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PEGACLSA_6.2V2 exam Dumps Source : Certified Lead System Architect (CLSA) 62V2
Test Code : PEGACLSA_6.2V2
Test Name : Certified Lead System Architect (CLSA) 62V2
Vendor Name : Pegasystems
: 149 Real Questions
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Pega techniques has rather distinct ‘title’ terminology from one which is popular in IT.
everybody is known as Architect ) .for many people it’s complicated. How can they have Architect with 1 12 months of event in IT??
Pega systems concerned such titles to highlight utility is build by way of configuring ,now not through establishing. There are three degrees of Pega Architects available on the market:
certified device Architect (CSA) -basic degree ,each PEGA expert should still benefit it;
certified Senior gadget Architect (CSSA) -can also be mapped to middle-senior specialist;
Lead gadget Architect (LSA) — leading professional. constantly there are 1–2 LSA per project.
As for me crucial in recognizing of seniority level are IT/Pega event, knowledge of applied sciences (Oracle tools,Programming, application server);
In Pega ‘Architect’ doesn't equal to ‘Developer’ .There are examples of projects the place all capabilities (administration, building, checking out, evaluation) are shared amongst Pega Architects. It’s feasible when the same adult combines more then one advantage. Most projects include Pega and nonPega consultants for distinctive areas which is additionally first-rate ,but not preferable as per foremost practices.
nowadays in terms of trainings Pega programs developed bendy, extended ,tree-structured direction. It will also be followed on PDN -Pega developers network web site. Your travel all the time begins from the 1st step -CSA, then that you would be able to choose the style -manager,technical professional (CSSA,LSA) ,company evaluation ,trying out and even UI expert.
this article doesn’t give any assistance on Pega undertaking stuffing as this is pretty particular person technique ,loads of elements should be measured and analyzed . i would be comfortable to discuss it additionally per demand.
Geneva, February 18, 2019 - STMicroelectronics (STM.PA), a worldwide semiconductor leader serving customers throughout the spectrum of electronics functions, has recorded cumulative income of over one thousand million units for its ST33 embedded-protection ICs.
The recognition of the ST33 household reflects the transforming into quintessential to protect information and methods in at ease cellular-buyer, smart-using, wise-industry and wise-cities functions. in response to a typical certified comfortable platform featuring state-of-the-paintings cyber coverage, the ST33 household's flexible structure has enabled ST to lead the building of latest classes of protection chips including embedded SIMs (eSIMs), embedded comfy elements (eSEs), and depended on Platform Modules (TPMs). These give hardened safety in design-in- and person-friendly kind elements, combining convenience with powerful resistance to cyber-attacks.
"ST33 chips have pushed the evolution of embedded security for the ubiquitous related wise objects equivalent to smartphones, wearables, and IoT contraptions that make contemporary world work," noted Laurent Degauque, advertising Director, cozy Microcontroller Division, STMicroelectronics. "as the first such instruments to undertake the advanced Arm® SecurCore® SC300 cozy processor, and with the expertise of their bendy structure and superior Flash know-how, the family has normally offered insurance policy that meets the highest trade requirements while enabling the mixing of recent features reminiscent of interfaces and accelerators to aid emerging use instances."
The ST33 is the embedded-security platform chosen by SIM companies, operating system developers, and essential Tier-1 manufacturers producing machine reminiscent of smartphones, wearables, safety readers, laptop PCs and servers. ST33 secure chips had been selected by using important smartphone OEMs to install new eSIM based mostly instruments, taking knowledge of a smaller and thinner WLCSP (Wafer degree Chip Scale package) equipment and GSMA-compliant Personalization-on-Wafer industrial movement.
In 2018, ST became the primary chip brand to earn the GSMA SAS-UP (safety Accreditation Scheme for UICC construction) certification to personalize ST33 eSIMs for mobiles and related IoT instruments and not using a additional programming required by means of the OEMs.
ST33 comfortable microcontrollers are available in a big range of editions offering a decision of features together with connectivity to an NFC controller, hardware accelerators for superior cryptographic services, as well as business-grade and automotive-grade qualifications.
ST is a worldwide semiconductor chief supplying clever and energy-productive items and solutions that vigour the electronics at the heart of popular existence. ST's products are discovered far and wide today, and along side their clients, we're enabling smarter using and smarter factories, cities and houses, together with the next technology of mobile and web of things gadgets.
through getting extra from know-how to get more from lifestyles, ST stands for all times.augmented.
In 2018, the business's web revenues have been $9.66 billion, serving more than one hundred,000 valued clientele worldwide. further tips can also be discovered at www.st.com.
For more information please contact:
STMicroelectronicsMichael MarkowitzDirector Technical Media RelationsMichael.Markowitz@st.com+1 781 591 0354
 ST33 equipment versions meet high safety requisites spanning cellular payments, e-government, IT and different industries, together with ISO 15408 CC EAL 5+, EMVCo, Federal assistance Processing specifications (FIPS), GSMA far flung SIM Provisioning.
This put up became contributed with the aid of a community member.
CNH Architects in Apple Valley has hired a seasoned certified indoors clothier, Ashley Klis, to provide capabilities for the firm's commercial challenge interiors.
Klis expands the firm's LEED AP credentials, which are wide. LEED is the management in energy and Environmental Design, which named Klis as an approved knowledgeable for development and development of industrial interiors and tenant areas that present a heathy, sustainable and productive work ambiance.
