Texas Instruments Secures $1.6 Billion in CHIPS Act Funding

Texas Instruments (TI) reached a preliminary agreement with the U.S. Department of Commerce to potentially receive up to $1.6 billion in funding under the CHIPS and Science Act. This financial support will aid in the construction of three new 300mm semiconductor wafer fabs located in Sherman, Texas, and Lehi, Utah. The investment is expected to enhance TI's manufacturing capabilities, providing a reliable supply of analog and embedded processing semiconductors crucial for various technologies.

In addition to the CHIPS Act funding, TI anticipates receiving between $6 billion and $8 billion from the U.S. Department of Treasury's Investment Tax Credit for its domestic manufacturing investments. The proposed funding will also include $10 million dedicated to workforce development, which will create over 2,000 new jobs at TI and thousands more indirectly across related industries. The new fabs are part of TI’s broader $18 billion investment in manufacturing through 2029, aimed at expanding its semiconductor production and strengthening its market position.

Haviv Ilan, President and CEO of Texas Instruments, emphasized the significance of this investment, stating, "The historic CHIPS Act is enabling more semiconductor manufacturing capacity in the U.S., making the semiconductor ecosystem stronger and more resilient. Our investments further strengthen our competitive advantage in manufacturing and technology as we expand our 300mm manufacturing operations in the U.S."

The proposed direct funding under the CHIPS Act would support TI's investment of more than $18 billion through 2029, which is part of the company's broader investment in manufacturing. This proposed direct funding will support three new wafer fabs, two in Sherman, Texas, (SM1 and SM2) and one in Lehi, Utah (LFAB2), specifically to:

• Construct and build the SM1 cleanroom and complete pilot line for first production;
• Construct and build the LFAB2 cleanroom for first production; and
• Construct the SM2 shell.

These connected, multi-fab sites benefit from shared infrastructure, talent and technology sharing, and a strong network of suppliers and community partners. They will produce semiconductors in 28nm to 130nm technology nodes, which provide the optimal cost, performance, power, precision and voltage levels required for TI's broad portfolio of analog and embedded processing products.

The project will create over 2,000 direct jobs at TI and thousands of additional jobs in construction and related sectors.

Since its enactment in August 2022, the CHIPS and Science Act has significantly bolstered U.S. semiconductor manufacturing with substantial federal funding. Intel has received approximately $20 billion for its expansion projects, including new fabs in Ohio. Micron Technology has been awarded around $15 billion to support its memory chip production expansion in Idaho. GlobalFoundries was granted $10 billion to enhance its semiconductor manufacturing capabilities at its facilities in New York. 

https://news.ti.com/2024-08-16-Texas-Instruments-signs-preliminary-agreement-to-receive-up-to-1-6-billion-in-CHIPS-and-Science-Act-proposed-funding-for-semiconductor-manufacturing-in-Texas-and-Utah?HQS=corp-dbwti-manu-chips-bhp-pr-null-wwe

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Ericsson to Sell iconectiv (formerly Telcordia, Bellcore) to Koch for US$1 billion

 Ericsson  announced a strategic divestment of its U.S. subsidiary, iconectiv, to Koch Equity Development. Acquired by Ericsson in 2012 through the Telcordia acquisition, iconectiv specializes in network number portability and data exchange services. The sale is expected to provide Ericsson with a cash benefit of approximately SEK 10.6 billion (USD 1.0 billion) after accounting for taxes and transaction costs. The deal, which will require regulatory approvals, is anticipated to close in the first half of 2025.

The transaction will also result in a one-off EBIT benefit of around SEK 8.8 billion (USD 0.8 billion) for Ericsson. Iconectiv, which has been co-owned by private equity firm Francisco Partners since 2017, contributed SEK 1.0 billion (USD 0.1 billion) to Ericsson’s net income in 2023. The divestment aligns with Ericsson's strategy to streamline its operations and focus on its core business areas.

Under its new ownership, iconectiv is expected to continue its growth trajectory. The move will allow the company to further develop its number portability and network services offerings without the strategic constraints of its previous parent company. Ericsson’s decision reflects its ongoing efforts to optimize its portfolio and enhance shareholder value.

