|Bid||57.18 x 1000|
|Ask||58.93 x 900|
|Day's Range||56.60 - 59.17|
|52 Week Range||41.58 - 70.55|
|Beta (3Y Monthly)||N/A|
|PE Ratio (TTM)||N/A|
|Earnings Date||Aug 29, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||72.31|
In the latest trading session, Dell Technologies (DELL) closed at $56.80, marking a -1.03% move from the previous day.
The technology sector may have led the charge this year, up more than 40% since the late-2018 low. But, as we head into the dog days of summer and what's usually a slow patch for the third year of a presidential term, those very same tech stocks are looking uncomfortably vulnerable to a wave of profit-taking.Not every technology name is too risky to step into at this time, however. There are a handful of them with more upside ahead than behind. Granted, it takes some scouring to find them, but they're out there. * 10 Best Cryptocurrencies to Keep on Your Radar To that end, here's a rundown of the top tech stocks to buy in an environment that's not decidedly bullish. A handful of them may be a little off the radar, but that's the point. The broad sector tide tends to push the most familiar names around with it. Standouts tend to march to the beat of their own drum, and are equipped to perform here in the second half of 2019.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Intel (INTC) Click to EnlargeThere's no getting around the fact that Advanced Micro Devices (NASDAQ:AMD) caught rival CPU maker Intel (NASDAQ:INTC) off guard back in 2016.Largely left for dead, mired in its own irrelevancy, AMD's CEO Lisa Su hit the ground running with a plan, when she took the helm back in 2014. A couple years later, AMD's new Ryzen series of processors and impressive leaps with graphics processors and 7 nanometer technology put Intel on its heels.AMD played a big role in creating the headwind that has held INTC stock since, and a string of uncovered security flaws in some of its older processors did the rest of the work.No company becomes more innovative and effective than a company fighting to hold onto its leading position in its respective markets though, and Intel is (finally) doing that. Although its 7 nanometer CPUs have been put off until 2021, stop-gap technologies like its Ice Lake architecture are powerful enough compared to similarly priced options, while Intel gets back in the game.The recent weakness in INTC stock is a chance to step into an underestimated company on the cheap. The trailing and forward-looking price-to-earnings ratios are both just over 11. L3Harris Technologies (LHX) Click to EnlargeIn some circles it's still just being called L3, though as of April, a so-called merger of equals gave birth to what's now properly called L3Harris Technologies (NYSE:LHX) … an organization that spans the defense contractor and technology space.It has not been a poor performer. In fact, it's up more than 40% year-to-date, and seemingly still going strong. * 10 Monthly Dividend Stocks to Buy to Pay the Bills There's confusion within the actual act of the merger though, which was only completed at the beginning of this month when the new ticker "LHX" went into service. Still not knowing where to look, and in many cases still lacking any analyst outlooks, many investors don't know or can't fully appreciate that a 10% dividend hike has already been put in place, and a twelve-month stock-buyback program of $2.5 billion has already been established. Alphabet (GOOGL) Click to EnlargeAlphabet (NASDAQ:GOOG, NASDAQ:GOOGL), parent of search engine giant Google, may have gotten this year started on the right foot. That early advance was clearly up-ended in early May though, when an earnings miss sent the stock careening from a high near $1,280 to a low near $1,000 in early June.Investors largely lost perspective though. Sales were still up year-over-year last quarter. Operating cash flow was up year-over-year too. While per-share profits fell even when stripping out the impact of a steep fine, however, this is still Alphabet, which still owns Google. It's proven to be one of the best stocks to buy specifically because the company finds a way to constantly renew its reach into consumers' digital lives. It's proven a particularly good buy on dips like the one seen just a few weeks ago. Microchip Technology (MCHP) Click to EnlargeWhen investors think of tech stocks to buy, Microchip Technology (NASDAQ:MCHP) isn't a name that tends to come up first, if at all. The company isn't exactly on the front lines, so to speak, putting its logo on the hardware technology owners hold in their hands or have on their desks.In turbulent times though, perhaps being a little bit off the radar