Shares echo Wall Street
Share prices closed down 2.54 percent yesterday following a Wall Street plunge at the end of last week that dealers attributed to fears that debt problems in Europe will worsen after a financial crisis surfaced in Hungary.
The TAIEX closed down 186.76 points at 7,157,83 on turnover of NT$82.48 billion (US$2.56 billion).
The market opened 2.79 percent lower on a knee-jerk reaction to Wall Street’s dive to below the key 10,000 point level, and the losses extended, led by the high tech sector, during the trading session before rebounding on bargain hunting toward the close, the dealers said.
Edward Chen, vice president of First Capital Management Ltd’s research department, said that as Hungary is a small economy and not a member of the eurozone, its debt problems are unlikely to pose a serious threat to the economy in the EU.
“However, amid the already weak investor sentiment, the development has dealt a blow to market confidence at home and abroad,” Chen said. “The impact so far has been very psychological, in particular as investors witnessed the panic selling on Wall Street.”
Chen said many local investors are afraid that accelerating debt problems in Europe will hurt demand and cut consumption in the European market.
“The worries are running deep, as Taiwan is an export-oriented economy with so many high-tech firms heavily dependent on foreign markets,” he said, adding that bellwether electronic heavyweights faced heavy selling as a result of the concern.
Lower demand hurts MediaTek
Lower demand in China for cellphone microchips as a result of tighter government monetary policy affected last month’s sales figures of integrated circuit designer MediaTek Inc (聯發科), analysts said yesterday.
MediaTek posted NT$9.87 billion in sales for last month, down 18.14 percent from April’s NT$12.06 billion, although last month’s figure was 5.44 percent higher year-on-year.
Demand for cellphone microchips in China reached a peak in April before the long Labor Day holiday early last month, TLG Asset Management (台壽保投信) analyst Arch Shih (施博元) said.
“This shows that China’s recent tightening of its monetary policies to cap inflation is working,” Shih said.
In the first five months of the year, MediaTek posted NT$54.6 billion in sales, up 27.33 percent year-on-year.
Shih said there are concerns about MediaTek’s gross profit margin, as competition in China is getting stiffer.
The forecast for the company’s gross profit margin for this year is 57 percent.
“I do not think it will be easy for the company to achieve the 57 percent margin, given the stiffer competition in China,” he said.
FPG workers protest in Taipei
Formosa Plastics Group (FPG, 台塑集團) said 500 to 600 employees gathered in front of the company’s Taipei headquarters yesterday asking for bigger bonuses.
The protest ended without violence, a company public relations officer said by telephone. The company controls Formosa Plastics Corp (台塑), the nation’s biggest maker of polyvinyl chloride, or PVC, and Nan Ya Plastics Corp (南亞塑膠), the world’s largest processor of plastics for imitation leather and pipes.
FPG pays bonuses based on earnings per share (EPS), the company said in a statement. Bonuses from last year’s profit equal to 5.57 times of base monthly salaries, the company said, without giving a comparison.
Formosa Plastics Corp reported EPS of NT$4.50 last year, compared with NT$3.45 in the previous year, the company said on March 29.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day