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Supply Chain Experts Share Analysis on New US Census Bureau Report

To prominent supply chain industry analysts weigh in on a new U.S. Census Bureau report showing that overall retail sales in April rose by 51.2% year-over-year.Kearney’s Michael Brown and Coresight Research’s Deborah Weinswig shared their insights with SCMR in an interview.The Census Bureau’s Advance Monthly Sales for Retail and Food Services show a slow but steady return to normalcy, says Michael Brown.He is a partner in the consumer practice of management consultant, Kearney, and co-author of The Future of Shopping Centers and The Future of the Mall.  “Dramatic increase in apparel and food service sales vs. last year foreshadow what is yet to come this summer as mask mandates are lifted and the country starts to reopen,” he says. Brown also noted that vacations, back to work and back to school will fuel demand and sales in apparel and general merchandise. However growing supply chain challenges throughout the country and conservative planning by retailers could limit how much of that demand can be satisfied.“Retailers need to review forecasts and inventory commitments for Holiday 2021 which could be a blockbuster,” he concluded. “Waiting to see what happens this Spring will be too late for retailers to react”  Deborah Weinswig, CEO and Founder of Coresight Research, a global advisory and research firm specializing in retail and technology, observed that despite numbers being largely flat from March, April’s sales were a positive sign for retail recovery this spring and summer.

“Growth was of course very strong year over year from last April, when the pandemic caused a substantial slide in spending, but even looking to April 2019 this month stacks up well,” she said.

Overall, their measure of retail sales (which is unadjusted sales excluding food service, auto and gas) rose 22.2% from April 2019. Plus, strong March spending was driven by government stimulus checks, so keeping pace with a month where much of the country got a $1,400 check is a pretty good performance.“Particularly of note was the growth of nonstore retail sales, which were up 14.8% from last year’s values (not adjusted),” said Weinswig.

She added that that it was pretty impressive considering nearly everyone was locked in their homes and switching to online spending last April. Some expected a retrenchment of online sales penetration this year, but this, along with the strong growth of e-commerce sales in the first quarter, suggests that penetration is actually likely to rise again this year.“Growth in clothing and clothing accessory store sales, one of the hardest hit sectors of the pandemic, was 3.5% from 2019 (it was 711.3% from 2020, but that comparison is a bit misleading),” she sayd.

According to Weinswig, that was something of a disappointment from March growth of 8.9% from 2019, but still solid. It just brought the sector back down to reality after that strong month where people seemed to dash out to spend stimulus checks on clothes- the recovery in this sector is going to be slower than those March numbers might have given some people hope for, but it is definitely underway and should continue.“Finally, it will be interesting to watch going forward how the electronics and appliance sector copes with growing concerns over chip shortages for all of their electronic components,” she said.

“The auto manufacturing industry has already been hit by the shortage, and the high consumer demand for electronics that drove 12.4% growth from 2019 values in this sector (and likely even greater growth in purchases of electronics from retailers that are not classified in this sector) could soon be at odds with a supply shortage.

