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Week In Review: Manufacturing, Test

Trade wars; semiconductor R&D; new IC forecasts.

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Trade wars
In recent testimony before a U.S. government panel considering tariffs on $300 billion worth of Chinese goods, SEMI called for the removal of about 30 tariff lines.

These items are central to the semiconductor manufacturing process. “SEMI asserts that these tariffs will harm not only companies operating in the U.S., but other companies as well in the semiconductor supply chain by increasing costs, introducing uncertainty, and most problematically, stifling innovation,” said Jay Chittooran, global public policy manager at SEMI, in a blog. “Collectively, SEMI estimates that this round of tariffs will cost its 430 U.S. members millions annually in additional duties. All told, SEMI estimates that all U.S. and Chinese retaliatory tariffs will cost members nearly $800 million in annual duties.”

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Here’s another sobering blog: “The Trump administration’s proposed 25% tariff on $300 billion in goods imported from China would increase the prices Americans pay for cell phones, laptops, tablets and video game consoles,” according to the Consumer Technology Association (CTA).

If the list 4 tariffs take effect, Americans will pay between $50 and $120 more for many products. “Tariffs are taxes, paid by American consumers – and these new tariffs would be a burden on American families just as they start back-to-school shopping,” said Gary Shapiro, president and chief executive of the CTA. “U.S. consumers, not China, pay the price for tariffs – what more proof does the White House need? It’s time for this administration to put American small businesses, workers and families first and make a deal with China.”

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The Trump administration’s move to bar Huawei from sourcing American technology has serious ramifications for U.S.-based semi firms. “The implications of the Huawei ban are quite serious for Micron and Western Digital,” said Michael Yang, research and analysis director at IHS Markit. “When you lose the world’s largest mobile infrastructure equipment supplier and the second-biggest smartphone maker as a customer, it’s going to have a major impact. Meanwhile, Huawei faces some touch challenges as well, including finding new sources for semiconductor memory devices, accelerating internal development plans and developing China-based manufacturing capabilities.”

Semiconductors
John Neuffer, president and chief executive of the U.S. Semiconductor Industry Association (SIA), urged U.S. government leaders to triple investments in semiconductor research over the next five years to a total of $5 billion annually. “America is in a race with global competitors to win the technologies of the future, including artificial intelligence, quantum computing, and 5G and 6G wireless networks. Semiconductor innovation is the engine that drives all these promising technologies. As Congress turns to the budget, setting aside research funds to keep America the world leader in semiconductor technology is critical,” Neuffer said.

Foxconn Chairman Terry Gou is stepping down, according to various reports. Gou is running for president in Taiwan.

Amid a lackluster quarterly forecast, Macom has implemented a restructuring plan, which includes a permanent reduction in hourly, salaried and management workforce of approximately 250 employees, or 20% of the total workforce. It plans to close of seven product development facilities, including locations in France, Japan, the Netherlands, Florida, Massachusetts, New Jersey and Rhode Island.

Market research
It’s time to take a pulse of the semiconductor market amid the memory downturn and trade frictions with China. To get an idea where the industry is today, Semiconductor Engineering polled several market researchers to take a pulse on the market. Here’s the latest IC forecasts from experts.

North America-based manufacturers of semiconductor equipment posted $2.06 billion in billings worldwide in May of 2019, according to SEMI. The billings figure is 7.4% higher than the final April 2019 level of $1.92 billion, and is 23.6% lower than the May 2018 billings level of $2.69 billion. “Billings of North American equipment manufacturers increased for the second consecutive month,” said Ajit Manocha, president and chief executive of SEMI. “Expanding end-market applications continue to fuel demand for advanced semiconductors and the equipment necessary to manufacture those devices. However, market volatility continues due to the macroeconomic environment.”



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