Key Points:

• Ericsson is selling iconectiv to Koch Equity Development LLC.
• The sale will generate approximately SEK 10.6 billion (USD 1.0 billion) in cash for Ericsson.
• A one-off EBIT benefit of SEK 8.8 billion (USD 0.8 billion) is anticipated upon transaction closure.
• The transaction is subject to regulatory approval and expected to complete in the first half of 2025.
• Iconectiv has been a part of Ericsson since 2012 and has co-ownership with Francisco Partners since 2017.

"By divesting iconectiv, we are enabling the company to pursue its growth ambitions under new ownership while streamlining our focus on core areas," said Börje Ekholm, CEO of Ericsson.

• iconectiv, which is based in Bridgewater, New Jersey, was founded as Bellcore in 1984. The company changed its name to Telcordia in 1999. 
• iconectiv is known as the global leader in providing numbering solutions and previously designated by the U.S. Federal Communications Commission to serve as the Local Number Portability Administrator in the U.S.
• In 2012, Ericsson acquired Telcordia for $1.5 billion in cash from Providence Equity Partners and Warburg Pincus.
• In 2017, Francisco Partners invested US$200 million to acquire a 16.7% ownership in iconectiv, an independent subsidiary owned by Ericsson that develops connectivity solutions used by more than 1,200 service providers, regulators, enterprises, and content providers worldwide.

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Archtop Fiber picks Render to accelerate rollout in Hudson Valley

Render Networks announced a partnership with Archtop Fiber to expedite the deployment of high-speed, reliable, and affordable fiber internet across underserved markets in the Northeast U.S. This collaboration aims to enhance efficiency through Render’s network construction management technology, which will streamline the entire process from construction to operations. 

Render Networks, based in Melbourne, Australia, offers a construction management platform optimized for fiber network deployment, focusing on digitizing geospatial data flow in real-time to enhance the efficiency of network construction and management.

Archtop Fiber is headquartered in Kingston, NY in the Hudson Valley region. The company is investing up to $350 million to build out their fiber network in the Hudson Valley area, including Ulster, Sullivan, Dutchess, Columbia, Greene and Orange Counties in New York

• Render Networks provides construction management technology to accelerate fiber deployment.
• Archtop Fiber focuses on underserved markets in the Northeast U.S., offering multi-gig services.
• The partnership will enhance efficiency, driving faster network build-out and improved operations.
• Render’s solution integrates with VETRO Fibermap for seamless fiber management.

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Sterlite to Appeal Verdict in Prysmian Lawsuit

Sterlite Technologies has decided to appeal a recent federal district court verdict in a lawsuit filed against it by Prysmian Cables & Systems. STI asserts that the verdict is not supported by the evidence and testimony presented during the three-year case and believes the lawsuit was initiated for anti-competitive reasons. The court dismissed all but two of Prysmian’s claims against STI.

Earlier this month, a jury in South Carolina awarded $96.5m in damages to Prysmian Cables.

STI emphasized its longstanding global presence in the optical manufacturing industry, with over 700 patents and ten manufacturing facilities worldwide. The company remains committed to expanding its U.S. operations and continuing its involvement in federally funded and private fiber broadband projects across the country. STI’s leadership reiterated their dedication to the U.S. market and to upholding high ethical standards as they move forward with their appeal.

Key Points:

• STI to appeal federal court verdict in a lawsuit filed by Prysmian Cables & Systems.
• Court dismissed all but two of Prysmian’s claims during the three-year litigation.
• STI has a strong global presence with 700 patents and ten manufacturing facilities.
• The company is committed to expanding its U.S. operations and participating in broadband projects.
• STI continues to support its U.S. employees, distributors, and customers.

“We believe the verdict is not supported by the testimony and evidence presented at the trial and intend to appeal and vigorously pursue all available post-trial remedies,” said Ankit Agarwal, Managing Director, STL.

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Quantum Circuits Secures $60M or Error-Detecting Qubits

Quantum Circuits, a spinout from Yale University specializing in superconducting quantum computing, has closed its Series B funding round with more than $60 million. This final investment round aims to advance the company's efforts to commercialize its quantum systems, which feature an industry-first: a powerful qubit with built-in error detection, addressing one of the critical challenges in quantum computing—error correction.

The funding round was led by ARCH Venture Partners, F-Prime Capital, Sequoia Capital, and Hither Creek Ventures, with participation from several other investors including Canaan Partners and In-Q-Tel. The new capital follows the recent hiring of Ray Smets as President and CEO, and will support the company's go-to-market plans and customer engagement strategies.

Investment Total: Over $60 million in Series B funding.

