Texas Instruments announced recently that, even though it reported better than expected chip sales during the fourth quarter of 2011, the company will shut down its plants in Texas and in Japan. Texas Instruments has seen an increased demand for its mobile chips but will close the two factories during the next 18 months while increasing its employee numbers at different plants. The move is an effort to cut costs, Reuters said. The company reported a fourth-quarter profit of $298 million, down from $942 million during the same quarter last year. Revenue also fell from $3.53 billion last year to $3.42 billion during the fourth quarter. “Everybody feared we’d end the holiday season with abysmal sales,” Cody Acree, an analyst with Williams Financial, told Reuters. “The reality is that end-demand is better than TI customers had originally feared. We’re not calling for great growth but we’re not heading into the abyss.”

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Samsung Group, the parent company that owns Samsung Electronics and several other subsidiaries, said it plans to spend $41.1 billion investing in new technology this year. Reuters said most analysts expect the company to spend a large chunk of that money on OLED and mobile technologies in an effort to continue to stay on target with its rivals. The South Korea-based company uses its OLED displays on mobile phones and on televisions. “Samsung’s got strong cash flow to make bold bets in new technologies,” NH Investment & Securities analyst Lee Sun-tae told Reuters. “No other IT company can beat it in terms of investment and that’s how Samsung finds new revenue sources ahead of rivals and widens its gap.” Samsung’s spending on its mobile processors and other mobile technologies is expected to exceed the amount it spends on its memory business for the first time ever, Reuters said. The firm currently employs about 350,000 people around the globe and expects to hire 26,000 additional employees this year.

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Rumors surrounding an NFC-equipped iPhone from Apple date back to last summer, when Apple hired NFC expert Benjamin Vigier as its Commerce Product Manager. Speculation surrounding how Apple might use NFC dates back even further, of course, considering the many NFC-related Apple patents that have been revealed in the past. On Monday, the flames were rekindled yet again as The New York Times reported Apple will include NFC chips from Qualcomm in a future version of its iPhone handset. The Times’ report doesn’t specifically state that Apple’s next iPhone — referred to as the iPhone 5, for now — will include NFC capabilities, saying only that a “coming iteration” of Apple’s smartphone will include Qualcomm NFC chips. Following several reports however, many still anticipate that the iPhone 5 will indeed be the first Apple smartphone to include NFC capabilities. Apple is expected to unveil its next-generation iPhone in June.

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Samsung on Friday reported its fourth quarter and full year 2010 earnings, highlighting revenue and net income growth but missing Wall Street’s consensus as operating profit slid for the first time in six quarters. The company posted fourth quarter revenue of 41.87 trillion won, up 7% from the same quarter in 2009, and net income was up 13% year-over-year to 3.42 trillion won. Operating profit missed the Street’s consensus, however, falling 12% year-over-year to 3.01 trillion won. Samsung reported record revenue for the full year, up 13% from 2009 to 154.63 trillion won. 2010 net income set a full-year record as well, up 65% year-over-year to 16.15 trillion won, as did full-year operating income, which came in at 17.3 trillion won. Samsung’s mobile division reported a record profit of 1.44 trillion won in the fourth quarter, up 38% year-over-year, and the company shipped 80.7 million cell phones in the quarter. Full-year shipments reached 280 million units, up 23% from 2009 and outpacing the global market. Hit the break for Samsung’s full press release.

Samsung Electronics Announces Fourth Quarter & FY 2010 Results

SEOUL, Korea – January 28, 2011 – Samsung Electronics Co., Ltd. today announced revenues of 41.87 trillion Korean won on a consolidated basis for the fourth quarter ended December 31, 2010, a 7-percent increase year-on-year. For the quarter, the company posted consolidated net income of 3.42 trillion won, a 13-percent increase year-on-year. Consolidated operating profit for the quarter was 3.01 trillion won.

In its earnings guidance disclosed on January 7, Samsung estimated fourth-quarter consolidated revenues would reach approximately 41 trillion won with an operating profit of 3 trillion won.

