The January 1 earthquake that hit the coast of Japan on January 1 caused severe damage to the Northern Coast of Ishikawa Prefecture, with the epicenter about 26 miles northeast of the town of Anamizu.  This puts the Japan Display (6740.JP) Ishikawa LCD fab approximately 55 miles from the epicenter of the 7.5 magnitude quake, and while the magnitude at that distance was closer to 5.0 to 5.5 on the Richter scale, it was enough to cause a number of semiconductor fabs nearby to be shut down for inspection, particularly the Toshiba (pvt) Kaga fab, which is ~9.3 miles south west of the JDI fab, and has given no estimate for when it might reopen.  While Japan Display has not commented on the status of the Ishikawa fab, we expect automated sensors at the fab, similar to those at the Toshiba Semiconductor fab, would have triggered an automated shutdown of sensative equipment to prevent damage and closing water and gas lines.  If the impact of the quake was limited to a general shutdown, we would expect the production loss to be limited to ~2 days and the loss of some product that was on the line when the shutdown occurred, so the overall impact to JDI, at least at this juncture, is minimal.
The semiconductor fabs in Ishikawa Prefecture, in most cases, were automatically shut down and would require full inspection before restarting.  Tower Semiconductor (TSEM), which has two fabs in Ishikawa Prefecture stated, “There was no impact or damage to the buildings and only minor damage to the facilities which had no impact on operations. The dedicated staff and response teams have worked to ensure operational safety and stability. Tools requalification is underway, combined with efforts to efficiently repair any damage to fab tools and in-line materials, while utilizing all available resources to minimize any potential disruptions to manufacturing and customer service.” 
Taiyo Yuden (6976.JP), a supplier of MLCCs with a ~5% share stated, “No injuries to our group employees have been confirmed. In addition, our group's production bases, no major damage was confirmed to the building or production equipment. Production is expected to resume after equipment inspection work is through”. No word from Global Wafers (6488.TT), who has two production facilities about 100 miles from the epicenter, although local sources indicate that wafer production was halted and the lines are undergoing full inspection, with the same for Shin-Etsu (4063.JP), although silicon wafer growth using the CZ method is very sensative to vibration and can cause uneven crystal growth or stress defects.  While 4” silicon wafers can be grown in 3 to 5 days, 8” wafers can take between 7 to 14 days, and 12” wafers between 14 to 28 days, so it will take quite a while to assess the damagefacing these wafer fabs.
All in, while the damage to smaller towns in northern Ishikawa was significant, most production facilities seem to be relatively unaffected, other than the typical automated shutdown, inspection  and restart, which we expect, for those with no significant damage, will take a few days to complete.  The loss of WIP is still unknown, and in the case of wafers production, could turn out to be a bit more significant, but it would seem that production losses will be limited to a week to 10 days on average so far.  Not a disaster for the display and semiconductor industry, but not a happy new year in Ishikawa for others.

​Over the next few weeks there will be a number of CE product releases, some of which will happen in conjunction with CES, while others will have their own release promotions.  In fact two popular Chinese smartphone brands, OnePlus (pvt) and Honor (pvt), will be announcing their newest models, the OnePlus Ace 3 and the Honor X50 GT tonight, while Oppo (pvt) is set to release  its Find X7 series on 1/8, Honor again on the 10th with the Magic 6 series, the ROG (2357.TT) 8 gaming series follows on the 16th, and the crecendo on January 18 with Samsung’s  (005930.KS) Galaxy S24 flagship smartphone series.
As always, each model will offer its unique feature set combination to entice consumers to trade in their old phones and step up to the new, but there is one feature than spans all of these smartphone brand offerings, and that is they all use one form or another of Qualcomm’s (QCOM) Snapdragon 8 chipset, although there is some expectation that the Oppo Find X7 might also offer Mediatek’s (2454.TT) Dimensity 9300.  Its early in the year, with lots of new smartphones to be released, but we have to note that at least for January, Qualcomm seems to be at the top of the hit parade as far as smartphone chipsets, although said chipset decisions were made months ago.
That said, all of the smartphone excitement will fade away quickly as Apple (AAPL) is thought to be releasing its Vision Pro XR device in the US on January 27th, finally revealing (hopefully) the details about its first venture into the AR/AV/XR world, or the world of ‘spatial computing’ as Apple calls it.  While the hardware details of the Vision Pro will be revealed this month, the $3,500 price tag will be a bit of a challenge for consumers, and we expect, with corrective optical inserts, and a number of other optional extras, the real cost will be ~$4,000.  Perhaps not enough to stop a number of super-fans that will buy anything with the Apple logo ttached, or the “I have to be the first” crowd, but the steep price will be a bit much, even for ardent iPhone fans.
Apple needs to set itself apart from other VR/AR players, particularly Meta (FB), whose seeding philosophy, while costing a bit of change, has allowed them to rule the VR space for years, so why not start high, as the price can always be reduced but rarely can increase?  It sets Apple apart while giving the psychological impression that there is some inherent value in the device itself that ‘allows’ Apple to charge such a high price, but we believe that has little to do with the hardware, and in fact, we expect the price will be justifiable if the device operates as it has been advertised.  That does njot mean that the hardware will perform, as Apple is smart enough to know that they need to make sure the quality of the hardware is a given before the dvice hits the shelves, but the Vision Pro’s ability to create a new user environment will be the key to its success.
The risk to Apple is if the user experience does not live up to expectations, the hardware is a moot point.  Apple has set a picture in the minds of potential buyers of a new concept in the user’s environment, one not dependent on games or the ‘metaverse’, but one that promises a more flexible environment thjat allows the user to do whatever they so desire (work, play, relax, socialize) more easily and more efficiently than is possible outside of the Vision Pro environment.  No longer would an analyst be struggling with multiple monitors, multiple windows, and desktops, but would have an open space as wide as necessary to work with.  Apple also promises that videos will take on new dimension and give the user visual opportunities that were not available before, all of which will operate without lag or workariounds, and that is only a piece of what the Apple marketing machine has promised or implied, and that is a lot to live up to.  Apple has had it’s big winners (iPhone, iPod, App Store) and its failures (Lisa, Butterfly keyboard, Firewire), so the Vision Pro will be a game changer one way or another, and we should know before mid-year.