"Ashley is an excellent listener, and suits in smartly with their group and the company's client-based service," pointed out Quinn Hutson, a important of CNH Architects. In her old work with a nationwide company focusing on design and consulting for meals carrier, she listened to leaders for tasks in ok-12 and better training, company and business and churches.
Klis is part of a methodology to further strengthen the indoors design expertise at CNH, Hutson explains, and she or he brings enhanced capabilities in gadget and freestanding furnishings.
The interior fashion designer follows the customer's lead when settling on indoors hues, finishes and products and considers 3-D laptop drawings invaluable to assist them visualize the layout and design. She is at the moment working on assorted tasks at CNH, together with a fireplace station, corporate café, church, day care and a couple of workplace structures. Klis referred to she appreciates the range.
As a graduate of the institution of Wisconsin-Stout, she acquired a Bachelor of quality arts in indoors design. Klis is gaining added expertise via carrying on with schooling. She graduated from Lakeville excessive faculty and lives in Lakeville along with her husband, their son and daughter.
CNH Architects is a inventive, service-oriented enterprise that offers creative design solutions for the business constructing and retail areas, public sector consumers, such as cities, counties and states, and automobile facility initiatives, day care and animal care facilities. CNH has served purchasers within the Twin Cities and higher Midwest for 50 years.Get the Apple Valley-Rosemount newsletterSubscribe
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Darrin D. Peller - Barclays Capital, Research Division
Craig J. Maurer - Credit Agricole Securities (USA) Inc., Research Division
Julio C. Quinteros - Goldman Sachs Group Inc., Research Division
Timothy W. Willi - Wells Fargo Securities, LLC, Research Division
Gil B. Luria - Wedbush Securities Inc., Research Division
Good day, ladies and gentlemen, and welcome to the MasterCard PayPass Wallet Services Conference Call. My name is Catherine, and I will be your operator for today. [Operator Instructions] As a reminder, this call is being recorded for replay purposes.
I would like to turn the call over to Ms. Barbara Gasper, Head of Investor Relations. Please proceed, ma'am.
Thank you, Catherine. Good morning, and thank you for joining us either by phone or webcast today for a discussion about last night's announcement of their PayPass Wallet Services. With me on the call today is Ed McLaughlin, their Chief Emerging Payments Officer, who is joining from the CTIA Conference in New Orleans. They are only able to allocate about 30 minutes this morning for the call due to Ed's other conference commitment. However, they wanted to give you all an opportunity to hear directly from Ed about their new PayPass Wallet Services. They will then have a few minutes to address some questions.
The press release on last night's announcement can be found on the Investor Relations section of their website, mastercard.com. They have also posted some hotlinks to a few things that Ed will refer to in his remarks. Also, a replay of this call will be posted to their website for one week through May 15.
Finally, as set forth in more detail in today's release, I need to remind everyone that today's call may include some forward-looking statements about their new services based on their current expectations and beliefs. Actual performance could differ materially from what is suggested by their comments today. Information about the factors that could affect future performance are summarized at the end of their press release, as well as contained in their recent SEC filings.
With that, I'll now turn the call over to Ed McLaughlin. Ed?
Thanks, Barbara, and yes, we're calling here from CTIA in New Orleans, which if you're not familiar with, it is one of the largest global telecom events for the year. Last night, they announced the PayPass Wallet Services, and we've gotten great response so far. Also, in about 2 hours, we're going to be demonstrating the PayPass Wallet Services to probably a few thousand people as part of Gary Flood's keynote here at the conference. And this will be streamed live if you'd like to see it in action. They put the link to this. It's available up on the Investor Relations website. So about 10:20 Central, 11:20 Eastern Time, they wish to have the keynote streaming.
But first, let's take a little bit of time to follow up on any questions you may have on the wallet services announcement from last night. So I think it's probably best to start with a quick recap of what it is and who it's for.
So the PayPass Wallet Services, their new global offering from MasterCard that extends PayPass beyond the Tap & Go, the E and M and other types of commerce. With PayPass Wallet Services, it will be faster, simpler and more secure for consumers to make purchases, both in-store or online, with a click of the mouse, touch on the tablet or tap their smartphone.
The PayPass Wallet Services are comprised of 3 distinct components: the first would be is enhanced merchant payment acceptance capability, which includes both their PayPass Contactless NFC technology for in-store and a new PayPass Online checkout service for e-commerce. These provide consumers and merchants with better shopping experiences in-store and online, which will reduce queue time and helps to turn more browsers into buyers. It eliminates the need for customers' detailed bit -- to enter detailed shipping, card and other information. And that's a great benefit, particularly when you're on small or mobile script.
The PayPass acceptance benefits are also specifically designed to be very simple for merchants to integrate into their current store and online business. They accept MasterCard today. It's very easy for them to adopt the PayPass Wallet Service. So that's the merchant acceptance.
The second component is the PayPass Wallet. This will enable banks, merchants, partners to offer their own wallet to their customers without needing to build out an infrastructure. They want to enhance relationships that their partners have with their customers, not interfere with them. So for example, consumers could use the same login and applications they have today from their bank and seamlessly get great new payment capabilities and other service.
The wallet is also open so consumers will be able to use any card they have: MasterCard, Visa, American Express, others, and store their addresses, offers and other information in one familiar, convenient and secure way. And merchants adopting PayPass acceptance know there will be any number of wallets the consumers can use that will take advantage of them.
The third component is the PayPass API, which will enable partners to connect their own digital wallets into the PayPass Acceptance Network, leveraging MasterCards checkout, fraud detection and authentication services and enabling their customers to make purchases wherever PayPass is accepted, online or in-store.
