Taiwan Power Co (Taipower, 台電), the nation’s only power distributor, posted a net loss of NT$23.25 billion (US$762 million) last year as a result of the soaring cost of international energy resources, Taipower chairman Edward Chen (陳貴明) said on Friday.
“Last year the company spent a total of NT$4.46 trillion, NT$31.25 billion higher than our total revenues of NT$4.15 trillion,” Chen said at a shareholders meeting where he announced the state-run company’s annual results.
“The NT$31.25 billion deficit marked a huge increase — NT$28.42 billion — over the deficit of NT$2.81 billion in 2006,” he said.
A tax break of NT$7.98 billion helped trim the company’s net loss last year to NT$23.26 billion, he said.
Chen attributed the company’s woes to soaring international oil and coal prices. The company’s electricity prices did not reflect this rise in costs as they were frozen under the former Democratic Progressive Party administration since July 2006.
Rapidly rising oil and coal prices took an especially high toll on the company in the first five months of this year. Taipower posted a pre-tax loss of NT$47.9 billion, compared with NT$15.5 billion for the same period last year.
International prices of crude oil and coal have risen by 46 percent and 50 percent respectively since January. Crude oil has hit US$130.62 a barrel and coal US$150 per tonne.
The two fuels provided half of the company’s electricity in 2006.
A 5.8 percent increase in electricity prices in July 2006 was the first hike in 23 years. The company has since repeatedly appealed for more hikes.
The Chinese Nationalist Party (KMT) administration has agreed to a 12.6 percent hike in electricity prices starting next month and a 12.6 percent increase on Oct. 1 to reflect the higher cost of raw materials.
“The company is also working on ways to boost operational efficiency with measures such as cutting the procurement price of fuels,” Chen said.
Chen said Taipower would not be able to construct new power-generating facilities if it continued to run a deficit.
“The problem will also hurt the company’s capital position,” he told shareholders.
To make up for its losses, Taipower said it had used its NT$1.99 billion legal surplus, earned in previous years, and NT$21.26 billion in legal reserves.
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