is a good thing.To that end, Microchip Technology has solid exposure to the pieces of the technology market that are solidly resistant to cyclical headwinds. It makes microcontrollers, analog and digital converters and LED-backlighting solutions, just to name a few. Its wares are found in everything from automobiles to smart meters to home appliances, and more. * 10 Stocks Driving the Market to All-Time Highs (And Why) This diverse product base is a key part of the reason that, though it ebbs and flows in the meantime, the bottom line reliably grows for the long haul. Square (SQ) Click to EnlargeWhile rival Paypal Holdings (NASDAQ:PYPL) continues to be the dominant player in the alternative payments space -- particularly now that it owns Venmo -- Square (NYSE:SQ) somehow seems to be making inroads with younger consumers that are starting to enter their highest earnings years.More important, it's drawing a larger crowd on the newest frontier of the payment space. As of June, Instinet says, there are more active users of Square's peer-to-peer money transfer app than there are users of PayPal's option.If that's a microcosm of how Square's payment processing platform resonates with consumers (and it at least partially is), then the younger company is well positioned to take more than its fair share of the ever-changing money middleman market.Perhaps more important, this year's and next year's strong revenue growth is expected to drive a major push into profitably. Last year's bottom line of 47 cents per share is projected to reach 76 cents this year and $1.12 next year. Dell Technologies (DELL) Click to EnlargeAlthough taken private in 2013, computer maker Dell Technologies (NYSE:DELL) became a publicly traded entity again in 2018 following a complex spin out and repurchase from VMware (NYSE:VMW).It has been a well-received return thus far. Although volatile, the long-standing advance since 2016 when it was still a tracking stock of VMWare is still in place, with this year's selloff starting to be unwound again.Investors are still struggling to find analyst outlooks for the new/reborn company, while those who've found some have to like what they see. Next year's projected earnings of $7.29 per share on respectable revenue growth translates into a forward-looking P/E of less than 8. * 7 of the Best Smart-Beta ETFs to Target Right Now Perhaps better still, Gartner says PC shipments grew by 1.5% last quarter. It's a start. Arista Networks (ANET) Click to EnlargeArista Networks (NYSE:ANET) was not only bold enough to take on a venerable Cisco Systems (NASDAQ:CSCO) within the networking market, it was savvy enough to capture a respectable piece of the market. Capitalizing on Cisco's complacency, Arista leveraged its software-driven, cloud-based solutions into more than $2 billion worth of revenue over the course of the past four quarters.That's still relatively small in the grand scheme of things, and ANET is still a relatively expensive stock. It's one of the best stocks to buy among tech stocks, however, as it's en route to a big coming-of-age next year.With top-line growth expected to reach just under 20% this year and next, last year's per-share profits of $7.96 are projected to reach $10.56 next year. That translates into a forward-looking price-to-earnings ratio of right around 26 … a very reasonable price to pay for a small cap facing the kind of opportunity Arista has in front of it. FireEye (FEYE) Click to EnlargeIt's not the biggest cybersecurity outfit, and it may not be the best. FireEye (NASDAQ:FEYE) stock, however, may be the name in the business offering the most upside to newcomers if Stoic Point Capital Management analyst Raj Shah's intuition is on target.Shah wrote last month "We estimate FireEye trades at a nearly double-digit 2021 FCF yield and is worth $23-$30 per share, driven by continued execution and leverage." Shah went on to explain "Cybersecurity spending is expected to grow at an 8% CAGR over the next few years, well ahead of overall IT spending growth. It is a unique pocket of enterprise spending as companies are reticent to be thrifty amid state-sponsored cyberattacks, data leaks, and privacy concerns." * 7 Battery Stocks for High-Powered Gains Investors lost faith in the story late last year, but are starting to wade back into the trade. International Business Machines (IBM) Click to EnlargeThe turnaround International Business Machines (NYSE:IBM) CEO Ginni Rometty is leading has been interesting to watch, even if ineffective thus far. Despite solid revenue growth from the company's so-called "strategic imperatives" like mobile and security, it has not been enough to offset headwinds