Thursday, July 28, 2022

Key provisions of the CHIPS and Science Act of 2022

The U.S. House of Representatives voted 243-187 to pass the CHIPS and Science Act of 2022. The legislation was approved by the U.S. Senate last week. President Biden is now expected to sign it into law.

The principal aim of the CHIPS Act is to onshore domestic manufacturing of semiconductors. It will also substantially increase government funding for science and technology development programs impacting the networking and telecommunications fields. 

The legislation provides $54.2 billion in total appropriations for CHIPS and Public Wireless Supply Chain Innovation (also known as ORAN), and $82.5 billion in additional appropriations for research programs through the National Science Foundation, the Department of Commerce, NIST, NASA, and the Department of Energy.

Here is a summary

CHIPS for America Fund:

  • Manufacturing Incentives: $39 billion in financial assistance to build, expand, or modernize domestic facilities and equipment for semiconductor fabrication, assembly, testing, advanced packaging, or research and development, including $2 billion specifically for mature semiconductors. Within the incentive program, up to $6 billion may be used for the cost of direct loans and loan guarantees.
  • Research and Development (R&D): $11 billion for Department of Commerce (DOC) research and development.
  • National Semiconductor Technology Center (NSTC): A public-private partnership to conduct advanced semiconductor manufacturing R&D and prototyping; invest in new technologies; and expand workforce training and development opportunities.
  • National Advanced Packaging Manufacturing Program: A Federal R&D program to strengthen advanced assembly, test, and packaging (ATP) capabilities, in coordination with the NSTC.
  • Manufacturing USA Semiconductor Institute: A partnership between government, industry, and academia to research virtualization of semiconductor machinery, develop ATP capabilities, and design and disseminate training.
  • Microelectronics Metrology R&D: A National Institute of Standards and

CHIPS for America Workforce and Education Fund: $200 million to kick start development of the domestic semiconductor workforce, which faces near-term labor shortages, by leveraging activities of the National Science Foundation.

CHIPS for America Defense Fund: $2 billion for the DoD to implement the Microelectronics Commons, a national network for onshore, university-based prototyping, lab-to-fab transition of semiconductor technologies—including DoD-unique applications—and semiconductor workforce training.

CHIPS for America International Technology Security and Innovation Fund: $500 million for the DOS, in coordination with the U.S. Agency for International Development, the Export-Import Bank, and the U.S. International Development Finance Corporation, to support international information and communications technology security and semiconductor supply chain activities, including supporting the development and adoption of secure and trusted telecommunications technologies, semiconductors, and other emerging technologies.

Public Wireless Supply Chain Innovation Fund: $1.5 billion through the DOC National Telecommunications and Information Administration (NTIA), in coordination with NIST, the Department of Homeland Security, and the Director of National Intelligence, among others, to spur movement towards open-architecture, software-based wireless technologies, and funding innovative, ‘leap-ahead’ technologies in the U.S. mobile broadband market.Technology (NIST) research program to advance measurement science, standards, material characterization, instrumentation, testing, and manufacturing capabilities.

O-RAN: The CHIPS & Innovation Act of 2022 would also provide $1.5 billion to implement the USA Telecom Act that was enacted in the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021. This program would help shore up the global telecommunications supply chain and limit the scope of involvement globally of telecommunication companies with close ties to the Communist Party of China, like Huawei. Funds would be used to capitalize on U.S. software advantages, accelerating development of an open-architecture model (known as OpenRAN) that would allow for alternative vendors to enter the market for specific network components, rather than having to compete with Huawei end-to-end.

Basic R&D: Expanded funding for Research and Innovation (National Science Foundation, Department of Commerce, National Institute of Standards and Technology, NASA, and Department of Energy). Representing the largest five-year investment in public R&D in the nation’s history, the expanded funding aims to "grow both curiosity-driven and translational research, ensuring both the creation of new ideas and the ability of those ideas to create new innovations, products, companies, and jobs in the United States."

Read the bill's text:

EU Chips Act promises €43 billion in semiconductor investments

The European Commission is calling for €43 billion euros of public and private investments to spur the design, manufacturing and packaging of advanced semiconductors in Europe.The EU Chips Act aims to bring about a thriving semiconductor sector from research to production and a resilient supply chain. The ambition is for the EU to double its current market share in semiconductors to 20% in 2030. Key elements of the proposal:The main components are:The...

Aruba advances its AIOps capabilities

Aruba introduced new AIOps capabilities for its Aruba ESP (Edge Services Platform) aimed at reducing the time spent on manual tasks such as network troubleshooting, performance tuning, and Zero Trust/SASE security enforcement. 

Aruba said AIOps, which it has been developing since 2013, is now being used not just network troubleshooting but also performance optimization and critical security controls.

