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Electronic News Digest

9 May 2001 News Electronic News Digest

Southern Africa

Altech posted record results for the year ended February 2000, surpassing four years of consistent growth. According to the company, its strategy of globalisation and telecommunications, multimedia and information technology ('TMT') convergence enabled it to once again post an excellent set of year-end results. Revenue increased by 21% to R3,7 bn and operating income of R284m was 32% higher than the previous financial year. By division Altech reported the following:

Telecommunications - Autopage Cellular and Netstar both contributed substantially to group results. Autopage Cellular grew its subscriber base to more than 400 000 users, while a highlight was a partnership with ABSA to distribute pre-paid cellular vouchers electronically to 25 000 points-of-sale. Netstar maintained its dominant position in the stolen vehicle tracking and recovery market, showing a real growth of 40% in its subscriber base.

Electronics - here UEC Multi-Media (UEC) remained the major contributor. Focusing on the design and development of software and the design and manufacture of digital set-top-boxes for the satellite markets, UEC also expanded into the cable and terrestrial multimedia markets. To meet international demand the UEC facility in KwaZulu-Natal doubled in size and a further R12m was invested in advanced equipment for an additional surface mount assembly line - resulting in a 40% increase in overall production capacity. Its activities in Australia were also expanded to increase research and development capabilities. A new subsidiary company, MediaVerge, has been established to focus on the development of advanced interactive television applications. Alcom Systems is currently installing a R60m Terrestrial Trunked Radio system in conjunction with Motorola, for the Cape Metropolitan Council. STC Frequency Technology remains the largest manufacturer and distributor of frequency control products on the African continent, while Arrow Altech Distribution, having completed a restructuring programme after recording a loss during the previous financial year, is now profitable with a strong order book. A new inventory management system has improved customer service with e-commerce capability.

Information Technology - ISIS Information Systems, together with Altech subsidiary Keops Isis, completed the development of software for the Mozal project. Altech Smart Card Technologies (ASCT) significantly expanded its operations into smartcard solutions for the financial services industry. Africard, a recent acquisition, is the dominant manufacturer of secure and nonsecure cards within South Africa.

Altech announced it is adopting a new corporate structure, which will entail the reorganisation of its businesses and the possible sale of certain noncore activities. In future Altech will consist of four focussed divisions: Telecommunications; Multi-Media; Technology (IT); and Electronics.

Technology group IST, which has been on the turnaround track since the middle of last year, has reported continued progress with substantially improved results for the 12 months to February. Net profit for the year climbed to R10,4m from the R2,2m level of 2000. Turnover from continuing operations increased by 18% to R202,3m and operating profit by 28% to R27,4m. Net cash flow from operating activities was R14,5m against a negative of R11,8m the previous year. New Chief Executive Harry Coetzee said the past year's results reflected not only an effective turnaround effort but also the inherent soundness of the group's continuing businesses, all of which had contributed to the strong earnings improvement. He noted that defence equipment supplier IST Dynamics had won new orders in Europe and the Middle East and now derived 80% of its income from offshore sales, while IST Telecom had gained a multimillion rand contract in conjunction with IST Data to equip Telkom with the Smallworld integrated network planning system. He said that IST Energy is in the process of successfully completing the R45,5 million Swaziland Electricity Board turnkey project, confirming its world-class capabilities, and IST Industrial had been awarded tenders for the design of three critical subsystems of the Pebble Bed Modular Reactor against international competition.

The Zimbabwe Electricity Supply Authority (ZESA) has commissioned the largest CUTS (Currency Universal Transfer Specification) stepped tariff prepayment electricity systems installation in the world, following a successful tender bid by South African company, Energy Measurements. ZESA has commenced with the initial roll-out of the CUTS system throughout Zimbabwe. The CUTS technology, which has sophisticated but easy to use data transfer capability, provides an ongoing step tariff functionality. The users' remaining credit is displayed in terms of currency value as opposed to kilowatt per hour making household budgeting easier and emergency credit facilities more accessible, said Ken Baker, Spescom Director and Energy Measurements International Marketing Consultant. Commissioning of the first phase is expected to be completed by June this year, with a second phase likely to follow soon thereafter, according to the company. Zimbabwe joins Zanzibar and other countries in implementing a stepped tariff electricity fee structure, the use of which is becoming increasingly prevalent.