Espey Mfg. & Electronics Corp. reports third quarter results

SARATOGA SPRINGS, N.Y., May 17, 2021 (GLOBE NEWSWIRE) — Espey Mfg. & Electronics Corp. (NYSE American: ESP) announces results for the first nine months of fiscal year 2021. Net sales for the third quarter of fiscal year 2021, January 1 to March 31, 2021, were $4,205,068, compared with last year’s third quarter net sales of $6,191,300. Net loss for the quarter was $(1,070,114), $(0.44) per diluted share, as compared to net loss of $(103,765), $(0.04) per diluted share for the same quarter last year. For the first nine months of fiscal year 2021, July 1 to March 31, 2021, net sales were $18.4 million, compared with $19.4 million for the first nine months of fiscal year 2020. Net loss for the period was $(1,061,297), $(0.44) per diluted share, compared with net income of $206,975, $0.09 per diluted share, for the same period last year. The backlog for the Company was approximately $67.3 million at March 31, 2021, compared with last year’s backlog of $59.8 million at March 31, 2020. New orders in the first nine months of fiscal year 2021 were $30.8 million, compared with new orders in the first nine months of fiscal year 2020 of $33.6 million. Mr. Patrick Enright, President and CEO, commented, The current quarter results reflect continuing issues associated with the pandemic’s impact on the industries we service. Direct impacts include the write-off of inventory under a commercial airline industry contract partially written down last quarter. We also incurred additional, unplanned investment in a new development program for submarines. A major subcontractor increased its cost to supply a critical component for the first production deliveries. This one-time increase was absorbed by Espey in order to remain a supplier for the submarine class over the coming decade. In addition, supply of electronic components, which were already in short supply prior to the pandemic, now have lead times stretching out to over a year, which moves revenue recognition into future quarters. Unfortunately the pandemic also hit closer to home for us. Nearly a year into the pandemic, Espey suffered a COVID 19 outbreak in our facility. Following governmental guidelines, Espey closed the facility for ten days to allow the outbreak to run its course, but the impacts to our production line are still being felt more than a month later. Based on the direct and indirect impacts the pandemic had on Espey in Q3, we currently believe annual sales will be lower than prior year sales and earnings-per share will be lower than the prior year, each reflecting a decrease from the original plan. However, new order bookings are expected to exceed $40 million for the current fiscal year and our backlog remains strong at over $67 million as of March 31, 2021. Our customers, suppliers and the end users of our defense products are coming together in a collaborative environment to identify and address the common issues we are all facing. The challenges encountered over this fiscal year are not unique to Espey. The diversity of our offerings, and the relationships built over the last few years continue to allow our backlog to grow to record levels. We are positioned well for the coming fiscal years with stable programs and dedicated customers. We recognize and appreciate the continued support we have from our investors, and we are preparing to emerge from the challenges of the pandemic stronger than we have ever been. Espey’s primary business is the development, design, and production of specialized military and industrial power supplies/transformers. The Company can be found on the Internet at www.espey.com. For further information, contact Mr. David O’Neil (518)245-4400. This press release may contain certain statements that are “forward-looking statements” and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent the Company’s current expectations or beliefs concerning future events. The matters covered by these statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those set forth in the forward-looking statements. The Company wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made.  

Chip shortage or crisis? Semiconductor issue illustrates the difference

On the Transmission show this week, we speak with Dan Hearsch, managing director at AlixPartners, about the difference between a shortage and a crisis. In the auto supply chain world, that distinction means a lot as automakers continue to scramble to source the semiconductor chips they need to keep building cars. Hearsch told us that the acute crisis side of the chip shortage is peaking right now, and should be over in the next few weeks or maybe months. As for the overall shortage, well, that’s going to last a lot longer.

Look for our discussion with Hearsch in your podcast feeds Tuesday (sign up here if you haven’t already) and read on for more details about where AlixPartners sees things going.

AlixPartners: Chip shortage will cost automakers $110 billion in 2021

The chip shortage could have a $110 billion impact on the auto industry this year. That’s the prediction from AlixPartners, which issued a new report on the situation late last week. The analyst firm’s previous estimate, issued in January, was that the lack of silicon would hit the industry’s revenues for around $61 billion this year. Looking at more recent data, AlixPartners now thinks automakers will build around 3.9 million fewer vehicles this year, resulting in a global light-vehicle production for 2021 of around 80.7 million units.

The chip shortage has hit everyone, as we know, and AlixPartners said this situation is causing automakers to focus on “supply-chain resiliency” in the long term so that similar disruptions can be avoided in the future. Automakers are cutting out middlemen suppliers and negotiating with chip manufacturers directly, Mark Wakefield, co-leader of AlixPartners’ global automotive practice, told Reuters. “These things are shocked into existence,” he said.

Ford redesigning some components to handle more ‘accessible’ chips

Speaking at Ford’s online annual shareholder meeting Thursday, CEO Jim Farley said the chip shortage could cost the automaker $2.5 billion this year and the company will probably build just half as many vehicles in the second quarter of 2021 as it planned. That’s the kind of shock, in Wakefield’s words, that makes you rethink how things are done. Ford is doing just that by redesigning some of its parts so the company can use what Farley called “more accessible” semiconductor chips.

Currently, Reuters said, the majority (around 60%) of the chips that Ford uses are 55 nanometers or larger. Farley said these “mature nodes” are difficult to acquire right now, which is why Ford is looking at using other types of chips.

“Not only are we redesigning a lot of our components to work with chips that are more accessible … but we think we need to look at buffer stocks, actual direct contracts with some of the foundries,” Farley said at the meeting, according to Reuters. “We think that’s going to be a really critical approach to our supply chain as we get more electronic components.”

Changing the supply chain doesn’t mean just one thing

The evolving automotive supply chain — and it is evolving, perhaps more than casual observers are aware — is forcing companies to rethink best practices when it comes to getting cars out of the factory and into customer hands. Some are focusing on making their supply chains more independent while others are trying to find more ways to work together. No one says both approaches can’t be right, depending on the situation.

VW calls batteries ‘the heart’ of EVs, moves more production in-house

Volkswagen, for example, fits into the first category. The German automaker issued a press release Monday talking about the battery system that lies “at the heart” of the company’s new electric vehicles, the ID.3, ID.4 and ID.4 GTX.

