In case you missed it: news from week of January 27

Artificial intelligence
The rapid growth of artificial intelligence (AI) chips will be a key trend in 2020 and beyond, according to industry observers. (Pixabay)

The major news in the electronics industry this past week is a story that is still playing out: the spreading coronavirus could potentially cripple the electronics industry. On top of the human suffering and life disruptions posed by coronavirus, the presence of electronics manufacturers in China, and particularly Wuhan, is likely to have ripple effects throughout the industry for weeks as plants remain shut down and workers are unable to get back to their jobs. Analysts are projecting price increases for liquid crystal display panels used in flat panel TVs, and delays in producing consumer goods such as smartphones are likely.

Speaking of smartphones, 2019 was a lackluster year for that sector, according to the latest report from IHS. IHS Markit reported that 1.38 billion smartphones were shipped by various vendors in 2019, down from 1.41 billion in 2018. The firm is concerned that the production of 5G chips for smartphones could be delayed as the spreading coronavirus causes the plants in China and Taiwan to shut down.

5G is one of the industry buzzwords in 2020. One other buzzword is AI (artificial intelligence). Analysts project robust growth in the market for artificial intelligence chips, with one estimate calling for the market to triple from $43 billion in 2018 to $129 billion in 2025. Key players in this rapidly growing sector include familiar names such as Intel and Nvidia, and Xilinx. But also pay attention to newer companies such as Halio, Graphcore, Cambricon Technology, Cerebras, Kalray, Novumind, Thinci, Gyrfalcon Technology, Syntiant, Greenwaves, Horizon Robotics, Groq and Wave Computing.

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This past week also featured a number of earnings announcements. As with last week, the news was mixed. On the strength of its Rome chips, AMD posted record Q4 and 2019 sales. AMD expects a solid first quarter for 2020, with growth in its data center business driving growth for this year.

But the news was not so good for Xilinx. The FPGA supplier announced it would reduce its global workforce by 7%—about 350 workers of its 5,000 employees—as it sees a slowdown in 5G and wired deployments and “ongoing global trade headwinds.” In its December quarter, Xilinx generated sales of $723 million, down 10% from the same quarter a year earlier. Xilinx’s net income for the quarter was $162 million, down 32% from a year earlier. 

The beleaguered U.S. automotive sector saw some good news, for a change. General Motors announced it would invest $2.2 billion to convert its underutilized Detroit-Hamtramck plant, which produces internal combustion engine vehicles, to produce several future electric and autonomous vehicles, starting with an electric pickup truck in late 2021. The refurbished plant will eventually employ 2,200 workers.

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