Sivan Electronic Supplies has been appointed as an agent for Kanda Logical Devices, a manufacturer of development and production tools for the microprocessor industry and end-users. Kanda Systems recently acquired Denver-based Logical Devices from Denver-Colorado, and now trades under the Kanda Logical Devices name.

Overseas

Business

STMicroelectronics reported net revenues for the first quarter increased 12,9% to $1921,1m, from $1702,2m in the 2000 first quarter. Gross profit was $855,8m, representing an increase of 19,3% over 2000 first quarter. Gross margin was 44,5%, significantly above the 42,1% reported in the year-ago quarter. ST said that operating income reached $412,3m, a 41,2% increase over last year's comparable quarter. First quarter 2001 operating income benefited from higher revenues and gross profit as well as from a significant decrease in start-up costs, it said. According to Pasquale Pistorio, President and CEO of ST, the company achieved solid performance for the quarter, posting year-over-year double-digit growth in revenues, gross and operating profits and net earnings. Telecom applications posted the strongest year-over-year growth, increasing 35,8%; automotive was up 12,3%; computer increased 8,2%; and industrials and others, which includes smartcards, was up 17,5%. Digital consumer product revenues were down 11,4% from first quarter 2000 levels reflecting persistent excess inventory conditions and a sharp decline in consumer demand, particularly in the US. From a geographic perspective, ST said that Europe had the strongest growth, increasing 19,9% in comparison to the first quarter of 2000, as well as achieving sequential revenue growth over the 2000 fourth quarter. Asia/Pacific was up 15,3% on a year-over-year basis; Japan increased 32,8%; and Emerging Markets were up 89,1%. The Americas declined 15,2%, consistent with the US economic downturn.

Microchip Technology reported net sales for quarter three ended 31 March, 2001. Revenues were $153,4m, a decrease of 2,1% from the prior year's fourth quarter, and down 19,3% sequentially from the immediately preceding quarter. Charges to cost of sales in the quarter for inventory write-downs of serial EEPROM products and analog products were $7,0m, and included in the quarter were special charges of $17,4m related to acquisition expenses and capacity and cost reduction expenses. Microchip said that net sales for the year were $715,7m, an increase of 29,4% from net sales of $553,1m in the prior fiscal year. Said Steve Sanghi, Microchip's President and CEO: "The quarter's results reflect the very challenging conditions the semiconductor industry is experiencing. The reduction in demand reflects continued inventory corrections at our customers and slowing of demand from end markets. Despite the difficult current market conditions and the short-term low booking visibility, we believe the longer-term indicators of the business continue to be positive." Microchip anticipates sales for the first fiscal quarter ending 30 June, 2001 to be approximately $138m, a 10% drop from the fourth period.

Molex reported revenues of $599,8m for its third fiscal quarter ended 31 March, 2001, a 5,7% increase from last year's third quarter. Net income was $60,7m, a 5,1% increase compared to the same quarter a year ago. Fred A. Krehbiel, Co-Chairman and Co-CEO, Molex, said: "We believe that business levels are approaching a bottom in both Far East regions (Japan and Korea). However, we expect that our business in the Americas will see further slowing, and that growth in Europe is now beginning to slow. For the June quarter we now see revenues in a range of $540-560m. We are aiming toward our 10 % after tax goal for the quarter, but could see profits drop to 9,5% after tax. Molex began a staff reduction plan in November 2000 and said it maintained research and development spending at its original budget of $150m, to ensure the introduction of a record number of new products again this year."

Atmel announced revenues for its first quarter ended 31 March were $525,9m, up 23% from a year ago, and down 8% sequentially. Net income for the quarter totalled $56m. In the previous quarter, the company reported net income of $86,3m. George Perlegos, Atmel's President and CEO said: "Our strategy is and has been to invest heavily in new products and technologies and with our broad product portfolio, we believe growth in our business should resume for Q3 and Q4 of 2001."