The fourth quarter results brought Samsung’s full year 2010 revenue to an all-time high of 154.63 trillion won, up 13-percent from last year. Net income reached a record high of 16.15 trillion won, up 65 percent compared with the previous year, while operating profit was 17.30 trillion won, also a record.

Samsung’s performance in the fourth quarter continued to be driven by memory semiconductors and strong sales of its cutting-edge smartphones. On a quarter-on-quarter basis, however, profit margins decreased primarily due to weakening pricing for memory semiconductors and LCD panels, as well as price competition in the TV market.

“Despite the difficult business environment including reduced IT demand caused by the economic slowdown, we achieved record-high results both in terms of sales and operating profit in 2010,” said Robert Yi, Vice President and Head of Samsung Electronics’ Investor Relations Team. “However, considering overall business conditions, unlike 2010, we expect the traditional earnings pattern of a weak first half, with a strong second half to return in 2011.”

Samsung expected price competition to intensify in the consumer electronics, IT and mobile device markets in 2011, while major components prices are also forecast to decline. To offset pressures stemming from adverse market conditions, Samsung will focus on the cost competitiveness of its memory semiconductor portfolio, reducing marketing expenses and increasing shipments of high-end smartphones and tablet devices.

Samsung said the forecast continued appreciation of the Korean won during 2011 could have a negative impact on earnings, but the company’s diversified foreign exchange mix would limit the effect of movements in particular currencies.

Capex to Reach 23 Trillion Won in 2011

Capital expenditure on a consolidated basis reached 21.6 trillion won for the entire year of 2010, including 12.7 trillion won for the Semiconductor Business and 4.6 trillion won for the LCD Business.

In 2011, Capex is expected to reach 23 trillion won. As was announced in early January, 10.3 trillion won will be invested in the Semiconductor Business, including 5.8 trillion in memory and 4.2 in system LSI. A further 4.1 trillion won is allocated for the LCD Business, as well as 5.4 trillion won for subsidiary Samsung Mobile Display.

Premium Memory Makes a Difference

Samsung’s Semiconductor Business recorded a consolidated basis operating profit of 1.80 trillion won in the fourth quarter. Revenue reached 9.25 trillion won, a 16-percent increase year-on-year. For the full year 2010, the Semiconductor Business registered 10.11 trillion won in operating profit on revenue of 37.64 trillion won, a record-high.

Despite a weakening market trend, Samsung secured profitability by increasing the portion of high-margin products such as server and mobile DRAM, as well as by strengthening its market position with increased production of 40nm-class processes and below.

While the global DRAM market suffered from falling prices and weakening PC DRAM demand, NAND chips did well with help from surging demand for smartphones and tablet PCs. Samsung’s market differentiation strategy in the NAND sector was to expand production of 30nm-class processes and below.

The DRAM market is forecast to improve in the second half of the year driven by growth in PC replacement demand from businesses. Samsung will continue to focus on energy-efficient green memory solutions for servers and enhancing technology leadership to maintain the profit margin of the Semiconductor Business.

LCD Looks to Second Half for Rebound

The LCD Business recorded an operating profit of 0.10 trillion won on revenue of 7.20 trillion won in the fourth-quarter, down 1 percent from a year ago as increasing shipments could not offset price falls. For fiscal year 2010, Samsung’s LCD Business posted 1.99 trillion won in operating profit with 29.92 trillion won in revenue.

Overall unit sales for the period increased more than 10 percent quarter-on-quarter. While shipments for IT panels climbed supported by demand for tablet PCs, the fall in demand for TV panels was compounded by a buildup of inventory in the TV set market.

Average industry sales prices retreated across all segments in the fourth quarter. The average price for TV panels dropped 12 percent, with prices for monitor panels dipping 5 percent and notebook PC panels falling 3 percent.

Samsung forecasted LCD panel prices will remain low in the first quarter of 2011 due to supply outpacing demand. However, the company anticipated incremental demand increases in the second half led by the economic recovery and inventory restocking by set makers. Samsung aims to drive market growth with a new line-up of entry-level LED panels and explore the high-potential market for tablet PC panels.

