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.
UNPRECEDENTED PACE: Micron Technology has announced plans to expand manufacturing capabilities with the acquisition of a new chip plant in Miaoli Micron Technology Inc unveiled a newly acquired chip plant in Miaoli County yesterday, as the company expands capacity to meet growing demand for advanced DRAM chips, including high-bandwidth memory chips amid the artificial intelligence boom. The plant in Miaoli County’s Tongluo Township (銅鑼), which Micron acquired from Powerchip Semiconductor Manufacturing Corp (力積電) for US$1.8 billion, is expected to make a sizeable capacity contribution to the company from fiscal 2028, the company said in a statement. It would be an extended production site of Micron’s large-scale manufacturing hub in Taichung, the company said. As the global semiconductor industry is racing to reach US$1 trillion
A man walks past real-estate advertisements outside a house in Taipei yesterday. The central bank yesterday said it plans to establish an “Inflation-at-Risk” gauge as a supplementary tool for observing inflation, as policymakers express wish to communicate more effectively with the public when making inflation forecasts.
ABOVE LEGAL REQUIREMENT: The Ministry of Economic Affairs is prepared if LNG supply is disrupted, with more than the legal requirement of 11 days of inventory Taiwan has largely secured liquefied natural gas (LNG) supplies through May and arranged about half of June’s supply, Minister of Economic Affairs Kung Ming-hsin (龔明鑫) said yesterday. Since the Middle East conflict began on Feb. 28, Taiwan’s LNG inventories have remained more than 12 days, exceeding the legal requirement of 11 days, indicating no major supply concerns for domestic gas and electricity, Kung said at a meeting of the legislature’s Economics Committee in Taipei. The ministry aims to increase the figure to 14 days by the end of next year, he said. While one or two LNG or crude oil shipments for May
Memory chip stocks extended their losses yesterday after Alphabet Inc’s Google publicized research that could allow more efficient use of the storage needed for artificial intelligence (AI) development. SK Hynix Inc and Samsung Electronics Co, South Korean leaders in the market, fell more than 6 percent and about 5 percent respectively in Seoul. In the US, Micron Technology Inc, Western Digital Corp and Sandisk Corp slid more than 2 percent in pre-market trading, after they all closed lower on Wednesday. Memory companies have been on a tear in recent months as the rapid development of AI infrastructure triggered a spike in chip
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