Lead Investors: ARCH Venture Partners, F-Prime Capital, Sequoia Capital, Hither Creek Ventures.

Technology Focus: Superconducting quantum computing with built-in error detection.

Recent Leadership: Ray Smets appointed as President and CEO.

Core Innovation: Industry-first dual-rail qubit with error detection, aimed at scalable, reliable quantum computing.

"By putting the power of error detection and real-time control into the hands of algorithm developers, we will accelerate their ability to create new solutions and achieve better results needed for commercial applications," said Ray Smets, CEO of Quantum Circuits.

https://quantumcircuits.com/quantum-circuits-secures-series-b-investment/

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Key Observations from Cisco's Q4 2024 Analyst Call

 Following Cisco Systems' release of its financial results on August 14th, key observations from the subsequent market analyst call provide insight into the company’s performance, strategic shifts, and future outlook. Cisco reported strong fourth-quarter results for fiscal year 2024, with $13.6 billion in revenue, surpassing its guidance range. The company demonstrated robust demand across its product lines, particularly in security, AI infrastructure, and observability, while also outlining a strategic restructuring plan aimed at driving growth in high-priority areas such as AI, cloud, and cybersecurity.

During the call, Cisco execs highlighted robust performance in its security, AI infrastructure, and observability segments. The integration of Splunk into Cisco's broader portfolio was a significant contributor to this success, with Splunk adding $960 million in revenue for the quarter. Cisco's gross margin reached 67.5%, the highest in 20 years, reflecting the strong impact of this acquisition. The company also announced a strategic restructuring plan that includes a 7% workforce reduction, aimed at reallocating resources toward high-growth areas such as AI, cloud, and cybersecurity.

A notable theme throughout the call was Cisco's focus on AI. The company has crossed $1 billion in AI-related orders from web-scale customers and expects an additional $1 billion in fiscal year 2025. Cisco's AI-driven products, including Hypershield, are expected to enhance its position in the market as enterprises increasingly modernize their infrastructure to support AI applications. The company also emphasized the normalization of customer inventory levels, signaling the end of a challenging period of inventory digestion.

Some observations from the call:

Subscription Revenue: Subscription revenue accounted for 56% of Cisco's total revenue in Q4 2024.

Splunk Contribution: Splunk integration contributed $960 million in revenue for Q4, with continued double-digit ARR growth.

AI Infrastructure Investments: Strong demand for AI-related infrastructure, with double-digit growth in data center switching.

Security Product Orders: Security product orders grew by double digits, driven by competitive wins and new solutions like XDR and Secure Access.

Wireless Order Growth: Wireless product orders exceeding $1 million increased by over 20% year-over-year.

Gross Margin: Cisco achieved a product gross margin of 67% and a services gross margin of 70.3% in Q4.

Operating Cash Flow: Cisco generated $3.7 billion in operating cash flow during Q4 2024.

Shareholder Returns: Cisco returned $3.6 billion to shareholders through dividends and share repurchases in Q4, totaling $12.1 billion for FY24.

Public Sector Demand: Public sector demand increased by 20% year-over-year, with strong federal spending in the U.S. and growth in APJC (Asia Pacific, Japan, and China).

Enterprise Demand: Enterprise demand rebounded with 13% growth, showing strength across all geographies, particularly in APJC.

Service Provider and Cloud: Service provider and cloud product orders grew by 5%, with notable strength in EMEA (Europe, Middle East, and Africa).

AI Orders: Cisco secured over $1 billion in AI-related orders from web-scale customers and expects another $1 billion in FY25.

Platform Deals: Cisco signed several nine-figure platform deals, including a significant agreement with a global logistics company to modernize its AI-powered supply chain.

Observability Growth: Observability product revenue grew 41% year-over-year, with contributions from Splunk, ThousandEyes, and Cisco’s observability suite.

Networking Segment: Cisco's networking segment revenue declined by 28% year-over-year, impacted by comparisons to a strong Q4 2023 driven by backlog clearance.

Hypershield Launch: Cisco introduced Hypershield, an AI-native cybersecurity solution, expected to be available in the fall of 2024.

R&D Focus: Over 50% of Cisco’s R&D spend is now focused on AI, cloud, and cybersecurity.

AI-Specific Orders: Cisco's partnerships with top hyperscalers are driving AI-related orders, including design wins that are expected to convert into significant revenue.