on other fronts. Last quarter's total top line was down nearly 5%.The tech giant may have reached a turning point though. While this year's top line is expected to shrink by another 3%, next year's estimated revenue suggests revenue will be flat.What happens beyond that is still too uncertain to say with any great confidence, but the deal announced on Tuesday morning to provide software-defined networking solutions for AT&T (NYSE:T) in addition to the recently completed acquisition of Red Hat suggest IBM may truly be on the cusp of rekindled growth. Corning (GLW) Click to EnlargeCorning (NYSE:GLW) may not be the growth machine it once was, but don't count it out. What it lacks in raw horsepower it more than makes up for in value and reliability. The 5G evolution that's now underway? The bulk of the data loads that the new high-speed wireless technology will facilitate won't actually be handled wirelessly, but rather, through fiber optic cables like the ones Corning makes.That's not necessarily the reason Corning is quietly one of the best stocks to buy, however. Rather, Corning is a standout among tech stocks largely because the company's leadership is so deliberate and self-directed. Just after completing a four-year, goal-oriented plan it called its "Strategy and Capital Allocation Framework" earlier this year, it unveiled another one called "Strategy and Growth Framework." * Top 7 Semiconductor ETFs to Buy Now This 2020-2023 plan is specifically going to dive into new kinds of glass pharmaceutical packaging at the same time it continues to capitalize on the growing mobile touch-screen market.As of this writing, James Brumley held long positions in Alphabet and FireEye. You can learn more about James at his site, jamesbrumley.com, or follow him on Twitter, at @jbrumley. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks Top Investors Are Buying Now * The 10 Best Cryptocurrencies to Keep on Your Radar * 7 Marijuana Penny Stocks That Could Triple (But You Won't Make Money) The post 10 Tech Stocks That Are Still Worth Your Time (And Money) appeared first on InvestorPlace.
(Bloomberg) -- Billionaire Foxconn founder Terry Gou never considered an independent run for Taiwan’s presidency, a spokeswoman for the electronics tycoon said, after Gou lost the nomination to lead the island’s opposition party into January’s election.Speculation that Gou will leave the Kuomintang to pursue leadership of Taiwan is a “fake issue,” his spokeswoman Amanda Liu said in a text message on Tuesday. Gou’s response comes one day after Han Kuo-yu, the firebrand mayor of the southern port city of Kaohsiung, overcame Gou and three other candidates in the party’s presidential primary.Liu declined to elaborate further when asked if Gou still intended to seek Taiwan’s presidency in another capacity, leaving the door open to speculation that the tech tycoon -- who in June quit as chairman of Hon Hai Precision Industry Co., Foxconn’s main listed arm -- would find another way to run in the election. A solo bid by Gou could have a significant impact on the outcome, likely siphoning votes from the KMT as it tries to unseat incumbent President Tsai Ing-wen.Shares of Hon Hai climbed as much as 2.8% to their highest in about two months as investors expect Gou to focus more on the company.Power BrokerThe 68-year-old is a major power broker in the global electronics industry, with unusually strong ties to both the U.S. and China. He built Foxconn Technology Group from a maker of television knobs into a global powerhouse that is now Apple’s largest supplier and China’s largest private employer, with as many as 1 million mostly migrant workers assembling everything from iPhones to Dell desktop computers.Earlier: China-Friendly Mayor Tops Foxconn’s Gou to Vie for Taiwan LeaderGou also has ties to U.S. President Donald Trump, agreeing to build a 13,000-worker facility in the state of Wisconsin in exchange for more than $4.5 billion in government incentives.Hailed by Trump as “one of the great deals ever,” the project has since been criticized for low-paying jobs and sudden dismissals. Foxconn says the plant is on track to begin producing LCDs next year.\--With assistance from Miaojung Lin and Adela Lin.To contact the reporters on this story: Debby Wu in Taipei at email@example.com;Iain Marlow in Hong Kong at firstname.lastname@example.orgTo contact the editors responsible for this story: Brendan Scott at email@example.com, Edwin Chan, Karen LeighFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
China released its second-quarter GDP report today. The country’s GDP expanded 6.2% in the second quarter, marking its slowest growth since 1992.
