lower shipment volume sequentially in the fourth quarter.3D SensingIn the smartphone segment, Himax has advanced its WLO optics solution to cover both structured light and time-of-flight (ToF) 3D sensing. Separately, as the Company reported in the last earnings call, its structured light-based 3D sensing total solution business targeting Android smartphone’s front-facing application was unsuccessful. The Company has since adjusted its structured light-based 3D sensing development to focus on applications for non-smartphone segments that require high level of depth accuracy. That the customer in non-smartphone segments almost always requires a total solution for 3D sensing also plays to Himax’s advantage. Looking at ToF-based 3D sensing solution for smartphone where its strategy is to provide WLO optics, Himax is seeing increasing ToF adoption by smartphone makers for rear-side cameras to enable advanced photography, distance/dimension measurement and 3D depth information generation to enable AR. Himax is actively pursuing smartphone makers’ ongoing ToF 3D sensing projects by teaming up with its ecosystem partners.The Company’s non-smartphone engagements have been focused on smart door lock and industrial automation segments. It is collaborating closely with industry-leading facial recognition algorithm and application processor partners to develop new 3D sensing applications for smart door lock and have started design-in projects with certain end customers. The Company is in the process of revamping the solution based on customers’ technical requirements. Separately the Company is working with partners who wish to take advantage of its 3D sensing know-how to automate traditional manufacturing, thereby improving efficiency and reducing cost. Himax’s 3D solution for shoe factory automation production line, announced in August, has gained tractions among footwear OEMs, ODMs and machinery suppliers.Ultra-low power smart sensingWiseEye is the Company’s AI-based ultra-low power smart sensing solution. The demand for battery-powered smart device with AI intelligent sensing is rapidly growing. The Company’s total solution is built on Emza’s unique AI-based algorithm, on top of Himax’s proprietary computer vision processor and CMOS image sensor, all equipped with ultra-low power design. Currently laptop is the market of focus. Himax WiseEye 2.0 NB solution provides a ‘laptop-ready’ 3-in-1 RGB/IR/AI solution, respecting privacy while enhancing security for notebook users. The prototype the Company announced during Computex 2019 has been well received by leading CPU platform providers and laptop end customers who are now actively evaluating the technology. Himax is expected to demo the mass production version on laptops at the 2020 CES.In addition to providing a total solution for ultra-low power smart sensing, Himax also provides individual parts of the total solution separately to address the market’s different needs. For example, the ultra-low power computer vision processor it developed as part of the WiseEye 2.0 NB solution can also be used for AIoT applications. The WiseEye WE-I Plus, the AI-enabled ASIC platform that the Company recently announced, can support popular machine learning frameworks for the system customer to develop a wide range of video and audio AI applications where power is a strict constraint and on-device memory is limited. Typical applications include smart home applications and surveillance systems.CMOS Image SensorCMOS image sensor is another critical part of the WiseEye 2.0 NB solution that the Company just mentioned. To support the lean camera design and high-quality image needed for laptops with thin bezels, Himax has made a 2-in-1 sensor that offers the duo capabilities of high quality HD image capturing and ultra-low-power, low resolution visual sensing in one single sensor, the industry’s first with the innovative design. With this sensor, laptop makers can simplify their next generation product design and save costs by eliminating the need for an additional camera in their effort to offer context awareness for better user experience. In addition, Himax’s sensor has incorporated an RGB-IR design to enable Windows Hello facial recognition. The new CMOS sensor will be available by the end of 2019.For the traditional human vision segments, Himax sees strong demand in notebooks, where Himax is one of the market leaders, and increased shipments for multimedia applications such as car recorders, surveillance, drones, home appliances, and consumer electronics, among others. Additionally, Himax has seen increased shipments and new design-wins in the automotive segment covering before-market solutions such as surround view and rear-view camera.LCOSHimax continues to focus on AR goggle devices and head-up-displays (HUD) for automotive. The Company’s technology leadership and proven manufacturing expertise has made us a preferred partner for customers in both areas for their ongoing engineering projects. Separately, one of Himax’s customers has recently announced an advanced LiDAR solution that utilizes the Company’s proven LCOS technology and tailor-made manufacturing service. This is another solid evidence of its leadership position in this complex emerging technology. LCOS represents a long-term growth driver for the Company.For non-driver IC business, the Company expects revenue to decrease by around mid-single digits sequentially in the fourth quarter.Fourth Quarter 2019 GuidanceThe Company is providing the following financial guidance for the fourth quarter of 2019:Net Revenue:To?be around?flat sequentiallyGross Margin:To?be slightly up sequentially, depending on final product mixIFRS Loss:To be around 3.0 to 4.5 cents per diluted ADSNon-IFRS Loss(1):To be around 2.7 to 4.2 cents per diluted ADS(1)?Non-IFRS?Loss excludes share-based compensation and acquisition-related charges?HIMAX TECHNOLOGIES THIRD QUARTER 2019 EARNINGS CONFERENCE CALLDATE:Thursday, November 7th, 2019TIME:U.S.8:00 a.m. EST?Taiwan9:00 p.m.DIAL IN:U.S.+1 (866) 444-9147?INTERNATIONAL+1 (678) 509-7569CONFERENCE ID:5086829?WEBCAST: replay of the call will be available beginning two hours after the call through 11:30 a.m. US EST on November 15th, 2019 (12:30 a.m. Taiwan time, November 16th, 2019) on .tw and by telephone at +1 (855) 859-2056 (US Domestic) or +1 (404) 537-3406 (International). The conference ID number is 5086829. This call is being webcast by Nasdaq and can be accessed by clicking on this link or Himax’s website, where the webcast can be accessed through November 7th, 2020. About Himax Technologies, Inc.Himax Technologies, Inc. is a fabless semiconductor solution provider dedicated to display imaging processing technologies. Himax is a worldwide market leader in display driver ICs and timing controllers used in TVs, laptops, monitors, mobile phones, tablets, digital cameras, car navigation, virtual reality (VR) devices and many other consumer electronics devices. Additionally, Himax designs and provides controllers for touch sensor displays, in-cell Touch and Display Driver Integration (TDDI) single-chip solutions, LED driver ICs, power management ICs, scaler products for monitors and projectors, tailor-made video processing IC solutions, silicon IPs and LCOS micro-displays for augmented reality (AR) devices and heads-up displays (HUD) for automotive. The Company also offers digital camera solutions, including CMOS image sensors and wafer level optics for AR devices, 3D sensing and machine vision, which are used in a wide variety of applications such as mobile phone, tablet, laptop, TV, PC camera, automobile, security, medical devices, home appliance and Internet of Things. Founded in 2001 and headquartered in Tainan, Taiwan, Himax currently employs around 2,100 people from three Taiwan-based offices in Tainan, Hsinchu and Taipei and country offices in China, Korea, Japan, Israel, and the US. Himax has 2,929 patents granted and 565 patents pending approval worldwide as of September 30th, 2019. Himax has retained its position as the leading display imaging processing semiconductor solution provider to consumer electronics brands worldwide. Looking StatementsFactors that could cause actual events or results to differ materially include, but not limited to, general business and economic conditions and the state of the semiconductor industry; market acceptance and competitiveness of the driver and non-driver products developed by the Company; demand for end-use applications products; reliance on a small group of principal customers; the uncertainty of continued success in technological innovations; our ability to develop and protect our intellectual property; pricing pressures including declines in average selling prices; changes in customer order patterns; changes in estimated full-year effective tax rate; shortages in supply of key components; changes in environmental laws and regulations; exchange rate fluctuations; regulatory approvals for further investments in our subsidiaries; our ability to collect accounts receivable and manage inventory and other risks described from time to time in the Company’s SEC filings, including those risks identified in the section entitled “Risk Factors” in its Form 20-F for the year ended December 31, 2018 filed with the SEC, as may be pany Contacts:Jackie Chang, CFOHimax Technologies, Inc.Tel: +886-2-2370-3999 Ext.22300OrUS Tel: +1-949-585-9838 Ext.252Fax: +886-2-2314-0877Email: jackie_chang@.tw.twSky Wang, Investor RelationsHimax Technologies, Inc.US Tel: +1-949-585-9838 Ext.223Fax: +1-312-445-3643Email: sky_wang@.tw.twInvestor Relations - US RepresentativeMaili Bergman, Managing DirectorMZ North AmericaTel: 949-298-4320Email: HIMX@mzgroup.usmzgroup.usIEC Will Host Conference Call to Discuss Fiscal 2019 Fourth Quarter Financial ResultsNEWARK, N.J., and NEW YORK, Nov. 07, 2019 (GLOBE NEWSWIRE) -- IEC Electronics Corp. (NYSE American: IEC) today announced that it will host a conference call on Friday, November 22, 2019 at 10:00 a.m. Eastern Time, to discuss its financial results for the fiscal fourth quarter ended September 30, 2019.The conference call may be accessed in the U.S. and Canada by dialing toll-free (877) 407-9210. International callers may access the call by dialing (201) 689-8049.A replay of the teleconference will be available for 30 days after the call and may be accessed domestically by dialing (877) 481-4010 and international callers may dial (919) 882-2331. Callers must enter conference ID: 55915.To access the live webcast, log onto the IEC website at . The webcast can also be accessed at . An online replay will be available shortly after the call.About IEC ElectronicsIEC Electronics is a provider of electronic manufacturing services (“EMS”) to advanced technology companies that produce life-saving and mission critical products for the medical, industrial, aerospace and defense sectors. The Company specializes in delivering technical solutions for the custom manufacture of complex full system assemblies by providing on-site analytical testing laboratories, custom design and test engineering services combined with a broad array of manufacturing services encompassing electronics, interconnect solutions, and precision metalworking. As a full service EMS provider, IEC holds all appropriate certifications for the market sectors it supports including ISO 9001:2008, AS9100D, ISO 13485, and Nadcap. IEC Electronics is headquartered in Newark, NY and also has operations in Rochester, NY and Albuquerque, NM. Additional information about IEC can be found on its web site at iec-.Contact:Audra GavelisDirector of Marketing & Investor RelationsIEC Electronics Corp.(315) 332-4559agavelis@iec-Koh Young Europe first to Present Full Range Product Line at Productronica07 November 2019 – Seoul, South Korea – Over the past years Koh Young Technology’s drive to not only satisfy but to exceed our customers’ expectations lead to further innovations and a wider range of product portfolio. For the first time visitors of the Productronica show can experience Koh Young’s newest and full range Product Line. From Front to Backend production Koh Young will show a wide range of not only SPI and AOI, but also Machining Optical Inspection (MOI), Automated Pin and Terminal Inspection (API), and more. Koh Young, the leading 3D measurement-based inspection solutions provider, is delivering also in this year’s Productronica new levels of inspection capabilities.In addition to delivering innovative hardware, Koh Young will also present the true Smart Factory solution. Utilizing the precise 3D-Measurement data to visualize and analyze any step in the production process, the KSMART Smart Factory solution can close the gap between M2M (Machine-to-Machine) communication on SMT machines.If you want to experience the blazing trail for Advanced Optical Inspection systems, you can take the opportunity to see our flagship the Zenith 2 Side Camera system at our booth 377 in Hall 2. Our Zenith 2 is here to fulfill the future of AOI delivering best-in-class performance, functionality, and accessibility with a wide range of inspection capabilities. Having AI-driven Auto Programming software it is highly efficient and reduces programming time by 70 percent. Equipped with side cameras Koh Young’s Zenith 2 allows to quickly detect and analyse defects on a wide range of mounted components and chips. Not only at our booth but also the 3D AOI Arena in Hall A2 you can experience our next generation AOI. The 3D AOI Arena offers you the opportunity to convince yourself from the performance of our Zenith 2 directly in comparison to other AOI manufacturers.At this year’s Productronica Koh Young presents its strength not only in SMT but also Frontend and Backend Markets. With the award-wining KY-P3 API models KYT designed a solution for SPF (Single-Press-fit), C-PFT (Conventional Press-fit), and FOI (Final Optical Inspection) using its expertise with highly reliable 3D measurement innovations. It identifies defects like missing pins or pin offset, as well as co-planarity and position by accurately measuring the pin-to-pin pitch.? The KY-P3 helps manufacturers ensure maximum alignment accuracy, which is essential in producing high-quality PCBs.Further innovations like our Meister series which provide automated inspection solutions for OSAT (Outsourced Semiconductor Assembly and Test) companies, device manufacturers, and foundries offering high level of productivity, accuracy and UPH (Unit Per Hour) with cost efficiency, will be exhibited in Munich. Not only with innovation in hardware but especially through innovative software we excel. With quality control capabilities and a full lineup of integrated inspection systems, KSMART ties everything together: SPI, AOI and production machines with AI powered production analysis for fully automated control that boosts productivity while minimizing costs in real time. Together with our partners Ekra, MPM, and ASM, we will also demonstrate and show live how KPO can optimize the printing process.Meet the absolute leader in the SPI and AOI markets on Hall 2 booth 377 and experience next generation inspection systems. About Koh YoungKoh Young Technology Inc., the leading 3D measurement-based inspection equipment and solutions provider, performs an essential role for quality control and process optimization across a growing set of industries including printed circuit board assembly, machining and assembly process manufacturing, semiconductor manufacturing, and various medical fields. In addition to its corporate headquarters in Seoul, Koh Young has sales and support offices in Germany, Japan, Singapore, China, Mexico, and the United States. These local facilities ensure it sustains a close relationship with its growing customer base, while providing them with access to a global network of inspection experts.Brent A. FischthalSr. Manager, Americas Marketing & Regional SalesKoh Young America, Inc.1950 Evergreen Blvd., Suite 200, Duluth, GA 30096 – We’ve MovedMobile: +1 704 651.2860Support: KYA_Support@Lenovo Q2 Momentum Powered By 9th Consecutive YoY Quarterly Revenue Growth, Strong, Positive PTI and Net Income GrowthGroup revenue grew year-on-year for the ninth consecutive quarter, reaching US$13.5 billionPre-tax Income (PTI) grew 45% year-on-year to US$310 millionNet income up 20% year-on-year to US$202 millionLenovo continues to be the world’s #1 player in the global PC market with record shipments of 17.3 million units, including double-digit premium segments growthSoftware and services revenue* up 35% year-on-year to US$883 millionNovember 6, 2019HONG KONG--(BUSINESS WIRE)-- Lenovo Group (LNVGY) (HKSE: 992) (PINK SHEETS: LNVGY) today announced Group revenue in the second quarter reached US$13.5 billion, the ninth consecutive, year-on-year quarter of growth. Pre-tax income grew 45% compared to the same quarter a year earlier, to US$310 million. Net income also increased 20% year-on-year to US$202 million. Revenue mix continues to be balanced across the company’s four geographies (Americas, Asia Pacific, China, EMEA) with each reporting more than 20% share of revenue.Basic earnings per share for the second quarter were 1.69 US cents or 13.23 HK cents. Lenovo’s Board of Directors declared an interim dividend of 6.3 HK cents per share.“During the quarter we were pleased to see our growth momentum deliver continued solid financial performance amidst a complex and dynamic global trading environment. This success is a testament to our commitment to innovation, to our customers across 180 markets around the world, and to how the world continues to embrace our vision to deliver smarter technology for all,” said Yang Yuanqing, Lenovo Chairman and CEO.Global trade environmentAlthough global trade and geo-political uncertainties persist, they continue to have a negligible material impact on the financial performance of the company. This quarter’s results highlight the consistently high degree at which Lenovo continues to perform. Lenovo’s global footprint, flexible, majority-owned manufacturing base and ongoing strong financial performance remain competitive differentiators propelling the company’s market-leading position. Going forward, Lenovo is well positioned to manage complex and dynamic market conditions, while continuing to deliver sustainable long-term results.Business Group OverviewThe strong results are led by the Intelligent Devices Group (IDG). The PC and Smart Devices Group (PCSD), one of the two IDG business units, reported US$10.7 billion in revenue and record PTI margin of 5.7%. Sales volume in PCs enjoyed strong growth year-on-year of 7.1%, resulting in overall PCSD revenue growth of 4.1% year-on-year. Pre-tax income was US$612 million, up US$97 million year-on-year.In PCs, volume again outgrew the market, which is continuing to recover. Lenovo holds 24.4% of the global PC market, sustaining its position as the worldwide #1 in PCs. Growth came from high-growth and premium categories, including Workstation, Thin and Light, Visuals and Gaming PCs – all of which had double-digit volume growth year-on-year. In the future the PCSD group will continue to drive premium-to-market growth and industry leading profitability as it continues to focus on customer insights to innovate across the portfolio.IDG’s second business unit, the Mobile Business Group (MBG), posted its fourth consecutive quarter of profitability and positive PTI, improving US$57 million year-on-year. While there was a small revenue decline reported year-on-year (5.7% to US$1.5 billion), the group continues to focus on inventory controls, portfolio efficiency and diligent cost controls to help expand margins. The company’s Latin America stronghold continues to see revenue, profit and market share grow year-on-year. In North America Lenovo moved up two places in the industry rankings from the previous quarter to number four. In addition, revenue continues to outgrow the market with profit continuing to improve. Going forward, Lenovo will continue its investment in its mobile business to drive ongoing and future growth opportunities in select new and profitable markets.The Data Center Group (DCG) successfully navigated challenging circumstances during the quarter and reports its 9th consecutive year-on-year quarter of narrowing losses. Overall revenue in DCG declined 13.8% as a result of lower prices for key components and softness in demand from some of the largest hyperscale customers. Revenue – excluding Hyperscale – grew almost 13% year-on-year with China reporting more than a 47% increase in non-hyperscale revenue compared to the same quarter a year ago. In addition, there was strong double-digit growth in Storage, Software Defined Infrastructure and High