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STMicroelectronics N.V. reported U.S. GAAP financial results for the third quarter ended September 30, 2023. ST reported third quarter net revenues of $4.43 billion, gross margin of 47.6%, operating margin of 28.0%, and net income of $1.09 billion or $1.16 diluted earnings per share.
Jean-Marc Chery, ST President & CEO, commented:
- “Q3 net revenues of $4.43 billion came in above the midpoint of our business outlook range, and Q3 gross margin of 47.6% was slightly above guidance.”
- “Q3 net revenues increased 2.5% year-over-year. As expected, the revenue performance was driven mainly by continued growth in Automotive, partially offset by lower revenues in Personal Electronics.”
- “On a year-over-year basis, gross margin remained stable at 47.6%, while, as expected, operating margin decreased to 28.0% from 29.4% and net income was stable at $1.09 billion.”
- “First nine months net revenues increased 11.1% year-over-year, driven by growth in ADG and MDG Product Groups, partially offset by a decline of AMS Product Group. Operating margin was 27.6% and net income was $3.14 billion.”
- “Our fourth quarter business outlook, at the mid-point, is for net revenues of $4.30 billion, declining year-overyear and sequentially by about 3%; gross margin is expected to be about 46%.”
- “The midpoint of this outlook translates into full year 2023 revenues of about $17.3 billion, representing 7.3% year-over-year growth and a gross margin of about 48.1%.”
Original – STMicroelectronics
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As expected, the business performance of Siltronic AG in Q3 2023 was marked by weaker demand from the semiconductor industry. Quarterly sales were EUR 349.1 million, 13.5 percent lower than the previous quarter (Q2 2023: EUR 403.7 million).
Despite a noticeable decline in wafer volumes, sales prices continued to be stable. Thanks to this development, the EBITDA margin in the reporting quarter remained at a solid level of 28.4 percent and even reached 29.6 percent after nine months. As the Executive Board expects a slight improvement in Q4 compared to Q3, the annual outlook is confirmed and specified within the communicated range: Group sales for the financial year 2023 are expected to be between 15 and 17 percent below the previous year’s value (exchange rate EUR/USD 1.10), and the EBITDA margin is expected to reach a value between 28 and 30 percent.
Driven by the megatrends artificial intelligence, digitalization, and electromobility, Siltronic is preparing for the next growth phase. The company is well-prepared for this with the expansion of global production capacities in Singapore and investments to improve the product mix in Freiberg.
“Despite the expected decline in wafer demand, Siltronic achieved a solid EBITDA margin of 28.4 percent in Q3. Thanks to the continued stable sales prices for our wafers, we are confident in achieving a respectable EBITDA margin between 28 and 30 percent for the full year. To further support the expected growth in the semiconductor industry in the coming years, we are investing in our new fab in Singapore and are close to producing the first wafers,” commented Dr. Michael Heckmeier, CEO of Siltronic AG, on the development.
Business Development in Q3 2023
Siltronic generated sales of EUR 349.1 million in Q3 2023, down by 13.5 percent compared to the previous quarter (Q2 2023: EUR 403.7 million). After nine months, the company reported sales of EUR 1,157.2 million, down 13.2 percent year-on-year (Q1-Q3 2022: EUR 1,333.2 million). This development was due to the lower wafer area sold. Sales prices remained stable compared to the previous periods and FX changes also had no
significant impact.Cost of sales decreased by 9.7 percent in Q3 2023 compared to the previous quarter and decreased by 2.7 percent in the first nine months of 2023 compared to the period January to September 2022. The decline in sales was more pronounced than the reduction in cost of sales, both quarter-on-quarter and year-on-year. In the quarterly comparison, this is mainly due to increased depreciation.
In a year-on-year comparison, the most important reasons for the disproportionately low reduction in cost of sales are a reduced dilution of fixed costs, higher depreciation and cost increases in labor costs, raw materials and supplies. As a result, the gross profit fell by EUR 25.4 million compared to the previous quarter and by EUR 151.9 million compared to the previous year. The gross margin fell from 33.4 percent to 25.3 percent year-on-year. Q3 includes positive currency effects of EUR 9.9 million (Q2 2023: EUR 6.3 million), which are shown in the balance of other operating income and expenses.
