Applied Materials Makes A Profit

Chip-equipment maker Applied Materials has surprised most of the cocaine nose jobs of Wall Street with a better-than-expected third-quarter profit. It appears that contract manufacturers are spending more on technology used to make smartphone and memory chips.

The company also forecast current-quarter adjusted profit largely above analysts’ average estimate. Chief Executive Gary Dickerson said that demand for DRAM chips is expected to grow in the current quarter.

Applied Materials, which also provides equipment to make flat panel displays and solar cells, forecast an adjusted profit of 25-29 cents per share for the fourth quarter. Wall Street was expecting a profit of 26 cents per share.

Applied Materials expects revenue growth of about 10 to 17 percent, implying revenue of $2.19 billion to $2.33 billion for the quarter. Analysts on average were expecting $2.28 billion. Applied Materials’ net income rose to $301 millionin the third quarter ended July 27, from $168 milliona year earlier. Revenue rose 14.7 percent to $2.27 billion.

Revenue in the company’s silicon systems business, which brings in about two-thirds of total sales, rose 16 percent to $1.48 billion.

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Is The Demand For DRAM Slowing?

Hynix has reported a slowing down of growth in the memory chip profits as it posted its first drop in quarterly profit in two years, casting doubt on medium-term revenue growth.

SK Hynix President Kim Joon-ho told analysts that the problem was a change in product mix and a transition to more complex production technology will crimp third-quarter shipments growth for the key DRAM business. Analysts are concerned that DRAM shipments growth will be increasingly limited in the latter half of the year, given the technology migration issues, which would lead to slower top-line growth. But Hong said such concerns were overblown, as limited shipments growth would help keep supply tight and support chip prices.

Hynix posted an operating profit of $1.07 billion for the April-June period which is not to be sneezed at. But that result was 2.7 percent below the same quarter a year earlier. The other problem is the rise in the value of the won, which toll on revenue, which fell 0.2 percent compared with the previous corresponding period. The currency on average gained more than 9 percent against the dollar during the April-June quarter from a year ago.

President Kim said growth in shipments of DRAM chips, mainly used in personal computers and servers, would slow to a mid-single-digit percent rate in the third quarter, from 13 percent in the April-June period. Shipments of NAND chips, typically used in mobile devices, would slow to a high 20 percent rate from 54 percent.

He said that DRAM market trends will remain favorable due to better-than-expected demand for personal computers as well as data centre-related server demand.

“The launch of new mobile products by major companies and the development of LTE-related demand in China will likely keep demand-side conditions firm,” he added.

Analysts played down concerns of a supply glut arising from the company’s plans for capital investment in the second half of 2015, and expected short-term earnings to remain firm.

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Do Chip Makers Have Cold Feet?

It is starting to look like chip makers are having cold feet about moving to the next technology for chipmaking. Fabricating chips on larger silicon wafers is the latest cycle in a transition, but according to the Wall Street Journal chipmakers are mothballing their plans.

Companies have to make massive upfront outlays for plants and equipment and they are refusing, because the latest change could boost the cost of a single high-volume factory to as much as $10 billion from around $4 billion. Some companies have been reining in their investments, raising fears the equipment needed to produce the new chips might be delayed for a year or more.

ASML, a maker of key machines used to define features on chips, recently said it had “paused” development of gear designed to work with the larger wafers. Intel said it has slowed some payments to the Netherlands-based company under a deal to help develop the technology.

Gary Dickerson, chief executive of Applied Materials said that the move to larger wafers “has definitely been pushed out from a timing standpoint”

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Amazon Debuts Cloud-based Transcoding Service

Amazon Web Services has rolled out the option to use its Elastic Transcoder for audio-only conversions.

Amazon Elastic Transcoder was developed to offer an easy and low-cost way to convert media files from their source format into versions that will play on devices like smartphones, tablets and PCs.

The new feature lets anyone use Amazon Elastic Transcoder to convert audio-only content like music or podcasts from one format to another. Users can also strip out the audio tracks from video files and create audio-only streams. An option that, for example, can be used to create podcasts from video originals that are compatible with iOS applications that require an audio-only HTTP Live Streaming (HLS) file set, Amazon said.

The output from Elastic Transcoder is two-channel AAC, MP3 or Vorbis. Metadata like track name, artist, genre and album art is included in the output file and users can also specify replacement or additional album art.

Users of the service pay for the length of their converted content. For audio-only transcoding, prices start at $0.0045 per minute. That compares to the video version, which costs from $0.015 per minute for standard definition content and $0.03 per minute for high-definition clips, according to Amazon’s website.

For users who want to try out the service, the AWS Free Tier offers up to 20 minutes of free audio output per month. The service was announced for video in January and is still tagged as a beta.

