Semiconductor equipment manufacturer KLA has announced the closure of its Flat Panel Display (FPD) business by the end of 2024, resulting in the layoff of hundreds of employees, mainly affecting staff at Orbotech. Founded in 1976, KLA employs nearly 14,000 people worldwide, primarily providing semiconductor process inspection and measurement equipment. With a revenue of $9.68 billion in 2023, a decrease of 8% compared to the previous year, the closure of the FPD division, one of Orbotech's major departments, has been significant. Orbotech is a globally renowned manufacturer of semiconductor optical equipment, acquired by KLA for $3.4 billion in 2019. KLA cited sustained market decline and is exploring alternative solutions for its FPD business. However, the exit from the FPD sector is not expected to affect revenue expectations for the current quarter, estimated at $2.3 billion. Nevertheless, it is anticipated to incur tens of millions of dollars in non-cash charges and goodwill impairment.
American PC giant Dell Technologies has announced layoffs following a 20% decline in sales. The layoffs are part of a cost-cutting plan, which includes recruitment restrictions and employee restructuring, although the specific scope and number of layoffs have not been disclosed. Dell employs nearly 120,000 workers, and the layoffs are in response to subdued demand for personal computers over the past two years, particularly with a recent quarter's revenue drop of 11%. The company anticipates an improvement in demand for the fiscal year 2025 but expects costs to rise. Changes in business relations with VMware may result in reduced net revenue from other business segments. Dell had previously repurchased shares related to VMware, but Broadcom acquired VMware last year. In 2023, Dell laid off 6,650 employees, accounting for 5% of its global workforce, to address economic downturns and declining demand. However, the PC market is expected to rebound, with the Chinese PC market forecasted to grow by 3% year-on-year in 2024 and by 10% in 2025.
In February 2024, Japan's semiconductor equipment sales experienced the largest increase in 10 months, reaching ¥3,174.18 billion, a 7.8% increase compared to the same period last year. This marks the second consecutive month of growth and the highest increase since April 2023. Additionally, sales exceeded ¥300 billion for the fourth consecutive month, setting a new record. From January to February 2024, sales reached ¥6,322.93 billion, a 6.4% increase from the same period last year, setting a historical high. Japan ranks second globally in the semiconductor manufacturing equipment market share, following the United States. This recovery was not unexpected, as Tokyo Electron Limited (TEL) signaled a revival in the previous month's financial report. It is forecasted that the global market size for semiconductor front-end manufacturing equipment will reach around $100 billion in 2024, with a potential double-digit growth expected in 2025.
By 2029, it is projected that 95% of laptops will support Artificial Intelligence (AI). These AI-capable laptops will be equipped with specialized chipsets designed to accelerate AI computations. The year 2024 is expected to mark a significant milestone for AI PCs, with laptops featuring NPUs capable of processing 40 trillion operations per second (TOPS) making their debut. As the market for AI laptops expands, there will be shifts in their definition and demands. While commercial markets will lead in sales, the potential for consumer markets, particularly in gaming and content creation, is substantial. The AI PC era may witness a transition in the PC market from x86 architecture to a broader adoption of Arm architecture, emphasizing energy efficiency. Qualcomm's Snapdragon X Elite could emerge as a formidable competitor in the PC field.
Qualcomm has terminated its acquisition of Israeli automotive chip manufacturer, Autotalks Ltd., citing failure to obtain regulatory approval as the reason. Autotalks specializes in V2X communication in the semiconductor industry, offering automotive-grade dual-mode global V2X solutions aimed at reducing vehicular collisions and enhancing travel experiences. Qualcomm sought to enhance its capabilities in vehicle connectivity chips through the acquisition, but the move drew scrutiny from regulatory agencies. The U.S. Federal Trade Commission (FTC) announced an antitrust review of the case, while regulatory bodies in the UK and the EU also conducted investigations into the transaction. Ultimately, Qualcomm decided to terminate the acquisition, reaffirming its commitment to the automotive sector.
Resources:
1. https://www.esmchina.com/news/11624.html
2. https://www.esmchina.com/news/11630.html
3. https://www.esmchina.com/news/11631.html?method=1
4. https://www.esmchina.com/marketnews/48215.html
5. https://www.esmchina.com/news/11629.html
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