EBITDA in Q3 was EUR 99.1 million and thus EUR 19.5 million below the previous quarter (Q2 2023: EUR 118.6 million). The EBITDA margin remained at a good level of 28.4 percent (Q2 2023: 29.4 percent). After nine months, Siltronic reported EBITDA of EUR 342.8 million (Q1-Q3 2022: EUR 503.5 million – comparable: EUR 453.5 million) and an EBITDA margin of 29.6 percent (Q1-Q3 2022: 37.8 percent – comparable: 34.0 percent). It should be noted that a one-off termination fee of EUR 50.0 million was received in Q1 2022 as a result of the failed tender offer by GlobalWafers.
Due to the lower EBITDA and higher depreciation and amortisation, EBIT amounted to EUR 46.4 million in Q3 (Q2 2023: EUR 70.3 million) and to EUR 194.5 million after the first nine months (Q1-Q3 2022: EUR 370.8 million). Net profit for the quarter was EUR 35.1 million (Q2 2023: EUR 61.4 million) and earnings per share were EUR 1.10 (Q2 2023: EUR 1.83). Net income for the period from January to September was EUR 169.0 million (Q1-Q3 2022: EUR 315.8 million) and earnings per share of EUR 5.13 after EUR 9.46 in the same period of the previous year.
Continued good balance sheet quality as a basis for financing investments
With an equity ratio of 49.3 percent as of September 30, 2023 (December 31, 2022: 51.0 percent), Siltronic continues to have a good balance sheet quality. In the first nine months of the financial year, EUR 51 million more customer prepayments were received than refunded. In addition, the last tranche of a loan to finance our investments was drawn in Q3, as planned.
“Our balance sheet reflects a favourable equilibrium, as about half of our capital is equity. The financing of our new fab in Singapore is based on a broad foundation. This consists of high customer prepayments, which were negotiated within the framework of the long-term agreements concluded. In addition, the financing is based on Siltronic’s sustainable and solid cash flows and the concluded debt financing,” adds Claudia Schmitt, CFO of Siltronic AG.
Cash and cash equivalents and financial investments fell by EUR 542.8 million to EUR 508.1 million in the first nine months of 2023. This was due to payments for capital expenditure including intangible assets of EUR 904.6 million for the construction of the new 300 mm fab in Singapore and the distribution of the dividend to the shareholders of Siltronic AG of EUR 90.0 million.
The cash outflows were offset by cash inflows in the same period of EUR 324.3 million from the cash flow from operating activities. Due to the high investments, the net cash flow, which does not take into account the inflows and outflows from prepayments, was negative at EUR -631.3 million, as expected. This primarily led to Siltronic reporting net financial debt of EUR -315.7 million at the end of September 2023.
Outlook 2023 confirmed and specified: Group sales expected to be 15 to 17 percent below the previous year and EBITDA margin between 28 and 30 percent
In view of the Q3 2023 development, which is in line with expectations, the Executive Board has confirmed the full-year guidance communicated in H1 2023 and confirmed it at the upper end of the range. Even though the end of the weaker demand due to inventory corrections by chip manufacturers and their customers is not expected in Q4 2023, sales in Q4 2023 are expected to be higher than in Q3.
Therefore, Siltronic continues to expect wafer volumes to decline by around 15 percent year-on-year in 2023. Sales prices are expected to remain stable. Accordingly, the full-year guidance has been concretised and group sales are now expected to be 15 to 17 percent (exchange rate EUR/USD: 1.10) below the previous year’s record level of EUR 1,805.0 million. We expect that the increased inventories will also have an impact into the year 2024.
The EBITDA margin in 2023 is also forecast to be significantly lower at 28 to 30 percent, but at the upper end of the range guided in July. In addition to the reduced sales volume, which at the same time leads to a lower dilution of fixed costs, higher costs of less than EUR 40 million due to inflation as well as the aforementioned one-time effect from the previous year contribute to the decline. The stronger euro year-on-year is weighing on the operating result, but Siltronic can expect a positive result from currency hedges in 2023, after a negative contribution in the previous year. The tax rate is expected to be around 15 percent in 2023.