Performance Computing as a result of an expanded storage portfolio, strong ThinkAgile offerings and new HPC project wins. Looking ahead, the data center group will continue its growth in non-hyperscale including fast-growing segments like SDI and storage, while also investing in new Edge, Telco and AI infrastructure opportunities. The Hyperscale customer base is expected to expand and return to growth in the second half of this fiscal year.Software and Services heading to US$1 billion businessSoftware and Services revenue* grew 35% year-on-year, reaching almost US$900 million. Device as a Services (DaaS), premier support service and managed services all grew significantly to contribute to this performance and ongoing diversification of the company’s revenue streams. This business is expected to exceed US$1 billion per quarter very soon.About LenovoLenovo (HKSE: 992) (ADR: LNVGY) is a US$50 billion Fortune Global 500 company, with 57,000 employees and operating in 180 markets around the world. Focused on a bold vision to deliver smarter technology for all, we are developing world-changing technologies that create a more inclusive, trustworthy and sustainable digital society. By designing, engineering and building the world’s most complete portfolio of smart devices and infrastructure, we are also leading an Intelligent Transformation – to create better experiences and opportunities for millions of customers around the world. To find out more visit , follow us on LinkedIn, Facebook, Twitter, YouTube, Instagram, Weibo and read about the latest news via our StoryHub.NCAB Group AB (publ) Q3 2019 Earnings CallNov 7, 2019 (Thomson StreetEvents) -- Edited Transcript of NCAB Group AB (publ) earnings conference call or presentation Wednesday, November 6, 2019 at 9:00:00am GMTTEXT version of TranscriptCorporate ParticipantsAnders ForsénNCAB Group AB (publ) - CFOGunilla ?hmanNCAB Group AB (publ) - IR ManagerHans St?hlNCAB Group AB (publ) - CEO & DirectorConference Call ParticipantsRobert RedinCarnegie Investment Bank AB, Research Division - Research AnalystPresentationOperator [1]Ladies and gentlemen, welcome to the NCAB Group Q3 Report 2019. Today, I’m pleased to present CEO Hans St?hl; and CFO Anders Forsén. (Operator Instructions)Speakers, please begin.Hans St?hl, NCAB Group AB (publ) - CEO & Director [2]Hello, it’s Hans here. Hello, everybody. And I’m sitting here with Anders and Gunilla, and we’re going to present NCAB, who we are and what we are doing and what’s our Q3 report.So we’ll start with Page 4, describing who we are. And we can see that we have 17 companies around the world, and we are 403 employees, and we prefer to call ourselves specialists. And also, one can see that we are aiming for demand in customers. So that’s our mission, selling circuit board to demanding customers and, of course, with 0 defects and sustainably at the lowest total cost.So at Page 5, what circuit boards using for? So we are selling the bad board. Our customers has marked in the components and the components over the printed circuit board assembly is then mounted, placed in the, what we call, the end product, the final product.And on Page 6, one could see some samples of products that where we make circuit boards for. And at the top—at the left, there is high-speed trains in China, where we supply circuit board for a braking system, door opening system. And mid-top, it’s a heating camera we supply boards for. And at the top right, there is actually a new gadget for trucks and coming on the cars also with a rear mirror camera instead of ordinary mirrors that it’s kind of making high air resistance. And we are having entertainment system. And we also have a golf monitor that can actually see or project where the ball will wind up. So that’s what many watching the golf on TV. It’s the cost of our products that makes that comes true. And also a fair meter source of a taxi, that’s just a small kind of selection of end products we supply.Page 7, we are working in a niche. We don’t supply high volume. We supply high mix, low volume. And that’s the important thing because high volume, there is a big risk, very low margin. So we are supplying boards to a high—where it’s a high product value and quality demand is extremely important, and it’s a little bit less price pressure.At Page 8, we have low customer concentration, which also is important. So we could say, the top 50 customers stand for 50% of other revenue. And the Industrial segment is the biggest segment from our sales.Our journey, the history. The company was founded back in 1993 of 3 gentlemen from Sweden, and they rather quick realized that you have to go out of Sweden to make more business to grow. So we kind of started in Scandinavia and then went on further to Russia, China, Spain, Poland, Germany. And then we made some acquisitions. The first acquisition we made in May 2012 in the U.S., and the second one in U.S. 2014, and then it’s—we made—Multiprint, we acquired in March this year. And that’s our last acquisition, or latest, I should say.And also in the revenue, you can see we have grown every year since 2008, except for 2009, where all businesses went down, but we were rather proud of, we could also make a profit in 2009, and that’s kind of explaining our business concept as we don’t own any factories. So when business goes down, it’s rather easy for us. We only have one the fixed cost, and that’s the staff.We have a customer case, customer we work within the U.S., Kimball Electronics. It’s a company that has 7 locations in North America, and they also have in Europe and Asia and we are working with 4 of these companies. This case is described in the Tampa location in Florida. And they use us for medical project here and where they are important for the design expertise. So we support the customers with design and also high reliability. It’s extremely important for medical purpose.So one could see on Page 11, you can see the development for this project, which we are very proud of. So looking at the quarter, the quarter 3, we can see we have a growth. We are very proud of this result. We have a growth of 5%. It’s a little bit slower than anticipated. And we have—we measure in the U.S. dollars, is minus 3%. But what’s extremely good is that the EBITA has gone up with 10%, and also the margin has gone up. If we look at the whole year, it’s also plus 12% and plus 2% in U.S. dollars and the profit plus 15%, which is fantastic.So highlights. During Q3, we have received our first order from Malaysia and Netherlands, great, and very successful integration of Multiprint in Denmark. And actually, the synergies has been actually much bigger than we anticipated. And then also, I don’t know if it’s a highlight, but anyway, I’ve decided to retire next year. So the Board has initiated a recruitment process and to install—the aim is install successor in mid-2020. So I will stay in the company until we find best possible replacement for me. And I will also be a part of the company on a long-term basis as a shareholder and also in the Board. So Anders?Anders Forsén, NCAB Group AB (publ) - CFO [3]Okay. Good morning, Anders Forsén here. So on Page 15, you can see a short summary of the different segments. We can see that this quarter, we have a big difference between the segments from a result point of view, and we still have a lot of good development in Nordic and mainly in Norway and Denmark, it is growing a lot. Of course, some positive effect from the Multiprint acquisition. We also have a very healthy and good result, the EBITA margin in Nordic. Europe, a little bit slower. I think we are following the market trend, and then we’re seeing weakening market in Germany. That also have seasonable growth. North America was hit by the tariffs, start—was increased in second quarter. It’s had a negative impact on our revenue. And East is not stable, but we see an improving profitability.So next page then, even if we see a little bit weaker growth, we are growing and we are increasing our gross margin, which we think is positive. So that’s also important that we continue to increase our margin despite the tougher market conditions.So Page 17. As I said, a bit slower growth, but we—anyway, we are doing a growth in order intake. And you can see that the increased tariffs to U.S.A., which was imposed in second quarter, they had a negative impact on the order intake second quarter, which is what we can see in the revenue this quarter.On the other hand, we had a growth in all other segments, which is good. And what is positive as well is that we can see order intake for the third quarter was growing more than the revenues. We have a positive book-to-bill, which is anyway a positive sign for the future. So we had a 9% growth in our order intake and that in USD is 2%. In general, we can see continued strong activity and development in the Nordic and a positive development in East, where we see much more hesitance from the U.S. and European market. So I think in many ways, we’re following the trend from other companies in that perspective.So Page ‘18. Even if you had a slower growth, we are happy to present increasing profitability. EBITA increased by 10%, up to SEK 46.3 million and an EBITA margin of 10.5%, which we are, of course, proud of. The reason is that we continue to increase our gross margin. And we have also slowed down a little bit in our recruitment activities. We are still recruiting in Europe and East for growth, but in a little bit slower pace than before if adjusted to the market. Also, good to see that earnings per share increased 19% to SEK 2.29. So in general, we are proud of the results for the quarter.And coming into the different segments. If we start with Nordic, which is our operation in Sweden, Norway, Denmark, Finland and Estonia, we had a growth of 25%. If we exclude Multiprint, it’s 10% growth. It’s still a very healthy and good growth. And it comes a lot from good activities in Norway, as we see a very strong position in Norway, and we are growing that. Also, our old Danish operation is growing, and we have seen a very positive impact from the Multiprint acquisition.Our EBITA margin, once again, is up to 18% and increased a lot compared to last year. And I think we have seen very strong financial synergies from the Multiprint acquisition, where we have been able to raise the gross margin due to our better purchasing prices. They have also been able to adapt our payment terms of the factories. It had a very positive impact on working capital. So all in all, we see a very good benefit from the last acquisition.Going into Europe. As we saw in second quarter, the order intake was rather slow, and that is what we see in the revenue this quarter. We have also rather weak or stable order intake this quarter, and it is mainly Germany, which is a little bit weak at this time. We have some bad results in the U.K. and the other countries are more or less in line with last year.EBITA has decreased compared to last year, but we had a little bit enormous strong results second—third quarter 2018. So a margin around 6% is more what we should expect.North America, on Page 21. We have a slowdown, and we have a negative growth. We saw huge impact on the orders when the tariff was increased in May. And of course, that has an impact on the revenue for the third quarter. However, we have been able to adapt our cost structure, and we also were able to increase our gross margin. So the impact on the profit is not that much. And I think hopefully, we can see slightly same strength in the orders. They are still weaker than last year, but you might see a little bit positive turn in the end of the quarter.And last but not least, segment East, Russia and China. The growth was rather stable compared to last year. And also here, U.S. is impacting what we had a lower order intake in second quarter from EMS companies in China exporting to U.S.A., but we have a healthy gross margin, healthy profit and increased profitability, and we are very proud of the order intake that we had in the third quarter, which actually grew 25% compared to third quarter last year. And it’s mainly our business with local Chinese EMS companies that are growing again. So we see that’s a very, very positive sign, and we have a very healthy margin on the Chinese business. So even if you don’t see the big revenue impact this quarter, we see a very good growth in orders and profitability for East.And then going down to some financial balance sheet KPIs. The return on equity ended up in 45%. We have a very low debt level. So we have a strong balance sheet, and we have a lot of accessible cash. Solvency 40%. And also net working capital, as usual, below 10% of our LTM revenue. Of course, we do have rather low inventory levels. We have rather good payment terms, the fact that China with eases out to trade receivables in a way. So we are an asset-light business, and we have possibilities to—and that means we have a good cash flow. And of course, we have a lot of strong balance sheet for further growth activities.Hans St?hl, NCAB Group AB (publ) - CEO & Director [4]Gunilla, just continue.Gunilla ?hman, NCAB Group AB (publ) - IR Manager [5]Okay. So a short summary then on the third quarter is that we see growth, it’s flattening out a little bit in sales, but still we see a positive trend in order intake and especially for Nordic and East. Gross margin and EBITA margin continue to increase, which we’re happy for. Nordic is growing very, very strong and especially than Norway and the acquisition of Multiprint in Denmark. China, you mentioned before and still we see some weaker market in U.S. and North America. But in a way, you can see it’s good to have operations in many areas because something always can—something that’s growing and something that maybe not just growing as much.Hans St?hl, NCAB Group AB (publ) - CEO & Director [6]Yes. On Page 25, we can see our strategy going forward. And we have kind of built it on 4 cornerstones here. And the first one, increase market share in Europe, U.S.A. and East. We have so small market share. So there is so much we can do on the existing markets where we are to capture new customers.And also, secondly, I mean, the customers we have also have a huge potential. Normally, maybe—we are maybe 10% we have there TAM, total available market, for us. So there is so much we can do there. And also, of course, we can expand geographically and the latest one we have done Malaysia and the Netherlands.And the last one, consolidate the market. That’s basically acquisitions because we think that our smaller trading companies that we struggle as factories in China is being consolidated. They’re going to have a huge problem in buying the products in China. So we think or we know that there will be a lot of companies that they are willing to sell their companies—similar companies to NCAB.And on the last page, we have the financial targets, which we are following, aiming at. That’s all. Any questions?Questions and AnswersOperator [1](Operator Instructions) First question we have is from the line of Robert Redin from Carnegie.Robert Redin, Carnegie Investment Bank AB, Research Division - Research Analyst [2]So a couple of questions, if I may. So one on those gross margins. They’re improving quite a bit in the quarter, but what were the sort of main drivers there? And do you think that development is sustainable?Hans St?hl, NCAB Group AB (publ) - CEO & Director [3]I mean gross margin is something we work very much with. And it’s—I think it’s basically 2 reasons: as we are adding more value to the customers, we have been able to charge a little bit higher prices; and also due to our purchase power, we have been able to bargain with the factories also. So that has kind of created a better gross margin.Robert Redin, Carnegie Investment Bank AB, Research Division - Research Analyst [4]And that doesn’t sound like something which is very temporary?Hans St?hl, NCAB Group AB (publ) - CEO & Director [5]No.Robert Redin, Carnegie Investment Bank AB, Research Division - Research Analyst [6]Okay. Perfect. So second question would be on Europe and Germany or Germany seems to be the weak spots in the Europe business area. And you said that there was sales growth, I think, in Europe, excluding Germany. So I guess Germany was not so good in Q3. And I thought I wanted to ask if you could say something about order intake sort of trends throughout Q3 and maybe in October, if there’s any strengthening out for the development in Germany?Anders Forsén, NCAB Group AB (publ) - CFO [7]No, we—as I said before, we had rather weak situations in the third quarter. But we actually saw in the end and also you can see in the beginning of this quarter, a small upwind churn for the order intake in Germany. So it’s not continuing down at least, so that seems a little bit of confident.Robert Redin, Carnegie Investment Bank AB, Research Division - Research Analyst [8]Okay. Sounds hopeful. And then on the U.S., I guess, order intake was down year-over-year, but was it up quarter-over-quarter? And what are the sort of trends throughout the quarter there in the U.S.?Anders Forsén, NCAB Group AB (publ) - CFO [9]I think it was down year-to-year, but I think it was rather stable quarter-to-quarter, and also to say that we saw a little bit change in the end of third quarter, so it’s difficult to say. But hopefully, it—I mean we believe, of course, that at some stage, the customers need to start ordering again because they have emptied the warehouse with inventory. It’s difficult to see that yet, but it must come at some stage.Robert Redin, Carnegie Investment Bank AB, Research Division - Research Analyst [10]Okay. And then on East, I mean, the margins are very good in Q3. I guess, they can go up and down a little bit quarter-to-quarter. But do you expect, let’s say, the year-to-date margin level in East, is that sustainable sort of going forward?Hans St?hl, NCAB Group AB (publ) - CEO & Director [11]Yes. We think so, especially with the customers, we have been able to capture where we believe it’s going to be rather stable. And actually, our gross margin is rather stable over all countries.Robert Redin, Carnegie Investment Bank AB, Research Division - Research Analyst [12]Okay. Perfect. And then on Multiprint, I mean, positive to hear that you think synergies are sort of bigger than anticipated. Would you want to specify how much of synergies you expect to realize? And with this $1 billion sort of seemingly affect us, could you say something about your pipeline of acquisitions going forward?Anders Forsén, NCAB Group AB (publ) - CFO [13]But what we have seen, of course, is that we—from a gross margin point of view, it’s a number of percent geo mix increased for the Multiprint operation, mainly due to that we have been able to use our prices for the factories. So that has improved the profitability. We also see that we could take away some costs that they had in the operation before because we had our insurances and business stuff that could be useful then without any add-ons. So they also saved some cost in that respect. And then I also think we can see a big impact on the working capital, where we have mainly strong trade liabilities, where we adapted our terms on mainly 90 days is kind of in the roughly 30 days they had before. So of course, that gives also some kind of positive effects.And going forward, as we said before, yes, we are actively looking for further acquisitions. So we are looking into a number of markets. And—but anyway, we need to find the right partner and we need to find the right company. So that’s a lot of discussions and so on, but that’s high on the agenda. And it might be as well that if the market is a bit weaker right now, that might also open up for new possibilities. And I think some smaller companies might have even more troublesome to go to the customers and also to find a good projects that factors in China. So this could be an opportunity, so it can give us more companies in the pipeline.Robert Redin, Carnegie Investment Bank AB, Research Division - Research Analyst [14]Okay. That sounds good. And with that, one being good, of course, it would be (inaudible) and you have the financing. So okay, those are my questions.Unidentified Company Representative, [15]There is one question from Anders ?ksendal at DNB on the e-mail here. And he asks, you mentioned strong order in China, are you taking market share? Or are the market close to bottoming out?Hans St?hl, NCAB Group AB (publ) - CEO & Director [16]I think China is growing, of course. But one of the biggest projects we are running there, we have actually taken from another factory that couldn’t give the same service as we have