Higher commodity prices and rising labor costs could bring an end to the recent improvement in operating margins and credit difficulties for the nation’s non-tech firms, Taiwan Ratings Corp (中華信評), a local unit of Standard & Poor’s Ratings Services, said yesterday in a report.
“Most non-tech firms that we rate in Taiwan slightly improved their adequate credit metrics over the past two quarters through deleveraging and capital expenditure cuts,” credit analyst Raymond Hsu (許智清) said in the report.
Taiwan Ratings said rising consumer demand, particularly from China, would continue providing support to Taiwanese chemical, building material and air and maritime transport firms’ operating performance in the next two quarters.
In addition, as worldwide consumer interest in tablet computers and smartphones continues to grow, Taiwanese firms that offer data and other telecommunication services will also see market demand increase significantly in the second half of the year.
“Nonetheless, profitability pressure from high and still-rising commodity prices have constrained non-tech firms’ credit profiles in recent quarters, which we expect to continue throughout 2011,” Hsu said in the report.
The report also said rising production and labor costs could undercut the profitability of non-tech companies and further impact the sector’s credit quality in the following two quarters.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) secured a record 70.2 percent share of the global foundry business in the second quarter, up from 67.6 percent the previous quarter, and continued widening its lead over second-placed Samsung Electronics Co, TrendForce Corp (集邦科技) said on Monday. TSMC posted US$30.24 billion in sales in the April-to-June period, up 18.5 percent from the previous quarter, driven by major smartphone customers entering their ramp-up cycle and robust demand for artificial intelligence chips, laptops and PCs, which boosted wafer shipments and average selling prices, TrendForce said in a report. Samsung’s sales also grew in the second quarter, up
LIMITED IMPACT: Investor confidence was likely sustained by its relatively small exposure to the Chinese market, as only less advanced chips are made in Nanjing Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) saw its stock price close steady yesterday in a sign that the loss of the validated end user (VEU) status for its Nanjing, China, fab should have a mild impact on the world’s biggest contract chipmaker financially and technologically. Media reports about the waiver loss sent TSMC down 1.29 percent during the early trading session yesterday, but the stock soon regained strength and ended at NT$1,160, unchanged from Tuesday. Investors’ confidence in TSMC was likely built on its relatively small exposure to the Chinese market, as Chinese customers contributed about 9 percent to TSMC’s revenue last
Taiwan and Japan will kick off a series of cross border listings of exchange-traded funds (ETFs) this month, a milestone for the internationalization of the local ETF market, the Taiwan Stock Exchange (TWSE) said Wednesday. In a statement, the TWSE said the cross border ETF listings between Taiwan and Japan are expected to boost the local capital market’s visibility internationally and serve as a key for Taiwan becoming an asset management hub in the region. An ETF, a pooled investment security that is traded like an individual stock, can be tracked from the price of a single stock to a large and
Despite global geopolitical uncertainties and macroeconomic volatility, DBS Bank Taiwan (星展台灣) yesterday reported that its first-half revenue rose 10 percent year-on-year to a record NT$16.5 billion (US$537.8 million), while net profit surged 65 percent to an unprecedented NT$4.4 billion. The nation’s largest foreign bank made the announcement on the second anniversary of its integration with Citibank Taiwan Ltd’s (花旗台灣) consumer banking business. “Taiwan is a key market for DBS. Over the years, we have consistently demonstrated our commitment to deepening our presence in Taiwan, not only via continued investment to support franchise growth, but also through a series of bolt-on acquisitions,” DBS
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