Intel to invest $25 bn in new Israel plant: government

JERUSALEM — US chip giant Intel will spend $25 billion on a new plant in Israel, officials said, with Prime Minister Benjamin Netanyahu calling it the country's single largest foreign investment.

The "agreement in principle" would see the semiconductor firm build the facility in southern city Kiryat Gat that would open by 2027 and operate at least until 2035, Israel's finance ministry said.

As part of the deal, Intel's taxes to Israel would rise from 5 to 7.5 percent, the finance ministry said in a statement.

Intel in return would receive a grant of 12.8 percent of its outlay, the ministry said, in line with Israel's capital investment encouragement law.

Netanyahu said the new plant would constitute "the largest investment in Israel".

"This is a great show of confidence in Israel's economy, and shows the strength of the free economy we built here and the technological economy developing here," the Israeli leader said.

The two sides would begin finalizing the deal in a process expected to take a number of weeks, according to the ministry.

A spokesman for Intel in Israel had no immediate comment.

Intel has been operating in Israel since the 1970s with development centers and a production site that employ some 12,000 people out of the company's global workforce of 130,000, the finance ministry said.

In 2017, Intel acquired Israel-based Mobileye, which makes technology for automated driving systems in vehicles, for just over 15 billion dollars.

Agence France-Presse

Samsung overtakes Intel as world's biggest chip maker: study

South Korea's Samsung has overtaken U.S. rival Intel as the world's biggest maker of semiconductors as sales in the sector boom, a study published by consultancy Gartner showed on Thursday.

Samsung Electronics "gained the most market share and took the number one position from Intel -— the first time Intel has been toppled since 1992," said Gartner analyst, Andrew Norwood.

The total global market for semi-conductors grew by 22 percent to $419.7 billion (348 billion euros) in 2017, fueled by growth in smartphones and other connected devices, Gartner calculated.

Samsung's sales jumped by 52.6 percent to $61.2 billion, giving it a market share of 14.6 percent, the study showed.

Intel's sales, on the other hand, grew by just 6.7 percent to $57.7 billion, or a market share of 13.8 percent.

Booming demand for memory chips was the main factor driving growth in the semi-conductors market, Gartner said.

"Memory accounted for more than two-thirds of all semiconductor revenue growth in 2017, and became the largest semiconductor category," said analyst Norwood.

The key driver behind the booming memory revenue were higher prices due to a supply shortage, the study said.

NAND flash prices increased year-on-year for the first time ever, up 17 percent, while DRAM prices rose 44 percent.

"Equipment companies could not absorb these price increases so passed them onto consumers, making everything from PCs to smartphones more expensive in 2017."

Gartner suggested that the global ranking could be shaken up again this year if Singapore-based Broadcom succeeds in taking over U.S. rival Qualcomm after its unsolicited merger offer was rejected last November.

If the tie-up eventually does go ahead, Samsung would fall back to third place in terms of revenues, Gartner calculated.

"2017 was a relatively quiet year for mergers and acquisitions. Qualcomm's acquisition of NXP was one big deal that was expected to close in 2017, but did not. Qualcomm still plans to complete the deal in 2018, but this has now been complicated by Broadcom's attempted takeover of Qualcomm," Gartner said.

The combined revenues of Broadcom, Qualcomm and NXP amounted to $41.2 billion in 2017.

"If Broadcom can finalize this double acquisition and Samsung's memory revenue falls as forecast, then Samsung could slip to third place during the next memory downturn in 2019," said Norwood.

source: news.abs-cbn.com

Big tech tieup: Broadcom bids $130 billion for Qualcomm

WASHINGTON - In what could be the biggest deal ever in the tech sector, Broadcom on Monday bid $130 billion for rival chip maker Qualcomm to gain position in the booming sector fueled by growth in smartphones and an array of connected devices from cars to wearables.

The proposal by Singapore-based Broadcom, which has announced plans to return its domicile to the United States, would consolidate 2 major players in the semiconductor sector.

Broadcom's unsolicited offer amounts to $70 per share, including $60 in cash and $10 in Broadcom stock, or 28 percent above the closing price of Qualcomm on Thursday, before reports of the deal surfaced.

"This complementary transaction will position the combined company as a global communications leader with an impressive portfolio of technologies and products," Broadcom chief executive Hock Tan said in a statement.

"With greater scale and broader product diversification, the combined company will be positioned to deliver more advanced semiconductor solutions for our global customers and drive enhanced stockholder value."

Qualcomm, based in San Diego, California, said it would "assess the proposal in order to pursue the course of action that is in the best interests of Qualcomm shareholders."

News of the deal came days after Tan appeared at the White House with President Donald Trump to announce plans to move the tech company back to the United States from Singapore.

It comes as Qualcomm seeks a $47 billion acquisition of Dutch rival NXP, a deal that is the subject of an European Union anti-trust probe.

Broadcom, meanwhile, is seeking to buy US rival Brocade Communications in a deal being reviewed by Washington.

Broadcom and Qualcomm are both major makers of semiconductors used in the latest tech gadgetry.

The US firm is the leader in processors for smartphones and is expanding into new sectors, while Broadcom makes an array of chips for wireless communications, set-top boxes and electronic displays.

On Wall Street, Broadcom shares rose 1.4 percent and Qualcomm added 1.1 percent.

RBC Capital Markets analyst Amit Daryanan said in a research note that the deal "makes both financial and strategic sense" for Broadcom.

$51 BILLION GIANT

Combining the firms would create a behemoth with some $51 billion in revenues, including those from NXP.

But any deal would need to pass muster with Qualcomm shareholders and could face regulatory scrutiny in the United States and other markets.

Qualcomm has been facing a series of investigations around the world linked to its dominance in the smartphone chip segment.

Last month, Qualcomm was fined more than $770 million in Taiwan for abusing its market dominance. It is facing similar challenges in several countries, including the United States. China and South Korea have already imposed heavy fines.

Qualcomm and Apple have also been locked in legal battles over royalty payments and patents.

Apple filed a US lawsuit in January accusing Qualcomm of abusing its market power for certain mobile chipsets to demand unfair royalties, and has also joined efforts in other countries where Qualcomm faces probes from antitrust authorities.

Qualcomm responded with its own claims against Apple and argued that the iPhone maker had been providing "false and misleading information" to antitrust authorities in an effort to reduce its royalty payments to Qualcomm.

ABI research analyst Stuart Carlaw said a combined Qualcomm/Broadcom operation would represent the third largest global semiconductor supplier.

"The Qualcomm shareholders are likely to be split with many viewing this opportunity as a solution to the worsening relations with Apple, whom Broadcom has a good relationship with," Carlaw said.

"The potential merger raises significant questions surrounding the difficult takeover of NXP by Qualcomm and much is still to be discerned regarding the value of the Qualcomm patent holdings and its associated lucrative high-margin revenue stream."

Broadcom was founded in 1991 by California researchers and moved its corporate headquarters to Singapore as part of a merger with Avago Technologies Ltd. while keeping many of its operations in Silicon Valley.

source: news.abs-cbn.com