As already communicated in H1 2023, capital expenditure including intangible assets is expected to be at a level of approximately EUR 1.3 billion (2022: EUR 1,074 million). In 2024, Capital expenditure including intangible assets is expected to decrease significantly by more than half. Depreciation is expected to be around EUR 200 million in the financial year.
Megatrends such as artificial intelligence, digitalisation and electromobility form the basis for the expected medium- to long-term growth spurt
Due to the rapidly increasing number of end applications based on megatrends such as artificial intelligence, digitalisation and electromobility, which will lead to a noticeable increase in wafer demand, Siltronic sees great growth potential in the medium and long term. The company is systematically preparing for this by investing heavily in its global production network. The main focus of expenditure is on building up new production capacities in Singapore (FabNext). Siltronic has also invested heavily in improving its product mix. For example, the extension of the crystal pulling hall in Freiberg was successfully inaugurated in September.
Original – Siltronic
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Renesas Electronics Corporation announced consolidated financial results in accordance with IFRS for the nine months ended September 30, 2023.
Summary of Consolidated Financial Results (Note 1)
Three months ended September 30, 2023 Nine months ended September 30, 2023 Billion Yen % of Revenue Billion Yen % of Revenue Revenue 379.4 100.0 1,107.5 100.0 Operating profit 98.0 25.8 318.5 28.8 Profit attributable to owners of parent 75.3 19.9 271.1 24.5 Capital expenditures
(Note 2)21.3 63.2 Depreciation and amortization 46.9 137.3 R&D expenses (Note 3) 61.2 173.1 Yen Yen Exchange rate (USD) 142 137 Exchange rate (EUR) 156 148 As of September 30, 2023 Billion Yen Total assets 3,291.2 Total equity 2,056.4 Equity attributable to owners of parent 2,052.1 Equity ratio attributable to owners of parent (%) 62.4 Interest-bearing liabilities 710.3 Note 1: All figures are rounded to the nearest 100 million yen.
Note 2: Capital expenditures refer to the amount of capital for property, plant and equipment (manufacturing equipment) and intangible assets based on the amount of investment decisions made during the three months and nine months ended September 30, 2023.
However, the investments from Dialog Semiconductor Limited and Celeno Communications Inc. (hereinafter “Celeno”) are listed as an input basis. It should be noted that as of September 29, 2023, Celeno changed its company name from Celeno Communications Inc. to Renesas Semiconductor Design US Inc.
Note 3: R&D expenses include capitalized R&D expenses recorded as intangible assets.
Note 4: The allocation of the acquisition costs for the business combination with Steradian Semiconductors Private Limited, which was completed on October 17, 2022, has been revised at the end of three months ended March 31, 2023. This revision to the allocation of the acquisition costs has been reflected in the consolidated financial results for the year ended December 31, 2022.
Original – Renesas Electronics
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DENSO CORPORATION hosted a press conference at JAPAN MOBILITY SHOW 2023 held at Tokyo Big Sight on October 26. Shinnosuke Hayashi, President and COO introduced the strategy to maximize company’s contributions to “Green” and “Peace of Mind.”
Shinnnouke Hayashi, President and COO of DENSO CORPORATION said that it is a great pleasure that the Tokyo Motor Show, which has attracted much public attention for decades, has been renamed the JAPAN MOBILITY SHOW. This change reflects the fact that we are entering an era of creating new value by addressing various issues from the viewpoint of a mobility-centered society instead of just vehicles and by connecting people and technologies across industries. This means that DENSO must meet major challenges.
To evolve from “a Tier 1 supplier that supports the auto industry “to “a Tier 1 supplier that supports a mobility-centered society” to create value for more diverse customers, the company addresses three intiatives. To promote these three initiatives, DENSO will recruit new employees in the electrification and software field and actively shift the employees from the mature field to the electrification and software fields and strengthen about 4,000 employees during the four years from 2022 to 2025.- The contribution to the “evolution of mobility”
In the “Green” field, “the environment”, in addition to the product lineup in the “horizontal” direction to enable installation in HEVs, PHEVs, BEVs, and FCEVs, the lineup will be expanded in the “vertical” direction ranging from large systems, which link electrification products with energy management, to components, including power modules, thereby meeting the needs of various customers as BEVs proliferate and helping to achieve carbon neutrality in respective countries. In the “Peace of Mind” field, “worry-free society”, in addition to around-vehicle monitoring systems, DENSO will focus on driver status monitoring systems and cloud-based large systems, which connect with the social infrastructure. Through these efforts, the company will help eliminate fatalities.