And finally over time, the wallet services will be expanded to include other value-added services like their inControl alerts and spending control, MoneySend, MarketPlace offers and coupons, enhanced loyalty programs and others.
So these are the PayPass Wallet Services they just announced. And before they open up to the open question, I'd like to take a moment to address some of the specific questions that I know you have. One of the first question is always is, well, what's the distribution model? Now it sounds great, but how would I be able to get one. And as I mentioned earlier, the PayPass Wallet is designed to be white-labeled and branded by financial institutions, merchants and other partners, and this is key.
The integration services will allow issuers and their partners to connect their proprietary wallet offerings to their network and enable their customers to pay wherever PayPass Online and PayPass Contactless are accepted. Now while their primary method of distribution will be through their partners, we're actively testing the PayPass Wallet with their employees, and they will have it live later this year on paypass.com.
So consumers will be able to get PayPass simplicity and enhance security from MasterCard through any number of global partners. And I think you've seen from the announcement they have out. They can range from a Banesto, a Citibank, Bank of Montreal, Westpac, Commonwealth Bank of Australia and many others who have already signed us.
As they want to emphasize, the PayPass Wallet Services are designed to enhance, not to interfere with, the relationship their banks and other partners have with their customers today. They believe the integration model will also greatly accelerate the reach to consumers they can bring to merchants, so the merchants can take advantage of a better checkout experience online and in-store. We've been working closely with merchants to design the service, particularly to make it easier for them to implement. And you should check out some merchant testimonials, which I believe we're posting up on their YouTube channel. You can find the link to this in the Newsroom section of their corporate website.
Our acquirers are also key partners of it, along with MasterCard's DataCash and MiGS Internet Gateway and a large number of payment service providers they are already working with like Ogone, Sage Pay and CardinalCommerce. And as you've already seen with the work we're doing with Isis, with Google, with others, there will be ongoing announcements of places and partners where the PayPass services will be used with digital wallet.
Another question which came up is, so why did you go with the PayPass branding to the digital service? And the answer is pretty simple. They asked consumers. They loved the ease and convenience of Tap & Go in the physical world and wanted the same security and simplicity online and responded really well to extending PayPass into an open, online in-store wallet, particularly when they knew it was from MasterCard.
Our merchant partners also talked about the growing convergence in shopping. A term that was used a lot was omni-channel, we're not even multi-channel anymore, where consumers shop online and pick up in-store or in-store shopping online to have shipped home or any other combination in between from any digital device they may have in any account. Their converged PayPass digital wallet services provide a secure way to support any number of digital wallet, both online and in-store, which really met their needs.
And a few more that maybe on your mind. So what about the iPhone, My Kindle, tablet, other smartphones that I have today. How does my existing equipment apply? And the good news is, PayPass Online, the online shopping component, can work purely browser-based, so you can use it with anything that connects to the Internet: a PC, tablet, game systems, smart bridge, whatever device. As we've said earlier, every device will be a commerce device. This is really an infrastructure that enables it.
Now to use the PayPass Contactless in-store directly from the phone, the phone will need to be able to support and secure NFC transaction. And I think you saw last week, the PayPass ready certification program they announced, working with handset manufacturers like Samsung, HTC, Nokia, RIM and others to make sure as their new NFC-equipped smartphone come to market, they're all ready for PayPass enablement.
So you can use PayPass Online today from any smartphone or other device and upgrades your phone to use PayPass NFC in-store when you get a new one that would be PayPass certified. The key is, the integrated PayPass services will be ready for you when you are.
And of course, what's the economic model? How does MasterCard make money in all of it? And the PayPass Wallet Services we've just announced are natural extensions of their business model, optimized to digital world. First, they increase their volumes and transactions as they capture more share of consumers spend on MasterCard, particularly in the e-commerce space. Second, in the future, they add new features such as inControl and they charge for these value-added services. And they believe by delivering value to banks and making these product available for white-labeling, we'll provide on-behalf services that will get a lot of value from. And even when a competitor's card leave their wallet, we're providing value to the payment's ecosystem by providing infrastructure and routing services that make it all work. They have always been supportive of economic system, and this takes the MasterCard business model and simply extends it to support all of these new device.
And the last important question is when will all this be in the market? And as I said at their Investors Day last September, we've been working diligently on the PayPass Wallet Services for quite some time now, getting them ready for the market. As you know, innovation is a very iterative thing. And you may have seen, we've been working with partners already like American Airlines, Barnes & Noble, using DataCash and other payment service providers and are currently in beta in the U.S.
The production platform in the PayPass Wallet Services will be in-market and available to their partners in the third quarter of this year, with the United States, Canada, U.K. and Australia as the initial launch market. And as you saw in the release with partners like Swedbank, BBVA, Intesa Sanpaolo and in the announcement yesterday, other global markets will soon follow, particularly in the support of cross-border e-commerce.
So I hope I was able to give you little bit of a feel for what the wallet services are and directly address some of the questions I know you may have had.
So with that, Barbara, I think they still have some time to open it up for more questions.
Right. Thanks, Ed. At this point, they do have a little bit of time for your questions. [Operator Instructions] Catherine, you want to start the mp;A session, please?
[Operator Instructions] Your first question comes from the line of Bryan Keane from Deutsche Bank.
Bryan Keane - Deutsche Bank AG, Research Division
Ed, maybe you could just help us what differentiates the MasterCard Wallet versus V.me and the others that are out there in the marketplace?