The new capabilities are powered by Aruba’s massive data lake, which continuously and anonymously collects and analyzes device, user, and location data from over 120,000 Aruba Central customers, from more than 2 million network devices and 200 million clients per day. Aruba’s AI is trained by the high volume and wide variety of network and client data. 

“For AI results that customers can trust, the key ingredient is not a mathematical model, but access to a large volume and variety of data to train the models to produce reliable results across all network topologies. Without that foundation, so-called “AI” is nothing more than demoware,” said Larry Lunetta, vice president of portfolio solutions marketing at Aruba. “Fueled by our data lake, our AIOps solutions help enterprises reduce trouble tickets by up to 75 percent while optimizing their network performance by 25 percent or more.”

The new AI-powered IT efficiency features include:

  • Aruba Client Insights: Automatically identifies each endpoint connecting to the network with up to 99% accuracy, which is especially important as increasing numbers of IoT devices are added to networks, sometimes without approval from IT. This allows organizations to better understand what’s on their networks, automate access privileges, and monitor the behavior of each client’s traffic flows to more rapidly spot attacks and take action.
  • AI-powered Firmware Recommender: Provides IT teams with the best version of firmware to run for the wireless access points in their environments – regardless of model numbers. This greatly reduces support calls and guesswork that network admins face, and helps ensure new features and fixes are implemented more quickly.
  • AI Search in Spanish: The same built-in natural language search function in Aruba Central shows its versatility by now supporting queries and responses in Spanish to satisfy the needs of our second largest geographical user community.
  • Automated Infrastructure Predictions: Leverages Aruba’s AI Assist feature and Aruba Support outreach to recognize possible hardware and software infrastructure issues for preemptive engagement that can consist of firmware upgrades or recommended hardware replacement.

AWS sales in Q2 reached $19.7 billion, up 33% yoy

In its Q2 earnings report, Amazon reported quarterly sales for AWS of $19.739 billion, up 33% yoy. AWS operating income amounted to $5.715 billion. AWS operating expenses amounted to $14.024 billion.

  • Some customer wins for AWS in Q2
  • Delta Air Lines selected AWS as preferred cloud provider to accelerate its digital business transformation and reimagine the travel experience. 
  • Riot Games and AWS have teamed up to bring AWS’s data analytics integration to esports broadcasts for the first time, through Riot’s League of Legends, VALORANT, and League of Legends: Wild Rift esports leagues. AWS will also power Riot’s new cloud-first remote broadcast centers, which will support Riot’s current and future ambitions to reimagine entertainment experiences for billions of fans worldwide. 
  • BT selected AWS as preferred cloud provider to transform legacy infrastructure and internal applications to a new cloud-first architecture.
  • Investment banking firm Jefferies will migrate all its IT systems to AWS, including internal and customer-facing applications, IT resources, and companywide data.
  • Health and wellness organization Geisinger selected AWS as its strategic cloud provider. Geisinger will migrate its entire digital portfolio of more than 400 applications and numerous workflows to AWS, which will enable lifesaving technologies and save Geisinger several million dollars annually. 
  • Sweden-based SKF, the leading manufacturer of bearings, collaborated with AWS to launch a fully automated, condition-monitoring solution for industrial machine reliability and predictive maintenance. This helps manufacturers monitor equipment, detect anomalies, and avoid unexpected machine failures in their facilities. 
  • Italian multinational energy company Eni worked with AWS to integrate its proprietary data platform XWARE with the built-for-the-cloud Open Subsurface Data Universe on AWS.

Intel hit by drops in Client Computing and Datacenter + AI

Citing a number of execution issues and macroeconomic headwinds, Intel reported GAAP revenue of $15.3 billion, down 22% year over year (YoY), and non-GAAP revenue of $15.3 billion, down 17% YoY. Second-quarter GAAP earnings per share (EPS) was $(0.11); non-GAAP EPS was $0.29.

The poor performance was driven by Intel’s Client Computing and Datacenter and AI Groups. Intel's Network and Edge Group and Mobileye achieved record quarterly revenue.

“This quarter’s results were below the standards we have set for the company and our shareholders. We must and will do better. The sudden and rapid decline in economic activity was the largest driver, but the shortfall also reflects our own execution issues,” said Pat Gelsinger, Intel CEO. “We are being responsive to changing business conditions, working closely with our customers while remaining laser-focused on our strategy and long-term opportunities. We are embracing this challenging environment to accelerate our transformation.” 

"We are taking necessary actions to manage through the current environment, including accelerating the deployment of our smart capital strategy, while reiterating our prior full-year adjusted free cash flow guidance and returning gross margins to our target range by the fourth quarter," said David Zinsner, Intel CFO. "We remain fully committed to our business strategy, the long-term financial model communicated at our investor meeting and a strong and growing dividend."

