|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's range||41.83 - 43.63|
|52-week range||11.00 - 44.55|
|Beta (5Y monthly)||1.52|
|PE ratio (TTM)||38.03|
|Forward dividend & yield||0.27 (0.63%)|
|Ex-dividend date||26 Feb 2021|
|1y target est||32.92|
(Bloomberg) -- President Joe Biden’s top economic adviser, Brian Deese, has sought the Taiwanese government’s help resolving a global semiconductor shortage that’s idling U.S. car manufacturing plants, according to a letter reviewed by Bloomberg News.In the letter, Deese thanked Taiwan’s minister of economic affairs, Wang Mei-hua, for her personal engagement on the microchips shortage and relayed concerns from U.S. automotive companies.Deese’s letter shows that top White House officials have become involved in trying to resolve the shortage, which has presented an early challenge to Biden’s administration. Deese, the director of the National Economic Council, as well as National Security Adviser Jake Sullivan are both personally engaged in the effort to address bottlenecks in auto companies’ supply chains, a White House spokesperson said.The spokesperson asked not to be identified by name because the talks have been private. Wang told reporters Thursday that she hasn’t received a letter from Deese and reiterated that Taiwan’s chipmakers are trying to resolve the supply constraints.The administration is engaging with international partners and allies to encourage them to take steps to address the shortage, but all sides recognize it’s not a short-term crisis, the White House spokesperson said. More will have to be done to prevent similar shortages in the future, the spokesperson added.The World Is Short of Computer Chips. Here’s Why: QuickTakeTaiwan is home to the largest semiconductor manufacturing industry in the world, and also relies on U.S. weapons to defend against China, which views the island as part of its territory and has threatened to use force if Taipei moves toward formal independence.The Biden administration has also asked U.S. embassies around the world to identify how foreign countries and companies that produce chips can help address the global shortage and to map the steps taken to date, the spokesperson said.‘Reasonable’ AsksThe formal outreach to Taiwan follows meetings between Deese and Sullivan and U.S. auto companies and their suppliers. The auto industry is leaning on the White House to pressure foreign chipmakers and their governments to allocate supplies to the U.S.“We think those are reasonable things for the government to ask,” said Matt Blunt, president of the American Automotive Policy Council, which lobbies for Ford Motor Co., General Motors Co. and Stellantis (formerly Fiat Chrysler Automobiles). “This is going to be a problem for the first half of the year.”Administration officials in the State and Commerce departments have previously sought meetings with Taiwanese government and industry officials to press them to ramp up the supply of semiconductors.Thousands of American autoworkers could face cuts to their hours and wages as plants halt production while awaiting new shipments of automotive-grade semiconductors from Taiwan and South Korea -- chips that won’t even be manufactured for three to four months. Companies have provided the White House with the job impact data, people familiar with the matter said.That prospect threatens to undermine Biden’s efforts to energize a sputtering economic recovery, hitting hardest in political battleground Michigan, as well as Texas and Kentucky.IHS Markit estimated this week that nearly 1 million fewer light vehicles will be produced in the first quarter of 2021 because of the semiconductor shortage. The projection was a revision of an earlier estimate of 672,000 fewer cars coming off production lines in the first quarter that was issued by the group on Jan. 29.The chip shortage first hit the auto industry in December, coinciding with a tumultuous transition of power, an impeachment trial, the ongoing pandemic and the urgent push for an economic stimulus. By the time Biden was sworn in, former President Donald Trump’s administration had only made preliminary efforts to fix the problem.Senior Biden administration officials have identified semiconductors as one of the strategic areas for domestic investment to compete with China and ensure the U.S. is no longer dependent on other countries. Biden plans to sign an executive order in the coming weeks to demand a review of supply chains, though no imminent action is expected to result from it.Taiwan DependenceLeaders across the globe are realizing just how dependent they’ve become on the island democracy of Taiwan, which is being courted for its capacity to make leading-edge computer chips. That’s mostly due to Taiwan Semiconductor Manufacturing Co., the world’s largest foundry and go-to producer of chips for Apple Inc. smartphones, artificial intelligence and high-performance computing.Taiwan’s role in the global economy was largely below the radar before the auto industry suffered shortfalls in chips used for everything from parking sensors to reducing emissions. With carmakers including Germany’s Volkswagen AG, Ford and Japan’s Toyota Motor Corp. forced to halt production and idle plants, Taiwan’s importance has suddenly become too big to ignore.But there’s a question about how effective cooperation can be in a time when every allied country wants to move away from its dependence on China and build their own capacity at home.U.S., European and Japanese automakers are lobbying their governments for help, with Taiwan and TSMC being asked to step in. German Chancellor Angela Merkel and French President Emmanuel Macron discussed the potential for shortages last year and agreed on the need to accelerate Europe’s push to develop its own chip industry, according to a French official with knowledge of the matter.Exacerbating the U.S. shortages, power failures caused by brutally cold weather in Texas have shuttered semiconductor plants clustered around Austin.NXP Semiconductor NV, one of the largest makers of chips used by auto companies, has idled two plants in the Austin area, the company said early Wednesday. Samsung Electronics Co., the world’s second largest semiconductor maker, also closed down production at its Austin site, the South Korean company said. Infineon Technologies AG, another large supplier of chips to the automotive industry, said its Austin plant has been shut down because the power was turned off.