Absolutely, and there's been so many different announcements in the marketplace. If you look at V.me, there have been quite a few announcements for Visa Inc. and Visa Europe. So the specifics on the initiatives, I really have to defer for them. But from a MasterCard perspective, what they want to do is design these services for integration. We're not trying to get in front of their partners' brands but rather enable commerce to happen, and that's very important for merchants. We've also been emphasizing the ease of the immigration for the merchant, make it very easy for them, they accept the MasterCard today, begin working with the wallet service. But unlike some of the other initiatives you've seen out there, I don't have to rewire my settlement systems or address my consumers in a new way. The other thing that's important for consumers is the PayPass Wallet Services delivered genuine digital card transaction. So all of my liability rights, my settlement guarantees, my rewards and other things are there. So I'm not subject to some sort of transaction randomization or other things that may interfere with the transaction itself. And probably the most unique feature is rather than saying there's going to be one wallet here that will rule them all, what we're enabling is a network of wallets. We're doing what MasterCard has always done. Think of it almost as the digital equivalent of the lower right-hand side of the card. We're giving merchants a great acceptance experience they can rely on. We're standing behind those transactions. We're ensuring the reliability of the overall service, but we're letting lots of their partners either use their white-label wallet services or even develop their own wallets and hook it into their network of wallet. And that's where, I think, they get to scale. But it's also, though, where they allow consumers to get any number of experiences environment that are specifically tailored for the relationship they have with that partner. So being able to use the same login that they use for my mobile banking application and not having to learn something else is a great benefit. Being able to get real financial information in real time from whoever has issue the card, while I'm making my shopping -- while I'm shopping. Again, it's a real benefit. So their emphasis is on partnership. It's on integration. It's on building a network of wallet and adding a lot of value to merchant. The last piece I would emphasize is this convergence that's going on right now. And merchants will tell you, I'm not e-commerce or in-store, it's both, but sometimes even both simultaneously. Because the amazing thing about a mobile phone is with your handset, you're always online, and online is always with you. So we've integrated in PayPass in-store, which is the gold standard globally for contactless transaction to turn that mobile into a payment device and along with what we've just announced with PayPass Online to give the same easing convenience from any channel that consumers want to shop.
The next question comes from the line of Darrin Peller from Barclays.
Darrin D. Peller - Barclays Capital, Research Division
Ed, while the wallet use in physical point-of-sale in NFC terms is probably still some time off during that need for acceptance at point-of-sale. Can they expect to see the click-to-buy online move more quickly and enable materially increases in your online market volume, maybe take share from PayPal? And then how easy is it for online merchants to really accept it? How many merchants online do you need to have for this to be a broad acceptance of scale where consumers are comfortable using it?
Yes, they see several things happening there. One of the primary is there's been a lot of shift in behavior. I'm sure you've seen the research on it, where people are moving away from using traditional keyboard and PCs to alternate device. Search is moving that way. Shopping is moving that way. And in that case, merchants are now looking to mobilize their site. So the form fill of data entry is not really optimal sometimes for the smaller keypads you'd see. So as merchants mobilize their site, there is a tremendous amount of interest in putting up the button for a one-click checkout. So it really is in line with the merchant objectives they see for that, and also because where a lot of the shopping is today is using these device to go online. They do think that's where you'll see a lot of the initial usage. But I wouldn't discount in any way the PayPass in-store. We've had 40% growth in just the last year in the number of merchant that are adopting to over 400,000 merchants. They have countries like Canada, where over 10% of their transactions are already contactless. And this is something we've been working on. If you look at the announcement for their EMV framework that they issued earlier this year, we're talking about not only upgrading the infrastructure to a more secure EMV cryptogram-based transaction, but also for contact and contactless. Just like they saw in Canada and other markets, merchants don't have to retrofit their equipment to do this, but it will be part of their natural upgrade cycle. So they see merchants where it brings a lot of value to their business, I think, doing it earlier. But we're on a path on market-wide levels around the world have mobile and other devices supported seamlessly to tell.
And the next question is from the line of Craig Maurer from CLSA.
Craig J. Maurer - Credit Agricole Securities (USA) Inc., Research Division
My question is, if you have many, many, many branded wallets offered by consumers, respective banks around the world, how do you handle the targeted marketing that the merchant might want to do into the wallet but you have huge fragmentation among the actual wallets that are out there?
Certainly, and that's where publishing mechanisms are so important. So if the wallets that will be using the acceptance mark will all be connected to the MasterCard network. So you may have seen with the offer services they have today where it's offered through specific destinations, but it also has the ability to publish out. So it will provide a distribution channel for merchants. Now the specific consumer experience will be up to their partner, and they expect there'll be a lot of tailored experiences out there. So consumers can choose what works best for them. But the ability to connect merchants to consumers through the PayPass network is not only for the transaction itself, but also for other services.
The next question comes from Glenn Fodor from Morgan Stanley.
Glenn Fodor - Morgan Stanley, Research Division
Just trying to gauge the appetite for some of these banks, large banks who already have wallet capabilities. So can you give us a sense -- you listed a bunch of banks that have signed on from the get-go. What percent of those already have their own wallet technology and you're going to just integrate yours with their technology? And is it almost easier from your perspective if a bank does not have a wallet perspective -- wallet setup already and you just start from scratch? Does it matter?
It doesn't matter. I mean, this is a market that's going to evolve. We've seen banks that have wallet initiatives and they embraced, they love the idea that we're building an open acceptance network to allow that wallet to be that much easier to use at a wide range of merchants. They have other institutions that say they're interested in the white label now, but may progress to their in-house version later, which they think is great. I do think in the future, they may have some banks that have put this side of application in place and realized it into scale and will be looking for on-behalf services from MasterCard. So that's the key to the architecture that they have here. They can either provide this on-behalf services or link in to what financial institutions they have. And economics and timing are really going to drive all of these in position. But I wouldn't say it's 100% yet?
