Paul Gluckman

Microchip Technology halted all Huawei shipments in mid-September in compliance with the further Commerce Department export restrictions on the Chinese tech giant that were imposed in August (see 2008170043), said President-Chief Operating Officer Ganesh Moorthy on a Thursday investor call for fiscal Q2, ended Sept. 30. Huawei generated about 2% of Microchip’s Q2 revenue, down sequentially from Q1, said Moorthy, who will succeed Steve Sanghi as CEO March 1 as Sanghi transitions to executive chairman. Microchip is working with Commerce “to apply for licenses for products and technologies that we believe have no impact” on U.S. national security, he said. “We do not know if or when such licenses may be granted,” so Microchip assumes no Huawei revenue in the fiscal third quarter ending Dec. 31, he said. Huawei's push to complete manufacturing of all products before the shipment ban took effect caused wide-scale supply chain "constraints" during the September quarter, he said. The rush of Huawei’s competitors to replace the business Huawei lost “further stressed the supply chain,” he said. The “ongoing shift” of semiconductor manufacturing out of China to avoid the Section 301 tariffs also pressured “the capacity in other Asian countries where we manufacture through our partners,” he said. The supply chain disruptions "are continuing into the December quarter,” he said.

Dish Network will light up 5G in “some preliminary small markets” in 2021's first quarter, said Chairman Charlie Ergen on a Q3 investor call Friday. “It will be the third quarter before we have a major market up and running that the world can touch and feel a little bit,” he said. The disclosures set off a barrage of questions from analysts skeptical about Dish’s progress and its ability to meet its FCC obligations of bringing 5G to critical mass by June 2023.

General Motors' self-driving subsidiary Cruise “continues to make progress” with launch of the Origin shared-ride autonomous vehicle, said CEO Mary Barra on a Q3 call Thursday. The Origin will be built at GM’s “Factory Zero” in Hamtramck, Michigan, she said. GM began testing the Origin’s Ultium battery system at its Milford, Michigan, “proving ground,” and "pre-production” Origin vehicles are expected next year, she said. Cruise AVs will be tested in San Francisco by the end of 2021 “without backup drivers” after California regulators give GM gets the “go-ahead,” she said. “Cruise will be the first company to test autonomous vehicles with no backup driver in a dense and complex urban driving environment.” GM and Cruise in "coming months” plan to file an “exemption petition” with the National Highway Traffic Safety Administration “to deploy Origin vehicles without steering wheels or pedals,” said Barra. Cruise is working with an epidemiologist and using health research “to identify measures that may help maintain a healthy ride environment,” free from risks of COVID-19, she said.

In home networking, CommScope continues to see a drive toward streaming devices, “and we're reacting quickly to reallocate resources to ensure we have a primary position as this transition takes place,” said Chief Technology Officer Morgan Kurk on a Q3 call Thursday. New technologies like Wi-Fi 6 “will give us even greater opportunities to support applications with our streaming devices in the future,” he said. The “collection of spectrum” in the U.S. “will become the foundation that enables 5G to reach its potential,” said Kurk. That spectrum will drive “increased competition for consumer wallets between wireless operators for mobility” and hasten the fight between wireless and fixed-line operators “in the battle for the home,” he said. “As the impact of COVID-19 will likely impact the world throughout 2021, operators will need to enhance the fixed-line access, given how essential connectivity has now become in the home.” Though the pandemic brought many challenges, it shows “the world how essential network connectivity is,” said new CEO Charles Treadway, who joined a month ago from Accudyne Industries (see personals section, Oct. 5). “Whether it's keeping businesses running, maintaining our education systems with virtual teaching or helping people stay connected to their loved ones, COVID-19 has highlighted the power of network connectivity.”

Revenue in Alibaba’s fiscal Q2, ended Sept. 30, jumped 30% from a year earlier on “deeper adoption” of the platform, accelerated by COVID-19 and “the rapid economic recovery in China,” said CEO Daniel Zhang on a Thursday investor call. “Digitalization is now universally recognized as a way forward in the post-pandemic world.” Global Shopping Festival, Alibaba’s equivalent of Amazon Prime Day, used to be a 24-hour event but this year was expanded into an 11-day marathon in two “shopping windows,” he said. The first ran Nov. 1-3; the second starts Nov. 11 and runs for eight days, he said. “We want to give consumers more time to browse and get the deal while easing pressure on the logistic infrastructure. This helps consumers receive their package sooner and enjoy a better shopping experience. Our merchants will also benefit from more exposure and selling opportunities.” On the festival's first day, more than 100 brands each surpassed sales of 100 million Chinese yuan ($15.1 million) “within the first 111 minutes,” and 357 new brands “on our platform became the top sellers in their respective subcategories,” he said.