Fairchild Semiconductor reported revenues for the first quarter 2001 ended 1 April, 2001, of $385,3m, down 18% sequentially from fourth quarter 2000. First quarter adjusted net income was $26,1m, as compared to $52,6m in the first quarter of 2000. This excludes nonrecurring charges of $22,3m for the purchase of Intersil's Discrete Power Products division. Including the one-time charges, Fairchild's net income was $1,6m in the first quarter. Fairchild said it continued to gain market share during this industry-wide inventory correction and slowdown in end market demand. It reported that Worldwide Semiconductor Trade Statistics (WSTS) data through the six months ended in February 2001 showed that Fairchild continued to outpace overall segment growth rates in power MOSFETs, logic, analog, and optoelectronics. The company said that in line with current expectations for the overall semiconductor market, it expects revenues to be flat to slightly down sequentially in third quarter of 2001, and improve sequentially in the fourth quarter of 2001.

On Semiconductor has reported revenues of $357m in the first quarter, a decrease of 13% compared to the first quarter last year and a decline of 24% from Q4 2000. The company posted a net loss of $159,4m, compared to net income of $7,9m in the first quarter of 2000. On Semiconductor had a net loss of $12,7m in the first quarter compared to net income of $10,9m, in the first quarter of 2000. This excludes amortisation of intangibles, restructuring charges and the cumulative effect of an accounting change, said the company.

Samsung Electronics has reported net income of $950m in the first quarter-down 22% from the same period a year ago. First-quarter sales totalled $6,62 bn, down 5,5% from the previous quarter and down 10% from the year-ago period. For the Samsung Semiconductor group it reported $2,3 bn in first-quarter sales on operating income of $792m and a profit margin of 35%. In this category, memory chips had $1,6 bn, LCD flat panels $385m, and large-scale integration (LSI) chip sales were $361m. The information and communications business had $1,5 bn in sales and operating income of $177m and profit margin of 12%.

Integrated Device Technology reported that revenues sequentially declined 24% to $212,9m fourth quarter, ended 1 April, compared to $278,9m in the prior quarter. IDT's sales were 8% higher than revenues of $197,5m in the same quarter last year. Excluding non-operating earnings, IDT's net income in the fiscal fourth quarter was $55,6m, compared to $96,6m in the previous period and $41,6m in the year-ago period. For fiscal 2001, IDT posted revenues of $991,8m, up 41% from 2000. The company's net income in the fiscal year was $301,0m compared to $95,8m in fiscal 2000.

Linear Technology has announced that net sales for its third quarter ended 1 April, 2001, were $282m, an increase of 52% over net sales of $185m for the similar quarter of the previous year. The company also reported net income for the quarter of $125,7m, an increase of 66% over $75,9m reported for the same quarter of last year. According to Robert H. Swanson, CEO, "This was a difficult quarter as business turned dramatically downward. Aided by a strong beginning backlog we were able to meet our sales and profit goals of 9% and 10% sequential growth over the December quarter. However, as the quarter progressed, cancellations increased and bookings decreased significantly across all business areas. North American business activity was the weakest, particularly in the networking communications area. Business now continues to be weak as customers have been reacting to larger inventories in several channels, shorter supplier lead times and diminished end-user demand. Consequently, we believe our business going forward will be negatively impacted and next quarter could be 20-30% lower in sales and profits than the quarter just ended."

Hynix Semiconductor (formerly Hyundai Electronics Industries) reported a net loss of $353m for the first quarter. The company said that plunging DRAM prices and high interest costs servicing its debt were key factors for the loss. Operating profit of $54m was 70% below the year ago quarter and 78% down sequentially from the last quarter of 2000. Sales totalled $1,35 bn, down 13% from the same period a year ago. Semiconductor sales totalled nearly $1 bn, down 20% from the year ago quarter.

Companies

Tektronix has signed an agreement to acquire Adherent, a specialist in MPEG measurement and analysis for digital video. Adherent will be combined with the Tektronix video business to provide solutions that will enable the broadcast industry, as well as telecommunications and computer industries, to deploy MPEG technology for storage and transmission of video over broadband communication networks, including the Internet, said Tektronix. Financial terms of the transaction were not disclosed. Tektronix intends to transform the current Adherent facility in Cambridge into a Global Center for MPEG test competency, which includes R&D for MPEG-related products, as well as the marketing for those products.