That's from the line of Chris Brendler from Stifel, Nicolaus.
Christopher Brendler - Stifel, Nicolaus & Co., Inc., Research Division
Can you talk at all about sort of the future as you see -- I love the open architecture. I just wanted to know if you think that in the future when we're shopping online, do all these wallets get integrated, like what if I had a MasterCard account at 2 different financial institutions, what if I have a Visa account online? How do they see the future? Obviously, we're not going to have that many wallets. Does your product actually give the opportunity to use different passwords to access different institutions but all linked into the same wallet?
I think what you see there, I get to use the word disambiguation into that, which is great, but consumers may have more than one wallet, just like you may have more than 1 car for whatever reason that you do. So when they get request for wallets, so consumers registered more than one wallet in the MasterCard network of wallets, we'll route it to their default, but we'll give them option to switch between them. And I think you're absolutely right. What merchants want to say, is want to provide this mechanism. And that's why it really is like the acceptance work that we've always done and know that a consumer has a wallet that is participating in the network, I can use it anywhere they see. So it really a natural extension of that. I think the relationship that banks and partners have with consumers will just be enhanced to incorporate online shopping and a lot of the benefit that they have and people will naturally orient towards you serving them back.
That comes from the line of Julio Quinteros from Goldman Sachs.
Julio C. Quinteros - Goldman Sachs Group Inc., Research Division
I was wondering if you guys could sort of think about or help us think about what this means for your efforts, along with Google Wallet, as you guys think about the mobile efforts there? And then in terms of competition in the online world, is the competition purely aimed at kind of sort of one-click effort, I guess, either, obviously, would be the most relevant there. So I'm just trying to think about the competitive dynamics both against Google Wallet and the eBay PayPal?
Sure. I'm really glad you asked because what we're doing with Google, what you're doing with Isis, the work we're doing with their other technology partners, this is all part of that. So at the heart of every Google Wallet is a MasterCard prepaid card that I can tap using PayPass anywhere in the world that is accepted. We're working with Isis. We're working with others. So they believe by making this things work better, by generating the value from MasterCard, that's what's best for people who have MasterCards today. That's what's best for their organization. That's an important part of their strategy. And I think the other thing which is important, when you look at any specific way of interacting, whether it's the online button, the tap in the store or any of the other things you'd see coming out of MasterCard Lat, in my mind, it's not that transaction itself, it's the overall MasterCard number. The account you have and the relationship you have. So I think, while there's a battle for who has that single online transaction, it kind of missed as a consumer and what we're building for. And the reason they talk about this converging world is this is already happening. I could be in my cab -- in a cab on with my mobile shopping online. I tap to get out of the cab, and when I get to that restaurant, maybe just slip my existing piece of plastic into the folio to pay for the meal. For me, as a consumer, that's great because I get to use whatever interface makes the most sense for whatever specific I'm trying to do, but it's all tied back to the same account, all handled by the MasterCard network. They have the same rights and rules and everything that comes from genuine MasterCard transactions. So I don't think there's a battle for specific transactions. It's really was providing what's best for consumers in all of the environments they want to shop. And their ability to give better experiences and more secure experiences online in your new NFC-enabled handset, that's still anchored on the great acceptance they have in the plastic world today, which people love. That's really the strength across the board, so I wouldn't focus on much on one specific edge device or transaction key.
That's from the line of Tim Willi from Wells Fargo.
Timothy W. Willi - Wells Fargo Securities, LLC, Research Division
I had a question going back to sort of the economic model. So I was curious if you could talk about within the wallet, there's often the talk of slotting fees for hosting cards and then the battle to be top of wallet. Could you talk about that concept and then to what degree that is also a part of the economic model for the products you've launched?
Yes, and I said earlier, they see this as just a logical extension of MasterCard's business model. And you do need to be careful with some of the proposals we've seen out in the marketplace for aggressive routing of consumers transaction and forcing them and all of that. They believe the consumer absolutely has to choose how they're paying and how they want to pay, and this is designed to enable them. So again, if you think this from a MasterCard perspective, we'll have the ability to provide on-behalf services. We'll be generating a lot of value in new transactions for merchant, and I really see that as the basis for the economics year. And if you do a great job for merchants and reducing dropout, reducing queue time, driving more sales and give consumers the experience the really want, the bits in the middle will sort themselves out.
And that's from the line of Gil Luria from Wedbush Securities.
Gil B. Luria - Wedbush Securities Inc., Research Division
It seems like to make the mobile payment attractive to consumers, you're going to have to have a bigger install base of NFC promo. You mentioned the 400,000, number. That's still a very small percentage of retailers. And much of that has either been installed in the past or was subsidized by Google. How do you see the adoption and the upgrade to NFC progressing over the next 3.5 years to your first deadline? And then after that, do you see it as a gradual same level of upgraded that's always happened over, let's say, a 5-year period or do you see an accelerated possibility that's already starting? Do you have evidence of that? Do you expect more of a back-end loaded upgrade cycle in 2015? How do you see that and then at what point do you see the critical mass that's going to compel consumers to feel like they can use an NFC-based wallet anywhere they want to shop?