Strong Smartphone Growth Powers Mobile Business

Samsung’s telecommunications businesses – Mobile Communications and Telecommunications Systems – registered a record quarterly operating profit of 1.44 trillion won for the period, up 38 percent year-on-year. Fourth quarter revenue reached 12.11 trillion won, compared with 10.17 trillion won for same period of 2009. By finishing the year strongly, Samsung achieved full year 2010 operating profit of 4.30 trillion won on sales of 41.20 trillion won for its telecommunications businesses.

Driven by strong year-end demand for the company’s flagship smartphones, Samsung’s mobile device sales reached 80.7 million units for the quarter, up 17 percent year-on-year. This brought total sales for the year to 280 million units, registering growth of 23 percent and outperforming the overall market.

Following its introduction in June, Samsung’s flagship Galaxy S smartphone has achieved worldwide sales of 10 million units, while the Galaxy Tab – an Android-powered tablet device – attracted strong year-end demand. In emerging markets, Samsung’s diverse product mix of mass-market smartphones and touch-screen feature phones also registered solid sales growth.

While mobile device sales are expected to contract slightly in the first quarter of 2011 due to weak seasonal demand, Samsung forecast high single-digit sales growth for the year overall, driven by the fast-expanding smartphone and tablet segments. Samsung announced it will introduce the successor to its Galaxy S smartphone during the first half of 2011, featuring a dual-core processor and Super AMOLED Plus display to further enrich user experience. With its growing lineup, the company is targeting smartphone sales of 60 million units for the year, double that of 2010. In the tablet market, Samsung will complement its Galaxy Tab with a range of devices to optimally meet various user needs.

The Telecommunication Systems Business continues to strengthen its leadership in Mobile WiMAX and explore new business opportunities in Long-Term Evolution networks, cementing Samsung’s position as a total solution provider offering both infrastructure and devices.

Demand for LED TV to Get Stronger

Samsung’s Digital Media businesses, which encompass Visual Display, Digital Appliances, IT Solutions, and Digital Imaging, posted quarterly revenues of 15.97 trillion won for the October to December period, up 3 percent year-on-year. The businesses registered a loss of 0.17 trillion won despite improved performance in TV and IT products. For the full year 2010, the Digital Media businesses’ combined revenue totaled 57.26 trillion, up 12 percent from 2009, with an operating profit of 0.49 trillion won.

Samsung shipped 12.72 million flat panel TVs in the fourth quarter, a 40 percent jump compared with the previous quarter and a 17 percent on-year increase. LED TVs sales grew strongly during the fourth quarter as consumers in developed markets continued to adopt this new technology. Market demand for LED TVs is forecast to rise further, with the portion of LED models in the overall LCD segment expected to reach 51 percent this year.

In 2011, market demand for flat panel TVs is forecast to increase 11 percent, helped by strong emerging market sales. To enhance profitability, Samsung aims to increase sales of premium products such as LED, 3D and Smart TVs. It will also market region-specific models along with low-cost models in emerging markets.

In order to allow more consumers to enjoy 3D TV, Samsung will expand its 3D TV line-up beyond the premium segment, while offering improved picture quality and 3D glasses technology. Samsung’s Smart TVs will get smarter this year by adding various new video and search features, and expanding its portfolio of TV apps from the current 400 to 1,000 by the end of 2011.

Sales revenue of the Digital Appliances Business climbed 16 percent year-on-year due to robust sales in developed markets and some emerging markets, such as Russia.  Sales are expected to continue to expand in 2011 with the launch of differentiated products, while the business will expand and improve its overseas operations.

Qualcomm announced Wednesday that it will acquire microchip maker Atheros. The $3.1 billion deal is set to be the largest acquisition in Qualcomm’s history. The two companies have worked together on several products in the past, and Qualcomm intends to use Atheros’ products to expand onto new platforms and into new markets. Atheros develops and builds the Wi-Fi and Bluetooth chipsets found in a wide variety of popular devices, including the Amazon Kindle and Apple notebooks. The implications of this deal are tremendous, and could ultimately result in the inclusion of cellular radios in countless popular consumer electronics products moving forward. The Atheros acquisition has been approved by the boards of both companies and now awaits regulatory approval and the approval of Atheros’ shareholders. The deal is expected to close some time in the first half of 2011. Hit the break for Qualcomm’s full press release.