Today at the 10th annual Dell Women Entrepreneur Network Summit, Dell Technologies announced findings of the 2019 Women Entrepreneur Cities (WE Cities) Index, ranking 50 global cities on their ability to foster growth for women entrepreneurs. Building on annual research since 2010, Dell Technologies ranks cities based on the impact of local policies, programs and characteristics in addition to national laws and customs to help improve support for women entrepreneurs and the overall economy.
As Wall Street gets ready to see how tech companies fared in the second quarter, the mantra about a ‘better second half’ is likely going to be a refrain in company conference calls
Dell Technologies (DELL) closed the most recent trading day at $53.78, moving +0.56% from the previous trading session.
Personal computer sales grew slightly in the second quarter, as companies tried to get more products out of China before more tariffs hit, combined with a better supply situation from Intel Corp.
Global personal computer shipments rose 4.7% to 64.9 million in the second quarter on improved supply for Intel Corp. processors and moves by some PC makers to ship a surplus of products with a threat of increased tariffs, market researcher IDC Corp. said Thursday. Lenovo Group Ltd., HP Inc. , Dell Technologies Inc. , Acer Group, and Apple Inc. comprised the top five PC sellers.
(Bloomberg) -- Worldwide shipments of personal computers increased 1.5% in the second quarter, fueled by businesses upgrading to the latest Windows software from Microsoft Corp. China-based Lenovo Group Ltd. held the No. 1 spot over U.S. rival HP Inc. amid a trade war between the two countries.PC shipments increased to 63 million units in the period ended June 30 from 62 million in the quarter a year earlier, researcher Gartner Inc. said Thursday in a report. Robust corporate demand offset a decline in notebook shipments, Gartner said. Lenovo shipped almost 16% more PCs year-over-year, giving the company a quarter of the global market.Industry research firm IDC estimated PC shipments climbed 4.7% in the most recent period, with vendors putting out 65 million devices worldwide."The threat of increased tariffs led some PC makers to ship a surplus of desktops and notebooks, thereby artificially propping up the PC market during the second quarter," said Jitesh Ubrani, a research manager at IDC.Computer makers have struggled to navigate global trade tensions. They already operate with low profit margins, and many of them have shuffled their supply chains in response to U.S. tariffs on some components. Dell Technologies Inc. and HP are reportedly considering moving 30% of their notebook production out of China.Dell came in third place in the global PC race, with 17% of the market after HP’s 22%. Apple Inc.’s PC shipments narrowly declined in the most recent period, and the company held the fourth spot with about 6% of the market.(Updates with estimates from IDC in third paragraph.)To contact the reporter on this story: Nico Grant in San Francisco at firstname.lastname@example.orgTo contact the editors responsible for this story: Jillian Ward at email@example.com, Andrew Pollack, Alistair BarrFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Global PC demand grew in the second quarter of 2019, reversing two quarters of declines, according to research firm Gartner late Thursday. Worldwide sales of PCs rose 1.5% to just under 63 million units in the second quarter as businesses refreshed computers because of demand for Microsoft Corp.'s Windows 10 operating system. "Additionally, there are signs that the Intel CPU shortage is easing, which has been an ongoing impact to the market for the past 18 months," said Mikako Kitagawa, senior principal analyst at Gartner, in a statement. Market share was 25% for Lenovo Group Ltd. , 22.2% for HP Inc. , 16.9% for Dell Technologies Inc. and 5.9% for Apple Inc. , Gartner said.