We have thoughts for that, and I think they have a great strength as they you can use your payment credentials anywhere you want to and with alerts and other things they can tie it back to the phone. And then you could you use an NFC-enabled phone wherever PayPass is accepted. So I would point to a few things, one of which is the 40% growth year-over-year we've seen in merchant adopting them. So it this at your 7-Eleven and McDonald's. It is at Subway. It is at Macy's and Bloomingdale's and Home Depot. I can go in at Home Depot today and tap my PayPass-enabled smartphone and it works great. The other thing is, if you look at, as I said earlier, markets like Canada, where 1 out of 10 MasterCard transaction are already contactless. Some phones and other markets are catching up to that. So they are actually seeing that momentum. They also will see millions of NFC-enabled handsets coming into the market, if you look at their PayPass ready certification program that they also talked about last week. And the last thing I'd highlight, if you haven't seen it, they just published some empirical research for their MasterCard Advisors, where they looked at consumers who were using PayPass and those who weren't. And there was a 30% greater spend, 30% greater usage of your cards when they were PayPass-enabled. So it's a great piece of research, and those types of value are what drives decision. Carrefour, one of their big retail partners, they said they were getting 20% to 40% faster time through queue using PayPass. So obviously, they moved all their store loyalty and other cards to take advantage of contactless. And to your critical point, the critical mass, I can use it today in any cab in New York. And so it becomes a near daily transaction for me when I'm around the city. But do you think it's something to build over time? I do think, as they said earlier, rather than trying to retrofit gear for a single value proposition. This is going to be part of the normal upgrade cycle. All of the major terminal manufacturers are including contactless as far as their standard mill. All of the incentives and the model they have to provide benefit for the adoption of EMV incorporates moving both contact and contactless. I think the real answers will be more than ready when consumers and the equipment are.
That comes from the line of Ramsey El-Assal from Jefferies.
Ramsey El-Assal - Jefferies & Company, Inc., Research Division
Understanding what you just said about handset manufacturers are starting to build the NFC capability. Now that they see PayPal at the physical point-of-sale using -- connecting with the digital wallet with a PIN code or plastic card, enabling consumers to transact that way. Can you contemplate using your wallet to transact without NFC and some future modality or is really NFC the way you see the physical point-of-sale as it gets connected to your wallet?
Well, I guess, from a MasterCard perspective, it's hard to see using a physical card that point-of-sale is breakthrough new innovation. You can always use your card. They have 31 million merchant locations globally that work flawlessly with the cards you have today, and it's all against the same account. So the digital is simply a way of having a virtual version of that card, if you will, that could be optimized for online and in-store shopping. So that's why I want to get back to this converged experience. As a consumer, MasterCard is providing a great option that can use that card anywhere, anywhere MasterCard is accepted today. As you know, that's a great experience. And they can make it even better, even simpler, even more secure with allowing PayPass Tap & Go or PayPass Online. But they're all just more secure, simpler and smarter ways to use the same account that you have. So as a consumer, it's exactly what I want. I get one set of alerts. I get one way of -- one account that I access in any number of ways that makes sense. So what they think about the future, they have sort of as of yet unimagined edge device in the network. And what that really means is how do they bring the value of the MasterCard network and bring that experience to consumers. So I'm really not worried about people trying to recreate or replace the plastic experience they have at the point-of-sale. We've been protecting that for 30 years. This is about extending into the new environment.
Thank you, Ed, for taking time out of your busy schedule this morning to join us, and thanks to everybody who's on the call. They hope that you will be able to listen in to Gary Flood's keynote address at about 11:20 New York time today, where you can see a demonstration of this technology. And as always, if you have further questions, please don't hesitate to reach out to Investor Relations. Thanks, and have a great day.
Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect, and have a good day.
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More From Seeking Alpha
Advanced Semiconductor Engineering (ASE) and Siliconware Precision Industries Ltd. (SPIL) are beginning the process of uniting the two companies, which are among the largest outsourced semiconductor assembly and testing contractors in the world.
For now, the companies will continue to operate separately, while their shares are traded under the ASX symbol on the New York Stock Exchange. ASE Industrial Holding serves as the parent company for ASE and SPIL. But the merger is almost certain to change the competitive landscape in the assembly, packaging and test markets.
All of these areas are tough markets. ASE posted net income of $670 million on 2017 revenue that was just slightly shy of $9.8 billion. While that may seem like a lot of money, compared with many segments in the technology world it’s a tight operating margin.
The ASE/SPIL deal is being very closely watched by Amkor Technology, JCET Group, and smaller contractors. OSATs are not just competing among themselves anymore. Increasingly, they are facing competition from TSMC, UMC and other foundries, which have pressed into chip packaging and testing services for several years now. There are also internal assembly and testing operations at some of the bigger semiconductor vendors, such as Intel, Samsung Electronics, and Texas Instruments, that take away certain business opportunities.
“There are a bunch of pressures in the OSAT business that will shape the industry in coming years,” says Risto Puhakka, president of VLSI Research. TSMC is competing in the high-end packaging business, with Apple as its big customer, and integrated device manufacturers are also competing in that field, he notes. (TSMC’s largest customer, not identified in its most recent 20-F filing, accounted for 22% of the foundry’s 2017 net revenue.)
There is more competition on the horizon, too. “The other pressure point that the OSATs feel is China,” says Puhakka. “There’s a substantial amount of packaging coming up in China, with the much lower cost, whether it’s through subsidies or something else. There is definitely pressure at the low end. It comes in the form of price pressure. Because the OSATs want to keep up the volume; their pricing is a much tougher environment. If you look at those two trends, you see people probably want to get bigger, they want to be operating in China, they want to be more competitive. The cycle in R&D is to get back that high-end business, and there are a number of things pushing in those directions. If you look at the OSAT business last year, there was growth, but nothing spectacular. Then, you look at the assembly equipment demand, which was spectacularly hot, which means a lot of equipment went to others—other than the traditional OSATs. It went mainly to China, to IDMs, to TSMC, Samsung.”
