Downstream firms hurting
Fitch Ratings yesterday said in a report that crude oil prices at high levels pose a squeeze in margins faced by some Asian downstream oil and gas companies.
“The financial performance of Indian Oil Corp, Sinopec [中石化] and CPC Corp, Taiwan [台灣中油], has suffered significantly over the last two years because governments, wanting to control inflation and maintain economic growth momentum, have not allowed the companies to fully pass through the higher costs of crude oil,” said Steve Durose, regional co-head of Fitch’s Asia-Pacific energy and utilities team.
The oil and gas price environment over the last 18 to 24 months has generally benefited the oil and gas companies.
Unprecedented high real wholesale prices mostly led to a significant increase in cash flows and margins, it said, adding that some firms without significant upstream exploration and production assets have, conversely, faced a significant margin squeeze.
Fitch expects oil prices to continue to decline and urged companies whose margins are under threat from high crude oil and gas prices to be prepared for crude oil prices to remain in the range of US$50 to US$100 per barrel.
CPC re-appoints chairman
CPC Corp, Taiwan, the nation’s state-run oil refiner, said Pan Wenent (潘文炎) was reappointed yesterday as its chairman.
Pan, 63, was elected by the company’s 12 board members.
His two-year term will end on Sept. 1, 2010, CPC spokeswoman Jessica Tang (唐苑莉) said in a telephone interview in Taipei yesterday. All CPC board members were appointed by the government.
The oil refiner’s board of directors also approved the resignation of its retiring president Chen Bao-lang (陳寶郎). Former vice president Chu Shao-hua (朱少華) will succeed Chen as the company’s acting president.
Park approves two new firms
The Central Taiwan Science Park has approved the applications of two more companies to set up in the park with a combined investment of NT$650 million (US$20.4 million), the park’s administration said on Saturday.
The two high-tech companies are Fulgent-tec Industries Co (富比利實業), which will invest NT$50 million to make carbon prepreg, a strong composite resin pre-impregnated with carbon fibers used in the information technology, medical and construction sectors, and Lof Solar Corp (樂福太陽能公司), which will invest NT$600 million to produce silicon wafer solar cells.
As of the end of last year, a total of 92 enterprises in several high-tech industries, including optoelectronics, integrated circuits, precision machinery, and computers and peripherals had been admitted to the park, with planned investments totaling NT$1.7 trillion.
The park has three separate sites, in Taichung City, in Taichung County’s Houli (后里) and in Yunlin County’s Huwei (虎尾), with construction of a fourth site in Changhua County’s Erlin (二林) planned to begin next July.
Compal cuts deliveries
Compal Electronics Inc (仁寶電腦), the world’s second-largest maker of notebook computers, cut its forecast for annual laptop shipments, citing slowing demand from the US.
Deliveries of laptop computers to its clients including Hewlett-Packard Co and Dell Inc will be about 28 million units to 29 million this year, Compal president Ray Chen (陳瑞聰) said yesterday in Taipei.
In July, the company had projected 32 million units.
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
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
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