Qualcomm to Acquire Atheros, Leader in Connectivity & Networking Solutions

Accelerates Expansion of Company’s Semiconductor Business into Adjacent Markets

SAN DIEGO AND SAN JOSE – January 05, 2011 – Qualcomm Incorporated (NASDAQ: QCOM) and Atheros Communications, Inc. (NASDAQ: ATHR), today announced that they have entered into a definitive agreement whereby Qualcomm intends to acquire Atheros, a leader in innovative technologies for wireless and wired local area connectivity in the computing, networking and consumer electronics industries. The acquisition is intended to help accelerate the expansion of Qualcomm’s technologies and platforms to new businesses beyond cellular and provide access to significant new growth opportunities.

Qualcomm has entered into a definitive agreement to purchase Atheros for $45 per share in cash, representing an enterprise value of $3.1 billion. The transaction has been approved by the Qualcomm and Atheros boards of directors and is subject to customary closing conditions, including the receipt of domestic and foreign regulatory approvals and the approval of Atheros’ stockholders. The transaction is expected to close in the first half of 2011. Excluding amortization of acquired intangibles, Qualcomm expects the acquisition to be modestly accretive to earnings per share in fiscal year 2012, the first full year of combined operations. Qualcomm intends to finalize its estimates of the transaction’s financial impact, as well as the accounting for the transaction, upon deal close.

“It is Qualcomm’s strategy to continually integrate additional technologies into mobile devices to make them the primary way that people communicate, compute and access content. This acquisition is a natural extension of that strategy into other types of devices,” said Dr. Paul E. Jacobs, chairman and CEO of Qualcomm. “The combination of Qualcomm and Atheros is intended to accelerate this opportunity by utilizing best-in-class products for communications, computing and consumer electronics to broaden existing customer relationships and expand access to new partners and distribution channels.”

Atheros’ current president and CEO, Dr. Craig H. Barratt, is expected to join Qualcomm as president of Qualcomm Networking & Connectivity.

“Qualcomm and Atheros have a long history of collaboration and share a culture of technical innovation and execution excellence,” Barratt said. “The Atheros team will build upon Qualcomm’s strengths and leadership to bolster our customers’ ability to deliver innovative and differentiated products in the increasingly connected world.”

“With this acquisition and our complementary products, Qualcomm will be in a strong position to take our successful mobile strategy of bringing the best technologies together into a systems solution and apply this to new opportunities,” said Steve Mollenkopf, EVP and group president of Qualcomm. “We see this strategy as central to helping our customers capitalize on the ubiquitous connectivity and seamless experiences that are developing across mobile phones, computing and consumer electronics.”

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While speaking at a conference hosted by Barclays Capital, Intel CEO Paul Otellini quipped, “You will see smartphones from premier-branded vendors in the marketplace in the second half of 2011 with Intel silicon inside them.” Mr. Otellini also went on to note that his company has won contracts on 35 tablet-style devices thus far. Intel’s chips have been noticeably absent from the smartphone marketplace, as the majority of devices have opted for ARM-based processors from Texas Instrument, Qualcomm, Samsung, and others. The CEO has been quoted several times as saying that the smartphone-chip development process is “a marathon, not a sprint.”

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Taiwan-based chip manufacturer JMicron is reportedly preparing to make a splash next month at Computex 2009 when it debuts its latest breakthrough NAND flash controller. The JMF612, successor to the company’s JMF602 pictured above, represents one of several technological advancements that could combine to substantially reduce Solid State Drive (SSD) pricing in the near future. The JMF612 is designed for a new breed of SSD drives that will be smaller, faster and cheaper to manufacture. Combined with an inexpensive single-chip controller such as JMicron’s, SSDs should become much more accessible and affordable — with drive pricing possibly impacted as soon as this holiday season. What’s more, the blazing speed of the JMF612 may very well lead to the introduction of a 1TB SSD as the chip’s improved efficiency will allow for larger drive sizes. JMicron is expected to begin mass production of its new controller in July.

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