done. So now China is growing, growing, growing.Unidentified Company Representative, [17]And in China, how does the seasonality looks like over the quarter?Anders Forsén, NCAB Group AB (publ) - CFO [18]It is not the same. It is, of course, we share the first quarter because February, we have the Chinese New Year, when it slows down a lot. But on the other hand, then January is strong and March is very strong, again. But you can see some impact on the Chinese New year in the first quarter.Operator [19](Operator Instructions) There are no further questions at this time. Please go ahead, speakers.Unidentified Company Representative, [20]Yes. So then we just want to remind you that the fourth quarter report will be published on February 19, next year, 2020, so welcome back.Hans St?hl, NCAB Group AB (publ) - CEO & Director [21]Thank you very much for listening.Anders Forsén, NCAB Group AB (publ) - CFO [22]Thank you.Operator [23]Thank you, ladies and gentlemen. That concludes your call for today. We thank you for joining and ask that you disconnect your lines. Thank you.NCAB Group Germany appointed Benjamin Klingenberg new Managing Director, responsible for the DACH-R2019 11 07Since October 2019, Benjamin Klingenberg is Managing Director at NCAB Group Germany and responsible for the DACH-Region.Benjamin Klingenberg MD NCAB Group GermanyBenjamin Klingenberg has an extensive background in the electronics industry and deep knowledge about PCBs. After his apprenticeship as mechatronic technician, he joined different namable electronics companies – always with a focus on Asia and PCBs.He is no stranger at NCAB Group neither. Previously, he has been working at NCAB as Key Account Manager for the Northern region of Germany. He took over sales-responsibility for an area, which was completely undeveloped at that time – with great success.Benjamin Klingenberg about joining NCAB again: “What has always fascinated me about NCAB is that closeness to customers is always at the core of all actions. NCAB Group Germany has a solid foundation and a great, dynamic team, that can win customers over with its technical know-how and support. Now, it is important to solidify this foundation by focusing even more on our customers in the future and by further developing our sales network. This is an exciting challenge which I am looking forward to taking up. I always phrase it like that: “Once the fascination for PCBs catches you, it will never release you”.NCAB Group Interim report Q3 2019November 6, 2019Net sales increased 5% to SEK 439.8 million. EBITA was SEK 46.3 million, representing an EBITA margin of 10.5%.”Overall, the Nordic and East segments offset the weak North America and Europe segments but we could nevertheless report continued growth – though at a slower rate than earlier quarters. Order intake remains strong. It is also gratifying to see the good synergies from our acquisition of Multiprint in Denmark are realized and that we have improved our overall earnings compared with the strong third quarter of 2018”, comments Hans St?hl, CEO of NCAB.JULY–SEPTEMBER 2019Net sales increased 5% to SEK 439.8 million (420.1). In USD, net sales decreased 3%.Order intake increased 9% to SEK 446.6 million (411.2). In USD, order intake increased 2%.EBITA was SEK 46.3 million (42.2), representing an EBITA margin of 10.5% (10.1).Operating profit was SEK 45.9 million (41.0). Operating margin was 10.4% (9.8).Profit after tax amounted to SEK 38.5 million (32.5).Earnings per share before and after dilution was SEK 2.29 (1.93).IFRS 16 increased EBITA by SEK 0.1 million.JANUARY–SEPTEMBER 2019Net sales increased by 12% to SEK 1,358.8 million (1,210.3). In USD, net sales increased 3%.Order intake increased 13% to SEK 1,338.6 million (1,189.8). In USD, order intake increased 3%.EBITA was SEK 124.2 million (96.2), representing an EBITA margin of 9.1% (7.9).Adjusted* EBITA was SEK 124.2 million (107.7), representing an adjusted* EBITA margin of 9.1% (8.9).Operating profit was SEK 121.0 million (92.7). Operating margin was 8.9% (7.7).Profit after tax amounted to SEK 96.7 million (69.9).Earnings per share was SEK 5.74 (4.28) before dilution and SEK 5.74 (4.16) after dilution**.IFRS 16 increased EBITA by SEK 0.4 million and increased total assets by SEK 35.7 million.SIGNIFICANT EVENTS DURING AND AFTER THE QUARTERFirst orders received in Malaysia and Benelux.NCAB’s CEO Hans St?hl has told the Board that he wishes to retire during 2020. The Board will initiate a seach process for a successor aiming to close the matter before halfyear 2020.MESSAGE FROM THE CEOGrowth slows but earnings improve for NCABNCAB continued to grow even if the pace has slowed down. Order intake is still increasing at healthy levels and we noted a rise in gross margin and EBITA margin. However, the performance among our segments differs more now than in the past.Nordic remained strong, with good contributions from Norway and Denmark in particular. It is exciting that growth in Norway is so strong, which is derived from several different electronics companies. In Denmark, it is gratifying to note the highly positive impact of our acquisition of Multiprint and that our order intake has more than doubled year-on-year. Profitability in the acquired operation increased through the implementation of NCAB’s better purchase prices and terms of payment from our factories. Furthermore, the acquisition added a new factory partner.The East segment also performed well, with a sharp rise in order intake and stronger earnings. The improvement in order intake is largely from domestic Chinese customers, where we have secured a number of major hi-tech projects as a result of our close collaboration.USA remains challenging. Just as we were getting our own operations in order, higher tariffs were introduced. Many customers are delaying orders and hoping for a cut in tariffs, though unfortunately this no longer seems likely. Our new approved factory in Taiwan has potential moving forward, even if it has only contributed small volumes to date.In Europe, the general slowdown of the industrial economy continued, with negative growth in most of our larger markets, not least in Germany. Despite this, NCAB reported year-on-year growth in this segment in most countries during the quarter. Furthermore, we have not noted any adverse impact on our gross margins and we have adapted the pace of recruitment to maintain our EBITA margin.Overall, the Nordic and East segments offset the weak North America and Europe segments but we could nevertheless report continued growth – though at a slower rate than earlier quarters. Order intake remains strong. It is also gratifying to see the good synergies from our acquisition of Multiprint in Denmark are realized and that we have improved our overall earnings compared with the strong third quarter of 2018.At NCAB, we have learned that an economic downturn also creates opportunities for us. Following the downturn in 2009, we grew sharply in 2010. Such times make it more difficult for domestic factories in the West, which may be forced to close, and can likewise affect smaller trading companies. This is an opportunity to gain customers and carry out acquisitions, which strengthens us when the economy recovers. Moreover, it can facilitate the recruitment of specialists. Our business model – to not own any factories – proves to be particularly good in times like these.Hans St?hlPresident and CEO, NCAB Group ABFor further information, please contact:Anders Forsén, CFO +46 (0)8 4030 0051Gunilla ?hman, Head of Investor Relations, +46 (0)70 763 81 25This is a translation of the original Swedish interim report. In the event of difference between the English translation and the Swedish original, the Swedish interim report shall prevail.NCAB’s CEO Hans St?hl to retire in 2020NOV 05, 2019 The CEO of NCAB, Hans St?hl, has today informed the Board that he wishes to retire from the position of CEO in 2020. The Board of NCAB will now commence the recruitment process to find a new CEO with the aim of accomplishing this during the first half of 2020. Hans St?hl will remain in the position of CEO until a successor is in place.Christian Salamon, Chairman of the Board of NCAB, comments: “We have been prepared that this day will come, considering Hans St?hl is approaching retirement age next year. He has led the development of NCAB from a Nordic PCB trader to a global, leading and publically listed full-service supplier with demanding customers worldwide. This has yielded stable and profitable growth over many years. The strong culture with decentralised decision making, solid local leadership, shared values and a clear focus on sustainability are all trademarks of Hans St?hl’s leadership.”Hans St?hl, CEO of NCAB, comments: “It feels, of course, strange to step down from the position of CEO of NCAB after 16 years, but also natural to pass the helm to a new generation. I will remain a shareholder and continue to support NCAB in various ways. NCAB is a strong and solid organisation with many competent leaders and specialists.”For further information, please contact:Gunilla ?hman, IR Manager, Telephone: +46 707 63 81 25E-mail: gunilla.ohman@This is information that NCAB Group AB is obligated to disclose pursuant to the EU Market Abuse Regulation. The information was issued for publication through the agency of the contact person set out above, on 5 November 2019 at 19:30 a.m. CET.About NCABNCAB is a worldwide leading supplier of printed circuit boards, listed on NASDAQ Stockholm.NCAB is offering PCBs for demanding customers, on time with zero defects, produced sustainably at the lowest total cost. NCAB was founded in 1993. Since its foundation, the operations have been characterized by an entrepreneurial and cost efficient culture and have over time showed strong growth and good profitability.Today, NCAB has local presence in 17 countries in Europe, Asia and North America and customers in approximately 45 countries worldwide. Revenues in 2018 amounted to SEK 1 617 million. Organic growth and acquisitions are part of NCAB’s strategy. For more information about NCAB Group please visit us at .North American Relay Market: Sales Off 1%, Bookings Drop 11% for Q1 - Cumulus11/07/2019 Michael Schwert in: Switches & RelaysTTI MarketEYEThe total reported sales for all relay categories in North America for the first quarter of 2019 were 1 percent less than reported in the previous quarter, though up 1 percent from the same quarter in 2018. Sales units for Q1 2019 ran 5 percent less than units sold in Q4 and 2 percent more than Q1 of 2018.Total booking dollars reported for all relay categories in North America for Q1 2019 were 12 percent less than the previous quarter and down 20 percent from Q1 2018. The first quarter’s book-to-bill ratio for dollars was 0.839.Booking units in Q1 2019 came in 16 percent above Q4; the first quarter’s book-to-bill ratio for units was 1.paring the first quarter of 2019 to the fourth, sales were up in dollars and units for SSRs. Units and dollars dropped for EMRs. In total, dollars inched down 1 percent and units were off 5 percent, while the ASP was 4 percent higher.When compared to the first quarter of last year, EMRs and SSRs were higher in units. Dollars and ASPs had mixed results. In total, dollars were up 1 percent and units 2 percent higher with an ASP 1 percent lower. Sales Growth by Relay Category?Q1 Versus Q4 CY 2018Q1 2019 Versus Q1 2018CategoryDollarsUnitsASPDollarsUnitsASPElectro-mechanical-1.7%-5.9%4.4%2.3%1.8%0.4%Solid State2.5%10.8%-7.5%-2.0%6.7%-8.1%Total-0.6%-4.7%4.3%1.1%2.2%-1.1%When compared to the third quarter of 2017, total bookings were down in euros and units for the majority categories. In total, euros fell almost 11 percent and units slipped 4 percent. The average booking price fell 8 percent in total, with half of the categories decreasing. The results compared to same quarter last year saw euros and units moving lower for most categories. In total, euros dropped 14 percent and units slipped almost 8 percent with the ABP decreasing 6 percent. Year-to-date booking euros and units weakened for most categories with a 2 percent total decrease in euros and less than 1 percent increase for units. The total ABP shrank 3 percent.Bookings Growth by Relay Category?Q1 Versus Q4 CY 2018Q1 2019 Versus Q1 2018CategoryDollarsUnitsABPDollarsUnitsABPElectro-mechanical-8.6%18.5%-22.8%-16.3%8.5%-22.8%Solid State-21.1%-23.5%3.1%-30.1%-51.2%43.3%Total-11.6%15.9%-23.8%-19.7%3.5 %-22.4%The graph below shows total quarterly indexed sales and bookings in dollars and units for the reported data. Indexed sales and booking dollars and units generally have trended higher over the past two years; however, the trend seems to be rolling over.The overall indexed selling prices generally had moved lower over the last two years, until the last two quarters. During this period, the indexed ABP has trended lower.Book-to-bill dollars have been above 1.0 for most of the last two years, but, moved lower in Q4 and Q1. Book-to bill units also have been mostly over 1.0. The ratio of average booking to selling prices has oscillated around 1.0 over the period.Statements of fact and or opinions expressed in MarketEYE by its contributors are the responsibility of the authors alone and do not imply an opinion of the officers or the representatives of TTI, Inc.Michael is the founder of Cumulus, Inc. He has more than 30 years of marketing and sales as well as design experience in the electronic and electrical component industry. Prior to founding Cumulus, he was Director of Marketing for Cherry Electrical Products and held other marketing management positions with Panduit, BRK Electronics, and Ideal Industries.Novatek Microelectronics October revenues were NT$5.64 billion, up 0.4% sequentially and hitting a record high; expects up to 5% sales drop in 4Q19Novatek expects up to 5% sales drop in 4Q19Cage Chao, Taipei; Jessie Shen, DIGITIMES Thursday 7 November 2019 LCD driver IC design specialist Novatek Microelectronics expects to post revenues of between NT$15.8 billion (US$519.3 million) and NT$16.3 billion for the fourth quarter of 2019, representing a 2-5% sequential decrease.Gross margin is estimated at 30-32% for the fourth quarter, compared with 31.07% in the prior quarter.Novatek also disclosed October revenues of NT$5.64 billion, up 0.4% sequentially and hitting a record high.Novatek indicated that the company’s SoC shipments have already peaked for 2019, and is cautious about large-size display driver IC demand during the fourth quarter. However, sales of the company’s small- and medium-size display driver ICs will register a sequential rise in the fourth quarter, thanks to 5G smartphones set to be rolled out by China-based vendors.Novatek also expressed optimism about sales of its TDDI chip solutions and OLED display driver ICs next year. Shipments for OLED display will pick up rapidly in the first half of 2020, with the product segment set to be a major driver of company growth next year, according to the Taiwan-based firm.Novatek generated net profits of NT$2.03 billion in the third quarter, down 4.5% sequentially, while revenues climbed to a record high of nearly NT$16.6 billion. EPS for the quarter came to NT$3.34.Novatek’s net profits for the first three quarters of 2019 totaled NT$6.125 billion, rising 41.2% on year, while revenues grew 21.2% from a year earlier to NT$47.85 billion. EPS for the nine-month period reached NT$10.07.Pegatron mulling more production in Southeast Asia; positive about 5G-induced revenues in 2020DIGITIMES 7 November 2019Pegatron will not rule out setting up new factory sites in Vietnam and India to satisfy customer demand, according to the Taiwan-based ODM.The commercialization of 5G technology will make a positive contribution to Pegatron’s sales of mobile devices, gaming consoles and smart home related products in 2020, according to company president and CEO SJ Liao.Pegatron net profit last quarter surged 122.5 percent to NT$6.29 billion (US$206.9 million), bolstered by strong iPhone sales and an improved product mixNov 08, 2019 Natasha Li Taipei TimesContract electronics manufacturer Pegatron Corp, which assembles Apple Inc’s iPhones, yesterday reported that net profit last quarter surged 122.5 percent to NT$6.29 billion (US$206.9 million), bolstered by strong iPhone sales and an improved product mix.As a result, earnings per share reached NT$2.41, up from NT$1.08 a year earlier.Third-quarter revenue increased by 10.2 percent year-on-year to NT$354.79 billion, while gross margin improved from 3.3 percent to 3.8 percent, thanks to a high and stable utilization rate as well as lower inventory costs, Pegatron chief financial offer Louise Wu said.Despite the results, chief executive officer S.J. Liao gave a conservative outlook for this quarter.Shipments from the company’s network and communications segment are expected to decline by 10 to 15 percent on an annual basis due to a high comparison base, Liao said, adding that the segment’s revenue would nevertheless increase on a quarterly basis.Revenue of the network and communications segment, which contributed 61 percent to the company’s overall revenue last quarter, grew by 12 percent year-on-year.While the company’s consumer electronics segment, which contributed 14 percent to overall revenue, contracted by 9 percent year-on-year last quarter, Liao remained optimistic as he expects growth to come as the rollout of 5G accelerates.“Next year will be a defining year for 5G technology products ... new smartphone models, devices that use the Internet of Things [IoT], wearables and gaming consoles,” Liao said, adding that she also has high hopes for smart home appliances.Liao said he expects the company’s subsidiaries to also benefit next year from the deployment of 5G technologies, saying that the worst is over for silicon substrate maker Kinsus Interconnect Technology Corp, which posted net losses of NT$278.47 billion last quarter.The company plans to relocate production lines from China to Vietnam and India, as well as moving an assembly plant to Batam, Indonesia, Liao said, adding that the Batam plant should start shipments in January.Although reluctant to share details, Liao said that the moves to India and Vietnam are a response to customer demand, but the plan ultimately depends on how the trade spat between the US and China plays out.Leaving China is unavoidable, as production costs there are bound to rise, Pegatron chairman Tung Tzu-hsien said earlier this year.The company, which has pledged to invest NT$14.9 billion in Taiwan, is expanding its plants in Taoyuan’s Gueishan District and purchasing a plant in New Taipei City’s Sindian District, which would produce high-value-added products such as IoT sensors.Plasmatreat GmbH to present live lead frame and surface cleaning at productronica 2019Steinhagen, 07.11.2019In today’s world of electronics, semiconductor components are essential. For the manufacturing of these components the cleaning of metal surfaces before wire bonding or injection molding of the semiconductor housing is still an important and necessary step. Contaminated and oxidized metal surfaces can cause low wire bond strength and lead to failures due to interruption of the electrical contacts. At productronica 2019 Plasmatreat GmbH will be presenting its Openair-Plasma technology for cleaning surfaces live to the audience of experts.Low pressure plasma processes can remove oxide layers and weaker organic contaminants, but equipment costs and long process times are a drawback. With Plasmatreat’s reducing Openair-Plasma, these surface impurities can be removed in a single process. A special combination of gas mixture and a new type of nozzle makes it possible to create a strongly reducing atmosphere around the sample during treatment. The number of active radicals and ions per volume unit is by magnitudes larger than in a low-pressure hydrogen plasma and allows for very short treatment times.The combination of nozzle and gas mixture makes it possible to treat metal surfaces, such as copper, which can normally only be treated in low-pressure plasma or in a protective atmosphere. Copper is particularly sensitive to oxidation at high temperatures. With the reducing Openair-Plasma treatment, copper lead frames can be cleaned very quickly. A PlasmaPlus coating will prevent the copper to reoxidize. “After cleaning with Openair-Plasma, no discoloration of the copper frame is visible. Thanks to the geometry of the nozzle, the treated parts are subjected to less thermal stress than with comparable reducing atmospheric plasmas. This means, for example, that circuit boards on plastic or metal cores can be processed without thermal damage. Ceramic and LS switch carriers can also be treated after die bonding and before wire bonding,” explains Nico Coenen, Business Development Manager Electronics Market at Plasmatreat GmbH. Plasma is electrically neutral, which eliminates chip damage caused by electrostatic charges.In addition to semiconductor applications, the process can also be applied to LED housings and substrates. “Thanks to the process speed, reducing Openair-Plasma is a great alternative to low-pressure plasma processes and can be regarded as an ecologically sensible substitute for wet cleaning processes. The process not only saves equipment costs, but also reduces cycle times,” continues Coenen.Plasmatreat will be presenting its Openair-Plasma technology at productronica 2019 in hall B2, booth 103. The live demonstrations for surface cleaning will take place regularly throughout the entire trade show in short intervals.About plasmatreatPlasmatreat is the worldwide market leader in Atmospheric plasma applications for cleaning and activation of all kind of surfaces. You can find the Openair-Plasma applications in automated production lines in almost any type of industry. Plasmatreat has production centers in Germany (headquarter), USA, Canada and China and has more than 30 subsidiaries and partners around the world.Plasmatreat GmbHHauptsitz DeutschlandQueller Str. 76 - 80D-33803 SteinhagenPhone: +49 5204 99 60 0 Fax: +49 5204 99 60 33 mail@plasmatreat.de plasmatreat.deContact person: Florian Schildeinphone: +49 30 585 846 011email: fs@butter-and-salt.dePortugal hopes European tech investment will drive up exportsNov. 