Intel has announced it has separately acquired three optical networking component makers - Cognet, nSerial, and LightLogic. The acquisitions will extend Intel's portfolio into products for new and emerging networking chip markets, such as 10 GB Ethernet. Cognet manufactures CMOS-based chips that process electrical signals in modules for 10 GB Ethernet networks, and LightLogic is a supplier of optical transponders that integrate high-speed optics and electronic components into a single device. Terms of the deals were not disclosed.

Philips Semiconductors has joined the Auto-ID Center to support research into cutting-edge automatic identification technology for future smart labels. The Auto-ID Center is a nonprofit organisation headquartered at MIT in the USA. It is funded both by industry organisations such as the Universal Code Council, and also by support from many leading developers and users of identification technology. Automatic ID systems being researched by the centre, such as the electronic product code (ePC), are expected to bring increased efficiency and better information flow for suppliers, distributors and retailers, and improve the retail experience by providing additional information and service for customers.

BCcomponents and Walsin Technology have announced a strategic partnership whereby Taiwan-based Walsin's comprehensive range of ceramic multi-layer chip capacitors (MLCC) will be available from BCcomponents in Europe, Asia/Pacific and NAFTA, from 1 April. The move represents an important extension to BCcomponents' existing portfolio of electrolytic, film and ceramic disc capacitors. The companies said they will cooperate to further develop the market for ceramic chip capacitors in direct response to industry trends. These include the continuous shift towards surface mount devices and the significant rise in demand for multilayer chip capacitors.

Ericsson and the Japanese consumer electronics company Sony have announced a joint venture to be called Sony-Ericsson Mobile Communication. It will start operating on 1 October with 3500 employees. The company will draw upon Ericsson's expertise in telecommunications and Sony's expertise in consumer electronics, with responsibility for research and development, industrial design, marketing, distribution and production. The venture will develop products under its own brand name.

Toshiba and Matsushita Electric Industrial have announced plans to start construction on the world's largest manufacturing plant for thin-film transistor LCD panels in Singapore and plan to invest about $1,01 bn in a new Singapore joint venture called AFPD Pte. Ltd. The venture will provide the two companies with large-glass substrates for TFT liquid-crystal displays. Toshiba will own 67% of AFPD with Matsushita holding the remaining 33% stake. The plant is planned to come on line in July 2002, and it is expected to ramp capacity to 55 000 glass substrates (730 by 920 mm) per month in fiscal year 2003.

Industry

High costs to buy spectrum, delays in handset introductions and slow consumer uptake are combining to dampen prospects for high-speed wireless third generation (3G) services, according to Cahners In-Stat Group. Although the market may take off in several years, the short-term prospects for the technology that enables video calls, high-speed Internet access, multimedia services and other features are bleak, said the high tech market research firm. It said 3G services will make up just 4,7% of worldwide wireless market this year, but if the market develops as expected, will jump to nearly 50% in 2005.

JDS Uniphase has announced a massive restructuring program in which it will close several operations, and reduce employment by approximately 5000 people or 20% of its workforce. The fibre-optic equipment parts maker said the actions are being taken in response to current business conditions in a market the company continues to believe will experience substantial growth over the longer term. JDS Uniphase also reported $920m sales for its third quarter ended 31 March and pro forma net income of $160m. The company will record one time charges for these restructuring actions of between $375m and $425m, and expects to save $250m annually as a result.

A consortium comprised of 11 Japanese chipmakers and one South Korean firm are to begin a five-year, $675m research project to develop intricate new semiconductor circuit technologies. The Asuka project will pool resources allowing the companies to remain focused on their own core businesses.

The Advanced Reticle Center (ARC), a new European research consortium that has been established in Stuttgart, Germany, will focus its initial R&D efforts on requirements for 70 nanometer processes. It consists of 12 companies and research groups whose members include: ASM Lithography; Arch Chemicals; Heidelberg Instruments; the IMEC laboratories; IMS-CHIPS; Leica Microsystems; M+W Zander; PDF Solutions; Photronics; Schott ML; Steag Hamatech; and Unaxis USA. As a fist project the centre will investigate reticle performance dynamics and essential requirements at the reticle plane to fabricate ICs with a 70 nm technology node.

