Hynix
Fire Scorches DRAM World
Welcome
to the premier issue of the Electronics Purchasing
Strategies main newsletter. EPS, as
promised in our first mailing to you, will focus the industry's
attention on procurement and supply chain news, research, data, and
other events of importance to the electronics manufacturing community.
To sign up for the newsletter please click here.
The
news pipeline is chockfull of some interesting developments in the
electronics world: Component distributors are furiously adding new
lines, expanding into new value-added services, expanding globally and
pushing aggressively into commodity markets with the goal of
demonstrating new innovations to help customers clinch new businesses.
Here's a further sampling of some recent developments we've
covered:
Koch
Industries says it will pay $7.2 billion to acquire Molex
Inc., in a deal that has suddenly thrust the staid connector market
into the spotlight; Michael Dell has finally received the much-sought
shareholder approval to take the company that bears his name private in a
$25 billion deal; a fire at SK Hynix plant in Wuxi, China, has thrown
the DRAM supply chain into a pickle with some companies talking about
putting their memory inventory on allocation and; of course, Apple
Inc., has unveiled new versions of its iPhone smartphones. On the
product front component vendors are rolling out innovative parts
designed to address key issues in the electronics manufacturing world,
including applications targeted at power management devices, currently
one of the industry's hottest areas.
Each
one of these stories and others covered over the last several weeks on
EPS have significant implications for manufacturers, distributors,
purchasing professionals, design engineers, sales and marketing folks
and OEMs. Take the SK Hynix fire situation. As Gerry Fay, a veteran of
the electronics industry and chief global logistics and operations
officer at Avnet Inc., points out in a blog on EPS, the SK Hynix fire
points squarely to the Achilles heel of the industry. As Fay puts it,
the fire demonstrates the "significant gap between perception and
practice" because of the panic that resulted from the incident. (See: Avnet's Fay: Hynix Fire
Exposes Supply Chain Vulnerability.)
For
professionals in the electronics procurement and purchasing community,
keeping a tab on all segments of the industry has become critical to
enterprise success. News stories like the SK Hynix fire confirm the
continuing need for a deeper dive into events in the industry. A review
of jostling for market positions in the IP&E . That's what you can expect in every
issue of News+ Plus, Electronics Purchasing Strategies' highlight of
significant industry events and analysis of their implications for the
entire market.
Please
go to www.epsnewsonline.com
to leave comments or email me at bolaji.ojo@epsnewsonline.com.
Bolaji
Ojo
Editor
in chief & publisher
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The 3 Pillars of 3M
3M Co.'s
greatest strength can often also seem like its Achilles heel. Few
technology companies have quite as diversified a product portfolio,
which means declines in some business segments can be offset by solid
growth in other sectors but the opposite can also happen - as it did in
2012 when 3M's revenue grew a tepid one percent as opposed to a torrid
11 percent in the prior year. Continue Reading . . .
Koch Veers into
Electronics with $7.2B Molex Acquisition
Koch
Industries has agreed to purchase Molex Inc. for $7.2 billion in a
transaction that will bring the 75-year old electronic components
manufacturer into the fold of one of the world's biggest and
privately-owned industrial conglomerates. The transaction
represents Koch's deepest foray into the electronics industry and marks
one of the biggest acquisitions in years for an economic sector that is
often characterized by rapid technology shifts as well as
margin-corroding commoditization. Continue Reading . .
.
For years now
I have been advocating the importance of having a comprehensive and
proactive risk management strategy to protect the continuity of the
supply chain when a disruption occurs. And though I believe that there
is indeed a greater awareness of the importance of risk management, the apparent panic
ignited by the recent Hynix factory fire leads me to believe that there
remains a significant gap between perception and practice.Continue Reading . . .
Update:
Plant Fire at SK Hynix May Impact Supply, Pricing
A
fire on September 4 at South Korean-based SK Hynix's Wuxi
plant, which is the company's primary DRAM production facility,
resulted in a plant shutdown, according to a TrendForce
report. The fire may have started in a major piece of manufacturing
equipment or one of the CVD machines inside the wafer facility,
according to TrendForce. The Wuxi plant produces nearly half of SK
Hynix's monthly 260K wafers. This includes 100K of its PC DRAM, and 30K
of its mobile DRAM. Continue Reading . . .
Spot
prices for DRAMs have shot up 19 percent since a recent fire at a SK
Hynix plant in China halted production at the industry's second-largest
memory supplier's facility but fears of "allocation" - one of the most
dreaded words in the purchasing community - will eventually prove
unfounded. Continue Reading . .
.
Memory
on Allocation at America II
It has been years since the "A" word - allocation - has been used in
association with a widely-used commodity component. On Friday, however,
one of the industry's largest independent distributors, America II
Electronics, announced it was putting its memory inventory on
allocation. Continue Reading . .
.
Update
2 Plant Fire at SK Hynix May Impact Supply, Pricing
In
an email statement on Sept. 12, Hynix reiterates that the line not
effected by the fire at the Wuxi fab resumed operations on Sept. 7. The
memory maker also noted that the line impacted by the fire is still
undergoing a safety inspection with plans to "complete inspections and
full restoration of the air ventilation system and facilities in order
to resume production in October." Continue Reading . . .
Flextronics
Trims, Acquire in Bid to Win
Flextronics
International Ltd.'s strategy for achieving financial stability seem
simple enough except that, these days, drastic cost-cutting involving
plant closures don't necessarily go well with aggressive small and
medium-size acquisitions. There's a method to the madness, though, and
company executives in recent presentations to analysts and investors
have insisted this strategy is helping the contract manufacturer expand
revenue and boost profit margins. Continue Reading . .
.
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Cypress
Semiconductor Corp. has lowered its
third quarter revenue forecast, citing weakness at an unnamed Asian
mobile handset customer. The chip vendor also said inventory
re-balancing at some other customers in China would likely negatively
impact sales for the third quarter. Continue Reading . . .
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A
U.S. court in Massachusetts has approved an
agreement for AVX Corp. to pay about $366.3 million for the cleanup of
a harbor in the state, moving forward a deal that was initially struck
between the capacitor supplier and a group of regulators in
2012. Continue Reading . . .
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Nvidia
Corp. says it has appointed Colette Kress chief financial officer,
ending a multi-year search to fill the position that first became
vacant in March 2011 following the resignation of David White. Kress
joins the graphics chip manufacturer from Cisco Systems Inc. Continue Reading . . .
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Chip
Makers Align in Automotive Market
With
the PC market in decline and government budgets in sequestration, the
automotive market is a bright spot for component makers. The
electronics content in all types of vehicles is expected to increase
significantly as car makers woo customers with advanced safety features
and infotainment offerings. Continue Reading . . .
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