The reason this may matter to Transmission readers is because VW is taking more control of the battery production process, calling packs a “core component.” VW knows that building its own batteries is vital as the EV industry moves forward, and Thomas Schmall, member of the Group Board of Management for Technology and CEO of Volkswagen Group Components, said in a statement, “The battery is the technical heart of the electric vehicle as it determines driving pleasure, costs, range and charging experience. For this reason it plays a key role for ensuring sustained customer satisfaction in our Group brands.”

When it started building the e-Golf a decade ago, VW used cells provided by outside suppliers like Samsung and Panasonic. VW still uses outside cells for its current generation of EVs — LG Chem provides the cells for the ID.4, for example — and puts the packs together at the Volkswagen Group Components facility in Braunschweig, Germany. VW also makes EV battery packs at its Foshan and Anting locations in China, with Chattanooga, Tennessee, and Mlada Boleslav, Czech Republic, soon to be added to the list. But bigger battery plants are on the way.

Just before VW held its Power Day in March, it told its cell suppliers in South Korea that their pouch cell technology would not be a part of VW’s upcoming unified prismatic battery plans. VW will still require cells and other battery components from suppliers, but it is increasing its direct involvement in the production process. The most notable change came in VW’s announcement that day in March when it said it would build six battery “gigafactories” in Europe with a total production capacity of 240 GWh by the end of the decade.

For semiconductor chips, collaboration is key

In contrast to VW’s “we want more independence” moves on the battery front, we can point to an announcement from the largest global trade association for the design and manufacture of semiconductors, SEMI, and the think tank Center for Automotive Research (CAR). SEMI and CAR signed a memorandum of understanding (MOU) last month to explore “increased supply chain collaboration between the semiconductor and automotive industries.”

CAR said this week that with electronic systems becoming critical differentiators in vehicles, there is value in having automakers, suppliers and semiconductor manufacturers work together.“The result” of this increased collaboration “is intended to help connect larger cross sections of the supply chains and minimize the impact and risk of future chip shortages and oversupply,” CAR said.

“This MOU provides vehicle OEMs with access to innovation, the ability to influence technology direction and pace, along with greater visibility into global supply chain developments,” said Dave Anderson, president of SEMI Americas, in a statement. “Working with CAR will expand the cross-industry collaboration that is part and parcel to our automotive electronics and mobility activities, helping SEMI members in the global electronics design and manufacturing supply chain to better serve their automotive customers.”

What both of these approaches have in common is that they recognize the true value of understanding the many levels of a supply chain. As Mary Buchzeiger, CEO of metal parts supplier Lucerne International, told Automotive News over the weekend, “There’s not enough transparency in supply chains. If you get down to the nth degree of a supply chain and there’s one supplier that can’t supply a little piece of foam that goes into some large assembly, then you’re shutting down the assembly plant.”

Air Force, Navy Put Raytheon’s New AMRAAM Variant Through Free-Flight Tests

AMRAAMA joint U.S. Air Force-Navy program office tested new guidance hardware of Raytheon Technologies’ Advanced Medium-Range Air-to-Air Missile at a live fire demonstration that took place Wednesday at Point Mugu Sea Test Range in California.
Preliminary data from Raytheon, the AMRAAM prime contractor, showed the AIM-120D-3D variant met separation autopilot and free-flight navigation objectives during the missile shot test with an F/A-18F Super Hornet jet, Naval Air Systems Command said Thursday.
The AMRAAM JPO conducted the first shot in December as part of a developmental flight-testing phase meant to assess missile guidance, tracking and target acquisition functions.
Col. Sean Bradley, a senior materiel leader at the Air Force’s armament directorate, said data from the two free-flight shots will serve as key to form, fit, function refresh program execution.
Bradley added that the F3R aims to “address an increasing number of production challenges due to obsolescence of various electronic components within the AIM-120.”
The AIM-120D-3 system also features software updates and NAVAIR expects production deliveries to commence in 2023.

Blair Horner: The Right To Repair?

We’ve all had some version of this happen: Your cellphone refuses to boot up.  You take it to your favorite repair shop, and they tell you that they can’t get the parts to fix it.  Your choices now are either to go to an authorized repair shop and pay a lot more to get your cellphone fixed or just bite the bullet and get a new one.