Furthermore, DENSO will extend its commitment to the evolution of mobility to the sky to help realize more freedom of traveling and expand the possibilities of mobility.
- The challenge to “to create new value”
DENSO has been studying the possibility of developing and commercializing many technologies in non-mobility fields, including energy, food and agriculture, and the circular economy. Specifically, the company plans to market energy system products such as Solid Oxide Electrolysis Cell and Solid Oxide Fuel Cell in 2024 and beyond.
- Strengthening semiconductors and software
In terms of semiconductors, DENSO will actively invest about 500 billion yen by 2030. DENSO will triple the scale of the business from the current level by 2035. To expand production, the company must ensure stable procurement of materials. Thus, DENSO will forge strategic partnerships with various companies.
In the softaware field, the implementation phase to embody concepts, the company will accelerate the planning of electronic platform and over-the-air technology development based on user needs while strengthening partnerships with various customers and promote integrated development across companies. DENSO will increase the number of software engineers and improve their skills and integrate two group companies which have excellent proprietary technologies, into DENSO. One is NSITEXE, which specializes in the semiconductor intellectual property, and the other is AUBASS, which specializes in developing basic in-vehicle software. DENSO will double the speed of development by applying specialized AI, which incorporates company’s knowledge and experience gained through in-vehicle software.
Original – DENSO
- The contribution to the “evolution of mobility”
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“The 31st International Optoelectronics Exposition (OPTO Taiwan)”, organized by Photonics Industry & Technology Development Association, is taking place in Taipei Nangang Exhibition Hall 1 from October 25th to 27th, for a three-day technological extravaganza. As a leading company in semiconductor technology, GlobalWafers unveils its latest achievements in compound semiconductors.
At this year’s exposition, GlobalWafers features 8”N type SiC crystal growth technology, Thinning technology of 6”and 8”SiC wafers, and high-value niche products in the GaN epitaxy field, demonstrating its technical prowess honed over many years in the compound semiconductor industry. SiC crystal growth presents challenges due to the need for growth in extremely high-temperature sealed environments, with factors like hot zone design and crucible materials in crystal growth furnace adding the complexity to equipment and operations.
GlobalWafers independently designs and develops 8”SiC-specific Physical Vapor Transport Method Grower (PVT) to further reduce crystal growth costs while achieving higher material quality control. Through outstanding technical control and production efficiency, as well as continuous research and development, GlobalWafers overcomes the technical challenges of SiC crystal growth, successfully moving forward to 8 inches, providing customers with high-quality, superior-performance SiC materials.
The high hardness and brittleness of SiC make subsequent wafering process extremely challenging. Leveraging its edge in wafer processing, GlobalWafers has successfully developed SiC ultra-thin thinning technology, showcasing 6” 90µm and 8”350µm ultra-thin polished SiC wafers at the exhibition. Ultra-thin SiC wafers offer advantages in lightweighting, heat dissipation, thermal conductivity, high-frequency operation, component miniaturization, and material costs, making them an ideal choice for high-performance semiconductor devices.
GlobalWafers’ SiC wafers include 4”~ 6” semi-insulating wafers and 6”~ 8”conductive SiC wafers, offering a comprehensive range of products to cater for diverse customer needs and expand into various fields of application.
Heteroepitaxy of GaN poses various technical challenges, such as lattice mismatch, stress, and defects. GlobalWafers focuses on research and development, launching a full range of GaN heteroepitaxy products, including silicon, SiC and sapphire substrates. A variety of substrate selections can meet different requirements and expand terminal applications in an all-round way.
With its wealth of semiconductor substrate technology and years of industry experience, GlobalWafers has been able to give full play to our strengths and provide more advanced and high-efficiency solutions for the rapidly growing electric vehicle market.