(Updates with comment from Taiwan minister in fourth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- Power outages across Texas caused by historically cold weather have shut down semiconductor plants clustered around Austin, further disrupting a supply chain that has already been falling short of customer needs.NXP Semiconductor NV, one of the largest makers of chips used by automakers, has idled two plants in the Austin area, the company said early Wednesday. Samsung Electronics Co., the world’s second largest semiconductor maker, also closed down production at its Austin site, the South Korean company said. Infineon Technologies AG, another large supplier of chips to the automotive industry, said its Austin plant has been shut down because the power was turned off.Carmakers around the world have slowed production because they can’t get enough supply of electronic components. Other electronics makers, including Apple Inc., have said their growth has been constrained by the lack of parts as demand rebounded faster than many expected from the depths of the Covid-19 pandemic economic slump.The Austin area is home to several plants and other facilities of major chipmakers. Unprecedented cold winter weather and a surge in electricity demand has crippled the Texas utility grid, forcing factory shutdowns, store closings and leaving more than 3 million homes without power.Chip plants typically run 24 hours a day to enable them to be economically viable. The complex photolithographic process used to make semiconductors can’t usually be stopped suddenly without damaging at least some of the work in progress. Samsung and NXP said they are assessing the situation and will resume production as soon as power is restored.Samsung said Tuesday that it received prior notice of the shutdown and was able to take appropriate measures to protect the equipment and wafers in production. NXP said it will be able to evaluate the impact when full production resumes. The Netherlands-based company said all of its other manufacturing facilities outside Texas remain in full operation.Austin is home to two of NXP’s five internal chip plants. The company handles half of its own silicon wafer processing and outsources the balance.“It’s very early in the process, and we are dealing with a real-time situation,” Jacey Zuniga, an NXP spokesperson, said Wednesday. “Once necessary utility services are restored, our ops team will be able to evaluate when full production will resume.”NXP shares fell 2.4% to $190.69 at 1:15 p.m. in New York, in line with a general decline by semiconductor companies. The Philadelphia Stock Exchange Semiconductor Index declined about 2%. Shares of Samsung dropped 2% to 83,200 won at the close Wednesday in South Korea.Like Samsung, German chipmaker Infineon Technologies AG said it received advanced notice of the power cut, which helped to minimize the impact.“This gave us a few hours to prepare for the disruption and we were able to put the factory into a safe state and to protect our employees and production inventory,” Infineon said Wednesday in a statement. “We are still assessing the impact and are informing any affected customers as quickly as possible.”Samsung, which locates most of its production in its home base of South Korea, has a logic semiconductor plant in Austin that makes chips on a contract basis for other companies. It’s unlikely that the plant makes chips for high-profile customers such as Qualcomm Inc. and Nvidia Corp. because the factory is one of Samsung older facilities, according to a report by Chris Caso, an analyst at Raymond James.For NXP, the outage may have a more significant influence on industry dynamics, he said.“Under normal circumstances we would expect this to have only a minimal impact, but given the significant shortages occurring throughout the industry, and in NXP’s primary automotive market in particular, such an outage will only serve to exacerbate those shortages,” Caso wrote.(Updates with information on Infineon plant in the 10th paragraph. An earlier version corrected the name of the NXP spokesperson.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- The first hints of trouble emerged in the spring of 2020. The world was in the early throes of a mysterious pandemic, which first obliterated demand then super-charged internet and mobile computing when economies regained their footing. That about-face -- in a span of months -- laid the seeds for potentially the most serious shortage in years of the semiconductors that lie at the heart of everything from smartphones to cars and TVs.Auto and electronics makers that cut back drastically in the early days of the outbreak are now rushing to re-up orders, only to get turned away because chipmakers are stretched to the max supplying smartphone giants like Apple Inc. This week, Qualcomm Inc.’s Cristiano Amon, head of the world’s largest mobile chipmaker, flagged shortages “across the board,” citing the industry’s reliance on just a handful of players in Asia.Amon joined a growing chorus of industry leaders warning in recent weeks they can’t get enough chips to make their products. Carmakers appear in direst straits and have spurred the U.S. and German governments to come to their aid -- General