6th, 2019LISBON (Reuters) - European investment in Portugal’s digital sector can help address a shortfall in equity funding for start-ups and support an export-driving technology industry, Portugal’s economy minister said on Wednesday.A 30 million euro fund backed by the European Investment Fund, the Portuguese government and venture capital investors was announced on Tuesday at the Web Summit - Europe’s largest tech conference, held in Lisbon since 2016.The fund will invest in Iberian startups focused on artificial intelligence, machine learning and big data.“Access to finance is an issue here in Portugal and in Europe, putting us below par to our American competitors,” Economy Minister Pedro Siza Vieira told a press conference on Tuesday.“Working together with European authorities allows us to leverage the very small availability of public money in this country,” he added.Virtually non-existent 10 years ago, Portugal’s start-up sector attracted 485 million euros ($537 million) in foreign investment and contributed to 1.1% of GDP last year.Revenue generated from exports by the sector in 2018 nearly doubled from 2016 levels, reaching 1.1 billion euros, or 1.9% of Portugal’s total export revenue that has been growing year-on-year since the financial and debt crisis of the early 2010s.Siza Vieira told Reuters that improving Portugal’s data processing capacity was crucial to the economy.A supercomputer installed earlier this year, which multiplied Portugal’s computational capacity ten-fold, was an untapped opportunity for start-ups, he added.Portugal’s young people are highly educated and often multilingual, but wages remain far below the European average, with the minimum wage at 600 euros month ($664) and average wage at 943 euros ($1,045), government data shows.A qualified labor force, tax incentives, and a stable political environment are Portugal’s competitive advantages, according to Siza Vieira. The Socialist government, now in its second term, has presided over a period of solid economic growth and budget deficit cuts.“We expect to see a sizeable increase in companies from abroad investing in service centers and software development in Portugal and exporting from here,” he said.Siza Vieira expects the majority of investment to come from European companies, stating that most of the firms announcing expansion in Portugal at the Lisbon event are European.Reporting by Victoria Waldersee, editing by Andrei Khalip and Alexandra HudsonOur Standards:The Thomson Reuters Trust Principles.Primax Electronics reported consolidated revenues of NT$9.362 billion (US$307 million) for October, increasing 0.18% sequentially and 26.28% on year Adam Hwang, DIGITIMES, Taipei Thursday 7 November 2019 PC input device and CCM (compact camera module) maker Primax Electronics has reported consolidated revenues of NT$9.362 billion (US$307 million) for October, increasing 0.18% sequentially and 26.28% on year to hit a monthly record for the third consecutive month.Consolidated revenues for January-October stood at NT$64.998 billion, growing 21.03% on year.To cope with negative impact arising from US-China trade disputes, Primax said it will set up a subsidiary maker in Thailand.Qualcomm expects between 1.75 billion and 1.85 billion smart devices with modem chips, including 175 million to 225 million 5G handsets, to be sold in 2020November 07, 2019(Reuters) - Qualcomm Inc (QCOM.O) on Wednesday forecast current-quarter profit above Wall Street expectations, as its all-important licensing segment benefits from a deal with Apple Inc (AAPL.O) and the annual holiday-quarter boost it brings. Qualcomm, the world’s biggest supplier of mobile phone chips, derives most of its profits from a business segment that invents technologies and licenses them. The company forecast between $1.3 billion and $1.5 billion in revenue for that segment for its fiscal first quarter, above analyst expectations of $1.23 billion, according to IBES data from Refinitiv. The licensing business drove the adjusted profit forecast with a midpoint of 85 cents per share, also above analyst expectations of 83 cents per share, according to Refinitiv data. The return of Apple sales also provides Qualcomm a seasonal boost in its fiscal first quarter that ends in December, when Apple traditionally sells its biggest number of devices and therefore pays the most royalties. On the chip side, Qualcomm’s chief executive, Steve Mollenkopf, told Reuters in an interview that the company has won deals to supply 230 device designs with 5G chips, up from 150 a quarter ago. “We’re continuing to see strength in the licensing business, particularly after we’ve added in the deal we signed this year with Apple, and we’re on the front end of the 5G transition, which will impact our product business,” Mollenkopf said. “We’re closer to that and we’re really seeing the signs that we should be confident.” The news sent shares up nearly 5.1% to $89.00 in after-hours trading. The company has resolved license disputes with major customers such as Samsung Electronics Co Ltd (005930.KS) and Apple. It helps that most of Qualcomm’s customers are actually paying,” Patrick Moorhead of Moor Insights & Strategy said. But Qaulcomm remains in a license dispute with Huawei. “Although negotiations continue, we have not reached a final agreement with Huawei,” Qualcomm said on Wednesday. Qualcomm said it expects between 1.75 billion and 1.85 billion smart devices with modem chips, including 175 million to 225 million 5G handsets, to be sold in 2020. Because Qualcomm collects license fees on devices that use cellular connections to wireless data networks, a greater number of devices sold often results in higher revenue and profits. The results come a week after Apple calmed Wall Street nerves with improved sales in China, the world’s largest smartphone market, and follow strong earnings from chipmaker Intel Corp (INTC.O) last month. Qualcomm said that for the fiscal fourth quarter ended Sept. 29, revenue in its licensing segment was $1.16 billion, beating estimates of $1.10 billion, according to data from FactSet. Excluding items, the company earned 78 cents per share, topping analysts’ average estimate of 71 cents. Revenue in the fourth-quarter fell about 17% to $4.81 billion, but beat analysts’ estimates of $4.70 billion. Reporting by Munsif Vengattil in Bengaluru and Stephen Nellis in San Francisco; Editing by Sriraj Kalluvila and Leslie AdlerRenesas Electronics Reports Financial Results for the Third Quarter Ended September 30, 2019Thu November 7, 2019 TOKYO--(BUSINESS WIRE)-- Renesas Electronics Corporation (RNECY) (TSE:6723) today announced consolidated financial results in accordance with IFRS for the nine months ended September 30, 2019.Summary of Consolidated Financial Results?Three months endedSeptember 30, 2019Nine months endedSeptember 30, 2019?Billion Yen% of?Net SalesBillion Yen% of?Net SalesRevenue183.4100.0526.2100.0Operating profit7.94.3(4.2)(0.8)Net profit3.82.1(7.4)(1.4)Capital expenditures2.9?7.4?Depreciation and others39.3?109.3?R&D expenses32.7?93.9??Yen?Yen?Exchange rate (USD)108?110?Exchange rate (Euro)121?124??As of September 30, 2019?Billion YenTotal assets1,666.0Total equity596.6Equity attributable to owners of the parent593.8Equity ratio attributable to owners of the parent (%)35.6Interest-bearing debt828.8Note 1:All figures are rounded to the nearest 100 million yen.Note 2:Capital expenditures refer to the amount of capital for property, plant and equipment (manufacturing equipment) and intangible assets based on the amount of investment decisions made during the quarter ended September 30, 2019.Note 3:Depreciation and others includes depreciation and amortization of intangible assets and long- term prepaid expenses in consolidated statements of cash flows.Note 4:R&D expenses includes a partially capitalized R&D expenses recorded as intangible assets.Note 5:The allocation of the acquisition costs for the business combinations with Integrated Device Technology, Inc. (IDTI) (hereinafter “IDT”), which the Group acquired on March 30, 2019, has been revised at the end of the nine months ended September 30, 2019. The revised allocation of the acquisition costs are reflected in the Quarterly Consolidated Financial Statements of the nine months ended September 30, 2019.RENESAS ELECTRONICS CORPORATIONConsolidated Financial Results for the Third Quarter Ended September 30, 2019English translation from the original Japanese-language documentNovember 7, 2019Company name:Renesas Electronics CorporationStock exchanges on which the shares are listed:Tokyo Stock Exchange, First SectionCode number:6723URL: Shibata, Representative Director,President and CEOContact person:Yoichi Kobayashi, DirectorCorporate Communications Dept.Tel. +81 (0)3-6773-3002Filing date of Shihanki Hokokusho (scheduled):November 7, 2019(Amounts are rounded to the nearest million yen)1. Consolidated financial results for the nine months ended September 30, 20191.1 Consolidated financial results(% of change from corresponding period of the previous year)?RevenueOperatingprofit(loss)Profit beforetax fromcontinuingoperations(loss)Net Profit(loss)Net profitattributable toowners of theparent(loss)Totalcomprehensiveincome?Millionyen%Millionyen%?Millionyen%?Millionyen%?Millionyen%?Millionyen%Nine monthsendedSeptember30, 2019526,241(7.5)(4,245)---(6,679)---(7,409)---(7,411)---(44,766)---?Nine monthsendedSeptember30, 2018568,767---69,262---69,381---61,976---61,961---55,169---?Basicearningsper share(loss)Dilutedearningsper share(loss)?YenYenNine months ended??September 30, 2019(4.39)(4.39)???Nine months ended??September 30, 201837.1637.071.2 Consolidated financial position?Total assetsTotal equityEquity attributableto owners of theparentRatio of equityattributable toowners of theparent?Million yenMillion yenMillion yen%?????September 30, 20191,666,000596,565593,77935.6?????December 31, 20181,055,235600,968598,10056.72. Cash dividends?Cash dividends per share?At the endof firstquarterAt the endof secondquarterAt the endof thirdquarterAt theend ofyearTotal?YenYenYenYenYenYear endedDecember 31, 2018---0.00---0.000.00Year endingDecember 31, 2019---0.00---??Year endingDecember 31, 2019(forecast)???0.000.00(Note): Change in forecast of cash dividends since the most recently announced forecast: Yes3. Forecast of consolidated results for the full year ending December 31, 2019?Non-GAAPRevenueNon-GAAPGross MarginNon－GAAPOperating MarginFull yearendingDecember 31,2019Million yen708,741to 716,741%(6.3)to (5.3)%43.7%pts(0.4)%12.3%pts(1.5)Note 1:?Change in forecast of consolidated results since the most recently announced forecast: YesNote 2:?The Group reports its consolidated forecast in a range format. For details, please refer to Appendix 1.3. “Consolidated Forecasts” page 6.Note 3:?Non-GAAP figures are calculated by removing or adjusting non-recurring items and other adjustments from GAAP figures following a certain set of rules. The Group believes non-GAAP measures provide useful information in understanding and evaluating the Group’s constant business results, and therefore forecasts are provided in non-GAAP base.4. Others4.1Changes in significant subsidiaries for the nine months ended September 30, 2019: Yes(Changes in specified subsidiaries resulting in changes in scope of consolidation)4.2Changes in Accounting Policies, Changes in Accounting Estimates and Corrections of Prior Period ErrorsChanges in accounting policies with revision of accounting standard: YesChanges in accounting policies except for 4.2.1: NoChanges in accounting estimates: No4.3Number of shares issued and outstanding (common stock)Number of shares issued and outstanding (including treasury stock)As of September 30, 2019: 1,706,408,990 sharesAs of December 31, 2018: 1,668,385,390 sharesNumber of treasury stockAs of September 30, 2019: 2,581 sharesAs of December 31, 2018: 2,581 sharesAverage number of shares issued and outstandingNine months ended September 30, 2019: 1,689,257,809 sharesNine months ended September 30, 2018: 1,667,523,753 shares(Note): Information regarding the implementation of audit proceduresThese financial results are not subject to audit review procedures.Cautionary StatementThe Group discloses its consolidated financial statements in accordance with International Financial Reporting Standards (hereinafter “IFRS”) starting from the annual securities report for the fiscal year ended December 31, 2018.As of the first quarter ended March 31, 2019, there has been a change to the Group’s auditor, and therefore quarterly figures of the year ended in December 31, 2018, provided under IFRS are not reviewed by the previous auditors. However, for each of the quarterly figures of the year ended December 31, 2018 provided under the generally accepted accounting principal in Japan (hereinafter “J-GAAP”) have been reviewed by the Group’s previous auditor.The Group will hold a quarterly earnings conference for institutional investors and analysts on November 7, 2019. The Group plans to post the materials which are provided at the meeting, on the Group’s website on that day.The statements with respect to the financial outlook of Renesas Electronics Corporation (hereafter “the Company”) and its consolidated subsidiaries (hereafter “the Group”) are forward-looking statements involving risks and uncertainties. We caution you in advance that actual results may differ materially from such forward-looking statements due to changes in several important factors.The allocation of the acquisition costs for the business combinations with Integrated Device Technology, Inc. (hereinafter “IDT”), which the Group acquired on March 30, 2019, has been revised at the end of the nine months ended September 30, 2019. The revised allocation of the acquisition costs are reflected in the Quarterly Consolidated Financial Statements of the nine months ended September 30, 2019.Forward-Looking StatementsThe statements in this press release with respect to the plans, strategies and financial outlook of Renesas Electronics Corporation and its consolidated subsidiaries (collectively “we”) are forward-looking statements involving risks and uncertainties. We caution you in advance that actual results may differ materially from such forward-looking statements due to several important factors including, but not limited to, general economic conditions in our markets, which are primarily Japan, North America, Asia, and Europe; demand for, and competitive pricing pressure on, products and services in the marketplace; ability to continue to win acceptance of products and services in these highly competitive markets; and fluctuations in currency exchange rates, particularly between the yen and the U.S. dollar. Among other factors, downturn of the world economy; deteriorating financial conditions in world markets, or deterioration in domestic and overseas stock markets, may cause actual results to differ from the projected results forecast.About Renesas Electronics CorporationRenesas Electronics Corporation (TSE: 6723) delivers trusted embedded design innovation with complete semiconductor solutions that enable billions of connected, intelligent devices to enhance the way people work and live—securely and safely. A global leader in microcontrollers, analog, power, and SoC products and integrated platforms, Renesas provides the expertise, quality, and comprehensive solutions for a broad range of Automotive, Industrial, Home Electronics, Office Automation and Information Communication Technology applications to help shape a limitless future. Learn more at .Public RelationsKyoko OkamotoRenesas Electronics Corporation+81 3-6773-3001pr@Investor RelationsYoichi KobayashiRenesas Electronics Corporation+81 3-6773-3002ir@Schweizer Electronic AG: Positive development in the third quarter of 2019 | MarketScreenerSchweizer Electronic AG: Positive development in the third quarter of 2019Cost-cutting programme gradually shows a stronger effectForecast confirmed for the 2019 fiscal yearSchramberg, 07 November 2019 - The SCHWEIZER Group showed positive development in its business operations in the third quarter of 2019. It was the quarter with the strongest turnover and earnings of the fiscal year. With a turnover of 34.1 million euros (2018: 32.8 million euros), the previous year’s quarter was exceeded by 4 percent. Turnover in the first three quarters thus amounted to 94.3 million euros, which corresponds to a decline of 2.5 percent compared to the previous year.The positive momentum with customers in the automotive sector has increased significantly over the past two quarters. Compared to the previous year, turnover from the most important customer segment for SCHWEIZER rose by 5.3 percent to 71.2 million euros, representing 75.5 percent of turnover. The pronounced macroeconomic weakness in Europe was reflected in a shift within the sales regions. The share of exports to Asia and America rose to over 21 percent of total turnover. By contrast, Europe, including Germany, lost significance. However, with a 79-percent share of turnover, Europe remains the most important sales region for SCHWEIZER. Turnover generated via our Asian partner network rose by 59.7 percent to 27.9 million euros in the first three quarters (2018: 17.4 million euros). In contrast, turnover from our in-house production in Schramberg was a less positive development, totalling 66.4 million euros (2018: 79.3 million euros).Incoming orders in the third quarter reached their highest level in the current reporting year. At 30.3 million euros, they were as high as in the first half year as a whole. The order book at the end of the third quarter amounted to 140.2 million euros (2018: 169.2 million euros).Earnings significantly improved despite burdens from ChinaThis success is due on the one hand to the increasing effectiveness of the savings measures introduced at the Schramberg site in terms of personnel and material costs, and on the other hand to a lower-than-planned contribution to losses from the project in China.Earnings before interest, taxes, depreciation and amortisation (EBITDA) amounted to 1.9 million euros in the third quarter (2018: 2.7 million euros). An EBITDA of 2.9 million euros or 3.1 percent was thus achieved in the first three quarters.Investment project in China making great progressThe construction work on the production and administration building was completed on schedule. At present, the final interior design work is being carried out. A large number of production equipment have already arrived and will be set up step by step by the end of this year. Series production will start in the first quarter of 2020.2019 ForecastFor Schweizer, the situation with regard to turnover, incoming orders and earnings has stabilised in recent months and is showing the first signs of improvement. Overall, the Management Board of Schweizer Electronic AG expects a slightly better second half year in terms of turnover and EBITDA compared to the first six months. The Management Board continues to forecast a turnover of between 120 and 125 million euros, which corresponds to a growth of between minus 4 percent and 0 percent compared to the