Original – GlobalWafers
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MCC Semi expanded its growing auto-grade portfolio with three new 60V N-channel MOSFETs: MCU75N06YHE3-TP, MCG60N06YHE3-TP, and MCAC65N06YHE3-TP.
Leveraging split-gate trench (SGT) MOSFET technology, MCC’s new products deliver optimal performance, efficiency, and thermal management, making them the intelligent choice for a range of demanding auto applications.
With on-resistance as low as 4.8mΩ, these AEC-Q101 qualified MOSFETs guarantee optimal power flow while significantly reducing power losses.
DFN333, DFN5060, and DPAK package options enable design flexibility and compatibility with various automotive systems.
Original – Micro Commercial Components
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STMicroelectronics has released the ACEPACK DMT-32 family of silicon carbide (SiC) power modules in a convenient 32-pin, dual-inline, molded, through-hole package for automotive applications. Targeted at systems such as on-board chargers (OBC), DC/DC converters, fluid pumps and air conditioning, they deliver advantages including high power density, very compact design, and simplified assembly. The product family enhances flexibility for system designers by presenting a choice of four-pack, six-pack, and totem-pole configurations.
The modules contain 1200V SiC power switches that leverage ST’s state-of-the-art, second- and third-generation SiC MOSFET technology ensuring low RDS(on) values. The devices deliver efficient switching performance with minimal dependence on temperature to ensure high efficiency and reliability at converter system level.
Leveraging ST’s proven, robust ACEPACK technology, the modules reduce overall system- and design-development costs while ensuring outstanding reliability. The package technology features a high-performance aluminum nitride (AlN) insulated substrate for excellent thermal performance. There is also an integrated NTC sensor that provides temperature monitoring for thermal protection.
The first product in ACEPACK DMT-32, introduced today with ramp-up to volume production since Q4’23, is M1F45M12W2-1LA. The M1F80M12W2-1LA, M1TP80M12W2-2LA, M1P45M12W2-1LA, M1P80M12W2-1LA, M1P30M12W3-1LA are sampling now with ramp-up to volume production starting from Q1’24.
Original – STMicroelectronics
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Infineon Technologies AG announced the closing of the acquisition of GaN Systems Inc. (“GaN Systems”). The Ottawa-based company brings with it a broad portfolio of gallium nitride (GaN)-based power conversion solutions and leading-edge application know-how. All required regulatory clearances have been obtained and GaN Systems has become part of Infineon effective as of the closing.
“GaN technology is paving the way for more energy-efficient and CO 2-saving solutions that support decarbonization,” said Jochen Hanebeck, CEO of Infineon. “The acquisition of GaN Systems significantly accelerates our GaN roadmap and further strengthens Infineon’s leadership in power systems through mastery of all relevant power semiconductor technologies. We welcome our new colleagues from GaN Systems to Infineon.”
Infineon now has a total of 450 GaN experts and more than 350 GaN patent families, which expands the company’s leading position in power semiconductors and considerably speeds up time-to-market. Both companies’ complementary strengths in IP and application understanding as well as a well-filled customer project pipeline put Infineon in an excellent position to address various fast-growth applications.
On 2 March 2023, Infineon and GaN Systems announced that the companies had signed a definitive agreement under which Infineon would acquire GaN Systems for US$830 million. The acquisition, an all-cash transaction, was funded from existing liquidity.
Original – Infineon Technologies
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The Fraunhofer Institute for Solar Energy Systems ISE has developed and suc-cessfully commissioned the world’s first medium-voltage string inverter for large-scale power plants. By feeding power into the medium-voltage grid, the “MS-LeiKra” project team has demonstrated that PV inverters are technically capable of handling higher voltage levels.
The benefits for photovoltaics in-clude enormous cost and resource savings for passive components and cables. The device lays the foundation for a new system concept for the next genera-tion of large-scale PV power plants, which can also be applied to wind turbines, electric mobility and industrial applications.
Modern PV string inverters have an output voltage of between 400 VAC and 800 VAC. Although the output of power plants is steadily growing, voltage has not yet been increased. There are two reasons for this: First, building a highly efficient and compact inverter based on silicon semiconductors is a challenge. Second, there are currently no PV-specific standards that cover only the low-voltage range (max. 1,500 VDC / 1,000 VAC).
