Global information technology spending is projected to reach $4.1 trillion this year, up 8.4% from 2020, reported Gartner Wednesday. All IT spending segments are forecast to have “positive growth” through 2022, it said. The highest growth will come from devices (up 14%) and enterprise software (up 10.8%), “as organizations shift their focus to providing a more comfortable, innovative and productive environment for their workforce,” said Gartner. “IT no longer just supports corporate operations as it traditionally has, but is fully participating in business value delivery,” said Gartner Vice President John-David Lovelock. “Not only does this shift IT from a back-office role to the front of business, but it also changes the source of funding from an overhead expense that is maintained, monitored and sometimes cut, to the thing that drives revenue.”
The U.S. should adopt “smart policies” to eliminate or reduce “vulnerabilities” in the global semiconductor supply chain “and enhance the U.S. economy, national security, and supply chain resilience,” the Semiconductor Industry Association told the Commerce Department’s Bureau of Industry and Security. Comments due Monday in docket BIS-2021-0011 will help shape recommendations to the White House on President Joe Biden’s Feb. 24 executive order to relieve supply chain bottlenecks (see 2103110054). Though “geographic specialization” in semiconductor production “served the industry and its consumers well, it has also created potential vulnerabilities in the global value chain,” said SIA. The industry features more than 50 “points” across the value chain “where one region holds more than 65% of the global market share,” it said. About three-quarters of global chip manufacturing capacity is concentrated in China and East Asia, “a region significantly exposed to high seismic activity and geopolitical tensions and lack of fresh water and power,” it said: Virtually all the world’s “highly advanced” semiconductor manufacturing capacity is based in Taiwan (92%) and South Korea (8%). The global value chain features “single points of failure” susceptible to “natural disasters, infrastructure shutdowns, or geopolitical conflicts and may cause large-scale interruptions in the supply of essential chips,” said SIA. “Geopolitical tensions may result in trade restrictions that impair access to crucial providers of essential technology, unique raw materials, tools, and products that are clustered in certain countries.” The association fears those restrictions could result “in a significant loss of scale and compromising the industry’s ability to sustain the current levels of R&D and capital intensity needed to maintain the current pace of innovation.” The smart policies the U.S. government will need to deploy to mitigate the multiple vulnerabilities should include “targeted investments to fill high-risk gaps,” plus collaborating with “allies and partners globally to strengthen supply chains,” said SIA. “The semiconductor industry needs targeted government policies and incentives.” The U.S. government should work through existing “multilateral and plurilateral forums,” including the World Trade Organization and the Organisation for Economic Co-operation and Development, “to coordinate key semiconductor supply-chain related issues,” it said: Supply-chain resilience, cybersecurity, joint R&D, export controls, intellectual property protection, subsidies and market access barriers should top the list of priorities. SIA urged a U.S. goal of achieving “a more diversified geographical footprint by building additional semiconductor and unique raw material manufacturing capacity in the U.S. and expanding the production sites and domestic sources of supply for unique and critical materials.”
Revitalizing U.S. semiconductor manufacturing and R&D could “drive innovation across many different sectors for decades,” the Information Technology Industry Council told the Commerce Department’s Bureau of Industry and Security. Comments due Monday in docket BIS-2021-0011 will help shape recommendations to the White House on President Joe Biden’s Feb. 24 executive order to relieve bottlenecks (see 2103110054). For the U.S. semiconductor industry to remain competitive and to strengthen the resilience of critical semiconductor supply chains, the administration “should prioritize incentivizing research, development, prototyping, and manufacturing of advanced semiconductors” domestically, said ITI. “Federal investment and incentives to boost domestic semiconductor manufacturing will level the capital expenditure playing field ... enabling firms to build new or expand existing manufacturing capacity in the U.S versus other locations where governments heavily subsidize semiconductor manufacturing infrastructure.” Promoting such financial incentives is “the single most important action” the U.S. can take “to strengthen these critical supply chains,” said ITI. “Augmenting domestic production of semiconductors, coupled with ensuring the continuity of necessary global supply chains, would make America’s semiconductor supply chains more resilient to future crises and ensure the U.S. can supply the advanced chips needed.”