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Can Anyone Challenge Samsung’s SSDs?

You have seen that many companies that were selling SSD drives are slowly moving away from retail and etail consumer sales. Patriot and OCZ are among them and one of the key reasons is that Samsung has insanely attractive prices that are hard to fight.

Currently Samsung’s SSD 840 EVO series 250GB sells for about $2000, while Amazon in the US is selling the same drive for $177.99. The 120GB version in EU sells for €89.90 while US shops sell it for $99.99. Samsung offers a 500 GB SSD for $339.99 and at Newegg Mushkin, OCZ and similar priced or slightly cheaper but for 480GB drives. Toshiba Q series are the cheapest in this category with $319.99.

These are not the fastest or the cheapest drives on the market, but they are some of the most affordable per gigabyte and they offer quite good performance. In addition, consumers simply trust the Samsung brand and many of them are buying Samsung drives thanks to brand recognition, putting a lot of pressure on the smaller players. Just as it happened with the RAM memory market, profit margins on SSD drives went so low that you need to sell huge quantities to support your business model.

This is simply not a viable option for smaller players.

Samsung has its own chip production, has its own notebooks to put your drives in and it apparently is doing well in the market. Event close competitors are confirming that Samsung puts a lot of price pressure on everyone else. It sort of helps if you have your own NAND chip fabs.

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Chip Makers Going After Cars

Chip makers including Broadcom and Renesas Electronics are putting more focus on in-car entertainment with faster processors and networks for wireless HD movies and navigation, aiming to keep drivers informed and passengers entertained.

With PC sales slipping and the mobile device market proving highly competitive, chip makers are looking for greener pastures in other sectors like in-car entertainment and information.

From Renesas comes the R-Car M2 automotive SoC (System-on-a-Chip), which has enough power to handle simultaneous high-definition navigation, video and voice-controlled browsing.

The SoC is meant for use in mid-range systems. It features two ARM Cortex A-15 cores running at up to 1.5GHz and Renesas’ own SH-4A processor plus the PowerVR SGX544MP2 from Imagination Technologies for 3D graphics. This combination helps the M2 exceed the previous R-Car H1 with more than three times the CPU capacity and approximately six times better graphics performance.

Car makers that want to put a more advanced entertainment system in their upcoming models should go for the eight core R-Car H2 SoC, which was announced earlier this year. It is based on ARM’s big.LITTLE architecture, and uses four Cortex-A15 cores and another four Cortex-A7 cores.

The H2 will be able to handle four streams of 1080p video, including Blu-Ray at 60 frames per second, according to Renesas. Mass production is scheduled for the middle of next year, while the M2 won’t arrive in larger volumes until June 2015.

Broadcom on the other hand is seeking to drive better networking on the road. The company’s latest line of wireless chipsets for in-car connectivity uses the fast 802.11ac Wi-Fi wireless standard, which offers enough bandwidth for multiple displays and screen resolution of up to 1080p. Use of the 5GHz band for video allows it to coexist with Bluetooth hands-free calls on 2.4GHz, according Broadcom.

Broadcom has also implemented Wi-Fi Direct and Miracast. Wi-Fi Direct lets products such as smartphones, cameras and in this case in-car computers connect to one another without joining a traditional hotspot network, while Miracast lets users stream videos and share photos between smartphones, tablets and displays.

The BCM89335 Wi-Fi and Bluetooth Smart Ready combo chip and the BCM89071 Bluetooth and Bluetooth Smart Ready chip are now shipping in small volumes.

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Is Apple Doomed?

The necromancy department of Apple has been summoning the spirit of Steve Jobs in the hope of turning around its current dismal growth figures. For a while now, even amongst Apple fanboys, there has been a belief that Jobs’ Mob has gone done the tubes since Jobs croaked.

It is a myth of course, Jobs’ specialty was not innovation but to market a working ideas as if it were his own. But either way Apple is attempting to try and convince everyone that the new iPhone was personally designed by its former CEO. Even after being dead for a while now, and having no impact over the disasters the company has since suffered, Jobs apparently was on board for the iPhone 5S.

According to Apple’s government liaison Michael Foulkes, Jobs oversaw the design of two models of iPhone to go on sale after his death. We suspect that it will take full resurrection before anyone takes this particular spin seriously. If Jobs could really see into the future and predict where his toys would be three years after he died, we would have thought he would have also seen that was a stupid idea not to accept conventional medical treatment for his cancer until it was too late.

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SanDisk Debuts Wireless Flash Drive

SanDisk on Monday announced a line of wireless flash drives that can hold up to 64GB of data.

The new drives include the Connect Wireless Flash Drive — a thumb drive — and the Connect Wireless Media Drive, a larger, but still pocket-sized storage device. The Connect Wireless Flash Drive comes in 16GB and 32GB capacities; the Connect Wireless Media Drive comes in 32GB and 64GB capacities.