Though the proportion of New Yorkers working in physical offices is in the “teens,” the “return to normalcy will be the order of the day in months, not in years,” said Vornado Realty Trust CEO Steven Roth on a Q3 call Wednesday. The company owns major commercial buildings in Manhattan, including One Penn Plaza next to Penn Station and Madison Square Garden and the adjacent Farley Building, where Facebook will lease 730,000 square feet in Q1, said Roth. “We are hearing from all our tenants that Zoom fatigue is real, productivity is low and CEOs want their employees back in the office,” he said. “That will take some time.” The landlord believes “there will be marginal work from home” and the office “will be the main place where work, creativity, growth and business is conducted.”

Lenovo plans to introduce its first 5G Chromebook in the second half next year at the premium tier of the laptop space, said Chief Operating Officer Gianfranco Lanci on a fiscal Q2 call Tuesday. “I'm not afraid of any deterioration of the average selling price of Chromebook.” Competition in the Chromebook segment is limited to “four to five players,” he said. “I don't see additional players coming.” Lenovo had $10 to $20 "improvement" in Chromebook ASPs the past three quarters, he said. Chromebook demand for remote work and learning soared during the pandemic (see 2009110020). PCs and tablets “are now one device per person” in the “new normal” of COVID-19, said CEO Yuanqing Yang. Lenovo projects total PC market will grow by about 25 million units globally this year from 2019 and will “reach very close to 300 million units” in 2020, he said. The forecast is for 7% growth in 2021 PC demand, said Lanci. There’s a “dynamic shift” in PC demand that will “continue to create tailwinds for e-learning, work from home, play from home, cloud infrastructure and 5G,” said Chief Financial Officer Wai Ming: “We are optimistic that these long-term structural trends could enlarge the addressable market” for PCs and cloud infrastructure products, plus speed deployment of 5G services.

Skyworks Solutions had $957 million in fiscal Q4 revenue, more than $100 million above the high end of its guidance, proof it's “driving and benefiting from the rollout of 5G" worldwide, said CEO Liam Griffin on a Monday investor call about the quarter ended Oct. 2. “Recent data points” show how rapidly adoption is “accelerating,” he said. Thirty-eight countries have launched the networks, with more “set to deploy,” he said. About 12% of smartphones shipped this year are “5G-enabled,” with projections of more than 50% by 2023, he said. “The world's leading smartphone manufacturer has just now released its entire lineup of new 5G devices,” said Griffin, obviously referencing Samsung. “Although we are only in the early innings, 5G has arrived.” A large part of the front-end module and other component supplier's 5G demand came from Asia-Pacific smartphone OEM customers, he said. "We have been winning business. We've been expediting products. The demand has been incredible."

With the pandemic showing “no signs of slowing,” cash use is declining, said PayPal CEO Dan Schulman on a Q3 call: “Digitization of the global economy, combined with the rise of digital wallets, will drive our growth over the next decade.” Payment volume grew a record 36%, he said Monday. Transactions were just over $4 billion, a record and up 30% from the 2019 quarter, he said. The platform added 15.2 million “net new actives”, (NNAs) its second highest after Q2's 21.3 million, said Schulman. PayPal gained more than 1.5 million new merchants, more than twice the pre-coronavirus rate, he said. “We now have 28 million merchants on our platform. We ended Q3 with 361 million active accounts, and we remain on track to end the year with a record 70 million NNAs.” COVID-19 caused “a step change in e-commerce penetration this year,” said Chief Financial Officer John Rainey: “We expect there to be a deep and permanent change to commerce and consumer behavior, both in the U.S. and internationally.”

The movie theater industry is among “the very hardest hit” in this pandemic, AMC Entertainment CEO Adam Aron said on a Q3 call Monday. AMC’s loss grew 1,553% from a year earlier to $905.8 million. Global theater lockdowns and average attendance hovering under 20% of capacity led to revenue falling 91% to $119.5 million. AMC made “great strides” in the quarter to “safely open our theaters where permitted,” said Aron, but attendance has been “minimal.” AMC's attendees numbered 10 million since reopenings, he said, “and we have not heard of even one instance where the coronavirus was spread.” Aron estimated 90% of AMC’s U.S. theaters are open in 44 of its 45 states: “Critical” markets of Los Angeles and New York remain closed through state mandates, he said. “In the past few weeks, and especially just in the last few days, we've been ordered to close our theaters for most of the month of November” outside the U.S., he noted. The “gravity of the situation” puts the theater industry in “almost a warlike position of resolve and determination,” said Aron. “We are fighting this virus with all of our smarts, and all of our minds. We are a resilient, resourceful and creative bunch in AMC and all of that energy is being deployed to fight the good fight.” The company is working feverishly to raise and preserve cash, the chief said. That's including the “groundbreaking" Universal pact July 28 enabling AMC to begin “participating” in a new premium VOD window through its AMC Theatres on Demand platform. Universal plans to release six movies theatrically, exclusively through AMC, in Q4, “something that no other studio that does not yet have a PVOD window established has been willing to try,” Aron said. AMC has “sufficient liquidity to last through to the beginning of 2021,” said Chief Financial Officer Sean Goodman. The stock closed 8.4% higher Tuesday at $2.34.