You can't deny that the technology sector is fast-paced. It's ever-changing as new fads, trends, devices, and applications come and go. Today, it's cloud computing. A few years ago, it was wearable devices. And who can forget the hype surrounding B2B stocks during the dotcom days?But as these trends shifted, so too have the various tech stocks. The sector is littered with former leaders that have now turned into losers.Not all former high-flying tech stocks are worthy of the dust bin, though.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIn fact, there are plenty of decidedly old-school technology firms that are still making plenty of profits, cash flows and even dividends for their shareholders.For investors, these now-forgotten tech stocks could be huge potential values in the making. Sure, they require some patience and a little luck, but the potential rewards are great. All in all, making some room in a portfolio for a few forgotten tech stocks could make a ton of sense. * 7 Retail Stocks to Buy for the Second Half of 2019 But which ones actually have the goods to outperform over the long haul? Here are three former high-flying tech stocks that could be big bargains. eBay (EBAY)While Amazon (NASDAQ:AMZN) and even Walmart (NYSE:WMT) capture most of investor's e-commerce love, old school tech stock eBay (NASDAQ:EBAY) continues to rack up sales and profit growth.The firm is still one of the largest online retailers in the world -- with more than 179 million active users and an average of over 1.9 billion listings on its site at any one time. Meanwhile, as a third-party listing service, EBAY features some pretty high margins and cash flows when it comes to people actually making a purchase on the site.And it turns out, the firm has some tricks up its sleeve to get its former mojo going.After eBay jettisoned PayPal (NASDAQ:PYPL), growth at the firm slowed to a trickle. In order to get that growth back, the firm is starting to copy a playbook that has helped both AMZN and WMT: sponsored ads and promoted listings.EBAY charges sellers a fee in order to boost the prevalence of their products and quicken the pace of a sale. The beauty is that EBAY will still get the standard commission fees when the item does sell.These promoted ads are starting to work wonders. During the first quarter, eBay managed to generate more than $65 million in extra revenues from them. Better still, this only improves the firm's margins. Adding in moves to refresh and simplify the buying experience, eBay is back on track to post some significant gains this year.Despite the potential, new dividend, and increased estimates, EBAY stock trades at a forward P/E of 13. When it comes to tech stocks, eBay should not be forgotten. Groupon (GRPN)Source: Shutterstock A strange thing recently happened at a summer kick-off barbecue I attended. Multiple people were talking deals that they had scored on Groupon (NASDAQ:GRPN).About a decade ago, the deal-making site became a huge fad as it promoted its voucher system for local restaurants, goods, and various services. You could pay a low cost to save as much as 80% on dinner, a movie, and even dog grooming services. These days, GRPN is moving away from that system and into a potentially more lucrative one for consumers and its bottom line.Groupon now offers what's called card-linked deals. Instead of buying a voucher for a service later on, consumers are able to link a credit card to the account and then get cash back after they buy a good or service advertised on the platform. The benefit is that customers don't pay until the point of service and can use deals an unlimited number of times.At the same time, it has revamped its voucher-based products by adding appointments for certain services and experience segments. These two moves are designed to create a more seamless interaction between customers and businesses. Moreover, it's designed to make using GRPN a habit. The tech stock just sits back and collects the fees. * 10 Best Stocks for 2019: A Volatile First Half And while it's easy to write GRPN off as a former fad, the firm continues to be free cash flow positive, have a huge $1 billion in cash on its balance sheet, and see improving results. In the end, Groupon may be a former high-flyer, but today, investors are getting a huge sale on the discount provider. Dell Technologies (DELL)Dude, you're getting a Dell … again. However, these days Dell Technologies (NASDAQ:DELL) is a far better and perhaps more important tech stock than it was during the go-go dotcom days.The story of how DELL got here is perhaps a bit convoluted. The PC maker was public throughout the internet boom and was taken private by founder Michael Dell and Silver Lake Partners. During that time, the firm made a big splash when it bought enterprise software specialist EMC Corporation, which also included a stake in VMware (NASDAQ:VMW). This led to a tracking stock covering Dell's VMW holding.Which brings us to today. Dell decided to roll-up that tracking stock and once again IPO as its former ticker DELL.And while it may have fallen out of the public eye in the five or so years it wasn't openly traded, DELL has become a monster of an integrated tech stock. The PC and server business is still there -- which is booming thanks to rising data center demand. Meanwhile, the firm is a leader in cloud computing and virtualization software, cybersecurity via RSA as well as various infrastructure-as-a-service (IaaS) products. Today's DELL is looking like a real contender among leading tech stocks. That fact has shown up in its first-quarter results. First quarter revenue clocked in at $21.9 billion -- an increase of 3%.In the end, Dell may be a blast from the past. But this is one forgotten tech stock ready to rewrite its future. At the time of writing, Aaron Levitt held a long position in AMZN. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy on College Students' Radars * 7 Retail Stocks to Buy for the Second Half of 2019 * The S&P 500's 5 Best Highest-Yielding Dividend Stocks The post 3 Forgotten Tech Stocks Worth Remembering appeared first on InvestorPlace.