In the old days, the Consumer Electronics Show was a world class event, with almost every consumer electronics company happily showing off their latest and greatest wares to an adoring public[1].  Major product announcements were made at CES, with flashbulbs popping and beautiful models handing out tote bags emblazoned with company logos or sparkly key chains with company catch  phases, but over the years the show’s visitor’s seemed to change, with many apparently more interested in collecting geegaws that they hoped would one day become valuable memorabilia, while Chinese visitors took pictures of everything.  Eventually the floor became so crowded and frenetic that companies began taking suites in nearby hotels to speak with potential customers in a more sales conducive environment, and a few decided that the competition for press coverage at the show was just not worth the expense, as a small booth (10 x 10) starts at $10,000 (non-primary location) and can run to $20,000 for a better location, while a large (40 x 40) booth in a primary location can run several hundred thousands of dollars, before the cost of shipping products, booth materials, and personnel  what can be very long distances.
Here are a few of the majors that no longer have representation at CES:
Apple (AAPL)
Huawei (pvt)
Dell (DELL)
Hewlett Packard (HPE)
Nintendo (7974.JP)
Sony (SNE)
Vizio (VZIO)
TCL (000100.CH)
Tesla (TSLA)
 
So, while we expect there will be many announcements at CES this year, it is hard to get excited about LG’s (066570.KS) new line of OLED TVs, which is almost the same as last year’s line of OLED TVs, or the three new colors for a smartphone that is rarely sold in the US.  That said, when it comes to odd CE products there is no comparison to the devices that are shown at CES, regardless of whether they actually become commercial products, and even before the show has begun, a few announcements have already caught our eye.
A few of said oddities come from LG Lab, an ‘experimental marketing arm’ of LG that is expected to help the company realize it goal of becoming a ‘smart life solutions’ company, whatever that means.  The product from LG Lab that seems to have garnered the most attention this year is a device called the DukeBox.  The DukeBox is a combination of ‘new and old’ technology, according to the marketing department, which, in reality is a ‘portable’ speaker powered by vacuum tubes (‘old’) with a transparent OLED screen (‘new’) cover.  In its normal mode the display is transparent, allowing the user to see the glowing vacuum tubes that power the speaker, while at the flick of a switch, the display can become a sort of fireplace by displaying what marketing calls a cozy fireplace.  In order to satisfy those times when listening to music while staring at glowing vacuum tubes, or watching a crackling fire image is not enough, the screen can display content, although with a bit of transparency, so as not to miss the excitement of vacuum tubes.  Not only has no price been associated with the device, but there is no guarantee that it will become an actual product, or an actual product that sells, but you have to give LG credit for taking such a large leap into the ‘smart life solutions’ morass.
But wait, there’s more…  While the DukeBox was interesting when viewed from the outer reaches of the Twilight Zone, LG Labs really took the bull by the horns when it released the original version of the ‘Bon Voyage’ last August at the global wellness festival known as Wanderlust Korea.  The Bon Voyage was a 20 meter square two story structure that one could bring (perhaps ‘tow’ would be more apt) to a desired location, and ‘spend time his or her way that blends with the surrounding environment’, although the Bon Voyage in Fig. 2 does not seem to be ‘blending’ with the environment.  The marketing literature goes on to emphasize ergonomic stairs and a feeling of openness, due to one wall being glass, but notes that the Bon Voyage comes with air conditioning, home appliances, IoT devices, and furniture, so the user can maintain a comfortable lifestyle.
But wait, there’s even more…  LG Labs has decided that the Bon Voyage was not quite able to maintain the ‘life quality at home into nature’ and redesigned the Bon Voyage for this year’s CES.  The newly designed Bon Voyage is now the size of a camper (~6.5’ wide x 7.2’ high x 12.5’ deep) and is equipped with a bed, refrigerator, electric stove, water purifier, Styler (steamer to remove clothing wrinkles) and a shoe steam cleaner.  The less bulky size allows the Bon Voyage to be connected to a car and as a place your weird uncle can stay during the holidays.
While we are not choosing LG devices for any particular reason, and give credit to the company for at least trying to push the envelope a bit (We wonder what happened to last year’s “StandbyMe” battery-operated portable TV?), we are not sure why someone might want a transparent speaker, and a fancy camper with a shoe deodorizer is still a camper.  That said, LG is a big corporation with lots of R&D dollars to spend, so why not spend it throwing spaghetti against the wall to see if it sticks?  It has to be better than calling last year’s smartphone color ‘graphite’ titanium gray this year, last year’s ‘lavender’, this year’s titanium violet, and last year’s ‘phantom black’, this year’s (you guessed it…) Titanium Black.
 


[1] You must be in the CE biz in some way to gain entrance.