US International Trade Commission Is Investigating the Industrial Espionage and Patent …

WASHINGTON & SEOUL, South Korea–(BUSINESS WIRE)–May 17, 2021–Acting on a complaint filed by Pictos Technologies Inc., The United States International Trade Commission (“Commission”) has launched a probe into industrial espionage and patent infringement by Samsung relating to digital imaging technology. This investigation by the Commission could result in an embargo of Samsung’s smartphone imports from South Korea and other countries into the United States.This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20210517005156/en/
The Commission’s decision to investigate South Korean-based Samsung, which is led by the billionaire Lee family, was prompted by a complaint filed by Pictos on October 22, 2020, under Section 337 of the Tariff Act of 1930 (insert hot link to the Pictos Complaint). The complaint alleges that Samsung Electronics Co., Ltd., Samsung Electronics America, Inc., and Samsung Semiconductor Inc.(“Samsung”) have stolen trade secrets related to the digital imaging technology used in cameras on smartphones through industrial espionage and have continued to infringe the Pictos’ patents. These actions, Pictos alleges, destroyed its business.The remedies sought by Pictos from the Commission are cease and desist orders and an exclusion order that would protect its intellectual property rights by prohibiting the importation of Samsung consumer electronic and mobile devices with infringing digital imaging components such as mobile phone handsets, tablet computers, laptop computers, digital cameras, and web-based cameras that are designed, operated, distributed, sold, or offered for sale by or for Samsung. Such an exclusion order, if fully implemented, would stop over $16 billion in imports of infringing Samsung products. The Commission is now investigating Samsung’s behavior, and a decision should be made by the end of 2021.“In this case Pictos took every reasonable precaution to protect its trade secrets from Samsung, including non-disclosure agreements,” said Vince Capone, General Counsel of Pictos. “While other major corporations such as Apple, Kyocera, LG, and Nokia have all resolved their disputes with Pictos, Samsung has refused to do so, reaping billions of dollars from its wrongdoing. The Commission must not permit the patents of U.S. Companies and their trade secrets to be wantonly stolen by foreign interests. We urge the Commission to check Samsung’s predatory behavior,” he said.About PictosPictos Technologies Inc. is a U.S. owned company based in San Jose CA and organized under the laws of the State of Delaware. Pictos is the successor in interest to ESS Technologies, which, along with its predecessors, developed and patented the technology relying on significant trade secrets. Pictos is the owner of all right, title, and interest in those trade secrets.View source version on businesswire.com:https://www.businesswire.com/news/home/20210517005156/en/CONTACT: Bart S. FisherLaw Office of Bart S. Fisher
(202) 746-7089bart—[email protected] Gormley(917) [email protected]: SOUTH KOREA UNITED STATES NORTH AMERICA ASIA PACIFIC DISTRICT OF COLUMBIAINDUSTRY KEYWORD: LEGAL PROFESSIONAL SERVICESSOURCE: Pictos Technologies Inc.Copyright Business Wire 2021.PUB: 05/17/2021 09:00 AM/DISC: 05/17/2021 09:02 AMhttp://www.businesswire.com/news/home/20210517005156/en

AMD to Keynote J.P. Morgan’s 49th Annual Global Technology, Media and Communications Conference

SANTA CLARA, Calif., May 17, 2021 (GLOBE NEWSWIRE) — Today, AMD (NASDAQ: AMD) announced that Dr. Lisa Su, president and CEO, will provide a keynote presentation at the J.P. Morgan 49th Annual Global Technology, Media and Communications Conference on Monday, May 24, 2021 at 8:45 AM ET/5:45 AM PT. A real-time video webcast of the presentation can be accessed on AMD’s Investor Relations website ir.amd.com. A replay of the webcast can be accessed within four hours after the conclusion of the live event and will be available for one year after the conference. About AMD For more than 50 years, AMD has driven innovation in high-performance computing, graphics and visualization technologies – the building blocks for gaming, immersive platforms and the data center. Hundreds of millions of consumers, leading Fortune 500 businesses and cutting-edge scientific research facilities around the world rely on AMD technology daily to improve how they live, work and play. AMD employees around the world are focused on building great products that push the boundaries of what is possible. For more information about how AMD is enabling today and inspiring tomorrow, visit the AMD (NASDAQ: AMD) website, blog, Facebook and Twitter pages. AMD, the AMD Arrow logo and the combination thereof are trademarks of Advanced Micro Devices, Inc. Other names are for informational purposes only and may be trademarks of their respective owners. Media Contact:Drew Prairie AMD Communications 512-602-4425 [email protected] Investor Contact:Laura GravesAMD Investor [email protected]         

Article from: https://www.globenewswire.com/news-release/2021/05/17/2230800/0/en/AMD-to-Keynote-J-P-Morgan-s-49th-Annual-Global-Technology-Media-and-Communications-Conference.html