(Bloomberg) -- Cisco Systems Inc. agreed to buy Acacia Communications Inc. for about $2.6 billion, the technology giant’s latest acquisition as it seeks technologies to meet customer demand for more robust networks.The San Jose-based company will pay $70 a share, a 46% premium to Acacia’s closing price on Monday, the companies said in a statement Tuesday. The purchase price is about $2.6 billion on a fully diluted basis net of cash and marketable securities, and the deal is expected to close in the second half of Cisco’s fiscal 2020 year.Cisco, whose equipment makes up the backbone of the internet and corporate networks, has recently rekindled growth by revamping existing products and adding new software and services under a corporate makeover by Chief Executive Officer Chuck Robbins. In May, the company gave a bullish sales and profit forecast for the current period, a sign that corporations continue to spend on computer networks despite the trade dispute between China and the U.S.“Bringing Acacia’s high-speed digital signal processing (DSP) technologies in-house allows Cisco to better compete with peers, such as Ciena,” said Woo Jin Ho, senior technology analyst at Bloomberg Intelligence.Acacia’s stock surged 35% to $64.91 Tuesday in New York, while Cisco shares were little changed at $56.34. Cisco’s stock had climbed 30% this year through Monday’s close and has doubled in the past three years. Acacia went public in May 2016 at $23 a share and its stock surged that year to more than $120.Cisco’s latest acquisition makes chips and machines that help translate optical signals into electronic data. Acacia’s products are used to speed the flow of information around data centers and telecommunication networks.The new capabilities may help Cisco make more headway selling gear to hyperscale data center owners such as Amazon.com Inc. and Alphabet Inc.’s Google, the company said in a presentation. That’s an area where Cisco has struggled to win sales. If it doesn’t grab share in the market for optical systems, the expense of developing the components may prove burdensome and force it to keep selling to Acacia’s existing customers, many of whom are its competitors, according to Dell’Oro Group analyst Jimmy Yu.During a conference call after the deal’s announcement, analysts questioned whether that will be possible as those competitors may balk at buying from Cisco. Acacia’s customers include Nokia Oyj, Huawei Technologies Co. and ZTE Corp., and Cisco accounts for about 18% of its revenue, according to Bloomberg’s supply chain analysis.Bill Gartner, the head of Cisco’s optical business, said the deal allows the companies to more closely integrate their technologies and offer customers simpler solutions.“We feel like having this technology in-house is the best way to do that,” Gartner said.Under Robbins, Cisco has made a series of acquisitions aimed at bringing in software and services that will ease the company’s dependence on hardware. He’s trying to build more predictable, recurring revenue by offering customers the ability to remotely manage and monitor their networks in order to make them more efficient and secure.Robbins has said that transformation will take time as many of the new offerings require customers to shift to newer hardware that will support advanced functions and services.Cisco’s status as the biggest maker of routers, switches and other gear for connecting computers means its earnings are seen as a broad indicator of corporate spending plans. The company gets only a tiny percentage of sales from China, where it’s been largely locked out of the market, and in one way may be a beneficiary of the ongoing trade dispute, which includes U.S. government attempts to block purchases of equipment from one of its biggest rivals, Huawei Technologies Co. Still, if business spending is hindered by an overall economic slowdown caused by trade uncertainty, Cisco’s sales could feel a hit, analysts have said.(Updates with description of Acacia’s technology in the sixth paragraph.)\--With assistance from Peter Elstrom.To contact the reporter on this story: Ian King in San Francisco at firstname.lastname@example.orgTo contact the editors responsible for this story: Peter Elstrom at email@example.com, Molly Schuetz, Andrew PollackFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