Iomega will give rebates to millions of customers as part of a settlement of a class-action lawsuit that claimed its Zip drives are defective. Customers in the USA who bought a Zip drive between 1 January, 1995 and 19 March, 2001 will be entitled to rebates worth up to $40 for various Iomega products. A 1998 lawsuit claimed the company's product had a manufacturing flaw that often caused the drives and disks to fail.

Analog Devices was named a recipient of Intel Corporation's 2000 Preferred Quality Supplier (PQS) award for outstanding performance in providing products and services deemed essential to Intel's success. The company was awarded for its efforts to supply Intel with analog integrated circuits.

Ericsson Microwave Systems has received an order for Giraffe AMB, an air defence surveillance radar system with integrated command functions, from the French military equipment procurement agency DGA. The first system will be deployed in about two years. Giraffe AMB (Agile Multi Beam) belongs to the latest generation of mobile radar systems and has superior capacities in detecting and tracking aircraft and missiles. Giraffe AMB is based on an advanced command system and a new 3D concept. The antenna is electronically controlled and can, in addition to distance and direction data, also provide information on the altitude of the target.

Bluetooth wireless connection format is still expected to grow to 955 million units in 2005, according to Cahners In-Stat Group. The firm said the five-year compound annual growth rate for Bluetooth will still be at a highly respectable 360% between now and 2005, despite the number of setbacks. It said the semiconductor potential in Bluetooth will reach $4,4 bn in 2005.

Technology

Texas Instruments will introduce a reference design, called the Optical Wireless Solution, for the all-optical switching market. TI is targeting infrared Ethernet links for small-scale office networks of about 12 to 24 users. The solution will use the company's 3-D microelectromechanical system (MEMS) mirror technology to beam Ethernet via infrared to individual users within a 50 m line-of-sight radius. Since the micromirrors concentrate a signal at a particular point, data rates of up to 100 Mbps can be sent on the infrared links. This differs from standard IR ports that hit their target by spreading the light across a wide area, lowering the bandwidth, says TI.

Atmel's German chip operation has joined a European project to create radio-frequency identification (RFID) components and systems for a new passive long-range standard that operates from the UHF to microwave frequency bands. The company Atmel said its target is to create a new passive RFID platform by the middle of 2002 and to offer it as a worldwide standard, that conforms to European and US regulations. The development of a new long-range RFID solution is part of an Information Society Technologies project supported by the European Commission and initiated by an alliance of companies. The range of new applications that could benefit from the 860 MHz to 2,45 GHz radio systems include RFID applications in parcel, laundry, and library tracking networks.

Japan's Communications Research Laboratory (CRL), working with Fujitsu Laboratories and Osaka University's Graduate School of Engineering Science, has been reported to have developed what is claimed to be the highest-frequency high-electron-mobility transistor (HEMT) achieved to date. The HEMT, operating at 386 to 398 GHz, could be used for products such as automotive collision-avoidance radars at 76- to 77 GHz frequencies, ITS trunk communications, and 100 Mbps home LANs at 60 GHz. Ultrahigh-frequency HEMTs will also deliver at least double the gain of present-generation gallium arsenide devices, according to the researchers.

IP Semiconductors of Soeborg, Denmark is releasing SpeedAnalyzer, a single chip network processor for the OC-192 classification. The high-end packet processor is claimed to have advantage in terms of power and chip density.

Fujitsu has rolled out a new stacked multichip package containing 64 Mb of dual-operation flash memory and 32 Mb of mobile Fast Cycle RAM (FCRAM). The multichip memory solution is designed to serve next-generation handsets that provide e-mail, imaging, Internet access, video games and other features. Called the MB84VD23483EJ, the solution combines a NOR-type Flash memory and mobile FCRAM, which has an asynchronous interface and is compatible with SRAMs, according to Fujitsu. Power consumption in standby mode is 5 µA maximum for the RAM and 100 µA for the mobile FCRAM. The access times are typically 90 ns for both flash and FCRAM. Power-supply requirements are 2,7 to 3,1 V.





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