ASUSTek Sales Grow in Europe

Reuters reports ASUSTek sales in Europe will grow significantly this year. According to Reuters:

Taiwan's Asustek Computer, the world's top motherboard producer and a laptop PC maker, said on Wednesday sales of its own branded products in Europe would likely rise to $5-6 billion this year. Last year, sales of branded products in Europe totalled $3.8 billion, company officials said. "There will be growth in all our products," Eric Chen, Asustek's regional head of the European market, told reporters.

I guess the addition of the netbook to their product portfolio combined with growth in traditional sectors has helped add to their sales. It would be good to see a breakdown of their sector sales (both geographically and product wise) but I doubt they are letting that out. Anyway, it is good to see another Taiwanese company remaining competitive in the global market, even in these times of financial melt downs.

Reuters: Taiwan Asustek sees higher Europe sales, shipments

China to Push Design House Sales

Digitimes has an interesting report suggesting Chinese manufacturers are putting in early orders for chips because of ne incoming labor laws that will empower workers to decide whether or not to work overtime. Digitimes writes:

Thanks to new employment laws in China that empower employees to choose not to work overtime or else receive compensation at a higher rate, OEM/ODM IC orders are being brought forward to September, since makers hope to get the orders done in advance rather than wait for the peak holiday season, according to industry players.

The extra order momentum is expected to spur sequential sales growth for Taiwan IC design houses in September, challenging monthly records, and should prompt them to increase targets for the third quarter, the sources noted.

The sources identified MediaTek, Richtek Technology, Global Mixed-mode Technology (GMT), Global Unichip, Ralink Technology Corporation, Sitronix Technology, Orise Technology, Realtek Semiconductor, IC Plus (IC+) and ALi as companies whose sales are expected to hit record levels.

China is in constant flux and there laws seem to be constantly changing. At least for now this does seem to benefit Taiwanese companies over the short term.

Digitimes: IC design houses to see strong sales in 3Q08 thanks to China employment laws

64 GB Transcend Flash Drive Launched in India

I need to get one of these! Seriously! Its almost like carrying a hard drive in your pocket. 64 GB is a lot of space and in a flash drive format makes it very portable. Combine this with the Eee PC or some other netbook and you have ample storage space combined with extreme portability. Of course if you are into computers for other reasons (gaming, videos etc.) you will need a more powerful system. However, for an average computer Joe like me, this is sufficient.

Anyway, the 64GB flash drive was launched in India (since I was on furlough I probably missed the product announcement). Channel Times writes:

Transcend Information, a manufacturer of flash memory products, has announced the availability of its new 64GB JetFlash V20 USB flash drive in India. The V20 features pearlescent chassis with a semi-transparent color-band that lights up during use, the company said. Its storage space allows users to take back up, and store all essential files, music, digital photos and videos.

Austin Huang, regional head (Sales), SAARC & APAC, Transcend, said, "We are extremely delighted to announce the availability of the 64GB version of our JetFlash V20 flash drives in India. We are confident that our customers will appreciate the huge capacity available to them to store their precious data."

Channel Times: Transcend Unveils 64GB USB Flash Drive in India

Micron may Acquire Qimonda

Reports are surfacing that Micron, the largest U.S. maker of memory chips, may buy German competitor Qimonda AG. Digitimes writes:

One of the key drivers for the deal is the fact Micron will be able to leverage Qimonda's Inotera joint venture, which would add additional Taiwan facilities and IP revenue opportunities for Micron, in addition to its existing MeiYa joint venture with Nanya Technologies. Qimonda's fab assets are also more valuable to Micron, compared with other potential buyers, such as Hynix or Nanya, as their common geographies allow logistics synergy, Freedman noted.

Since Qimonda cannot fund projected losses through fiscal year 2009, Freedman expects that a deal could be done for US$350 million, near US$1 per share, or 25% of the US$4 per share book value. Freedman estimates an additional cost of about US$100 million would be required to convert Qimonda fabs to Micron processes.

Still, such a deal would would significantly reduce DRAM capacity investments in fiscal year 2009 for Micron, according to the note. Freedman calculated a US$500 million fiscal year 2009 capex for Micron's organic DRAM capacity.

Freedman concluded that the acquisition of Qimonda would position Micron as one of the two surviving memory leaders (along with Samsung) able to control supply and IP as the industry waits for long-term demand drivers to materialize, namely SSDs.

Well as we have noted before, the memory industry is in a very long-enduring slump. They haven't recovered from the excess capacity they generated when Windows Vista was launched and continue to struggle to leverage higher prices. Consolidation in the industry is therefore expected.