Equinix reports record Q2 gross bookings

Equinix reported Q2 revenue of $1.8 billion, a 5% increase over the previous quarter and up 10% on both an as-reported and normalized and constant currency basis over the same quarter last year. 

This represents the company's 78th consecutive quarter of revenue growth —- the longest streak of any S&P 500 company, according to Equinix.

Charles Meyers, President and CEO, Equinix, states "With record Q2 gross bookings that sizably surpassed the prior peak, Equinix had an outstanding first half of 2022, and our business continued to deliver strong and consistent results. The demand environment and our pipeline remain robust despite a complex global macroeconomic and political landscape, as we continue to enable digital leaders on their transformation journey."

Q2 net income was $216 million, a 47% increase over the previous quarter, primarily due to strong operating performance and a favorable tax settlement. EPS amounted to $2.37 per share, a 46% increase over the previous quarter.

Some highlights:

  • Equinix has 49 major projects underway across 34 metros in 21 countries, including new data center builds in Dublin, MontrĂ©al, New York, Paris, Warsaw and the company's first build in Chennai, India.
  • In May, Equinix closed the acquisition of four data centers from Empresa Nacional De Telecomunicaciones S.A. ("Entel"), a leading Chilean telecommunications provider (the "Entel Chile Acquisition"), extending Platform Equinix into Chile and bringing its global footprint to 70 metros across 31 countries.
  • Equinix expects to close on the acquisition of one additional data center from Entel to enter Lima, Peru, in Q3.
  • Equinix continued to strengthen its leadership position in the cloud ecosystem through the company's xScale program, which experienced strong leasing activity from top hyperscalers in Q2. The xScale portfolio has now leased more than 170 megawatts globally, with 11 xScale builds currently under development, of which more than 80% is pre-leased.
  • Equinix's Future First sustainability strategy was recently recognized by Sustainalytics as among the best large-cap REITs for ESG. Equinix was also ranked seventh on the U.S. Environmental Protection Agency's National Top 100 list of the largest green power users.

Infinera posts Q2 revenue of $358.0 million

Infinera reported Q2 2022 GAAP revenue of $358.0 million compared to $338.9 million in the first quarter of 2022 and $338.2 million in the second quarter of 2021.

GAAP gross margin for the quarter was 30.5% compared to 32.9% in the first quarter of 2022 and 35.6% in the second quarter of 2021. GAAP operating margin for the quarter was (11.1)% compared to (10.8)% in the first quarter of 2022 and (6.9)% in the second quarter of 2021.

GAAP net loss for the quarter was $(55.7) million, or $(0.26) per share, compared to $(41.9) million, or $(0.20) per share, in the first quarter of 2022, and $(35.6) million, or $(0.17) per share, in the second quarter of 2021. Non-GAAP net loss for the quarter was $(10.1) million, or $(0.05) per share, compared to net loss of $(14.0) million, or $(0.07) per share, in the first quarter of 2022, and $(6.0) million, or $(0.03) per share, in the second quarter of 2021.

Infinera CEO David Heard said, “Our second quarter results were encouraging in a challenging environment, with revenue beating the midpoint of our outlook range, non-GAAP operating margin at the upper end of the range, and non-GAAP gross margin near the midpoint of the range due to higher supply chain costs. Strong demand resulted in greater than 80% year-over-year growth in total backlog, which includes product backlog growth exceeding 100%, and a quarterly book-to-bill ratio above 1."

“We are executing well against our 8x4x1 strategy as we scale ICE6 globally, expand our metro footprint, and prepare to bring our pluggables business online, all while planning to deliver continued growth and margin expansion in the second half of 2022. The timing of our refreshed portfolio allows us to take advantage of the accelerated shift to open architectures and our customers’ growing requirement to bring on new vendors to improve their supply chain resilience.”

ADVA posts Q2 revenue of EUR 166 million, up 11% yoy

Citing growth in demand from network operators and internet content providers (ICPs), ADVA reported Q2 2022 revenues of EUR 166.3 million, down by 2.5% from EUR 170.5 million in Q1 2022 and up by 11.4% compared to EUR 149.4 million in Q2 2021. 

Net income reached EUR 7.3 million in Q2 2022, increased by 18.0% from EUR 6.2 million in Q1 2022, and considerably decreased by 39.2% from EUR 12.0 million in Q2 2021.  

“The recent months were very exciting for us as a company,” said Brian Protiva, CEO of ADVA. “We reached several important milestones on our journey of joining forces with Adtran and advanced our operational business. Our revenues in the first half of 2022 were at a record level, and our order books are nicely filled. We still see strong customer demand paired with a high level of complexity and costs in the areas of procurement, production and logistics. This environment will continue for the foreseeable future. Our teams work tirelessly on solutions to meet market demand, and we work closely with our customers every day to provide the best possible support for their network development. So far, we’ve mastered the challenges very well and look positively towards the remainder of the year.” 