previous year and an EBITDA of between 0 and 4 million euros.About SchweizerSchweizer Electronic AG stands for state-of-the-art technology and consultancy competence. SCHWEIZER’s premium printed circuit boards and innovative solutions and services for automotive, solar, industry and aviation electronics address key challenges in the areas of Power Electronics, Embedding and System Cost Reduction. Its products are distinguished for their superior quality and their energy-saving and environmentally-friendly features. Together with its partners WUS Printed Circuit (Kunshan) Co., Ltd., Meiko Electronics Co. Ltd. and Elekonta Marek GmbH & Co. KG the company offers in its division electronics cost- and production-optimised solutions for small, medium and large series. Together with its partner Infineon Technologies AG, SCHWEIZER plans to jointly tap the chip embedding market in future.The company was founded by Christoph Schweizer in 1849 and is listed at the Stuttgart and Frankfurt Stock Exchanges (ticker symbol “SCE”, “ISIN DE 000515623”).For further information please contact:Elisabeth TrikSchweizer Electronic AGEinsteinstra?e 1078713 SchrambergPhone: +49 7422 / 512-302Fax:???? +49 7422 / 512-777-302E-mail: ir@schweizer.agPlease visit our website: Siemens Quarterly Profit Surge Comes With Cautious OutlookFourth-quarter profit beats estimates, led by health, softwareIndustrial giant expects auto slump to hurt some businessesNovember 7, 2019By Oliver SachgauBloombergSiemens AG beat expectations for fourth-quarter profit, while warning a manufacturing slowdown will lead to a decline in some factory-equipment volumes next year.Europe’s biggest engineering company put forward the cautious outlook Thursday after its health and software operations helped to boost its main profit indicator by a fifth. Adjusted earnings before interest, taxes, and amortization from the company’s industrial businesses totaled 2.64 billion euros ($2.92 billion), 12% higher than analysts had expected. The shares rose as much as 2.4%.The guidance is “a relief after recent market conjecture of a much more challenging year for profits in 2020,” Citigroup analysts including Martin Wilkie wrote in a report, calling the overall outlook “complicated.”The German industrial giant is on the front lines of a manufacturing slump that has hit the global car industry particularly hard. The maker of factory equipment and software depends on investment by companies, which often drops during a downturn. German industrial production is continuing to worsen.Chief Executive Officer Joe Kaeser said in an interview on Bloomberg TV that the slump hitting its own operations will “level out over the next six months.”The company expects a “moderate decline” in market volume for its short-cycle businesses, which refers to orders that have a relatively fast turnaround. The software and automation division, called digital industries, would face “continued weakness” in its most important markets, particularly the automotive and machine tool industries, it said.What Bloomberg Intelligence Says“Siemens’s 2020 guidance points to another year of stagnant profit, and suggests progress on its Vision 2020+ strategy will be key to lowering the conglomerate discount that’s holding back its valuation.”Johnson Imode, BI industrial analystA planned spinoff of the gas and power division is on track for next year, the company said. Kaeser has spearheaded a breakup of its conglomerate structure into a holding of core businesses and stakes in listed former units.Siemens already warned in August of a sharp deterioration in some markets that was going to make full-year goals harder to reach.Earnings HighlightsRevenue rose 8% to 24.52 billion euros. Analysts had predicted 22.96 billion euros.Orders rose 2% on a comparable basisSiemens gave targets for division margins for the next fiscal year with a range of 17% to 18% for digital industries to 2% to 5% for gas and powerSilicon Motion Technology expects its share of the global SSD controller segment to reach 40% over the next three years, up from the current 30%Siu Han, Taipei; Willis Ke, DIGITIMES Thursday 7 November 2019 NAND flash controller supplier Silicon Motion Technology expects its share of the global SSD controller segment to reach 40% over the next three years, up from the current 30%, according to company president Wallace Kou.Kou said that SSD penetration in PCs has risen to 60% in the second half of 2019, driven by 25-35% price falls for consumer SSDs seen so far this year. He expects stable growth in demand for PC-use SSDs to persist into the first half of 2020.Kou also noted that Silicon Motion’s market share in the UFS (universal flash storage) segment may rise to 25% in 2020, as UFS controllers are replacing eMMC controllers as main handset memory storage spec and shipments will trend up steadily next year.After racing to volume produce 96-layer 3D NAND flash chips in 2019, major makers worldwide will enter production of 128-layer solutions in 2020, with next-generation NAND process technology likely to appear by the end of 2020, according to Kou.He disclosed that Silicon Motion has joined forces with NAND flash vendors to make preparations for applications of next-generation chips to Internet of Vehicles (IoV), datacenters and 5G devices in 2021.Kou, speaking at the 2019 Arm Tech Symposia Taiwan, said that China will see the fastest development of IoV in the world thanks to its rapid establishment of 5G networks, and 5G IoV networks are expected to be seen on freeways or in major cities in China, prompting leading chipmakers such as Arm, Intel and Nvidia to step up deployments in relevant chipset solutions.Kou said that in the future, a vehicle will be a small server and equipped with 20-30 sensors or LiDAR devices, making storage devices and controllers increasingly crucial components.Silicon Motion is set to release its new PCIe 4.0 SSD controllers for enterprise application market in the first quarter of 2020, which will be built using TSMC’s 7nm node and adopt Arm Cortex-R8 architecture.Smartphone Rebound Sparks Signs of Life in Asia’s Tech CycleSouth Korea felt the brunt of less demand for new smart phonesRapid run down of chip inventories hints at a turnaroundNovember 6, 2019By Enda Curran and Sam KimBloombergA technology slump that has dogged Asia’s manufacturing economies is showing signs of bottoming.That’s potentially good news for a region where exports of electronics goods on average account for around 30% of shipments, according to an estimate by ING Bank.Asia is the world’s dominant producer of semiconductors, optical lenses, memory chips and display screens that are used in every day goods like smartphones and cameras.A big fall off in tech sales has hurt economic growth and forced central banks and governments to respond by lowering interest rates and rolling out fiscal support.Now, better demand for smartphones—global sales rose on a quarterly basis only for the first time in two years during the third quarter—is signaling a nascent recovery. Samsung Electronics Co., the world’s biggest handset maker, said its smartphones enjoyed solid demand in the third quarter. The company also saw its mobile-display orders rise as Apple Inc. launched its latest iPhone.Apple projected fiscal first-quarter revenue that beat analysts’ estimates while Sony Corp. signaled buoyant demand for the image sensors used in smartphone cameras.“Smartphones are leading the tech industry to recovery,” said Neil Mawston, executive director at the London-based Strategy Analytics.South Korea, the bellwether for global trade and home to some of the world’s biggest semiconductor, smartphone and display makers, is where the nascent recovery will be tested.Samsung, which also dominates memory chips, said the inventory of dynamic random access memory—or DRAM, its biggest cash cow—would probably “normalize” in the first half of 2020 and prices for NAND rebound by the end of this year.That outlook came as data showed chip inventories in South Korea fell the most in more than two years on a monthly basis in September. On a yearly basis, the inventory still went up, but the pace of rise slowed for two months in a row, the first back-to-back deceleration since last year.“The bottom line is how quickly these chip inventories are cleared out,” said Mun Byung-ki, a researcher at the Korea International Trade Association in Seoul. “Demand for server DRAM has to come back even though there’s a clear recovery in NAND.” Semiconductor prices are expected to bottom in the first quarter of next year, Barclays Bank economist Angela Hsieh wrote in a Nov. 1 report. Citigroup Inc. economists Marie Kim and Jeeho Yoon also said in a Nov. 1 report that they were “cautiously monitoring to see a turn-around of the semiconductor cycle, and expect Korea’s semiconductor exports to turn positive in the second quarter next year.”The game changer for tech exporters over coming years is the expected roll out of 5G, or fifth-generation mobile networks, that promise wireless transfers of data dozens times faster than conventional devices.South Korea and the U.S. earlier this year rolled out commercial 5G networks, and China is trying to catch up by offering discounts to smartphone users that migrate to the nation’s own infrastructure.Yet that roll out is sputtering due to heightened technology tensions between the U.S. and China.“Upside prospects for this sector remain very limited unless 5G becomes more of a reality,” ING economists led by Rob Carnell wrote in a recent note. “And that is where the trade war is important, because while this still rages, 5G remains a distant prospect.”Displays are another sector that serves as a barometer of tech demand. While liquid crystal displays—a flat-panel technology widely popular for low prices—continue to suffer in sales, organic light-emitting diodes have been gaining ground as the go-to screens for high-end devices such as the iPhone and LG OLED televisions. Data from South Korea’s international trade association shows the nation’s OLED cycle has bottomed out, as revenue returns to levels seen last year.“With an inventory glut having been worked off, there are tentative signs that Asia’s electronics export cycle is bottoming out,” according to Vincent Tsui, an analyst at Gavekal.SMTA “Members of Distinction” Award Winners AnnouncedNovember 6, 2019Minneapolis, MN - During the 2019 Annual Meeting at SMTA International, the SMTA honored members who have shown exceptional service to the association and the electronics assembly industry.The association’s highest honor, the Founder’s Award, recognizes members who have made exceptional contributions to the industry, as well as support and service to the SMTA. This year, the organization selected Charles E. Bauer Ph.D., TechLead Corporation, to receive this prestigious award. SMTA and the electronics industry have benefited immensely from Dr. Bauer’s support over the years. His contributions of leadership to the Oregon Chapter and Board of Directors, as well as technical contributions such as founding the Pan Pacific Microelectronics Symposium, have truly set the standard for bringing global awareness to the SMTA.The Member of Technical Distinction Award recognizes individuals who have made significant and continuing technical contributions to the association. This year the Awards Committee selected Dudi Amir, Intel Corporation, as the recipient of this prestigious award. Dudi Amir has been a senior process engineer at Intel Corporation since 1994. He has given many industry papers and has been awarded 9 US patents in package and board technologies. Dudi is an authority on two key technical concerns in the industry - Head on Pillow and Non-wet Open defects for BGA solder joints. He has played an important role in the SMTA International Conference as a speaker, chair and member of the technical committee for several years as well as presenting many papers and instructing workshops.The Excellence in Leadership Award honors members who stand out as strong leaders in the association. The 2018 recipient of this award is Greg Kloiber, Ducommun. Greg Kloiber has been dedicated to the success of the SMTA for over20 years. He has demonstrated his leadership experience in various roles on the Wisconsin Chapter leadership team.Greg brings a high level of energy, optimism, inclusiveness, and FUN; key attributes for increasing participation in the organization. The SMTA thanks Greg for his many valuable years of service.The Excellence in International Leadership Award recognizes members who have provided outstanding support and leadership to the SMTA’s international members, chapters, or educational programs. The recipient selected for this award was Ivan Romo, SMarTsol Technologies. Ivan has been instrumental in growing the SMTA Guadalajara Chapter and various activities all over Mexico since joining the leadership team in 2012. Mr. Romo continually advocates for SMTA participation, dedicating his own company resources to support chapter needs when necessary. Through his extensive network with local and international suppliers, Ivan helped grow the Guadalajara Expo to the hugely successful event it is today, supporting the major demand for networking and education as manufacturing increases in Mexico.Intel Corporation received the SMTA+ Corporate Partnership Award this year. As a corporate member for 20 years, Intel Corporation has shown support at every level of the association from supporting chapter and board leadership positions to technical contributions for conferences, committees, and most importantly their willingness to share technical knowledge with others in the industry. They embody the SMTA mission by encouraging employees to become members, attend meetings and share their knowledge. Intel is most deserving of this honor.SMTA has recognized exceptional individual and corporate members for their immeasurable contributions to the association since 1994.View details at the website: contact Tanya Martin, tanya@ or +1-952-920-7682, with questions.SMTA – A Global Association Working at a Local LevelThe SMTA membership is an international network of professionals who build skills, share practical experience and develop solutions in electronic assembly technologies, including microsystems, emerging technologies, and related business operations.For more info contact: Tanya Martin+1-952-920-7682 tanya@Soft robots of the future may depend on new materials that conduct electricity, sense damage and self-healNovember 7, 2019By Michael Robots used to be restricted to heavy lifting or fine detail work in factories. Now Boston Dynamics’ nimble four-legged robot, Spot, is available for companies to lease to carry out various real-world jobs, a sign of just how common interactions between humans and machines have become in recent years.And while Spot is versatile and robust, it’s what society thinks of as a traditional robot, a mix of metal and hard plastic. Many researchers are convinced that soft robots capable of safe physical interaction with people – for example, providing in-home assistance by gripping and moving objects – will join hard robots to populate the future. Soft multifunctional materials will be used in soft robotics and wearable computers, for example, and will perform many different tasks simultaneously. Michael Ford, CC BY-NDSoft robotics and wearable computers, both technologies that are safe for human interaction, will demand new types of materials that are soft and stretchable and perform a wide variety of functions. My colleagues and I at the Soft Machines Lab at Carnegie Mellon University develop these multifunctional materials. Along with collaborators, we’ve recently developed one such material that uniquely combines the properties of metals, soft rubbers and shape memory materials.These soft multifunctional materials, as we call them, conduct electricity, detect damage and heal themselves. They also can sense touch and change their shape and stiffness in response to electrical stimulation, like an artificial muscle. In many ways, it’s what the pioneering researchers Kaushik Bhattacharya and Richard James described: “the material is the machine.”Making materials intelligentThis idea that the material is the machine can be captured in the concept of embodied intelligence. This term is usually used to describe a system of materials that are interconnected, like tendons in the knee. When running, tendons can stretch and relax to adapt each time the foot strikes the ground, without the need for any neural control.It’s also possible to think of embodied intelligence in a single material – one that can sense, process and respond to its environment without embedded electronic devices like sensors and processing units.A simple example is rubber. At the molecular level, rubber contains strings of molecules that are coiled up and linked together. Stretching or compressing rubber moves and uncoils the strings, but their links force the rubber to bounce back to its original position without permanently deforming. The ability for rubber to “know” its original shape is contained within the material structure.Since engineered materials of the future that are suitable for human-machine interaction will require multifunctionality, researchers have tried to build new levels of embodied intelligence – beyond just stretching – into materials like rubber. Recently, my coworkers created self-healing circuits embedded in rubber.They started by dispersing micro-scale liquid metal droplets wrapped in an electrically insulating “skin” throughout silicone rubber. In its original state, the skin’s thin metal oxide layer prevents the metal droplets from conducting electricity.However, if the metal-embedded rubber is subjected to enough force, the droplets will rupture and coalesce to form electrically conductive pathways. Any electrical lines printed in that rubber become self-healing. In a separate study, they showed that the mechanism for self-healing could also be used to detect damage. New electrical lines form in the areas that are damaged. If an electrical signal gets through, that indicates the damage.The combination of liquid metal and rubber gave the material a new route to sense and process its environment – that is, a new form of embodied intelligence. The rearrangement of the liquid metal allows the material to “know” when damage has occurred because of an electrical response.Shape memory is another example of embodied intelligence in materials. It means materials can reversibly change to a prescribed form. Shape memory materials are good candidates for linear motion in soft robotics, able to move back and forth like your bicep muscle. But they also offer unique and complex shape-changing capabilities.For example, two groups of materials scientists recently demonstrated how a class of materials could reversibly transform from a flat rubber-like sheet into a 3-D topographical map of a face. It’s a feat that would be difficult with traditional motors and gears, but it’s simple for this class of materials due to the material’s embodied intelligence. The researchers used a class of materials known as liquid crystal elastomers, which are sometimes described as artificial muscles because they can extend and contract with the application of a stimulus like heat, light, or electricity.Putting it all togetherBy drawing inspiration from the liquid metal composite and the shape-morphing material, my colleagues and I recently created a soft composite with unprecedented multifunctionality.It is soft and stretchable, and it can conduct heat and electricity. It can actively change its shape, unlike regular rubber. Since our composite easily conducts electricity, the shape-morphing can be activated electrically. Since it is soft and deformable, it is also resilient to significant damage. Because it can conduct electricity, the composite can interface with traditional electronics and dynamically respond to touch.Furthermore, our composite can heal itself and detect damage in a whole new way. Damage creates new electrically conductive lines that activate shape-morphing in the material. The composite responds by spontaneously contracting when punctured.In the movie “Terminator 2: Judgment Day,” the shape-shifting android T-1000 can liquify; can change shape, color, and texture; is immune to mechanical damage; and displays superhuman strength. Such a complex robot requires complex multifunctional materials. Now, materials that can sense, process and respond to their environment like these shape-morphing composites are starting to become a reality.But unlike T-1000 these new materials aren’t a force for evil – they’re paving the way for soft assistive