China’s OSAT industry is mostly made up of smaller firms, aside from Jiangsu Changjiang Electronics Technology (JCET), which owns STATS ChipPAC and other companies. JCET acquired STATS ChipPAC in 2015.
ASE and SPIL will be involved in integration initiatives in the near future, according to Puhakka. “The bigger question is, what will Amkor do? What will JCET do? The big players may want to buy from China. That’s not out of the question, but there would be some regulatory hurdles, I would imagine, to do that.”
The large OSATs today have geographically diverse operations throughout Asia. But China represents the largest growth opportunity.
“It is a market not to be ignored,” he says. “It just that you have the Chinese regulations, the requirement of joint ventures and technology transfers. It makes people very uneasy to do something like that. Those kinds of actions have limited how much business transfers to China. If you’re operating in China, you have ongoing IP protection issues. You’re constantly making decisions about what IP are you moving to China, what are you not. By default, people are basically saying, whatever you move to China, it becomes Chinese knowledge.”
Fig. 1: Pressures mount for OSATs. Source: CLSA
Bigger dealsJust as more limited opportunities and growing R&D investments fostered some mega-deals in the semiconductor business, similar forces are at work in the assembly, package and test world, which serves the semiconductor companies.
“It was certainly no surprise that ASE and SPIL came together, because of the increasingly challenging OSAT business environment and the major consolidation we’re seeing in their customer base,” says Hal Lasky, senior vice president of sales and marketing for JCET Group, who also serves as executive vice president and chief sales officer for STATS ChipPAC. “It’s kind of inevitable that they would see this at the OSAT level. Clearly, we’re a part of that as well, as they are now a part of the JCET Group. What does it mean for the competition? As a company, they embrace this change, and they see many opportunities arising due to this merger. There are many semiconductor companies, their customers, who see a combined market share of ASE and SPIL within their own TAM. I call it unhealthy, or maybe a little too high. We’ve had many chances to compete for market share where, without this merger, they wouldn’t have. I absolutely believe this merger enhances the competitive nature of the OSAT space. Maybe it gives us a higher bar to shoot at, which is not necessarily a bad thing for this very competitive OSAT industry.”
Lasky anticipates there will be more consolidation ahead, for the OSAT segment in particular, and the semiconductor industry in general.
“In the OSAT space, while I do expect us to follow the trend, they won’t see quite the pace. There is still a chance to see continued OSAT consolidation, but maybe not at the pace of their customer set. And the issue with OSATs is that the long tail of their industry—where the small players are not always of interest for M&A for the larger OSAT because the return you get versus the alternative of just competing for the business—when you look at that and the ROI and the deal around that, it doesn’t come out in favor of acquisition. Also, in the OSAT space, the technology gap between top-tier OSATs and the smaller OSATs continues to grow. That has an impact on the interest level in the larger OSATs to drive M&A with smaller ones.”
So rather than accelerating consolidation, consolidation among OSATs actually could slow down, he says. At the same time, TSMC will continue to compete with OSAT contractors in IC packaging services. “Their solutions in the wafer-level space—InFO and CoWoS—those are outstanding packaging solutions. They are targeted at key segments in their customer space, and they are staking out their portion of the application space. Within the overall application space, there is a very good fit for those products. They’re investing in the back end, and they’re doing it in a way that makes sense to their business. And it lets them optimize their overall business model. I see them continuing with that and continuing to stake out that position. While that’s certainly a challenge to the OSAT space, it’s not really a killer. But they need to adapt to that.”
Peaceful coexistence?So can foundries and OSATS live and work together?
“There’s no question that the answer to that is yes,” Lasky says. “I believe very strongly that there’s plenty of opportunity. As they adapt to that shift in TAM, it’s mostly TSMC when you look at it, the bottom line is I believe very strongly in the spirit of co-opetition, because they continue to work very closely with the foundries to take care of and support their customers. Key to how they adapt as an OSAT industry really is finding where their strengths and their capabilities in the OSAT industry can take advantage of new growth areas, to take TAM back versus losing it to the foundries.”
The system-in-package module space is one area where OSATs can really shine, Lasky asserts.
“When these higher-level solutions involve multiple die, multiple devices, and you need to integrate at the packaging level to create a packaging-level solution, suddenly you need the abilities of OSATs, where in the past you might have done that as an EMS board-level solution,” he says. “There’s miniaturization, there are shielding concerns, there are a lot of different intricate process-level concerns, and it’s required at a very high yield. And those are all things that they play well in. We’re starting to see their TAM actually grow in that space in the OSAT world. There is no one packaging solution that’s going to wallpaper the entire application space. You need to find your strengths, find where your capabilities can let you grab share, and then go for that. Even in wafer-level, where the foundries have the very strong solutions for some of these processors, they have their own fan-out wafer-level and wafer-level CSP solutions that don’t make sense in the foundry space. The OSAT can do a better job.”
Ron Huemoeller, corporate vice president of Amkor and head of corporate R&D, likewise sees big changes and challenges in the OSAT industry.
