OIL
High prices may hit recovery
There is a “strong potential” that persistently high oil prices could derail the global economic recovery, the International Energy Agency (IEA) chief economist said yesterday. “My worry is that the current prices [are] a major risk for the global economic recovery and I’m very worried to see the same movie that we saw in the year 2008,” Fatih Birol said at a conference in Singapore. Birol said the average price of oil this year is US$110, much higher than the US$90 seen in 2008 when crude hit a record above US$147 before the onset of the global recession.
STEEL
Protests halt land purchases
An Indian state has stopped acquiring land for a proposed US$12 billion steel plant to be built by South Korea’s POSCO after protests, further delaying the biggest foreign direct investment in Asia’s third largest economy. The project by POSCO, the world’s third-biggest steel company, is the most high-profile of numerous industrial plans delayed because of protests over land, which analysts warn could hurt economic growth and worsen a current account deficit. POSCO signed the agreement for the mill in 2005, but the project has been bogged down by protests and inquiries into alleged illegalities at a related mining concession have delayed it.
MUSIC
EMI considering IPO
British music company EMI Group Ltd said on Monday it is exploring the possibility of a sale or an initial public offering (IPO). EMI, owned by Citigroup, said the board of directors of its holding company, EMI Group Global Ltd, is reviewing the future of the business and looking into “strategic alternatives,” including recapitalization. The company — home of the Beatles, Katy Perry, Lily Allen and Norah Jones — was purchased by private equity firm Terra Firma in 2007 in a £4.2 billion (US$6.8 billion) acquisition financed with debt from US bank Citigroup. Terra Firma later said it had overpaid for the deal, and when it failed to pay its loans Citigroup acquired all its share capital in February.
CHIPMAKERS
Hynix creditors call for bids
Creditors of South Korea’s Hynix Semiconductor yesterday invited bids for a major stake in the world’s second-largest computer memorychip maker, with the aim of choosing a preferred bidder in August. The creditors-turned-shareholders, led by Korea Exchange Bank (KEB), said in a statement they hope to wrap up the sale by the end of the year. Collectively they hold about 15 percent of Hynix. They said Hynix could sell new shares along with the creditors’ existing shares as part of the process. The creditors injected US$4.6 billion to rescue Hynix by swapping their debt holdings into shares in 2001 and 2002.
POWER CABLES
Nexans in new joint venture
French cablemaker Nexans said yesterday it was strengthening its position in China by taking a 75 percent stake in a joint venture based on the power cable business of Shandong Yanggu Cable (陽谷電纜). The transaction would value the new business on a debt and cash-free basis at about 140 million euros (US$200 million) and should be completed in six to eight months, provided it receives Chinese regulatory approval, Nexans said in a statement. Shandong Yanggu Cable is one of China’s leading power cable manufacturers and supplies the state grid network, among other clients.
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