In a project funded by the German Federal Ministry for Economic Affairs and Climate Action (BMWK), Fraunhofer ISE, in collaboration with Siemens and Sumida, has developed an inverter that enables the output voltage to be increased to the medium-voltage range (1,500 V) at 250 kVA. The key to this is the use of silicon carbide semiconductors, which have a higher blocking voltage.
The research team has also implemented a more efficient cooling concept using heat pipes, which reduces the amount of aluminum required.
Thinner cables offer huge savings potential
An average photovoltaic power plant requires dozens of kilometers of copper cables. Increasing the voltage generates significant savings potential: At today’s possible output voltage of 800 VAC, a 250 kVA string inverter requires cables with a minimum cross section of 120 mm². By increasing the voltage to 1,500 VAC, the cable cross section can be reduced to 35 mm².
This in turn cuts copper consumption by around 700 kilograms per kilometer of cable. “Our resource analyses show that in the medium term, the electrification of the energy system will lead to copper becoming scarce. Increasing the voltage allows us to save valuable resources,” says Prof. Dr. Andreas Bett, Director of the Fraunhofer Institute for Solar Energy Systems ISE.
Standards need to change
With the “MS LeiKra” project, we are leaving the scope of low-voltage (<1000 VAC / <1500 VDC) standards. There are currently no PV-specific standards for this range. This is why the project team is also working on the standards that would result from increasing the voltage.
Finding a demo project partner
Having fed power into the medium-voltage grid successfully, the research team is now looking for solar farm developers and grid operators to test the power plant concept in the field.
Besides photovoltaics, moving beyond low voltage is also of interest for other applications, such as wind turbines, where the growing system capacities also require cables with large cross sections. The same is true for the charging infrastructure for large electric vehicles and vehicle fleets, and for industrial grids, where medium-voltage inverters could save a lot of material if cable cross sections could be reduced.
Original – Fraunhofer ISE
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Toshiba Electronics Europe GmbH has launched a pair of automotive grade 40V N-channel power MOSFETs based upon their latest U-MOS IX-H process. The new devices use a new S-TOGLTM (Small Transistor Outline Gull-wing Leads) package that offers a number of advantages in automotive applications.
Automotive safety-critical applications such as steering, braking and autonomous driving systems generally require more devices than other systems to meet redundancy requirements. Here, a power MOSFET with high current density is required due to the size constraints within automotive equipment.
The new XPJR6604PB and XPJ1R004PB have a VDSS rating of 40V and the XPJR6604PB is rated for a continuous drain current (ID) of 200A (XPJ1R004PB = 160A). Both devices are rated for pulsed current (IDP) at 3x this value, 600A and 480A respectively. The 200A rating is higher than that achieved by Toshiba’s 6.5mm × 9.5mm DPAK+ package.
The new XPJR6604PB and XPJ1R004PB automotive MOSFETs use Toshiba’s innovative new S-TOGLTM package that measures just 7.0mm × 8.44mm × 2.3mm. The products are post-less and feature a multi-pin structure for the source leads that significantly decreases package resistance.
Combining the S-TOGLTM package with Toshiba’s U-MOS IX-H process gives the XPJR6604PB an on-resistance (RDS(ON) Compared to this device, the mounting area has reduced by around 55% compared while retaining the channel-to-case thermal resistance characteristics (Zth(ch-c)) – XPJR6604PB = 0.4ºC/W and XPJ1R004PB = 0.67ºC/W.
Many automotive applications are based in severely harsh environments, so the reliability of surface mount solder joints is a critical consideration. Toshiba’s S-TOGLTM package uses gull-wing leads that reduce mounting stress, improving the reliability of the solder joint.
Suited to harsh temperature environments, the MOSFETs are AEC-Q101 qualified and capable of operating at channel temperatures (Tch) as high as 175ºC.
Toshiba offers matched shipments for the devices, in which the gate threshold voltage range does not exceed 0.4V for each reel. This facilitates designs with small characteristic variations for applications requiring parallel connectivity for high-current operation.
Original – Toshiba