devices like prosthetics, companion robots, remote exploration technologies, antennas that can change shape and plenty more applications that engineers haven’t even dreamed up yet.Taiwan top-3 foundries’ sales increased 18.8% sequentially to a record high of US$10.84 billion in the third quarter of 2019Eric Chen, DIGITIMES Research, Taipei Thursday 7 November 2019 Combined revenues of Taiwan Semiconductor Manufacturing Company (TSMC), United Microelectronics (UMC) and Vanguard International Semiconductor (VIS) are expected to hit another record-high level in the fourth quarter of 2019, Digitimes Research estimates.The top-3 Taiwan-based foundries’ sales increased 18.8% sequentially to a record high of US$10.84 billion in the third quarter of 2019.Specialty IC foundry VIS has expressed caution about its sales performance for the rest of 2019, while TSMC and UMC both expect their sales to be driven by growing demand for 5G related applications. In particular, TSMC has enjoyed robust 7nm chip demand and continues to outperform its fellow Taiwan-based foundry rivals this year.Orders for smartphone- and HPC-related chip solutions boosted TSMC’s sales generated from 28nm and more advanced process technologies to nearly 70% as a proportion of the company’s total wafer revenues in the third quarter, Digitimes Research has found. Leading-edge processes, defined as sub-28nm technologies, surpassed 60% for the first time as a proportion of Taiwan’s top-3 foundries’ combined revenues during the quarter.Taiwan’s top-3 foundries also enjoyed another sequential rise in their foundry ASPs in the third quarter, driven by growing sales generated from sub-28nm process technologies.But TSMC, UMC and VIS will see their combined revenues drop slightly on year in 2019.Taiwan-based hinge makers are expected to significantly benefit from foldable smartphones slated for launch in 2H20Aaron Lee, Taipei; Joseph Tsai, DIGITIMES Thursday 7 November 2019 Taiwan-based hinge makers are expected to significantly benefit from foldable smartphones slated for launch in the second half of 2020, according to sources from the related supply chain.Since hinges for foldable smartphones are composed of up to 100 parts and components, and feature complicated designs, their prices and gross margins are far higher than those of notebook counterparts and should dramatically improve makers’ sales.Samsung Electronics and Huawei were the earliest developers of foldable smartphones, but other smartphone brands have also been keen on creating similar devices of their own, said the sources, noting that many smartphone brands’ foldable products are expected to be released in the second half of 2020.Taiwan-based hinge maker Jarllytec currently has formed partnerships with two smartphone brands over foldable devices, but the company so far has yet to come up with a schedule for the hinges’ mass production, the sources said. Since the hinges require higher durability and are more complex in design compared to regular notebook ones, their yield rates are rather unsatisfactory at the moment and the company is still working with the clients trying to make improvements, the sources pared to notebook hinges that are able to endure 20,000-30,000 times of movement, foldable smartphone’s durability requirement is set much higher at 100,000-200,000 times, the sources said. Parts and components for notebook hinges amount to only 10-20, but foldable phone hinges need 80-100. The high complexity and precision control during the assembly process is expected to become an entry barrier for hinge makers to cross from notebooks to smartphones, the sources stated.With around 50% of hinge parts and components to be made using metal injection molding (MIM), investments in procuring MIM equipment or forming partnerships with MIM service providers are also necessary for hinge makers trying to obtain orders, the sources noted.Jarllytec currently has a total of seven MIM batch furnaces in house and another seven available at partners, the sources said, adding the company is looking to establish two more furnaces in 2020 with one to begin operation in the first half of 2020.Jarllytec has recently announced its third-quarter financial results with consolidated revenues reaching NT$1.45 billion (US$57.07 million) and gross margin arriving at 25%, up 3pp sequentially thanks to an increased shipment proportion for high-margin LCD monitor products and currency exchange gains. The company had net profit of NT$153 million for the third quarter, up 20% sequentially.Taiwan-based IC design houses have seen orders from Huawei slow down recently, but remain upbeat that orders from the Chinese vendor will start picking up in 1H20Cage Chao, Taipei; Willis Ke, DIGITIMES Thursday 7 November 2019 Taiwan-based IC design houses have seen orders from Huawei slow down recently, but remain upbeat that orders from the Chinese vendor will start picking up in the first half of 2020, according to industry sources.Huawei has decelerated its order placement with Taiwanese chip suppliers to facilitate its year-end inventory checking, which, however, is not expected to affect their revenue projections for the fourth quarter, traditionally a low season, the sources said.Taiwanese IC designers including RichWave Technology, ZillTek Technology, Novatek Microelectronics, Sitronix Technology and Elan Microelectronics had seen significant ramp-up in orders from Huawei for RF (radio frequency) ICs, mixed signal ICs, mobile display driver ICs and peripheral chip solutions since mid-May when it was blacklisted by the US.In the first half of 2020, the chipmakers are expected to again land robust orders from Huawei for diverse 5G-related chip products, including TDDI chips, OLED driver ICs, optical fingerprint IC chips, sensor chips, fast charging ICs and MEMS microphone solutions.They will also benefit from Huawei’s efforts in launching and promoting a spate of new consumer electronics devices including smart speakers, TWS earphones, smartwatches and smart TVs in 2020, mostly adopting Taiwan-supplied solutions.Many Taiwan IC designers including MediaTek, Novatek and Realtek expect their new-generation chip solutions to be well adopted by Chinese clients, and are confident that mounting ratios of shipments to China will drive their sales growth in 2020.Test Research, Inc. won 2019 Mexico Technology Award at SMTA Guadalajara 2019[November 7, 2019 – Guadalajara, Mexico] Test Research, Inc. (TRI), the leading test and inspection system provider for the SMT industry announces that the company’s new generation 3D AOI, TR7700 SV 3D, received a 2019 Mexico Technology Award at a ceremony held during the 2019 SMTA Expo and Tech Forum in Guadalajara, Mexico.TRI is one of the preeminent suppliers of test and inspection systems for the electronics industry in and around the world. As the only total solution vendor — with SPI, AOI, AXI, ICT, MDA, and FCT systems — TRI focuses on integrated production quality management and providing valuable data for Industry 4.0 manufacturing.The TR7700 SV 3D is equipped with TRI’s Dynamic Imaging Technology capable of delivering High-Speed Inspection up to 60 cm?/s, 30% faster speed than the last model. The TR77000 SV 3D achieves True 3D profile measurements with the latest Digital Dual 3D Blue Laser Module, 10 ?m optical resolution, and a 12 MP high-speed camera. The combination of a high-speed camera and True 3D profile measurement completely inspects even complex automotive and smartphone assemblies.About Mexico Technology AwardsThe Mexico Technology Awards recognize the best new innovations in the electronics manufacturing industry in Mexico. The goal of the award program is to celebrate the companies and people that are achieving the highest standards and driving the industry forward.About TRITRI offers the most robust product portfolio in the industry for Automatic Test and Inspection solutions. From Solder Paste Inspection (SPI), Automated Optical Inspection (AOI), and 3D Automated X-ray Inspection (AXI) systems to Manufacturing Defect Analyzers (MDAs), Functional Testers (FCT) and In-Circuit Testers (ICT), TRI provides the most cost-effective solutions to meet a comprehensive range of manufacturing test and inspection requirements. Learn more at . For sales and service information, please write to us at triusa@.tw or call +1 (408) 567-9898.TPK Holding net profit more than tripled to NT$228 million from NT$54 million in the second quarter, while revenue growth surpassed the company’s estimateNov 08, 2019 By Lisa Wang Taipei TimesTouch module and sensor supplier TPK Holding Co yesterday reported that last quarter’s net profits were the best of the past seven quarters, thanks to strong sales of customers’ lower-priced smartphones during the annual peak profit more than tripled to NT$228 million (US$7.5 million) last quarter from NT$54 million in the second quarter, a company financial statement showed.On an annual basis, net profits increased 19.37 percent from NT$191 million. Earnings per share increased to NT$0.56 last quarter, from NT$0.13 a quarter earlier and NT$0.47 last year.Revenue soared 40 percent sequentially to NT$40.05 billion, with the fastest growth coming from the company’s smartphone products at 75 percent.Overall revenue growth greatly surpassed the company’s own estimate from three months ago that predicted a 20 percent quarterly increase.With the electronics industry entering a slow season, TPK said that the fourth quarter would be a “typical off-season,” with revenue expected to fall by 10 percent from last quarter.“Company revenue usually hits its peak in the third quarter. This year is no exception,” TPK chief strategic officer Freddie Liu told an investors’ teleconference.However, ongoing customer demand for new smartphones should provide some cushion in the seasonal slowdown, TPK said.“We are cautiously optimistic about the fourth quarter,” Liu said. “No significant [correction] is expected.”Operating margin is to stand at 1 percent this quarter, slightly down from the third quarter’s 1.2 percent, the company said.“This year overall should look better than we expected at the beginning of the year,” TPK said, adding that it attributes the expected success to winning a larger slice, or 60 percent, of order allocations from its major clients for all of its product offerings.TPK competes with local rival General Interface Solution Holding Ltd and China’s O-film Tech Co for touch solution orders from Apple Inc for iPhones and iPads.Business prospects for next year remain uncertain as the unresolved US-China trade dispute is expected to affect customers’ shipment schedules, the company said.TPK said it remains confident about the development of its new silver-nanowire (SNW) technology as Samsung Electronics Co, Huawei Technology Co and more Chinese vendors prepare to launch foldable smartphones next year.“One to two models on the market are using our SNW technology,” TPK chief executive officer Leo Hsieh told investors. “We expect to see more next year.”The flexible nature of SNW film makes it ideal for foldable phones, TPK said, adding that the new orders came after the company started shipping its first SNW commercial product for interactive whiteboards.TPK silver nanowire touch solutions adopted for small-size foldable smartphonesDIGITIMES 7 November 2019TPK has disclosed its silver nanowire-based touch solutions are being engaged in the development of one to two small-size foldable smartphones slated for launch in panel prices to stop falling in November as efforts made by panel makers to reduce their output aggressively and demand has started picking up Rebecca Kuo, Tainan; Steve Shen, DIGITIMES Thursday 7 November 2019 TV panel prices are set to stop falling and level off in November thanks to efforts made by panel makers to reduce their output aggressively, while demand has started picking up as brand TV vendors have resumed pulling in orders in preparation for the Double-11 shopping festival in China as well as for the forthcoming Lunar New Year holiday season, according to industry sources.Brand TV vendors, particularly those in China, slashed their panel orders significantly in the third quarter as they were working to clear out inventories left over from the lukewarm sales of the 618 shopping festival. As a result, the stocks have returned to healthy levels recently, said the sources.China’s TV vendors have resumed their panel purchases since the start of the fourth quarter, with their inventory returning to normal levels, the sources said, noting their panel orders are registering on-year increases in the quarter, compared to a stream of on-year declines seen in the previous three quarters.The massive capacity reductions launched by individual panel makers have also contributed to an improvement in the supply-and-demand situation in the fourth quarter.Samsung Display shut down completely the output from one of its 8.5G LCD lines in September which had a capacity of 125,000 substrates a month, and it also slashed the total 7G output to 100,000 substrates in November from 160,000 previously. LG Display has been adjusting downward the capacity utilization rates of its 8G lines to as low as 70% recently, said the sources. Both companies have shifted to focus on developing OLED.In Taiwan, Innolux has lowered its capacity utilization mildly by realigning its production lines, while AU Optronics (AUO) has cut its utilization rate to 80%, focusing on reducing output from its 6G and 8.5G lines.China’s BOE Technology is expected to maintain its utilization rate at 75-80% in the fourth quarter, the same as a quarter earlier. China Star Optoelectronics Technology (CSOT) will lower the utilization rate of its 8.5G line to 85% in the fourth quarter from 90% previously, revealed the sources.As a result, prices of most TV panel sizes will remain stable in October-November, with 32-inch models to stay at US$33, 39.5-inch panels to be flat at US$61, and 43-inch ones to hover at US$66, according to Sigmaintell Consulting.Prices of 55-inch models, which dropped US$1 to US$100 in October, are expected to remain unchanged in November, and 65-inch panels will stay flat at US$168, said the consulting firm.Universal Celebrates Milestone 100th AnniversaryNovember 7, 2019Electronics assembly pioneer hosts commemorative event to honor heritage.Universal Instruments will celebrate its 100th Anniversary with a company-wide party at its Conklin, NY corporate headquarters on November 15, 2019. At the event, company executives will reflect on Universal’s proud past as the longest-standing electronics assembly equipment provider, as well as share their vision for an inspired future. Special guest, New York State Senator, Fred Akshar, will also be on-hand to speak at the event.Universal Instruments traces its roots to the Universal Instruments and Metal Company – a safety pin manufacturer founded in 1919. Through time, the company discontinued safety pin production and transformed into a precision machine, tool and die business. By controlling costs during the Great Depression, Universal continued to grow through World War II, when the company’s tool and die talents were called on to meet the needs of the state’s small arms manufacturers. This work continued until the 1950s, when Universal Instruments entered the electronics assembly equipment manufacturing industry.Universal Instruments first built electronic circuit assembly equipment for through-hole components in the 1960s. For nearly three decades, Universal flourished while producing axial, radial and DIP insertion equipment. The company’s through-hole enhancements continue to this day, enabling Universal to hold nearly half of the global market.The global electronics industry burgeoned with the transition from through-hole to surface mount components in the 1990s and Universal responded with another industry first. In 1992, the company introduced the GSM Platform – a modular surface mount assembly machine that pioneered today’s prevailing platform concept. With an installed base of more than five thousand machines, Universal’s GSM quickly became the industry standard and market leader in the flexible fine pitch arena.Today, Universal offers the industry’s most comprehensive solutions portfolio, including through-hole, surface mount, advanced semiconductor packaging, and automation equipment, as well as factory control software to optimize all aspects of operations for maximum productivity and a true “connected factory” production environment.“Not many companies make it to the century mark. It’s a great accomplishment and truly a testament to the special talents and work ethic of our employees,” said Universal Instruments President and CEO, Jean-Luc Pelissier. “We’ve been able to adapt to the market throughout the years by establishing strong relationships with our customers, understanding their needs, and developing and delivering the right solutions for their current requirements while preparing them for what’s to come. We maintain that same approach today and are working closely with the best companies in their respective markets to align our roadmap with the technologies that will drive the future.”To learn more about Universal’s solutions for any electronics manufacturing challenge, contact Universal Instruments at +1-800-432-2607 or +1-607-779-7522 or visit .USA, China, Japan and Korea to dominate 5G: Worldwide, 1.57 billion people are expected to adopt 5G by 2025 - or 18% of total mobile usersNovember 07, 2019 BERLIN (Reuters) - China, the United States, Japan and Korea will account for more than half of the world’s subscribers to super-fast 5G mobile networks by 2025, leaving Europe lagging, a study showed on Thursday. Europe, moving more slowly to build 5G networks, will lag in terms of consumer take-up. Yet the picture looks different in business, where 5G will be able to run ‘smart’ factories using connected robots, devices and sensors. “It’s going to be a small cluster of countries that leads adoption in 5G, with the rest of the world following,” Tim Hatt, head of research at GSMA Intelligence, told Reuters. “China, Japan, Korea and the U.S. – between those, you’re looking at well over half of worldwide 5G subscribers by 2025.” The rapid rollout of 5G networks, with speeds fast enough to download a movie to a smartphone in seconds, has surprised many. Nokia, the world’s No.2 network vendor behind Huawei [HWT.UL], recently suspended its dividend to invest in upgrading the 5G gear it sells to carriers. In Korea, 66% of mobile connections will be 5G by mid-decade, GSMA Intelligence forecast in a 100-page study, followed by the United States on 50% and Japan on 49%. In terms of sheer numbers, China will predominate with 600 million 5G connections. Worldwide, 1.57 billion people are expected to adopt 5G by 2025 - or 18% of total mobile users. Early experience shows that carriers can hike 5G prices by 15%-20%, offering ‘more for more’ unlimited data plans. But, if the past is anything to go by, those gains will eventually be competed away. EUROPE LAGS - OR DOES IT? With standards to enter force in a couple of years that will support the development of the industrial ‘Internet of Things’ (IoT), such usage is seen by European industry as a more promising way to recoup the vast outlays needed for 5G. Rather than sell to enterprise clients, Hatt said carriers would be better off teaming up with them on projects in the IoT - a market that GSMA Intelligence forecasts will be worth $1 trillion in 2025, roughly equal to total mobile industry revenue last year. Yet of that, only 5% will come from connectivity, forcing carriers to compete with global consulting firms and Silicon Valley tech giants like Amazon or Microsoft for the rest of the pie, said Hatt. 4G ROLLS ON For developing nations, it’s the spread of affordable connectivity through older 4G technology - and not 5G - that will affect the lives of billions of people for years to come, the research arm of telecoms industry group GSMA found. Looking to emerging markets like Nigeria, Mexico, India or Indonesia, a combination of cheap Android smartphones and affordable data still offers growth potential. GSMA Intelligence forecasts that 59% of total worldwide mobile connections will be 4G in 2025. “For a lot of these countries 5G is just not on the horizon right now,” said Hatt. “That 4G generation (is) for the most part mobile only. They don’t have computers... This is a whole new ball game and the operators are pretty well positioned to take advantage of that.” Reporting by Douglas Busvine; Editing by Elaine HardcastleVishay Precision Group, Inc. (VPG) CEO Ziv Shoshani on Q3 2019 Results - Earnings Call TranscriptVishay Precision