UMC slips to nine-year low
United Microelectronics Corp (UMC, 聯電), the world's second-largest maker of chips for other companies, slid to a nine-year low yesterday after UBS AG downgraded the shares to "neutral," citing a seasonal slowdown for the company.
UMC shares fell 4.9 percent to NT$21.30 at the close of trade, their lowest since Oct. 6, 1998.
"We expect slowing momentum, given the high base in Q3 ... and seasonal slowdown," Taipei-based analysts William Dong, Robert Lea and Samson Hung wrote in a report dated Thursday.
UMC's plan to issue stock options to employees from next year also has the potential to dilute earnings, the analysts wrote.
The potential dilution of the 500 million stock options is about 3.8 percent in the next six years, UMC said in an e-mail.
UBS cut its rating on UMC from "buy" and lowered its 12-month price target to NT$24 from NT$28.60.
Next step for Nicaraguan FTA
Taiwan and Nicaragua exchanged instruments of rectification on Thursday for a bilateral free trade agreement (FTA) that was signed last year to pave the way for its implementation this Jan. 1.
Minister of Economic Affairs Steve Chen (陳瑞隆) and visiting Nicaraguan Foreign Minister Samuel Santos Lopez exchanged the documents in a ceremony at the Ministry of Economic Affairs.
After the FTA takes effect next year, Nicaragua will allow tariff-free entry of 3,374 Taiwanese products, which is about 51.1 percent of Taiwanese exports to Nicaragua, while Taiwan will lift tariffs on the entry of 5,797 Nicaraguan products, or about 65.6 percent of Nicaraguan exports, including beef and coffee.
China's reserves keep growing
China's foreign exchange reserves, already the world's largest, surpassed US$1.43 trillion at the end of last month, the central bank said yesterday.
The figure was up 45.1 percent from a year earlier, the central bank said in a statement posted on its Web site.
Special zone status for Hainan
China has approved the establishment of a special export zone for the island province of Hainan in a bid to boost trade, especially with Southeast Asia, state media said yesterday.
The Yangpu Bonded Port Area will enjoy tax breaks and other preferential policies similar to zones in Shanghai, Tianjin and Dalian, the Shanghai Securities News said.
The Yangpu Port, approved by the State Council, will be built in three phases and eventually cover an area of 9.2km2, with an annual traffic of 70 million tonnes, the report said.
Cathay Life to add Beijing outlet
Cathay Life Insurance Co (國泰人壽), the nation's largest life insurer, said yesterday its Chinese venture based in Shanghai has been approved to open a new branch in Beijing.
Cathay Life said the joint venture with China Eastern Air Holding Co (中國東方航空) obtained approval from the China Insurance Regulatory Commission yesterday for the establishment of the Beijing branch, a filing to the Taiwan Stock Exchange showed.
Meanwhile, Cathay Life and affiliated Cathay Century Insurance Co (國泰世紀產險) announced yesterday that they had also received China's go-ahead to set up a property insurance company there.
The new property insurance company, which will be launched with 200 million yuan (US$26.6 million) from Cathay Life and Cathay Century each, will be the first Taiwanese property insurer operating in China.
Cathay Life broke into China's insurance market in 2005.
Nissan Motor Co has agreed to sell its global headquarters in Yokohama for ￥97 billion (US$630 million) to a group sponsored by Taiwanese autoparts maker Minth Group (敏實集團), as the struggling automaker seeks to shore up its financial position. The acquisition is led by a special purchase company managed by KJR Management Ltd, a Japanese real-estate unit of private equity giant KKR & Co, people familiar with the matter said. KJR said it would act as asset manager together with Mizuho Real Estate Management Co. Nissan is undergoing a broad cost-cutting campaign by eliminating jobs and shuttering plants as it grapples
TEMPORARY TRUCE: China has made concessions to ease rare earth trade controls, among others, while Washington holds fire on a 100% tariff on all Chinese goods China is effectively suspending implementation of additional export controls on rare earth metals and terminating investigations targeting US companies in the semiconductor supply chain, the White House announced. The White House on Saturday issued a fact sheet outlining some details of the trade pact agreed to earlier in the week by US President Donald Trump and Chinese President Xi Jinping (習近平) that aimed to ease tensions between the world’s two largest economies. Under the deal, China is to issue general licenses valid for exports of rare earths, gallium, germanium, antimony and graphite “for the benefit of US end users and their suppliers
Dutch chipmaker Nexperia BV’s China unit yesterday said that it had established sufficient inventories of finished goods and works-in-progress, and that its supply chain remained secure and stable after its parent halted wafer supplies. The Dutch company suspended supplies of wafers to its Chinese assembly plant a week ago, calling it “a direct consequence of the local management’s recent failure to comply with the agreed contractual payment terms,” Reuters reported on Friday last week. Its China unit called Nexperia’s suspension “unilateral” and “extremely irresponsible,” adding that the Dutch parent’s claim about contractual payment was “misleading and highly deceptive,” according to a statement
The Chinese government has issued guidance requiring new data center projects that have received any state funds to only use domestically made artificial intelligence (AI) chips, two sources familiar with the matter told Reuters. In recent weeks, Chinese regulatory authorities have ordered such data centers that are less than 30 percent complete to remove all installed foreign chips, or cancel plans to purchase them, while projects in a more advanced stage would be decided on a case-by-case basis, the sources said. The move could represent one of China’s most aggressive steps yet to eliminate foreign technology from its critical infrastructure amid a
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