H. Ross Perot, the colorful self-made Texas billionaire who twice ran for president, has died at 89.
Dell Technologies (DELL) is announcing that it will complete or exceed over 75% of the goals outlined in its 2020 Legacy of Good plan ahead of schedule. "Running a sustainable and inclusive business with purpose has never been more urgent for the success of our company, our customers and our communities," said Karen Quintos, chief customer officer at Dell Technologies. In 2013, Dell Technologies introduced the 2020 Legacy of Good with ambitious sustainability and social goals to put its technology and expertise to work to do the most good for people and the planet.
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. Resurgent tensions between Japan and South Korea threaten to wallop chipmakers from Samsung Electronics Co. to SK Hynix Inc., upsetting a carefully choreographed global supply chain by smothering the production of memory chips and other components vital to widely used devices.As the world fixates on Donald Trump’s campaign to contain Huawei Technologies Co. and China’s ambitions, a concurrent dispute between Beijing’s two richest neighbors also has far-reaching implications for the production of everything from Apple Inc. iPhones to Dell Technologies Inc. laptops. The industry is now scrambling to gauge the fallout after Japan -- citing longstanding and unresolved tensions -- slapped restrictions on exports to Korea of three classes of materials crucial to the production of semiconductors and cutting-edge screens.That maneuver, the most recent manifestation of decades of war-time tensions, places Samsung at the center of a firestorm and again underscores the global nature of the production machine that cranks out most of the world’s gadgets. Not only does it make memory chips, but Samsung is also the biggest producer of smartphones.Korea’s largest company has lost about 16 trillion won ($13 billion) in market value this month through Monday, while Hynix has shed 1.5 trillion won. The two companies -- which together account for 60% of the world’s memory chip-making capacity -- declined to comment.While inventory levels differ across each material, Samsung has under a month’s worth of supply on average, according to people familiar with the matter. Samsung and SK Hynix are busily sourcing alternatives, the people said, asking not to be identified talking about a sensitive political issue. The two Korean giants assured clients they would try to minimize the impact on output, but Samsung, for one, is bracing for potential production cuts or even stoppages should the situation persist, the people said.That’s why the Korean conglomerate’s de facto leader, Jay Y. Lee, hopped on a jet to Tokyo over the weekend for emergency meetings with Japanese suppliers. It’s unclear how deeply felt the impact might be -- much depends on whether Japanese Prime Minister Shinzo Abe and South Korean President Moon Jae-In can work out a compromise. But in a worst-case scenario, flexible screens for iPhones and other mobile devices could sputter, while memory chips used in everything from HP Inc. notebooks to Amazon.com Inc. servers could dwindle.“This is an unprecedented event,” said Jongjun Won, chief executive officer at Lime Asset Management Co. “If it’s lucky, the chip industry may be able to adjust inventories. There could be a happy ending if the Japan issue gets resolved in the meantime. However, the intertwining of politics and business is making it difficult to find a solution.”The dispute has spilled over into social media. South Koreans, angered by Japan’s move, have taken to Instagram and other platforms to call for boycotts of Japanese travel and consumer products.Japan’s targeting a trio of materials that, while little-known outside of the industry, is profoundly important for electronics production. The government says they also have sensitive military applications. Within the tech sector, fluorinated polyimide is required for the production of foldable panels -- such as those used in Samsung’s Galaxy Fold -- among other things. Photo-resists are key to chipmaking, while hydrogen fluoride is needed for both chip and display production.Finding substitutes won’t be easy: Korean corporations now depend on Japan for over 90% of all the fluorinated polyimide and resists it needs, and 44% of its hydrogen fluoride requirements, Societe Generale estimates. Ironically, if the dispute drags on, Japanese suppliers of those chemicals -- companies from JSR Corp. to Shin-Etsu Chemical Co. that comprise a small but inextricable link in the chain -- could take a hit as well.