The nation's financial institutions hold about NT$71 billion (US$2.16 billion) in investments linked to US subprime mortgage-related instruments, the Financial Supervisory Commision said yesterday.
Among them, nine Taiwanese life insurers hold about NT$30 billion in subprime-related products, while three property insurers have invested about NT$188 million in such subprime loans, the commission said in a statement.
In addition, 16 of the nation's 42 banks hold around NT$40.4 billion in investments linked to subprime mortgages, while securities investment trust firms have lost US$19.5 million through mutual funds, the statement said.
These figures, disclosed yesterday by the commission's spokesman and vice chairwoman Susan Chang (
The financial regulator didn't give details on the investments by Taiwanese insurers, but it revealed that two insurers had booked losses from its holdings in subprime-related securities.
This includes a loss of NT$447 million by Taiwan Life Insurance Co (
The collective losses of around NT$450 million accounted for just 0.0225 percent of the two insurers' total overseas investment, or NT$2 trillion, the commission said.
Other local insurers, however, have not yet booked potential losses for their holdings of similar instruments, it added.
As for Taiwanese banks, the commission said that only a limited number of the lenders have direct exposure to US subprime mortgage-related securities, while most others are exposed to subprime mortgages through securitized financial products or corporate bonds issued by the relevant subprime loan providers.
"Given that there haven't been any defaults and the interest repayments remain normal, the potential losses should be limited," the commission said.
Among the 16 local lenders is Mega Financial Holding Co (兆豐金控), the nation's second-largest financial-services company, Chang said, declining to identify the other firms.
Mega Financial has invested in NT$150 million worth of securities linked to subprime mortgages, Simon Dzeng (
While there are wealth management products sold by five local lenders that are linked to the subprime mortgages, the commission said the dollar volume of these instruments was not as huge as expected at NT$4.1 billion and should have a limited impact on investors.
On Aug. 7, Taiwan Ratings Corp (
Taiwan Ratings said that it didn't expect potential credit losses to materially erode the three insurers' capital bases based on their sound profitability and strong capitalization, the local arm of Standard and Poor's said in a statement.
Additional reporting by Bloomberg
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