ECONOMY
EU producer prices surge
European producer-price inflation accelerated more than economists forecast in January, as soaring energy costs added to the European Central Bank’s (ECB) concerns that inflationary pressures are building. Factory-gate prices in the euro region jumped 6.1 percent from a year earlier, after increasing 5.3 percent in December, the EU’s statistics office in Luxembourg said yesterday. That’s the fastest since September 2008 and above the 5.7 percent gain forecast by economists, according to the median of 16 estimates in a Bloomberg survey. January prices rose 1.5 percent from December. Crude oil has surged 33 percent over the past six months, increasing pressure on companies to pass on higher costs just as some labor unions demand more pay. Consumer-price inflation in the 17-nation euro area accelerated to 2.4 percent last month, and ECB officials have signaled they are ready to raise borrowing costs from a record low if needed.
ECONOMY
US manufacturing expands
US manufacturing expanded at the fastest pace in nearly seven years last month, but a sudden rise in the price of raw materials could threaten their profits. The Institute for Supply Management (ISM) said on Tuesday that its index of manufacturing activity rose to 61.4 last month, up from 60.8 the previous month. That’s the highest reading since it reached the same level in May 2004. The ISM’s index bottomed out at 33.3 in December 2008, its lowest point in nearly 30 years. Any reading above 50 indicates expansion. The manufacturing sector has now expanded for the past 19 months. The new orders index rose to a seven-year high. A measure of order backlogs rose to its highest level in a year. Moreover, inventories are shrinking, both at manufacturers and their customers. All are signs that factory output is likely to keep growing. Solid growth overseas, particularly in developing countries such as China, Brazil and India, has also helped by boosting exports.
BANKING
Banker charged in US
Credit Suisse Group AG banker Christos Bagios helped 150 US clients hide as much as US$500 million in assets from US tax authorities when he worked at UBS AG, according to a criminal charge made public on Tuesday. Bagios, who was arrested and jailed on Jan. 26 in a crackdown on offshore tax evasion, appeared in federal court in Fort Lauderdale, Florida, on Tuesday. US Magistrate Judge Robin Rosenbaum denied his request for his immediate release after his lawyers argued he failed to get a prompt hearing on the evidence against him.
EQUITIES
Australia may ease rules
Australia’s securities market regulator will tomorrow outline steps to open the country’s equity market to foreign competitors, two people familiar with the matter said. A timetable for licensing new competitors such as Chi-X Global Inc to challenge Australia’s dominant stock-exchange operator ASX Ltd will be published as early as tomorrow morning, they said. The timetable will be released by the nation’s markets regulator along with planned new “market integrity” rules and a summary of industry feedback on changes to the regulatory framework. Financial Services Minister Bill Shorten will sign off on the Australian Securities & Investments Commission’s licensing plans later tomorrow, the people said.
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