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.
Micron Plans to Cut Memory Chip Production by 5 Percent
Micron has announced a 5% production cut this year to both DRAM and NAND flash chips due to market oversupply. The news comes as quarterly sales contracted for the first time since the first quarter of the 2017 fiscal year.
“Our demand outlook for calendar 2019 has moderated, led by somewhat greater levels of customer inventory, weakening server demand at several enterprise OEM customers, and worse-than-expected CPU shortages,” said Micron CEO Sanjay Mehrotra. Amazon, Microsoft, and Google are all believed to have slashed orders in recent months, leaving Micron to work through their stockpiles of unused parts. At the end of their most recent quarter, Micron said that they were holding $4.4 billion in unsold inventory, up from $3.9 billion at the end of Q1. Read More.
Five High-Potential Growth Markets, According to SYNNEX
Two top executives from distribution giant SYNNEX Corporation – Peter Larocque and Michael Urban – recently spoke at the SYNNEX Varnex partner community meeting, where they discussed what they believe are five high-potential growth markets for 2019 and beyond. Here are three of the highlights.
- Internet of Things: With billions of devices already installed and billions more to come, SYNNEX is pushing all channel partners to get involved. IoT users need a rich combination of hardware, software, and services, leading to long-term, lasting partnerships with customers.
- Device as a Service: SYNNEX has joined top DaaS distributors D&H, Ingram Micro, and Tech Data in this arena that offers mid-to-large-sized businesses cost savings on the latest desktop, notebook, and mobile hardware with backend support and analytics for a monthly fee. This also leads to long-term business with customers.
- Hardware Refresh: Extended support for the Windows 7 OS ends in January 2020, as does extended support for multiple Windows Server operating systems. This will lead to end users investing in new desktops, laptops, and servers across the board. Spending will likely increase once the industry navigates past the processor and memory shortages!
Compal to see worsening supply gap in 2Q19
Compal Electronics, Taiwan’s top PC assembler, is feeling the impacts of Intel’s CPU shortage. The company said that it saw a 10-20% supply gap to its clients in the first quarter of 2019. The gap is expected to widen during the second quarter. Worldwide notebook shipments are predicted to increase by single digits in Q2, and Intel’s new 14 nm isn’t scheduled to come online until the third quarter. It’s unknown if the new capacity will ease pressures in the long term.
“Since the third quarter will be the traditional peak season for the notebook market, with shipments to peak in September and October, whether Intel’s newly added capacity is able to satisfy its downstream partners’ demand will remain to be seen,” said Ray Chen , Compal’s vice chairman. Read More. 
Recovery to take place in non-memory IC market starting 2Q19, says TSMC chairman
The non-memory semiconductor market is expected to start a gradual recovery in the second half of 2019, according to Mark Liu, chairman of Taiwan Semiconductor Manufacturing Company (TSMC). Liu cites emerging AI and 5G applications as the reasons for the promising outlook.
“The overall semiconductor market had a slow start in 2019, due mainly to sluggish smartphone sales,” Liu said. “Nevertheless, the availability of forthcoming 5G devices is definitely a positive sign for semiconductors.” Read More. 
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