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I was going to take a break and skip July's issue of Weiner's World, but there is just too much going on, so I'll combine it with August's and write as the summer passes and major events unfold.
The U.S. Trade Representative (USTR) released a 25% tariff on $16 billion in imports from China, including 29 tariff lines that represent the heart of the semiconductor industry. These tariff lines include semiconductor products such as machines and spare parts used to make, wafers, flat panel displays, masks and chips, and will cost SEMI’s 400 U.S. members an estimated more than $500 million annually in additional duties.
This trade action is on top of the already imposed $34 billion U.S. tariff list, which will cost SEMI’s U.S. members tens of millions of dollars annually. In the coming days, USTR will publish details on how U.S. companies can request the exclusion of products from the $16 billion tariff list, much as it did for the first round of $34 billion.
In a swift retaliation, China announced a 25% tariff on $16 billion in U.S. exports, including products vital to semiconductor manufacturing such as chemicals, test equipment and other parts. Both U.S. and China tariffs take effect on August 23.
The EU made concessions to avoid a trade war with the U.S.
The U.S. lifted the ban on selling components to ZTE while threatening new import taxes.
China's approval delays killed the Qualcomm $44 billion deal, for NXP (2 years in the making).
American PCB makers (and others) scramble to apply for wavers on new (up to 25%) duties for equipment and supplies that will ship from China in August. The PRC counters by lowering the value of its currency and adding new duties of irs own.
How much will inflation in the U.S. increase as companies prepare to raise prices to absorb new duties?
Several economies appear to be poised to stall. Mexico's new president-elect wants to resolve the NAFTA situation.
I wonder who will actually analyze the situation and write this report
U.S. President Donald Trump signed legislation that will bring greater focus and long-term leadership to the government’s interests in military electronics.
Specifically, Section 845 of the FY2019 National Defense Authorization Act (NDAA) – passed by the U.S. House and Senate last month – calls on the Secretary of Defense, in consultation with the Executive Agent for Printed Circuit Board and Interconnect Technology (based at the Naval Surface Warfare Center in Crane, Indiana) and the Director of the Office of Management and Budget (OMB), to prepare a report to Congress by January 2019 on the health of the U.S. defense electronics industrial base.
The report must include an examination of the department’s partnerships with industry and a plan to formalize the long-term resourcing and mission of the Executive Agent, which is the principal Defense Department entity charged with assuring the security and availability of printed circuit and interconnect technologies for defense electronics.
End of an era- the last of the independent American Cu clad laminators
Park Electrochemical has entered into a definitive agreement to sell its electronics business to AGC Inc., formerly Asahi Glass for $145 million in cash.
Park's Electronics Business develops and manufactures digital and RF/microwave printed circuit materials principally for the telecommunications and internet infrastructure, enterprise and military/aerospace markets, and includes manufacturing facilities in Singapore, France, Arizona and California and R&D facilities in Arizona and Singapore.
AGC Group employs approximately 50,000 people worldwide and generates annual sales of approximately $13.3 billion.
Park's electronics business was founded in 1961, when Park's Jerry Shore and Tony Chiesa bought a Connecticut firm called *New England Laminates Co. (Nelco) out of bankruptcy for a reported $200K. Brian Shore, Park Chairman and CEO said that the company supposedly developed the world's first multilayer circuit board in 1962 for a large OEM which needed to "take weight out" of ICBM rockets.
Park will retain its aerospace business following the close of the deal.
*Gene Weiner was president of New England Laminates in the early 1980's.
As TTM nears annual sales of $3 billion its management sees exploding demand for printed circuit boards in modern cars as the electronic content per vehicle keeps expanding. According to CEO Tom Edman, the average circuit board content per car is growing from $62 in 2016 to $75 in 2020, and some hybrid and electric vehicles already carry twice that targeted amount per car today.
There are now 487 electric-vehicle makers in China. Their proliferation is being spurred by Beijing’s call for the country to become a world power in electric-vehicle technology and by local governments eager to jump on the bandwagon. Source WSJ
Activities are also ramping up for our Executive Forum on Automotive Electronics to be held at IPC APEX Expo in San Diego. Did you know that there are over 400 electric vehicle makers in China? Ford has just established an autonomous driving vehicle unit.
This should be interesting considering current the current trade situation between China and the U.S.
On August 28-30 NEPCON South China will cohost its annual event in Shenzhen with Automotive World China, Smart Factory & Automation Factory Expo 2018, and Shenzhen 2018 Circuit Sourcing as component shortages incease along with their prices.
The worldwide semiconductor market reached an all-time high in 2017 up 21.6% in 2017 to $412.2 billion. 2018 is forecasted to grow 15.7% to $477 billion. Printed circuit markets have historically followedmchanges in the semiconductor market by 3 to 6 months.
Did you know that the IPC’s 2,300 U.S. member company sites employ more than 2 million people throughout the United States?
What would YOU like to see presented in the IPC's Executive Forum on the topic in January? Would you like to speak at the Forum? Let us know!