“In the past quarter, we again grew compared to the year-ago quarter. This underlines the positive market environment and the tailwind we are experiencing on the demand side,” said Uli Dopfer, CFO of ADVA. “However, in the second half of the year, we will also have to deal with the challenges resulting from increased procurement costs and stressed supply chains. Despite increased inventories, our liquidity is at a satisfying EUR 63 million. Against the background of a continued strong order intake and a strengthening dollar in combination with persistently higher costs in the supply chains, we have decided to adjust the outlook for the fiscal year accordingly, which we announced in an ad-hoc notification on July 15th. We are raising our revenue guidance to between EUR 680 and 730 million and reducing our pro forma EBIT margin guidance by one percentage point to between 5% and 9%.”

Ekinops reports 1H22 revenue of €63.3 million, up 25% yoy

Ekinops reported consolidated revenue of €63.3 million for the first half of 2022, compared with €50.8 million in the previous year, representing robust growth of 25%. At constant scope and exchange rates, half-year growth was 20%. Gross margin was 52.9%, within the target range, despite the components crisis.

This trend is the result of solid momentum in all the Group's activities: +31% for optical transport equipment, +21% for Access solutions and +47% for software and services, which now represent 15% of the group's revenue as a result of the success of SDN (Software Defined Networks) and virtualization solutions.

In geographic terms, half-year sales grew significantly by 48% in North America (33% in USD), reaching 20% of the group's business for the first time. Asia-Pacific continued on the growth trajectory that began in H2 2021 with a very sustained 80% increase in half-year sales. Sales in EMEA, in which 38% of the group's activity is generated, grew 6% compared with the same period in the previous year. After a first quarter in which activity in France remained virtually stable, the group's sales returned to steady growth of 29% in the semester.

Dell'Oro: Broadband Spending Boom

Sales of PON equipment for fiber-to-the-home deployments, cable broadband access equipment, and fixed wireless CPE will all increase from 2022 to 2026, according to a new report from Dell'Oro Group.

Some highlights from the Broadband Access & Home Networking 5-Year Forecast Report:

  • PON equipment revenue is expected to grow from $9.3 B in 2021 to $13.6 B in 2026, driven largely by XGS-PON deployments in North America, EMEA, and CALA.
  • Revenue for Fixed Wireless CPE is expected to reach $5.1 B by 2026, led by shipments of 5G sub-6GHz and 5G Millimeter Wave units.
  • Revenue for Cable Distributed Access Equipment (Virtual CCAP, Remote PHY Devices, Remote MACPHY Devices, and Remote OLTs) is expected to reach nearly $1.3 M by 2026, as operators ramp their DOCSIS 4.0 and fiber deployments.

“We’ve made significant upward revisions to our long-term broadband and home networking forecast, said Jeff Heynen, Vice President at Dell’Oro Group. “Fiber infrastructure buildouts are resulting in more new subscribers and more CPE with advanced Wi-Fi technologies as service providers look to differentiate their services in increasingly crowded markets,” added Heynen.

Cambodia's SINET picks Nokia for XGS-PON

SINET, Cambodia's leading Internet Service Provider, has chosen Nokia to deploy its XGS Passive Optical Network (PON) for enterprise broadband service.

Nokia's XGS-PON solution will be initially deployed in the capital city of Phnom Penh before being expanded to other cities and regions. The deployment, which includes the upgrade of the existing Nokia fiber access nodes, will be completed in 2022. 

Nokia's fiber access solution is powered by its Quillion chipset, which concurrently supports three generations of PON technologies, GPON, XGS-PON and 25G PON. 

Ajay Sharma, Head of Thailand and Cambodia at Nokia, said: “We are excited that SINET has reaffirmed its confidence in our solution. Our industry-leading XGS-PON solution will allow SINET to improve the overall speed and quality of broadband for its enterprise users, which will help them grow their revenues and attract new customers. The enterprise users will benefit from an increase in network capacity, speed, and reliability."

Video: Tipping point for A.I. in managing networks?

Eventually all networks will be fully managed by artificial intelligence, but that's not the current reality -- humans are running the show.

How close are we to the tipping point where A.I. can be trusted to make critical decisions for network operations? And what will it take to earn our trust?

Here is a perspective from Larry Lunetta, VP WLAN & Security Marketing at Aruba, a Hewlett Packard Enterprise company.

Video: Automating Wholesale Ordering between Carriers

It really feels like the carriers are coming towards a tipping with regard to the adoption of MEF's LSO Sonata API for the automation of service provisioning, saysJohn Carr, Vice President of Business Development, Neustar.

Neustar is making the LSO interface a standard part of its product.