“This could be a negative factor for the world economy,” Huh Nam-Kwon, CEO at Shinyoung Asset Management Co, said by phone. “All we need to do is wait and see how the situation goes. Just one word from Abe could decide anything. It’s hard to predict.”The most significant impact will be on Samsung’s next-generation products: foldable displays as well as chips of 7 nanometer line-widths or less that’re made via the so-called extreme ultra-violet (EUV) process. That puts at risk Samsung’s express goal of investing $116 billion to become the No.1 in the logic chip business by 2030. Without Japan’s materials, Samsung may be hamstrung in efforts to develop an EUV-based foundry business and in advanced memory chipmaking.Their rivals may step in to fill that gap in the interim. Micron Technology Inc., the only other memory chip maker of significance, stands to benefit. Taiwan Semiconductor Manufacturing Co. could further widen its lead over Samsung when it comes to made-to-order chips, vying for Samsung customers like Qualcomm Inc. and Nvidia Corp.“There will be considerable impact on both sides,” said Heungchong Kim, a senior research fellow at the Korea Institute for International Economic Policy. “Those materials are not something that can be replaced in a short period. This is becoming a weird situation.”The situation may worsen if Japan removes South Korea from a so-called “White List” of countries treated as presenting no risk of weapons proliferation, a move Tokyo is now considering.Japan and Korea have traditionally turned to the U.S. to mediate in their clashes, but it’s unclear this time if Trump is keen to step into the fray. Compounding the situation are the basic mechanics of the restrictions. While not a ban per se, would-be exporters of the affected materials need to obtain a license from the government. That could take up to 90 days -- an eternity for a fast-moving industry.There’s also disagreement by industry analysts over which corporations exactly will get hit hardest, in part because some Japanese firms have either localized production in South Korea or maintain plants in countries such as China.“In the near-term, we do not expect Korean companies’ major customers to move to other component vendors due to high switching costs and long qualification process times,” said J.J. Park, head of Korean equity research at JP Morgan. But “if there is a bottleneck due to a shortage of key materials resulting from Japan’s curb on export of materials, we can’t rule out potential market-share loss to their peers.”Japan’s Sumitomo Chemical Co. is a key supplier of polyimides, according to Taipei-based WitsView and Isaiah Research -- but company representatives deny it makes the material. IHS Markit analyst David Hsieh said in addition to Sumitomo Chemical, SKC -- like Hynix, an affiliate of the giant SK Group -- or Kolon Industries are viable local substitutes.JSR is a major resist producer, while the global hydrogen fluoride market is dominated by Kanto Denka Kogyo Co., Showa Denko KK and Daikin Industries Ltd., according to Taipei-based Isaiah Research. Resist manufacturer Tokyo Ohka Kogyo Co. said it already supplies South Korean customers locally. Daikin said the restrictions will have no impact on its hydrogen fluoride because the materials are made in China, while Morita Chemical Industries Co. is building a plant there that will go online next year.“While high levels of semiconductor inventory might provide some cushion, time may not be on Korea’s side,” Citigroup economists Jin-Wook Kim and Johanna Chua said in a recent note. “Displacing Korean chips would disrupt the supply chain because building alternative sources needs specific technology and sizable capex.”(Updates with analyst’s comments from the 18th paragraph.)\--With assistance from Heejin Kim, Yuki Furukawa and Isabel Reynolds.To contact the reporters on this story: Sohee Kim in Seoul at firstname.lastname@example.org;Debby Wu in Taipei at email@example.com;Pavel Alpeyev in Tokyo at firstname.lastname@example.orgTo contact the editors responsible for this story: Tom Giles at email@example.com, Edwin Chan, Colum MurphyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
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