The FCC told the U.S. Court of Appeals for the 4th Circuit that China Telecom moved too quickly to challenge in court the revocation of the company’s Communications Act Section 214 authorizations (see 2102020029). In January, the company sought expedited court review in court docket 20-2365 (see 2101220050). “China Telecom challenges the Commission’s decision to conduct the revocation proceeding through full written submissions before the Commission itself, rather than adopt more formal hearing procedures or hold an in-person hearing before an administrative law judge,” the FCC said in a Friday posting: “The decision whether and how to conduct a proceeding is not final agency action, so China Telecom must wait until the Commission issues a final order resolving whether or not to revoke its authorizations.”
Trade policy on China should prioritize technology issues and set “benchmarks" for a "phased rollback" of Trade Act Section 301 tariffs, the Information Technology Industry Council wrote new U.S. Trade Representative Katherine Tai Tuesday. It encouraged Tai to "move swiftly" on the commitment she made at her Senate Finance Committee confirmation hearing to install "a transparent, predictable, and rapid process for tariff exclusions.” Reforming the tariff exclusions process would be "very high on my radar" if confirmed, Tai told the committee (see 2102250043). Noting USTR has investigated the digital services taxes policies of several U.S. trade partners, the group asked the agency “to discourage further proliferation of such measures.” USTR didn't comment Wednesday, and ITI didn't answer our queries about whether it got a response from the agency. The Chinese tariffs are “there to be punitive,” rather than to stop China’s allegedly unfair trade practices, ITI CEO Jason Oxman told us in January (see 2011090043).
Chinese 5G subscriptions are expected to reach 739 million by 2025, enough for 40% global share, reported ABI Research Tuesday. It forecasts 5G annual data traffic in China reaching 782 exabytes by 2025, for nearly 60% share of 5G. Unlike in other early adopter 5G countries like the U.S., Japan and South Korea, mobile network operators in China are government-owned, enabling them to get “extensive support” for developing networks, “especially in the consumer market," said analyst Jiancao Hou. The U.S-China trade war and Commerce Department export restrictions on Huawei and other Chinese vendors aren't "slowing down 5G deployment in China,” said Hou.
The FCC created docket 21-112 for filings on Verizon’s proposed buy of Tracfone from America Movil (see 2010070056). Parties have been filing to the International Bureau's ITC-T/C-20200930-00173.
The Commerce Department's Bureau of Industry and Security plans a virtual forum April 8 at 2 p.m. EDT to collect input on how the Biden administration can help boost the competitiveness and capacity of the U.S. semiconductor industry, says Tuesday’s Federal Register. Comments are due April 5 on the BIS notice of inquiry on semiconductor competitiveness (see 2103110054). The comments and feedback from the forum will help shape Commerce’s policy recommendations to the White House on President Joe Biden’s Feb. 24 executive order to relieve bottlenecks in the chip supply chain. Registration for the virtual forum closes Thursday.
The U.S. and European Commission will “intensify” negotiations on an “enhanced” EU-U.S. Privacy Shield framework to comply with the Schrems II decision (see 2101150016), Commerce Secretary Gina Raimondo announced Thursday with European Commissioner for Justice Didier Reynders. The negotiations “underscore our shared commitment to privacy, data protection and the rule of law and our mutual recognition of the importance of transatlantic data flows to our respective citizens, economies, and societies,” they said. Also Thursday, the Information Technology and Innovation Foundation said the U.S. and EU should forge a "pragmatic" digital alliance for data transfers (see 2103250004).
Global videoconferencing device shipments are expected to reach 12.5 million units by 2025, a sixfold increase from 2020, reported Frost & Sullivan Wednesday. “This year marks the beginning of the revival of meeting rooms and office spaces,” F&S said. “As businesses and educational institutions prepare for the return to work, meeting rooms and classrooms will see heavy technology investments to support hybrid work and learning.” The company projects global revenue will exceed $7.7 billion in 2025, vs. $2.75 billion in 2020: “The long-term, sustainable demand for video meetings to connect remote workers and geographically dispersed teams” is driving the “secular growth opportunity,” said F&S.