The Connect Wireless Flash drive is 3.07-in. x 1.04-in. x 0.54-in. The Connect Wireless Media Drive is 2.6-in. x 2.6-in. x 0.52-in.

The Connect Wireless drive family allows users to not only store but share and stream files across multiple mobile devices. They offer up to eight simultaneous device connections and three media streams, and support separate streams of 720p video content at 2MB/sec to three or five devices concurrently (for the Flash Drive and Media Drive, respectively).

According to a SanDisk spokesman, video streaming performance isn’t affected by multiple streams because device limits are set at a point that supports the streams without degradation. Devices can connect to the drives up to 150 feet away.

The Connect Wireless drives work with all iOS and Android devices, and Kindle Fire tablets, as well as PC and Mac computers. The drives are compatible with Windows 8, Windows 7, Windows Vista, Windows XP and Mac OS 10.6 or higher

Movies, music, photos and documents can be loaded onto the wireless drives by simply dragging and dropping the files, which can then be accessed via the SanDisk Connect apps. Those apps are available for download from the App Store, Google Play Store and the Amazon Appstore for Android.

The drives contain an internal router, so no external router or Internet connection is needed to stream media. In order to use the drives, mobile device users simply download SanDisk’s Connect App.

The drives run on lithium-ion batteries. A single charge provides up to four hours of wireless streaming, with streaming data protected by Wi-Fi Password Protection (WPA2).

“With the new SanDisk Connect product line, we’re raising the bar on what consumers can expect from personal storage,” said Dinesh Bahal, vice president for product marketing for SanDisk.

The SanDisk Connect Wireless Flash Drive is available in 16GB or 32GB capacities for $49.99 and $59.99, respectively. In the U.S., it is available for preorder on Amazon.com, Newegg.com and Micro Center, with availability at Best Buy starting in August. It will also be available for preorder on Amazon.com in Germany and UK.

The SanDisk Connect Wireless Media Drive has a retail price of $79.99 for 32GB or $99.99 for 64GB storage capacity. It is available for preorder in the U.S. on Amazon.com, with availability in Germany and UK in the fourth quarter of 2013.

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Is NFC Catching On?

Near Field Communication (NFC) is steadily gaining adoption in the U.S. for sharing data and music among smartphones, but the technology faces years of slow growth as a replacement for physical wallets.

NFC will take a minimum of three more years to grab hold as a technology that enables so-called mobile wallets as a replacement for credit cards and cash in the U.S., according to a consensus of five analysts. And by “grab hold,” these analysts mean being used by only 10% of mobile phone users to make digital purchases.

Gartner analyst Avivah Litan predicts that NFC payments will hit the 10% threshold in 2015, compared to the process of SMS (texting) payments that is expected to represent 50% of mobile payment volume globally in that same year. “We’re still on the edge when it comes to NFC innovation,” Litan says. “It will take a decade before it’s mainstream across the globe.”

Dozens of new smartphones that run Android, BlackBerry and Windows, and that include an NFC chip, launched last year. But Apple notably did not put NFC in its new iPhone 5 when the phone launched in September. That move “surely had a significant detrimental impact on industry adoption of NFC,” Litan says, given Apple’s influence in the mobile market.

Apple justified the move by saying that consumers already could use its Passbook app, which shows barcodes on the display, instead of NFC. The barcodes contain information that can be scanned by optical readers to let users board planes and redeem movie tickets — tasks that Apple notes are “the kinds of things consumers need today.”

Some have criticized Apple for omitting NFC from the iPhone 5, which has led to a widespread reassessment of NFC’s immediate future, especially in the U.S.

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Can DRAM Be Saved By Win8?

Microsoft’s roll-out of Windows 8 is not expected to generate a significant increase in DRAM shipments, according to market research firm IHS iSuppli.

Other operating system roll outs have pushed up the demand for DRAM, and some had hoped that it would save the battered industry. However while iSuppli thinks that Global DRAM bit shipments are expected to increase by eight percent in the fourth quarter compared to the third quarter, this is much lower than previous Windows roll outs.

In the good old days  Windows rollouts have always generated double-digit increases in quarterly DRAM shipments. Part of the problem is that Windows 8 is pretty good software and has a leaner hardware requirement. But the biggest part is that Windows 8 is not likely to deliver a significant increase in PC shipments in the fourth quarter compared to the fourth quarter of 2011, IHS said.

Clifford Leimbach, analyst for memory demand forecasting at IHS said that starting with Windows 7 and continuing with Windows 8, Microsoft has taken a leaner approach with its operating systems, maintaining the same DRAM requirements as before.

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