JAPAN
BOJ lowers GDP forecast
Japan’s central bank yesterday cut its annual GDP growth forecast because of the March 11 earthquake and tsunami, but said the economy was beginning to recover. The Bank of Japan (BOJ) said after a one-day meeting that its policy board lowered expectations for economic growth to 0.4 percent from 0.6 percent for the current fiscal year ending March next year. The BOJ said the nation’s factories were recovering, as well as demand from households and businesses. It said the country was on track to rebound over the second half of the fiscal year. The bank also said all nine members of its policy board voted to maintain the overnight call rate target at zero to 0.1 percent.
BANKING
New loans in China drop
New loans issued by Chinese banks fell nearly 10 percent in the first half of this year, the central bank said yesterday, suggesting Beijing’s efforts to stem a flood of liquidity were bearing fruit. Banks handed out 4.17 trillion yuan (US$644 billion) from January to the end of last month, down 449.7 billion yuan, or 9.7 percent, from the same period last year, the central bank said in a statement. Last month, banks issued 633.9 billion yuan in new loans, more than the 551.6 billion yuan in May, but less than the 739.6 billion yuan in April, according to central bank data. Last month’s new loans were also 20.7 billion yuan more than a year ago, the statement said.
AUTOMAKERS
VW sales hit record 4m
Germany’s Volkswagen Group (VW) sold a record 4 million vehicles in the first half of this year and hopes to reach the 8 million mark for the year, the group’s CEO said in a statement on Monday. First-half sales were boosted by growing demand across the globe, Martin Winterkorn said during a presentation of the latest incarnation of the brand’s iconic Beetle. The CEO of Europe’s largest carmaking conglomerate said VW sales alone soared 11.8 percent over the past year to a record 2.5 million for the first half of this year.
ENERGY
Cairn sells 10% of India unit
British oil explorer Cairn Energy yesterday announced that it had sold 10 percent of its Indian unit to Vedanta Resources for a net cash sum of US$1.362 billion. India last month gave conditional clearance to the sale of Cairn Energy’s Indian oilfields to mining group Vedanta. Cairn said in a statement it “completed the sale of ... 10 percent of the fully diluted share capital in Cairn India,” adding that it planned to offload a further 30 percent to Vedanta subject to “approvals from the Government of India.” Following the sale of the 10 percent stake on Monday, Cairn remains the majority shareholder of Cairn India with a 52.2 percent shareholding. Vedanta now owns 28.5 percent of Cairn India.
CHINA
PBOC allays debt worries
The People’s Bank of China (PBOC) said risks associated with debts run up by its local governments are controllable, in the latest effort to allay fears state-owned banks might face a wave of loan defaults. The national auditor reported last month that local governments ran up 10.7 trillion yuan (US$1.6 trillion) in debt — equivalent to a quarter of the nation’s annual economic output — during the past decade. The PBOC said on Monday many local government investments were financially viable and would generate returns to repay their debts. It gave no new details on a possible default rate or steps it might take.
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