Group, Inc. (NYSE:VPG) Q3 2019 Earnings Conference Call November 5, 2019 10:00 AM ETCompany ParticipantsSteven Cantor - IRWilliam Clancy - EVP, CFO & Corporate SecretaryZiv Shoshani - CEO, President & DirectorConference Call ParticipantsSarkis Sherbetchyan - B. Riley FBR, Inc.John Franzreb - Sidoti & CompanyOperatorGood morning, and welcome to the VPG 2019 Q3 Results Conference Call. [Operator Instructions]. Please note, this event is being recorded.I would now like to turn the conference over to Steven Cantor, Senior Director of Investor Relations. Please go ahead.Steven CantorThank you, Danielle, and good morning, everyone. Welcome to VPG’s 2019 Third Quarter Earnings Conference Call. An audio recording will be made of the conference call today, including any questions or comments that participants may contribute. Our Q3 press release and accompanying slides have been posted on our website, , and an audio recording of today’s call will be available on the Internet for a limited time and can be accessed on the VPG website.I also want to note that yesterday, we issued a release announcing the acquisition of DSI. You can find that press release and presentation on our website. Today’s remarks are governed by the safe harbor provisions of the 1995 Private Securities Litigation Reform Act. Our actual results may vary from forward-looking statements. For a discussion of the risks associated with VPG’s operations, we encourage you to refer to our SEC filings, especially the Form 10-K for the year ended December 31, 2018, and our other recent SEC filings.And now, I’ll turn the call to Ziv Shoshani, CEO and President; and Bill Clancy, CFO. Bill will begin.William ClancyThanks, Steve. Good morning, everyone, and thank you for joining us on our call today. I will start by reviewing a few highlights and then summarizing the financials. Following that, Ziv will provide color on the results by segment, the acquisition of DSI and the Q4 outlook. Referring to Page 3 of the slide deck. In the third quarter of 2019, we achieved revenues of $67.4 million. Operating income was $6.2 million or 9.2% of revenues, adjusted operating margin of $6.7 million or 10% of revenues, net earnings per diluted share of $0.33 and adjusted net earnings per diluted share of $0.37.Moving on to Slide 4. Our third quarter 2019 revenues decreased by 10.7% to $67.4 million, down $8.1 million compared to $75.5 million of revenue in the third quarter of 2018. Foreign exchange negatively impacted revenues by $800,000 for the third quarter of 2019 compared to a year ago. Our gross margin decreased to 38.3% in comparison to 40.5% in the third quarter of 2018. The year-over-year decrease of $4.8 million was primarily attributable to lower sales volume of $4.6 million and a negative impact from foreign currency rates of $400,000, which was partially offset by an increase in export grant of $500,000.Selling, general and administrative expenses for the third quarter of 2019 were $19.1 million or 28.3% of revenues as compared to $19.7 million or 26.1% for the third quarter of 2018. The decrease in SG&A related to a reduction in bonus reserves of $1.3 million and a reduction in commissions of $400,000, which was partially offset by increase in wages of $500,000 and in other costs of $500,000. The adjusted net earnings for the third quarter of 2019 were $5 million or $0.37 per diluted share compared to $7.5 million or $0.57 per diluted share in the third quarter of 2018.Foreign exchange rates for the third quarter as compared to the third quarter of 2018 decreased net earnings by $300,000 or $0.03 per diluted share. We generated free cash flow of $4.8 million for the third quarter of 2019 as compared to $6.8 million for the third quarter of 2018. We define free cash flow as the amount of cash generated from operations, which was $7.6 million for the third quarter of 2019, less capital expenditure, which was $2.9 million for the third quarter of 2019, net of proceeds from the sale of assets, which was $200,000 in the third quarter of 2019.Our GAAP tax rate for the quarter ended September 28, 2019 was 29.3%. We anticipate that the operational tax rate for the year will be in the range of 27% to 29%. We ended the third quarter with $100.3 million of cash and cash equivalents, which increased $2.6 million from the second quarter of 2019. Total long-term debt was $23.7 million as compared to $24.8 million in the second quarter.Subsequent to the end of the third quarter, the acquisition of DSI, which closed on November 1, 2019, reduced our cash balance by approximately $21 million and increased our total long-term debt by approximately $20 million. Even with these impacts from the DSI transaction, we believe that our balance sheet remains very strong and provides us with ample liquidity to support our business requirements and to fund additional M&A opportunities.With that, let me pass further comments on to Ziv.Ziv ShoshaniThank you, Bill. The company’s overall book-to-bill was 0.96 in the third quarter compared to 0.94 in the second quarter of 2018 and 0.98 in the third quarter of 2018. Total orders for the third quarter were $64.4 million, down from $66.7 million in the second quarter and $74.0 million in the third quarter a year ago.Our backlog at September 28, 2019 decreased to $79.3 million from $83.4 million in the second quarter. Overall, our Q3 sales and orders reflected weaker macro industrial trend globally as well as impact from ongoing trade uncertainty, decelerating demand trends and channel destocking. For our Foil Technology Products segment, our market trends were mixed. There are signs and sentiment that the semi equipment market is turning positive, which we expect will result in a pickup in demand for our products in the second half of 2020.The aerospace, military and space market continues to be positive for FTP, driven by strong defense spending, while our general industrial markets, we saw some destocking of FTP products, particularly in Europe. For our Force Sensors segment, sales to OEM customers continue to reflect lower demand from general industrial customers and precision agriculture and construction equipment makers.For our Weighing and Control Systems segment, we saw some order push-outs in the U.K. for our onboard weighing products for transportation market, which we believe is related to the political uncertainty from Brexit. In the U.S., order rates for our process weighing solutions reflected slowing capital investments, while demand in Europe remains solid. Our products for the steel industry continue to perform very well.Moving to Slide 6. Looking at our reporting segment in details. The Foil Technology Products segment declined by 10.6% from the third quarter last year and was 2.7% lower sequentially. Even as we saw continued growth of advanced sensor products, the decline was driven by lower sales of Pacific Instruments products within the avionic, military and space end market in the Americas and strain gage products in the test and measurement applications, primarily in the Americas. Book-to-bill ratio for Foil Technology of 0.91 compared to 0.95 for the third quarter of 2018 and 0.93 for the second quarter of 2019. Gross margin for Foil Technology of 37.3% for the third quarter declined from 43.9% in the third quarter of 2018 and 43.6% in the second quarter of 2019. The year-over-year gross profit decrease was primarily due to lower sales volume of $2.5 million, an increase in manufacturing costs of $600,000 and a negative impact of foreign exchange rate of $600,000.Looking at the Force Sensors segment, sales declined by 7.9% year-over-year, and was essentially flat sequentially. The year-over-year decline was primarily due to lower volume related to OEM customers in the Americas. The book-to-bill for Force Sensors was 0.94, which compared to 0.98 in the third quarter of 2018 and 0.95 for the second quarter of 2019. Third quarter gross profit margin for Force Sensors was 30.4%, an increase from 25.9% in the third quarter of 2018 and an increase from 26.9% in the second quarter of 2019. The higher gross profit reflected an increase in export grants of $500,000, increased manufacturing efficiencies and positive impact of foreign exchange. This was partially offset by an impact of lower sales volume.Sales for the Weighing and Control Systems segment of $19.1 million declined 13.2% year-over-year and 11.3% sequentially. The year-over-year decrease in revenue was primarily attributable to the steel product line in Europe, the onboard weighing products in Europe and the Americas and the process weighing products in the Americas and Europe. This sequential decrease in revenue was primarily attributable to the softness in process weighing products in Europe and in onboard weighing products, mainly in Europe and the Americas. Book-to-bill for weighing and controls—for Weighing and Control was a positive 1.04, which compared to 1.02 in the third quarter of 2018 and 0.95 for the second quarter of 2019. Despite the lower sales, the gross profit margin of 46.6% for the segment was flat, with 46.6% in the third quarter of 2018 and improved from 45.6% in the second quarter of 2019. Sequential gross profit margin increase was primarily due to manufacturing efficiencies, partially offset by lower volume.Moving to Slide 7. In addition to capitalizing on our organic growth opportunities, the key part of our value-creation strategy is to deploy our capital to acquire a strong, profitable business that leverage the VPG platform. I am pleased to announce the acquisition of Dynamic System, Inc. for $41 million and a potential earn-out of up to additional $3 million. DSI is a well-established, high-margin premier manufacturer of thermal mechanical simulation equipment used to study materials and optimize manufacturing processes. The acquisitions add an industry-leading, high-margin niche market manufacturers that addresses the growing demand for high-performance materials for multiple industries.Moving to Slide 8. Based in New York, DSI’s Gleeble line of material testing and simulation systems help universities, research labs, metal producers and manufacturers around the world to accurately predict the performance of new steel and aluminum alloys. This allows customers to accelerate the time to market and to optimize production processes for a wide array of industrial end markets, including automotive, aerospace, energy and heavy industry.Moving to Slide 9. Gleeble should continue to benefit from a number of global macro trends facing these end markets. Demand for new lightweight, high-performance steel and aluminum alloys continues to grow in order to meet increasing fuel efficiency targets for cars and trucks. Growth in 3D printing is expected to drive metallurgical research of material used in the 3D printing processes. In addition, we should benefit from the competition between steel and aluminum for certain users since the Gleeble systems are used in the research of both metals. We expect DSI to take a meaningful portion of these opportunities since it is the clear market leader with more than 350 installed system worldwide, well in excess of all competitors combined.Moving to Slide 10. There are many reasons to be excited about what the acquisition means for both VPG and DSI. We see opportunities to leverage VPG’s sales platform to expand DSI’s sales as well as to expand our offering to steel customers addressed by VPG’s KELK business. There is also a potential to develop new generation of DSI systems to address blue ocean opportunities. Financially, the acquisition of DSI is a key part of our strategy to grow VPG’s sales and earnings and to create value for our stakeholders.Over the past three years, DSI’s achieved an average annual sales of $16 million with high EBITDA margins. Based on these results, the purchase price multiple is approximately 10x before synergies and excluding the potential earn-out. For the fourth quarter, given current business environment and our order trends at constant third quarter 2019 exchange rates, and including approximately 2 months of sales related to the acquisition of DSI, we expect net revenues in the range of $63 million to $69 million for the fourth fiscal quarter of 2019.Looking beyond the fourth quarter, we expect to continue to achieve good momentum in our strategic long-term growth initiatives, such as our advanced sensor products and our TruckWeigh and VanWeigh businesses. These initiatives are leveraging our unique differentiated technology and customer relationships. Our manufacturing consolidation project in Modi’in in Israel is on track. The project, which we targeted for completion at the end of 2020, is intended to increase our capacity to support our growth.In addition, the company is working on further cost reduction initiatives as part of our strategy to maximize our profitability and achieve our financial targets.With that, let’s open the line for questions. Thank you.Question-and-Answer SessionOperator[Operator Instructions]. The first question comes from Sarkis Sherbetchyan of B. Riley FBR.Sarkis SherbetchyanI just want to start first on the acquisition. So congrats on that. It seems like an interesting acquisition here. In regards to the purchase price paid plus the earn-out, I think on the documents filed yesterday, I saw an EBITDA range of between $4.3 million and $5.6 million to get the earn-out. Can you kind of maybe describe what you’d expect the business to generate from an EBITDA perspective?Ziv ShoshaniSarkis, the business for the last three years was running at a low-20s EBITDA margin range, and we would expect that to continue going forward and to continue going forward. So we are looking at low-20s—low- to mid-20s, margin-wise.Sarkis SherbetchyanUnderstood. And so it seems like it’s going to be accretive out of the gate. Is that the right way to think about it?William ClancyYes, Sarkis. I would say, obviously, like there’s only two months left in 2019, which probably won’t be as material. But looking at 2020, and given just we talked about the historical EBITDA levels, we would expect to be meaningfully accretive to the EPS in 2020.Sarkis SherbetchyanAnd then as far as just kind of why you guys chose to purchase this business, what kind of was very attractive about it? Is there an opportunity to also sell consumables and, therefore, kind of leverage your expertise in some of the other lines of business? Just kind of help me understand why you guys are a better owner of this asset?Ziv ShoshaniSarkis, we expect DSI to enhance our system capabilities for steel applications, for new developments, and we see room for further enhancements of our product portfolio in the steel market. In addition to KELK, both KELK and DSI are the leaders by far in their own systems and applications within their own markets. Like KELK, DSI’s another very strong brand within a similar end market as well as—within a similar end market. Joining VPG, we believe, would allow DSI to develop other products for similar end markets to VPG, which would be more limited in scope, but more price-effective, which would open potentially more opportunities for current customer base and for new customers.Sarkis SherbetchyanUnderstood. That’s helpful. And I guess, if I can kind of touch on the sales outlook here. I know you mentioned two months of the acquisition’s included. Can you maybe just talk about what you’re seeing real time in the macro environment for the 3 segments?Ziv ShoshaniRegarding the macro environment, we—the market, at least the way we see that for Q3, the trends were mixed. Our Q3 -- the headwinds would include weakness in the semi-test equipment, a slower general industrial demand, particularly in Europe, the transportation market mainly for our onboard weighing due to the Brexit uncertainty. On the other hand, we see some tailwinds in regards to aerospace and defense—in the aerospace and defense market. And also, the steel market is going very strong. Specifically, the headwinds would include destocking of precision resistors for the test and measurements market, specifically in the semi test market.Orders were weaker in the last few quarters due to customer overstocking. However, we are seeing positive signals in terms of increased customer orders for these products for shipments to be delivered mid of 2020. On the MM business, we have seen a negatively impacted economic slowdown, particularly in Europe and mainly in Germany. Force Sensors, we—I did mention before, this is mainly the general industrial market. And our onboard weighing orders has been—we have seen OEM order intake softer due to the—mainly due to the political uncertainty of the Brexit.On the process weighing, it’s more of a seasonality effect, and we would expect to see certain rebound in the following quarter. Specifically, the tailwinds in the Foil Technologies, the aerospace, defense, going very strong, very strong order intake for our PI products in the third quarter, and still continues to be very solid, very strong for us. KELK business continued to perform well, reflecting continued strength in the steel market, and also good order intake in the third quarter. We expect some of the headwinds to begin to stabilize in the fourth quarter as orders for precision resistors and for semi test would expect to rebound next year. And hopefully, the political uncertainty related to the Brexit may be resolved in the coming quarters.Operator[Operator Instructions]. The next question comes from John Franzreb of Sidoti & Company.John FranzrebI guess I want to go back to DSI first. You mentioned that there’s potential synergies. Could you just tell us what those synergies are that you’re looking for?Ziv ShoshaniOkay. When we are looking at the synergies from the DSI acquisition, we don’t expect to see any cost synergies. Rather, all of the synergies will be used to leverage revenue. This is not a new concept for us. The technology for our KELK business fit our vertical integration with a different business model. In that way, the synergies came on the revenue side back in 2013, which is similar to KELK. Now, 6 years later, we are in the same situation, integrating DSI into VPG. We expect that DSI will follow the same successful integration trend that our KELK acquisition did 6 years ago.John FranzrebOkay. But from what I remember with the KELK acquisition, you had a very similar product line and KELK was the dominant player. That’s not the case with DSI, though, is it?Ziv ShoshaniNo, it is a very similar case. When we have acquired KELK back in 2013, KELK was a dominant player in the hot strip steel mill processes. They had and they still have a wide range of optical measurement as well as roll force. VPG did not have any of these product lines. We had other product lines for weighing application coming from our Swedish Nobel subsidiary. So, to that extent, there were not—we did not have any cost synergies for the KELK.DSI and KELK was a leading brand in its own market. This is a very similar situation. Well, we don’t carry a similar portfolio to DSI. Therefore, we cannot realize any cost synergies, but DSI is definitely a leader in their own market, and we would expect to enhance their position in order to develop further products to their end markets, including helping them to—or I would say, enhancing our sales channels in order to leverage DSI new opportunities—for new opportunities as well as the synergies we would expect on the customer—on the steel mill customers that are currently joint customers between DSI and KELK.John FranzrebGot it. And who is DSI’s main competitors?Ziv ShoshaniDSI is by far the largest manufacturer in their own field. As I said, the installed base is $350 million, which is 4 -- at least more than 4x the combined—all the combined competitors 4x more there. I cannot say that they have a large competitor. They have very small competitors, a fairly small company in Japan, a smaller company in China and one in Europe, which are more regionally, in nature, with a much more limited product line and a much limited footprint. So we could—at this point in time, I cannot identify a second significant large competitor. All the others are way, way smaller companies to that extent.John FranzrebOkay. And regarding financing the deal, if I heard you correctly, Bill, I think you said about $20 million on incremental debt. Is that the right number? What should we be thinking about as interest expense going forward? And—or so what are your thoughts about debt repayment going forward?William ClancyYes, John. I mean, we use a combination of 50% cash and 50% debt. The debt today, we’re at a borrowing rate that’s probably all-inclusive, about 4.5% interest rate for that debt going