As the leading independent distributor of electronic components, Smith tracks open-market activity and conditions as an early indicator of trends and supply chain disruptions. Industry news provides important and time-sensitive information when strategically procuring components, planning for NPIs, or making any critical decisions in the supply chain.
We’ve curated a selection of this week’s industry articles that we feel can help customers gain relevant, useful knowledge and prepare for any supply chain requirements.
Taiwan ODMs Competing for Datacenter Server Orders
Data center orders are creating a lot of competition among first- and second-tier suppliers in Taiwan. After enjoying a surge in shipment growth over the past two years, many server clients pulled back orders due to high inventory at the end of last year. However, the second half of 2019 is expected to see a large amount of ordering activity. According to Digitimes Research, worldwide shipments of servers are expected to grow 7% this year, reaching over 16 million units. Wiwynn is hoping to secure orders from Amazon in the second half of the year, following news from sources that one of Amazon’s current server providers has experienced quality issues. In addition to supplying for Facebook, Google, and Microsoft, Quanta has targeted 5G carriers Nokia and Ericsson for orders. Currently, Google, Amazon, Microsoft, and Facebook together contribute 60% of worldwide data center orders. China-based Baidu, Alibaba, and Tencent together account for another 13%. Taiwanese makers command over 85% of global server shipments. Read More.
Cisco Continues to Dominate the Switch, Router Markets
Revenues of switches and routers hit a record-breaking U.S. $12 billion during 4Q2018, and Cisco was the overall dominant leader with 51% market share. The company controlled 59% of the Ethernet switch market for enterprises and campuses during 2018, in addition to 73% of the data center switch market share. This year, the data center switch market is expected to experience the most growth, a result of many large companies’ migration to the cloud. Huawei and Arista are Cisco’s closest competitors in all markets, with a market share under 20% each, respectively. Read More.
ST Goes 5G…on Multiple Fronts
STMicroelectronics is entering the 5G chip space. STMicro has announced an agreement with frequent collaborator Macom to begin developing 5G telecom-specific chips in the base-station, repeater, and small-cell markets – all heavily needed in 5G networks. STMicro also plans to expand its production capacity in Catania, Italy and possibly move into the new 200 mm architecture as demand picks up. Macom is targeting at least a 50% market share in the base-station market, with aspirations of building its capabilities to serve up to 85% of the worldwide 5G network buildout. Both Macom and ST will lean on each other’s expertise and facilities, with the mentioned Italy fab and ST’s fab in Singapore both being highlighted for the production load. Read More.
Global Semiconductor Sales Down 5.7% YoY in January
This year got off to a slow start in semiconductor sales. January saw the first year-to-year decline in chip sales for any month since July 2016, with sales down 5.7% year over year for the month. John Neuffer, president and CEO of the Semiconductor Industry Association, has named dropping memory prices, the trade war between the U.S. and China, and China’s current economic slowdown as the key factors behind lagging sales. However, there is a reason for optimism. Neuffer believes that the industry’s long-term outlook remains promising “due to the ever-increasing semiconductor content in a range of consumer products and future growth drivers such as artificial intelligence, virtual reality, the internet of things, and 5G and next-generation communications networks.” Read More.
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