Domestic non-technology businesses’ reliance on the Chinese market could increase their business risks, Standard & Poor’s Ratings Services said yesterday. \n“Some [non-tech] businesses’ increasing exposure to the China market may be a double-edged sword that increases demand for products and raises long-term credit risks,” credit analyst Frank Fan (范維康) said in a report, titled Taiwan’s nontech firms have stable credit outlooks, but their reliance on China could increase business risks. \nLocal non-tech firms are increasingly reliant on Chinese demand for their products, in contrast to high-tech companies, which mainly use China as a low-cost production base, Fan said. \nThat increases the risk that an unexpected drop in demand from China or non-tech firms’ aggressive expansion plans could pressure their credit metrics, the report said. \nFAST RECOVERY \nThe ratings agency said the key credit metrics of most of the nation’s non-tech firms had recovered faster than those of their global peers over the past six months — a trend it said was likely to continue this year. \nThe ratings agency said it expected the global economy’s gradual recovery would also support a stable outlook for most Taiwanese non-tech firms over the next few quarters. \n“We expect Taiwan’s competitive low costs to support further recovery in the credit profiles of local nontech firms” this year, Fan said in the report. \n \nCREDIT PROFILES \nThe report added that the credit profiles of local transportation companies had stabilized in the past few quarters, after a significant decline in their creditworthiness during the global recession. \n“We expect increased freight rates, higher shipping volume, and the deferral or cancellation of new ship orders to support shipping companies’ profitability and cash flow over the next few quarters,” the analyst said. \nWarming economic relations between Taiwan and China may also help improve the operating performance and credit metrics of the nation’s leading air carriers, he said.
‘BIG LOSS’: This year might see the last generation of Huawei’s Kirin chips, as their production would stop next month because they are made using US technology Chinese tech giant Huawei Technologies Co (華為) is running out of processor chips to make smartphones due to US sanctions and would be forced to stop production of its own most advanced chips, a company executive has said, in a sign of growing damage to Huawei’s business from US pressure. Huawei, one of the biggest producers of smartphones and network equipment, is at the center of US-Chinese tension over technology and security. Washington last year cut off Huawei’s access to US components and technology, and those penalties were tightened in May, when the White House barred vendors worldwide from using US
’WHITE BOX’: The open platform would give local firms access to Cisco’s cloud-based mobile network to develop 5G telecom equipment and tap into the global market The Ministry of Economic Affairs (MOEA) yesterday introduced a new 5G “open lab” in collaboration with US-based information technology and networking giant Cisco Systems Inc to address the rapidly growing “white box” 5G networking equipment market. The open lab will be a platform where Taiwanese manufacturers can access Cisco’s cloud-based mobile network to develop their own 5G telecom equipment, such as small-cell base stations, network switches, modems and Internet of things (IoT) devices, a ministry statement said. The open platform would allow Taiwanese manufacturers to tap into the lucrative 5G telecom equipment market, which was previously monopolized by Nokia Oyj, Ericsson AB
Nintendo Co is raising its target for Switch production to about 25 million units this fiscal year, people familiar with the matter said, as the ongoing COVID-19 pandemic keeps lifting demand and component shortages ease. The Kyoto, Japan-based company, which in April hiked orders to 22 million units by March next year, is asking partners to tack on another few million units, said the people, who did not want to be identified discussing internal goals. Assembly partners plan to work at maximum capacity through December. The new production target suggests that Nintendo is likely to outperform its Switch sales forecast of 19 million
CORPORATE SCANDAL: Cathay Life has invested NT$13.3 billion in Bank Mayapada since 2015, but the latest loss of NT$8.8 billion has completely written off its investment Cathay Life Insurance Co (國泰人壽) yesterday said it would recognize an investment loss of NT$8.8 billion (US$298.1 million) in Indonesia’s Bank Mayapada Internasional Tbk PT due to concerns about the lender’s operations amid a corporate scandal. The company said it would revise its earnings result for June, from a net profit of NT$6.52 billion to a net loss of NT$520 million, its first monthly loss over the past 17 months. After booking an investment loss of NT$5.2 billion in Bank Mayapada earlier this year, Cathay Life has so far recognized total investment losses of NT$14 billion in the lender, executive vice president