ELECTRICITY
TEPCO to raise rates
Tokyo Electric Power Co (TEPCO) plans to raise electricity rates for companies from April to help offset the rising costs of fuel to run thermal power plants after the Fukushima Dai-ichi disaster shut down most of its nuclear reactors. The utility known as TEPCO will announce the size of the increase next month, it said in a statement. It will also seek approval from the government to raise tariffs for households “as soon as possible,” according to the statement. TEPCO estimates its fuel costs will rise by ¥830 billion (US$10.6 billion) to ¥2.31 trillion in the year ending March 2012. Only two of the company’s 17 nuclear reactors are now running after the March 11 earthquake and tsunami wrecked its Fukushima Dai-ichi plant.
AIRLINES
IAG buys Lufthansa unit
British Airways parent IAG agreed to buy Deutsche Lufthansa AG’s BMI unit in the UK for £172.5 million (US$270.5 million), fending off a counterbid from Virgin Atlantic Airways Ltd. IAG will add as many as 56 additional daily slots at London’s capacity-constrained Heathrow airport through the acquisition, the London-based airline said in a statement yesterday. CEO Willie Walsh has said IAG wants Castle Donington, England-based BMI for its mainline operations at Heathrow, and will use the purchase to expand its own long-haul network, particularly on routes to Asia and Latin America. Buying BMI brings access to the 8.5 percent of takeoff and landing slots that IAG controls. UK billionaire Richard Branson’s Virgin also made an offer for BMI and has said British Airways is “already too dominant” at Heathrow and that competition authorities should be concerned.
AIRLINES
LAN and TAM close to deal
LAN and TAM are one step closer to becoming LATAM, the largest airline in Latin America. Shareholders of Chile’s LAN Airlines SA approved the company’s US$3 billion purchase of Brazil’s TAM SA on Wednesday, creating one of the 10 largest passenger and cargo airlines in the world. Combined, the two companies had more than US$11 billion in revenue last year. The merged company, known as LATAM Airlines Group SA, will be led by LAN CEO Enrique Cueto as chief executive and TAM’s Rolim Amaro as chairman. Relatives of both men will remain atop each family-owned airline. The deal has been approved by Brazilian regulators and awaits the approval of Chile’s Supreme Court, expected early next year. Together, the group will have 40,000 employees serving more than 45 million customers a year, with flights to more than 115 destinations in 23 counties.
NEW ZEALAND
World Cup boosted GDP
New Zealand’s economy exceeded expectations to grow 0.8 percentage points in the September quarter as the Rugby World Cup boosted GDP, official data showed yesterday. Renewed strength in the manufacturing sector also lifted growth, meaning the economy expanded 1.3 percent in the 12 months to Sept. 30, Statistics New Zealand (SNZ) said. The quarterly result showed the economy bouncing back from growth of just 0.1 points in the three months to June and surpassed market forecasts of an 0.6 point rise. “Activity in the retail, accommodation and restaurants industry was certainly boosted by the Rugby World Cup, New Zealanders and visitors to New Zealand,” SNZ national accounts manager Rachael Milicich 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