“It’s a changing competitive environment and the OSAT market continues to narrow at the top, with only two OSATs remaining dominant in all phases of technology, ASE and Amkor, following the merger of SPIL and ASE. With fewer choices, more dependence on the premier OSATs is inevitable. It is important to note that developing and manufacturing new package platforms is expensive, and it requires a high degree of engineering expertise. It also requires perpetual funding in R&D to maintain competitiveness. Adding new blocks of capacity is very expensive – continually challenging ROI.”
Whether that will lead to more consolidation, and how quickly, remains to be seen.
“The OSAT business requires scale,” says Prasad Dhond, Amkor’s vice president and general manager of automotive. “There will continue to be some level of consolidation as players try to combine their resources to compete. This might now be more applicable to the smaller (Tier 2 and Tier 3) players, though. Foundries are making a push into certain segments of high-end packaging. They view this as an opportunity to cross-sell additional services and also to make their business stickier. However, from a fundamental business model standpoint, packaging margins are lower than what foundries are used to. It is not clear if foundries will be willing to make heavy CapEx investments in packaging when they could be using the capital for something else.”
So does that mean everyone will co-exist in their own space?
“One of the key aspects of foundry success in entering into the OSAT market segment is the bundling of their silicon with advanced packaging technology,” Huemoeller observes. “They secure the silicon sale by attaching it to the package technology. Foundries and OSATs are key components of the ecosystem. The foundries won’t engage in all aspects of the assembly and test business. There are niche areas they will play in, but there will always be a need for them to work with OSATs for other applications and if volumes exceed certain thresholds.”
Behind the ASE-SPIL dealIn its 20-F filing with the Securities and Exchange Commission for 2017, ASE provided an in-depth look at market pressures and developments in this space.
“We have significantly expanded their operations through both organic growth and acquisitions in recent years,” ASE says. “For example, they acquired the controlling interest of Universal Scientific in 2010 to expand their product offering scope to electronic manufacturing services; they also entered into a joint venture agreement with TDK Corporation in May 2015 to further expand their business in embedded substrates; in June 2016, they entered into the Joint Share Exchange Agreement with SPIL to take advantage of the synergy effect of business combination between SPIL and us; furthermore, they entered into a joint venture agreement with Qualcomm Incorporated in February 2018 to expand their SiP business. They expect that they will continue to expand their operations in the future. The purpose of their expansion is mainly to provide total solutions to existing customers or to attract new customers and broaden their product range for a variety of end-use applications. However, rapid expansion may place a strain on their managerial, technical, financial, operational and other resources. As a result of their expansion, they have implemented and will continue to implement additional operational and financial controls and hire and train additional personnel. Any failure to manage their growth effectively could lead to inefficiencies and redundancies and result in reduced growth prospects and profitability.”
It adds, “The successful consummation of the SPIL Acquisition is subject to a number of factors, including, among other things, obtaining all necessary antitrust or other regulatory approvals in Taiwan, the United States, the PRC and other jurisdictions where they do business. They received a no-objection letter in respect of the Share Exchange from the TFTC on November 16, 2016. On May 15, 2017, they received a letter from the FTC confirming that the non-public investigation on the Share Exchange has been closed. On November 24, 2017, they received approval from the Ministry of Commerce of the People’s Republic of China (MOFCOM) for the Share Exchange under the condition that ASE and SPIL maintain independent operations, among other conditions, for 24 months. In the event these conditions cannot be satisfied, they may re-evaluate their interest in SPIL and may consider, among other legally permissible alternatives, to dispose their SPIL shares at a loss, which may significantly affect their financial position. Notwithstanding the above, even if they are successful in consummating the SPIL Acquisition, they will be subject to regulatory restrictions requiring us to maintain separate operation of SPIL for a period of time, and they may face challenges in successfully integrating SPIL into their existing organization or in realizing anticipated benefits and cost synergies afterwards. Each of these risks could have a material adverse effect on their business and operations, including their relationship with customers, suppliers, employees and other constituencies, or otherwise adversely affect their financial condition and results of operations.”
The 20-F says, “The packaging and testing business is capital-intensive. They will need capital to fund the expansion of their facilities as well as fund their research and development activities in order to remain competitive. They believe that their existing cash, marketable securities, expected cash flow from operations and existing credit lines under their loan facilities will be sufficient to meet their capital expenditures, working capital, cash obligations under their existing debt and lease arrangements, and other requirements for at least the next twelve months. However, future capacity expansions or market or other developments may cause us to require additional funds…If they are unable to obtain funding in a timely manner or on acceptable terms, their results of operations and financial conditions may be materially and adversely affected.”
ASE has a co-opetition relationship with TSMC. The two companies have had a “strategic alliance” since 1997. ASE serves as the foundry’s non-exclusive, preferred provider of packaging and testing services for microchips fabricated by TSMC.
ConclusionWhile OSATs will have one larger competitor to deal with in the near future, those companies look forward to the fray. TSMC’s muscling in on the high-end packaging business, especially when it comes to Apple’s custom application processors for the iPhone and the iPad, is a competitive challenge.
Yet OSATs retain expertise in the areas of SiP modules, molded interconnect substrates, substrate-like printed circuit boards, semiconductor embedded in substrate, and other emerging technologies. And while competition continues to ratchet up, there are always new opportunities around the edges for companies with the expertise and investment dollars to continue eking out a healthy living.
Related StoriesMIS Packaging Takes OffMolded interconnect substrate emerges as packaging choice for analog, power ICs and cryptocurrency chips.Toward High-End Fan-OutsDenser interconnects, stacked die could rival 2.5D approaches.What Next For OSATsASE’s COO opens up on the future of fan-out, growth prospects, and where the next opportunities will show up.
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