Motors Co. this month was forced to mothball three North American plants and Ford Motor Co. is bracing for a 20% drop in near-term output. But more industries have lately copped to shortages, emphasizing how Covid-19 and a boom in a new breed of 5G-ready smartphones like the iPhone 12 is exacerbating a shortage of capacity plaguing the entire consumer industry. Chip shortages are expected to wipe out $61 billion of sales for automakers alone, but the hit to the much larger electronics industry -- while tough to quantify at this early stage -- could be far larger.Apple, a major Qualcomm customer, said recently that sales of some new high-end iPhones were hemmed in by a shortage of components. Europe’s NXP Semiconductors NV and Infineon Technologies AG -- whose roles near the top of the supply chain grant them visibility over global chip flows -- have both indicated the constraints are no longer confined to autos. And Sony Corp. said Wednesday it might be unable to fully sate demand for its new gaming console in 2021 because of production bottlenecks.“The virus pandemic, social distancing in factories, and soaring competition from tablets, laptops and electric cars are causing some of the toughest conditions for smartphone component supply in many years,” said Neil Mawston, an analyst with Strategy Analytics. He estimates prices for key smartphone components including chipsets and displays have risen as much as 15% in the past three to six months.Read more: A Year of Poor Planning Led to Carmakers’ Massive Chip ShortagePC makers were among the first to hint, in the spring of 2020, at an impending crunch, a warning echoed by Lenovo Group Ltd. on Wednesday. At the heart of the crisis sits Taiwan and its largest company Taiwan Semiconductor Manufacturing Co., the chipmaker of choice to the world’s technology and auto giants. It spent billions in past years ensuring it remains at the forefront of semiconductor production technology -- a costly exercise that’s both paid off and also thrust it into the middle of a global geopolitical dogfight.On Friday, Qualcomm and Corning Inc. joined Biden administration officials to discuss the gathering storm with their Taiwanese counterparts and the island’s top industry representatives including TSMC. Both sides repeatedly stressed their interdependence, Taiwan’s Minister of Economic Affairs Wang Mei-Hua told reporters. The presence of several senior U.S. officials and the Semiconductor Industry Association -- which represents America’s biggest chipmakers -- emphasized the urgency of the situation.The current crisis stems from several factors that converged last year. Like most every chip designer on the planet, Qualcomm outsources production to Asian companies, foremost among which are TSMC and Samsung Electronics Co. The pair are increasingly the only recourse for producing the most advanced semiconductors. But their capacity takes years to plan and billions of dollars to build in tandem with customers, and the post-Covid 5G phone and internet boom took their clients by surprise.Read more: The World Is Dangerously Dependent on Taiwan for SemiconductorsIndustry executives also blame excessive stockpiling, which began over the summer when Huawei Technologies Co. -- a major smartphone and networking gear maker -- began hoarding components to ensure its survival from crippling U.S. sanctions. Led by Huawei, Chinese imports of chips of all kinds climbed to almost $380 billion in 2020 -- making up almost a fifth of the country’s overall imports for the year.Rivals including Apple, worried about their own caches, responded in kind. At the same time, the stay-at-home era spurred sales of home appliances from the costliest TVs to the lowliest air purifiers, all of which now come with smart, customized chips. TSMC executives said on its two most recent earnings calls that customers have been accumulating more inventory than normal to hedge against uncertainties, a maneuver they see persisting for some time.“There’s a chip stockpiling arms race,” said Will Bright, co-founder and chief product officer at Drop, which uses custom chips in headphones and keyboards.All that has dried up the spigot for smaller-volume buyers such as the makers of cars and gaming consoles: Nintendo Co., Sony and Microsoft Corp. have struggled to make enough Switches, PlayStations and Xboxes for about a year. The game hardware industry is bracing for supply to get worse before it gets better in 2021, potentially even affecting the next holiday season, people familiar with the matter say.It didn’t help that automakers -- the most visible cohort to be affected -- misjudged the situation. Some industry observers blame their predicament on near-sighted planning and under-estimation of a post-Covid rebound in auto demand. Others argue chipmakers are prioritizing higher-volume and more lucrative consumer electronics such as smartphones.On Friday, Minebea Mitsumi Inc. -- a vital supplier to the transport and electronics industries -- suggested shortages may plague even more sectors, including aviation. “Demand is springing up everywhere at a faster-than-expected pace,” CEO Yoshihisa Kainuma told analysts on a call. “Airlines around the world are scrapping old aircraft to slim down their balance sheet. And people’s desire to travel will explode after the pandemic.”It’s anybody’s guess when production will catch up with demand. But a growing number of industry observers don’t see quick or simple resolution.“A lot of it can be traced back to the second quarter of last year, when the whole world basically shut down. Many auto companies shut down manufacturing and their suppliers re-prioritized,” said Mario Morales, an analyst with IDC. “Not until the second half will we see relief for some of these markets.”(Updates with chart after eighth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.