Semiconductor market news from DPE- January 10 to January 16

1、VW ls Latest Automaker Ensnared by Chinese Covid PlantShutdowns

More global automakers have been caught in China’s latest coronavirus outbreak in Tianjin, adding further stress to already strained supply chains.

A production plant operated by Volkswagen AG's joint-venture with FAW Group has been shuttered since Monday, along with a gearbox supplier controlled by the German automaker, according to an emailed statement Friday. They join a Toyota Motor Corp. factory with a yearly output of half a million cars that have been closed for five days.

Halting the VW plant may hit production of the Audi Q3 and several versions of the VW Tayroncompact sport-utility vehicle, the company said. Volkswagen, which employs around 8,000 people in Tianjin, expects to resume output "very soon" and catch up with lost production.

The omicron outbreak in China is nevertheless sending jitters through supply chains, as the nation's production and shipping face disruptions from strict measures to contain the highly transmissible omicron variant. Tianjin, a port city of 14 million, is a key production hub for foreign businesses and home to not just the VW and Toyota facilities but also an Airbus SE final-assembly plant.

2、Canon to close Chinese subsidiary following the sharp drop in the camera market

Japanese optical product maker Canon will close part of its Zhuhai factory in southern China, with a full shutdown of the 32-year plant being considered, due to shrinking demand in the digital camera market and the continued fallout from the coronavirus.

The announcement, which was issued last Wednesday, said that “the operation of the company is facing unprecedented difficulties. Despite the joint efforts of the company and all employees, it has failed to reverse the situation.

“The headquarters has to adjust the overall operation structure of the group. After careful consideration, a difficult decision has to be made: to terminate the company’s production.”

It is not clear how many employees at the Zhuhai facility will be affected, and the company has yet to decide whether the relevant production line will be relocated, said Canon China public relations department representative Shen Yue.

By the end of 2020, investment in the Zhuhai subsidiary had reached $220 million, with 1,317 employees. Its production of lenses totaled 12.29 million in 2020, and it produced 1.03 million digital cameras and 94,000 digital video cameras, according to an annual report posted on the company’s website in December.

3、Japan chip subsidy requires a 10-year pledge from TSMC, others

Tokyo is planning to require semiconductor manufacturers to keep production in the country for around 10 years to qualify for subsidies designed to attract more chipmakers to Japan.

The Japanese government is providing monetary support to chipmakers that plan to build chip facilities in the country, according to Nikkei. Taiwan Semiconductor Manufacturing Co. (TSMC) is expected to be the first company to receive the subsidy with its planned fab in Kumamoto Prefecture.

In December, the Japanese parliament passed regulations on the chip subsidies, which are scheduled to go into effect as soon as March, Nikkei reported. A total of US$5.2 billion (NT$144 billion) was budgeted to help semiconductor manufacturers, per the report.

Around US$3.49 billion (NT$97 billion) is slated to go toward TSMC’s Kumamoto plant, while the remainder will go to other chip projects under consideration, Nikkei said.

4、Foxconn India's iPhone plant restarts production after Dec protests

Apple Inc supplier Foxconn restarted production at its plant in southern India on Wednesday, a company official said, about three weeks after it was closed because of protests over workers falling sick.

The company official, speaking to Reuters on condition of anonymity, said the factory reopened with one shift and 120 workers.

The plant, in the town of Sriperumbudur near the Tamil Nadu state capital of Chennai, employs about 17,000 people but was closed on Dec. 18 after 250 workers fell sick with food poisoning, igniting protests.

The official said it will take two months for full production to resume.

5、Microsoft hires Apple chip designer to work on server processors

Microsoft has hired Mike Filippo, a semiconductor designer who formerly worked at Apple as a chip architect, reports Bloomberg. Microsoft is aiming to further expand on chip designs for the servers that power its cloud computing services, and at Microsoft, Filippo will be working on processors for Azure servers.

Filippo joined Apple in 2019 after a decade of semiconductor design at Arm, where he was credited with developing some of the underlying technologies used in phones and other devices. Filippo was responsible for the development of several Arm chips, including the Cortex-A76, Cortex-A72, Cortex-A57, and upcoming 7nm+ and 5nm chips.

Prior to working at Arm, Filippo worked at AMD and Intel, and he was a high-profile engineer on Apple's chip team. Apple has been losing some of its chip hires in recent weeks. Former Director of Mac System Architecture Jeff Wilcox departed Apple in December and has since transitioned to Intel, where he will work on Intel's new SoCs.

    Stay tuned

    To receive the latest news via email, please click the bottom to subscribe.

    Related Market Reports View More