■ China Steel downgraded
Shares of China Steel Corp (中鋼), Taiwan's largest steelmaker, were downgraded to "underperform" from "neutral" by Credit Suisse First Boston as cost increases may outpace a rise in product prices. Credit Suisse First Boston analysts Jim Hung and Catherine Chen said in a report yesterday that costs will probably rise 28 percent this year, larger than a projected 17 percent increase in steel prices. The rise in product prices "cannot offset the increase in costs," the analysts said. The downgrade came after Kaohsiung-based China Steel said on Feb. 24 that it will increase prices for customers in Taiwan in the second quarter by NT$1,000 (US$32.10) to NT$2,100 a tonne, a range Credit Suisse First Boston said was "at the low end of market expectations."
■ AU Optronics sales fall
AU Optronics Corp (友達光電), the world's third-largest maker of flat-panel displays used in computers and televisions, said last month's sales fell 7.8 percent to NT$11.5 billion (US$373 million) from NT$12.5 billion a year earlier, the company said in a statement to the Taiwan Stock Exchange. Rival Chi Mei Optoelectronics Corp (奇美電子), said sales for the company and its units fell 3.5 percent last month to NT$8.8 billion (US$285 million) from a year earlier. Sales for Chi Mei alone rose 7.1 percent last month to NT$8.2 billion from NT$7.7 billion, the company said in a statement to the stock exchange.
■ CAL launches Chiang Mai flights
China Airlines (CAL, 華航) said yesterday it will launch passenger flights to Chiang Mai, Thailand, starting the thrice-weekly service on March 29. Chiang Mai would be the airline's third destination in Thailand along with Bangkok and the southern tourist resort of Phuket, a company statement said. Chiang Mai, a popular destination for Taiwanese tourists, has become Thailand's second air transport hub after Bangkok.
■ Formosa expects P&G orders
Formosa Plastics Corp (台塑) expects a factory it's building in China's eastern port city of Ningbo to win orders from Procter & Gamble Co, a Chinese-language newspaper reported, citing unidentified Formosa executives. The factory would contribute the equivalent of NT$35 billion (US$1.1 billion) to sales, or about a quarter of the Taiwanese company's revenue, when it starts production next year, the Taipei-based newspaper reported.
■ Firms must list currency losses
Taiwanese companies must include foreign-currency losses in their earnings statements starting in the current quarter, a Chinese-language newspaper reported, citing unidentified government officials. The Taipei-based newspaper didn't say whether companies must include foreign-exchange gains. Banks and auditors will be required to comply with the new policy on reporting earnings, the newspaper reported, citing the Financial Supervisory Commission.
■ NT dollar pares gains
The New Taiwan dollar pared gains on speculation the central bank sold its currency to slow the appreciation and help preserve exporters' profits. The NT dollar closed little changed at NT$30.875 after rising as much as 0.2 percent, according to Taipei Forex Inc. Turnover was US$694 million, compared with US$799 million the previous day. "The Taiwan dollar wasn't particularly strong yesterday, so any sales by the central bank would just be to slow the appreciation," said Joseph Lee, a currency trader in Taipei at Cathay United Bank (國泰世華銀行).
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to