Digitimes: Micron-Qimonda deal likely to happen, says analyst

Is AMD Outsourcing?

The China Economic News (CENS) reports AMD has outsourced their 40nm CPU production to TSMC. According to CENS:

Some foreign institutional investors recently said Taiwan Semiconductor Manufacturing Co. (TSMC) has won foundry contracts to make central processing units (CPUs) for Advanced Micro Devices (AMD), the world`s No.2 computer-microprocessor supplier second only to Intel Inc.

They said the volume production would begin at the end of the second quarter next year and run with 40-nanometer process. The contracts, they added, would give a boost to the world`s No.1 silicon foundry`s revenue.

In reaction to the reports, TSMC`s executives haven`t made any comments, simply saying pursing CPU contracts has been one of the company`s plans. Industry watchers said the contracts coming in economic meltdown reflected TSMC`s unmatched technology and manufacturing service.

AMD`s farming contracts to TSMC has been within expectations of industry watchers expectations after AMD announced plans to spin off its manufacturing operation at the end of this year to focus on IC design. However, the contract-production schedule comes around half a year earlier than expected in light of the reported second-quarter 2009 production.

AMD has already contracted TSMC and United Microelectronics Corp. (UMC) to make graphic chips after merging ATI Technology, with TSMC offering manufacturing to newer chips whereas UMC offering service to its older chips.

Well, there was rumor from the new AMD CEO about their asset smart strategy and rumors have been going around for a while that AMD will be forced to get rid of their fabs (see AMD's Foundry Business). AMD has been in a brutal price war with Intel over the last few years and their purchase of ATI Graphics made it more difficult for them to move as they are heavily burdened with debt.

If they have entered into a partnership with TSMC then I think it will be win-win for both of them. AMD will be able to focus on designing competitive chips and will be able to offload their very expensive fabrication plants. Of course the news would be good for TSMC and would show further consolidation in the IC manufacturing industry. Remember last week we said Morris Chang predicted only three semiconductor manufacturing companies would be around in 10 years.

From a consumer perspective, a strong AMD is very important. AMD's superior product line a few years ago forced Intel's hand and made them develop better chips faster. It also reduced the overall processor prices and made computers cheaper. A semiconductor world without AMD would not be good. If outsourcing the manufacturing helps them to remain competitive in the design of chipsets and processors, then it is the right move for them.

CENS: TSMC Reportedly Wins AMD`s CPU Foundry Contracts

Hon Hai Denies Interest in Pegatron

Reports out of Taiwan suggest Hon Hai is interested in purchasing ASUSTek spin-off Pegatron. Digitimes wrote:

Foxconn Electronics (Hon Hai Precision Industry) is reportedly considering acquiring the operations of Pegatron Technology through a stock exchange, according to a Chinese-language Economic Daily News (EDN) report.

Asustek acknowledged that releasing Pegatron stock is one of the strategies adopted after the spin-off of its OEM arm, while Foxconn declined to comment regarding the speculation, according to the paper.

Several first-tier OEMs have been in negotiations with Asustek seeking to cooperate or acquire Pegatron since last year. Some market watchers believe Foxconn and Pegatron would be an excellent complement for each other, added the paper.

However, currently Hon Hai, the Foxconn parent company have denied the rumors.

Digitimes: Foxconn considering Pegatron acquisition, says paper

NY Times: Taiwanese electronics giants deny reported tie-up

GE and Tatung in Joint Venture

General Electric (GE) and Tatung, one of Taiwan's renown 3C companies, have entered into a joint venture to produce "innovative HDTV" i.e. high-definition TVs. AFP reports:

US conglomerate General Electric announced on Tuesday that it had entered into a joint venture with Taiwan's Tatung Co. to produce innovative high-definition television sets.

The joint venture, General Displays & Technologies (GDT), will "design, market and service GE-branded HDTVs" with the first sets hitting the market early next year, GE said in a statement.

GDT chief executive Marc McConnaughey said the new HDTVs would bring a step closer to the goal of merging the Internet and television experience without a personal computer.

"We are developing advanced, Internet capabilities for content delivery to televisions, without the need for a PC," he said.

"This includes Internet Protocol TV (IPTV) through cable, satellite and advanced fiber-optic television connectivity," McConnaughey said.

"The long-term strategy is to allow consumers to customize their viewing experience by downloading widgets and a variety of services directly to their HDTVs."

The JV is interesting and will I am sure leverage the strengths of both companies. the IPTV are certainly the next generation of TVs and the development of these devices and set top boxes has become more important in Taiwan over the previous year. See for example News from Computex: Notebooks and STB.

AFP: GE, Taiwan's Tatung team up on HDTVs