forward. And like you’ve heard and mentioned that it’s very high EBITDA margins. This is all predominantly in the U.S. generating cash to pay down the debt.John FranzrebOkay. And regarding the legacy operations, FTP had a significant drop in sequential gross margin from September to June on—less than $1 million drop in sequential revenue. Could you just walk me through why that happened?Ziv ShoshaniThe drop in the sequential gross margin for FTP was one significant -- 50% of that was a significant drop in volume. And I have to say, to that volume, as you said, the volume effect was not so large. But within this volume, we have a very significant mix—product mix effect, which means much more profit. We have seen much more profitable products, lower volume, in combination with less profitable products. So out of this 1.1 volume effect, $500,000 is unfavorable mix. In addition to that, we have inventory reduction quarter-over-quarter, which had an effect of $400,000. We have also a $300,000 negative exchange rate and also some manufacturing inefficiencies, which I would—around $400,000, which I would assume that most of them are temporary and will not occur in the coming quarter. So we should expect the margins to improve.John FranzrebOkay. So with that all said, I guess I want to pose the—think about the outlook going forward a little bit. Ziv, how do you think about the depth and duration of this downturn? Do you feel like it’s going to be short in duration? Or do you think it might drag a little longer? And if you think it drags, what are your thoughts about the rollout of new production in the advanced sensor line? Because I know that’s a high-margin business for you, but that may suggest that you’ll have some redundancies during a downturn. Just can you kind of walk us through your thoughts along those 2 lines?Ziv ShoshaniSure, absolutely. First, the FTP—in the FTP, the largest impact is coming from precision resistors. As I’ve indicated before, the biggest end market slowdown was test and measurement and, more specifically, semi testing. Already, if you see some of the earnings report of the large equipment testing or semi testing manufacturers, you see that they are—that their, I would say, projection is positive. To that extent, we have seen—and as I said, we have seen overstocking mainly at distribution and EMS, which are the main sales channel to that end market. Based on the awards that—and the negotiations that are currently running for 2020, we do believe that we should expect to see a rebound of that business in the second half of 2020. Generally speaking, since we are not selling commodity products, we are selling custom products, the cycle of the process cycle is not—doesn’t go more than 3 to 4 quarters. But we do expect that stocking levels will continue to go down, and we would expect to see an upturn, I would say, sometime in the first half of 2020.Now regarding advanced sensors, this is more of a strategic initiative to position the company running for—with many, many design wins and also transitioning some legacy technology into the new technology. So in that respect, there is a certain slowdown. It’s not dramatic. This is something that also we expect to be stabilized in the coming quarter. But in principle, the expectation that we will—we are continuing on time with this project, which is very important for us, because we believe that some of the key designs could turn into a significant high volume in the near future. But all in all, we are optimistic looking forward.Operator[Operator Instructions]. There are no further questions. I would like to turn the conference back over to Mr. Shoshani for closing remarks.Ziv ShoshaniThank you. I would like to summarize the third quarter. Similar to other industrial tech companies, our business trends in the quarter reflect the general slowing in the global economy and the industrial sector as well as the impact of trade uncertainty. In spite of these headwinds, some of our markets continue to show some strength. For our Q4, we are seeing signs that our weaker markets may be bottoming as customers and distributors work through their inventories.The company’s strategic initiatives are progressing on track, and we feel good about them. The excitement and the expectation around the DSI acquisition, we believe it will not only be immediately accretive, but will provide some growth factors in terms of some potential synergies. I would like to thank you for joining the call, and we are looking forward to updating you in the next quarter. Thank you.OperatorThe conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.Why Taiwan’s role will be crucial in next phase of the US-China tech warDecades ago, Taiwan bet big on semiconductors to keep itself afloat, producing an industry powerhouse in the processNow, as development focuses on AI and 5G – technologies at the heart of the current US-China tech war – chip manufacturers on the island may be forced to choose sides7 Nov, 2019Craig Addison When then-US president Dwight D. Eisenhower visited Taipei in 1960, thousands cheered amid a sea of American flags as the motorcade made its way to the city centre. Ike addressed a crowd of half a million, pledging that America would support Taiwan over the communist-run People’s Republic of China.Two decades later, the Taiwanese felt betrayed when then-president Jimmy Carter unilaterally cut diplomatic relations to recognise the PRC. Angry protesters stomped on peanuts – since Carter had a peanut farm before becoming president – and waved placards calling Carter all kinds of names.Four decades later, the geopolitical climate in the Taiwan Strait is undergoing another dramatic about-face. Taipei is closer to Washington than at any time since Carter, and arguably further from Beijing, which regards the self-ruled island as a breakaway province.Taiwan may be diplomatically isolated – it has only 15 allies left, mostly impoverished nations – but it is a global powerhouse in a tech sector coveted by Beijing. That could shift the balance of power if the US-China trade war heats up.Ironically, it was a bold gamble that helped Taiwan get to that position after Carter cut diplomatic ties. The government bet big on semiconductors – the core enabling technology for all consumer and military electronics applications. Taiwanese chip makers now account for one-fifth of global silicon wafer fabrication capacity.In the wafer foundry segment, where chips are made to order, Taiwan Semiconductor Manufacturing Corp (TSMC) commands 48 per cent of the market, providing silicon wafers to the world’s so-called “fabless” chip makers, which focus their investment on chip design and outsource the manufacturing.By registering, you agree to our T&C and Privacy PolicyTwenty years ago, TSMC helped enable the US personal computer industry, spawning spectacular success stories like Nvidia, which became a giant in graphics processors.Over the past 10 years, the same thing has happened in mobile devices, enabling the growth of Apple and Qualcomm into wireless tech giants.Why technology disruption is doing more damage than trade frictionThe next phase in chip development will focus on artificial intelligence and 5G wireless communications – technologies at the heart of the current US-China tech war because of their national security implications.TSMC was able to flourish by acting as the Switzerland of semiconductor manufacturing, producing chips for fierce US competitors like AMD and Intel. In the smartphone market, it makes chips used by rivals Apple and Huawei.Until two years ago, TSMC didn’t even break out its China sales. Last year, its annual report revealed that China accounted for 17 per cent of revenue. As TSMC’s proportion of China sales grows, its role in enabling Chinese tech companies to catch up to the US in semiconductors is starting to worry Washington.Over at the Pentagon, Beijing’s long-stated goal of Taiwan reunification, by force if necessary, has triggered concerns that mission-critical, US-bound chips could be tampered with by the People’s Liberation Army.Under Trump, US arms sales to Taiwan could be the new normalThe US Congress has already recognised such a risk during peacetime with a bipartisan bill known as the Microchips Act, introduced on July 30, to deal with external threats to the semiconductor supply chain.Earlier this year, TSMC chairman Mark Liu told US Department of Commerce officials that building a new stand-alone wafer fab in the US would not be as cost-effective as in Taiwan, where the company operates three major manufacturing clusters.However, he has also sought to ease Pentagon worries over supply chain tampering, saying that research is under way into ways to trace and detect that.If the US and Chinese tech industries fully decouple, leading-edge semiconductor manufacturers like TSMC may be forced to choose sides. Earlier this week, TSMC denied a report that it was pressured by the US to stop supplying chips to Huawei, which is now its second-largest customer after Apple.There’s more to building the Made in China brand than Huawei and XiaomiWashington could wield a big stick to ensure compliance for companies that resisted by applying entity list sanctions, similar to those it has imposed on Huawei in May and China’s AI and video surveillance companies last month, preventing them from purchasing US technology without approval.For a chip maker, this would be a death knell because semiconductors cannot currently be produced in volume without relying on equipment from US companies like Applied Materials, Lam Research and Teradyne.While mainland Chinese foundries can produce chips for everyday applications, TSMC’s ability to manufacture devices at the most advanced level – known as 7-nanometre lithography in industry jargon – puts it in an unassailable position. China can never catch up, no matter how much money Beijing throws at the problem.Over the past three years, the US has done everything short of re-establishing diplomatic ties to help Taiwan as it faces increasing political and economic pressure from China. In the latest move, the US Senate unanimously passed the Taipei Act 2019, designed to help Taiwan keep its remaining allies.It marks a shift in US policy, with Washington directly working with Taiwan on mainland Chinese issues instead of letting the two sides resolve their own differences.If the Trump administration wants to cut China’s tech rise off at the knees, it knows where to go for help. The only question is, will Taiwan accept the quid pro quo?Wiwynn, a cloud computing server affiliate of Wistron, reported third-quarter consolidated revenues of NT$33.35 billion (US$1.09 billion), down 31.3% on year with net profit of NT$1.37 billionAaron Lee, Taipei; Joseph Tsai, DIGITIMES Thursday 7 November 2019 Wiwynn, a cloud computing server affiliate of Wistron, has reported third-quarter consolidated revenues of NT$33.35 billion (US$1.09 billion), down 31.3% on year with net profit of NT$1.37 billion and EPS of NT$7.84.Wiwynn’s gross margin was 7.5% for the third quarter, up 0.7pp sequentially and 1.7pp on year.Wiwynn had consolidated revenues of NT$114.05 billion for the first three quarters of 2019, dropping 15.2% on year, but its gross margin for the period went up 0.7pp to arrive at 6.8%. Wiwynn’s EPS came to only NT$25.18 during the 9-month period, lower than the NT$29.62 achieved at the same time in 2018, as a result of the company raising capital by listing in Taiwan in March.Although Wiwynn’s server shipments are expected to grow on year in 2019, its revenues are estimated to decrease due to memory price declines felling Wiwynn’s overall product ASP. The ASP decline is actually translating into higher gross margin for the company.With memory prices showing signs of stabilizing recently, Wiwynn’s revenues are expected to resume growth in the first half of 2020, but its gross margin are unlikely to rise.Some market watchers pointed out that Wiwynn’s key clients are Microsoft, Amazon and Facebook and their demand for establishing new datacenters are expected to benefit Wiwynn’s white-box server shipments in 2020.Worldwide smartphone shipments increased 0.8% y/y to 358.3 million smartphones in 3Q19 – IDCFRAMINGHAM, Mass., November 7, 2019 – Worldwide smartphone shipments increased 0.8% year over year in the third quarter of 2019 (3Q19) reversing seven quarters of decline, according to new data from the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker. In total, companies shipped a total 358.3 million smartphones during the quarter, which was up 8.1% from the previous quarter and enough to return the industry to positive growth.Digging into the growth areas, India led emerging markets in total, which together were responsible for propelling worldwide growth, mainly from the rise of Chinese brands. In China, greater consolidation toward the top 5 brands was the main trend in the quarter. The top Chinese brands all increased their local shipments in preparation for 11.11 or “Singles’ Day,” the Chinese equivalent of Black Friday for shopping in the U.S.“Despite facing challenges across many international markets, Huawei doubled down on China in the third quarter,” said Melissa Chau, associate research director with IDC’s Worldwide Mobile Device Trackers. “Samsung benefited the most internationally from Huawei’s woes, ramping up the more affordable A series, while in China the other domestic competitors felt the heat from Huawei.”“The market returning to positive growth shows the resilience of this industry as well as the ongoing demand for mobile phones, all in the face of many global macroeconomic challenges,” said Ryan Reith, program vice president with IDC’s Worldwide Mobile Device Trackers. “The number of factors in play for competition are incredible. It is clear Huawei continues to make big gains in China, which remains the world’s largest market. Apple beat many expectations and is driving strong volumes in mature markets that face equally challenging headwinds. And most importantly, the top 5 OEMs accounted for more than 70% of the world’s smartphone shipments for the first time ever this quarter. The industry and vendor landscape is still changing but the trend of consolidation is ramping along with it.”Smartphone Company HighlightsSamsung gained share in 3Q19 with annual growth of 8.3% on the back of the Galaxy Note 10 launch in August and increased A series volumes, with a total of 78.2 million smartphones shipped. The lower-end to midrange A series in particular helped to fill in the gaps left behind by Huawei.Huawei shipped higher volumes than expected as it shifted focus to its domestic market, particularly in lower-tier cities, and increased inventories given the unknown future with Google Mobile services. While a sentiment of nationalism has helped to bolster Huawei in China, solid relationships with the local channel players has been key, offering favorable distributor terms and a well-rounded product portfolio. Nevertheless, there will be challenges ahead with 4G inventory to clear while consumers wait for affordable 5G products to hit the market.Apple shipped 46.6 million iPhones in 3Q19, which was a slight decline year over year but still better than most expectations. Apple continues to sell some refurbished iPhones via its own channels, which sustain and possibly grow the installed base, but also impact iPhone revenues. Newer iPhones, specifically the iPhone 11s and XR, did very well this quarter, capturing strong share in important markets like the U.S. and Western Europe.Xiaomi for the first time saw less than a third of its shipments delivered domestically in China, which was second to India in volume. Domestically, despite its launch of the CC series to appeal to young female consumers, shipments declined under pressure from Huawei. The runway was clearer for Xiaomi in India, however, where it strengthened its offline presence by expanding its sales network via the Mi Store and Mi Preferred Partners.OPPO also focused its attention outside of China as it approached the tipping point of nearly half of its shipments outside of China with domestic shipments focused on the Reno series and the A9. India experienced the strongest momentum internationally where the Reno series helped complete its product portfolio with higher-end offerings while the online-exclusive K series strengthened its online 5 Smartphone Companies, Worldwide Shipments, Market Share, and Year-Over-Year Growth, Q3 2019?(shipments in millions)Company3Q19 Shipments3Q19 Market Share3Q18 Shipments3Q18 Market ShareYear-Over-Year Change1. Samsung78.221.8%72.220.3%8.3%2. Huawei66.618.6%52.014.6%28.2%3. Apple46.613.0%46.913.2%-0.6%4. Xiaomi32.79.1%33.89.5%-3.3%5. OPPO31.28.7%30.08.4%4.1%Others103.028.7%120.734.0%-14.7%Total358.3100.0%355.6100.0%0.8%Source: IDC Quarterly Mobile Phone Tracker, Q3 2019, November 7, 2019Notes:?Company shipments are branded device shipments and exclude OEM sales for all vendors.?The “Company” represents the current parent company (or holding company) for all brands owned and operated as a subsidiary.?Figures represent new shipments only and exclude refurbished units.About IDC TrackersIDC Tracker products provide accurate and timely market size, vendor share, and forecasts for hundreds of technology markets from more than 100 countries around the globe. Using proprietary tools and research processes, IDC’s Trackers are updated on a semiannual, quarterly, and monthly basis. Tracker results are delivered to clients in user-friendly excel deliverables and on-line query tools.For more information about IDC’s Worldwide Quarterly Mobile Phone Tracker, please contact Kathy Nagamine at 650-350-6423 or knagamine@.About IDCInternational Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC’s analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly-owned subsidiary of International Data Group (IDG), the world’s leading tech media, data and marketing services company. To learn more about IDC, please visit . Follow IDC on Twitter at @IDC and LinkedIn. Subscribe to the IDC Blog for industry news and insights: more information, contact:Ryan Reithrreith@+1 508-935-4301Melissa Chaumelissachau@+65 6829 7713Anthony Scarsellaascarsella@+1-508-935-4712Michael Shirerpress@+1 508-935-4200Yageo net profits rebounded 44.25 percent sequentially last quarter, as pricing pressure alleviated amid recovering demand from customers in China and other markets in AsiaNov 08, 2019 By Lisa Wang Taipei TimesYageo Corp, the world’s third-largest supplier of ceramic capacitors (MLCC), yesterday said its net profits rebounded 44.25 percent sequentially last quarter, as pricing pressure alleviated amid recovering demand from customers in China and other markets in Asia.During a pickup in demand, Yageo expects its finished goods stock to recede further this quarter as customers have reduced their inventory to normal levels, it said in a statement.However, the company is unable to fully address this rebounding demand in the short term, as its factory utilization is constrained by a worker shortage in China, it said.The spring back in orders began last month, helping cut the turnover of finished goods to 70 days this quarter, down from 90 days estimated previously and marking a substantial improvement from 147 days at the end of the first quarter, Yageo said.Still, the company said it would stay vigilant for the challenging environment, given lingering concerns over the US-China trade dispute, as Yageo remains conservative about its business performance going forward.During the three-month period to September, Yageo’s net profit jumped to NT$2.04 billion (US$67.1 million), compared with NT$1.42 billion in the previous quarter. That represented an annual slump of 86 percent from NT$14.5 billion.The quarterly growth reflected a continuous increase in demand in greater China and other Asian regions, it said.Earnings per share (EPS) improved to NT$4.81 last quarter from NT$3.34 in the second quarter, but were still lower than NT$34.35 a year ago.Gross margin fell to 31 percent, compared with 32.6 percent in the second quarter and 69.3 percent a year earlier.In the first three quarters, net profits dipped 79.53 percent to NT$6.05 billion from NT$29.56 billion a year ago, with EPS sinking from NT$70.29 to NT$14.26, while revenue plunged 48.7 percent year-on-year to NT$31.29 billion from NT$60.94 billion.In a separate statement submitted to the Taiwan Stock Exchange, Yageo said it has tapped David Wang as its new chief operating officer, the second major managerial adjustment in four months after former chief executive officer Dora Chang stepped down in August. ................
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