■ HACROECONOMICS
France is bankrupt: Fillon
France is bankrupt because of chronic budget deficits, the country's prime minister said on Friday, pledging to balance the budget before the end of his term. "The truth is that I am the head of a state that is in a state of bankruptcy due to its financing plan," French Prime Minister Francois Fillon said in the Corsican city of Calvi. Fillon answers to French President Nicolas Sarkozy, but heads the French government. "I am the head of a state that has been in chronic deficit for 15 years," the conservative Fillon said, adding, "I am the head of a state that hasn't voted a balanced budget in 25 years."
■ BANKING
Northern Rock borrows funds
Britain's mortgage lender Northern Rock has been forced to borrow around ?3 billion (US$6 billion) from the central bank to ease its financial crisis amid fears about bad investments linked to US home loans, a newspaper reported yesterday. The Financial Times said it obtained the sum from the Bank of England's weekly balance sheets, the first official estimate of the scale of its funding problems. But a spokesman for the Bank of England declined to confirm the report. The loan represents about 10 percent of its deposit base, the newspaper added.
■ AVIATION
Cathay eyes China Eastern
Hong Kong carrier Cathay Pacific will launch a US$4 billion attempt to block Singapore Airlines' bid to gain a foothold in the booming Chinese aviation market, reports said yesterday. Citing unnamed sources, Hong Kong's South China Morning Post said Cathay Pacific would seek to buy a significant stake in China Eastern Airlines. That stake would be worth US$4 billion, Britain's Daily Telegraph said. The shareholding would then be used to try and scupper the Singaporean carrier's own plan to acquire a key stake in China Eastern, the Post said. Cathay would use its alliance with Air China, China's largest airline, which holds 11 percent of China Eastern, to block Singapore Airlines' plan at a December shareholder meeting.
■ BANKING
China Construction in IPO
China Construction Bank Corp (中國建設銀行), China's second-largest bank, said its yuan-denominated shares would start trading in Shanghai on Tuesday. The bank raised 58 billion yuan (US$7.7 billion) in the world's second-biggest share sale this year. It sold 9 billion shares in Shanghai at the top end of a 6.15 yuan-to-6.45 yuan range, the bank said in a statement to the Shanghai stock exchange yesterday.
■ AUTOMAKERS
GM, union close to a deal
General Motors Corp (GM) and the United Auto Workers (UAW) are close to an agreement on a historic deal that would transfer the automaker's retiree health care costs to a trust managed by the union, a person who was briefed on the contract talks said. The details of the plan have not yet been worked out, said the person, who requested anonymity because the talks are private. UAW President Ron Gettelfinger told members on Friday that he was trying to speed up negotiations with General Motors Corp and he wanted to reach a contract agreement without a strike. GM and the UAW spent Friday negotiating issues like wages and job security while experts helped finalize the possible health care deal, people familiar with the negotiations said.
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