Customer Inventory Levels: Cisco confirmed that customer inventory levels have normalized, ending a period of inventory digestion that had affected order flow.

Long-Term Revenue Headwind: Cisco acknowledged a revenue headwind for FY25 due to a strong backlog shipment in Q1 FY24, which will not be repeated.

Global Revenue Performance: Revenue growth was observed across all geographic segments, with the Americas up 15%, EMEA up 12%, and APJC up 16%.

Product Recurring Revenue: Product annual recurring revenue (ARR) grew by 43% with Splunk and by 9% excluding Splunk.

Sales Strategy Shift: Cisco's sales strategy is increasingly focused on cross-portfolio sales, leveraging the combined strengths of Cisco and Splunk to win large enterprise deals.

Workforce Reduction: The restructuring plan, impacting approximately 7% of the workforce, or 7,000 employees, is aimed at reallocating resources toward AI, cloud, and cybersecurity initiatives. Some of the restructuring involves moving some operations to lower-cost location.

Fiscal Year Guidance: For fiscal year 2025, Cisco expects revenue in the range of $55 billion to $56.2 billion, with non-GAAP EPS between $3.52 and $3.58.

A replay of the call is available on the company's investor relations web site.

https://investor.cisco.com/home/default.aspx

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ZTE Sees 4.8% Profit Increase in H1 2024, Expands AI and 5G

ZTE Corporation announced its financial results for the first half of 2024, reporting revenue of RMB 62.49 billion (approximately USD 8.63 billion), a 2.9% increase year-on-year, and a net profit of RMB 5.73 billion (approximately USD 791 million), up 4.8% from the same period last year. Despite global challenges, ZTE experienced significant growth in its government-enterprise and consumer businesses, with revenues rising by 56.1% and 14.3%, respectively. The company also invested heavily in research and development, with R&D expenses totaling RMB 12.73 billion (approximately USD 1.76 billion), representing 20.4% of its operating revenue.

ZTE continued to innovate in the connectivity and computing sectors, achieving strong international growth and expanding its presence in emerging technologies such as AI, 5G-A, and optical networks. The company remains focused on enhancing its market competitiveness and is committed to further strengthening its digital and intelligent infrastructure. As ZTE advances its global strategy, it aims to build on its success by pursuing new opportunities and partnerships across various sectors.

• H1 2024 revenue: RMB 62.49 billion (approx. USD 8.63 billion), up 2.9% year-on-year.
• Net profit: RMB 5.73 billion (approx. USD 791 million), a 4.8% increase from the previous year.
• Government-enterprise and consumer business revenues grew by 56.1% and 14.3%, respectively.
• R&D expenses reached RMB 12.73 billion (approx. USD 1.76 billion), 20.4% of operating revenue.
• Significant focus on AI, 5G-A, and optical networks.

“We remain committed to technological innovation and the synergy of ‘connectivity + computing,’ contributing to stable overall performance and growth,” stated a ZTE spokesperson.

https://www.zte.com.cn/global/about/news/zte-reports-h1-revenue-of-rmb-6249-billion-and-net-profit-of-rmb-573-billion.html

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Deutsche Telekom IoT subsidiary joins Bridge Alliance

Deutsche Telekom’s IoT subsidiary has joined the Bridge Alliance, a business consortium of 35 mobile communications companies spanning Asia Pacific, the Middle East, Africa, and now Europe. Bridge Alliance offers connectivity and integrated IoT/M2M services to its members, enabling flexible solutions tailored to international customer needs. Deutsche Telekom, now the first European telecommunications company in this alliance, integrates its IoT subsidiary within T Business, its business customer division.  

By joining Bridge Alliance, Deutsche Telekom expands its reach, providing global companies with seamless access to the Asia-Pacific region. This partnership marks a significant step in Telekom’s IoT division’s strategy to become a global connectivity provider.

“We are very pleased to now be a strong partner for the Bridge Alliance. We are pooling the know-how and technical expertise of all members. Together, we always offer our customers the best connectivity solution for their global challenge,” emphasizes Dennis Nikles, Managing Director of Deutsche Telekom IoT. “For companies from the Asian region, it is now even easier to do IoT business in Europe. This is particularly interesting for the growing market of Asian electric vehicles in Europe. But European customers also benefit. A strong global offering - all under one contract, one management and one globally standardized service.” Local partners in the countries facilitate local customer support.

iot.telekom.com

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