TAXES
Big firms avoiding taxes
Microsoft Corp, Hewlett-Packard Co (HP) and other multinational corporations have avoided billions in US taxes by shifting profits offshore and taking advantage of weak, ambiguous sections of the tax code, US Senate investigators said on Thursday. Microsoft used “aggressive” transactions to shift assets to subsidiaries in Puerto Rico, Ireland and Singapore, in part to avoid taxes, the report by the Senate Permanent Subcommittee on Investigations said. In one example, the report said that the Washington state-based software giant saved US$4.5 billion in taxes from 2009 to last year by shifting assets to Puerto Rico. The report, released at a subcommittee hearing, also said that since at least 2008, HP has used complex offshore loan transactions worth billions of US dollars to avoid paying taxes, while using the money to run its US operations. The mammoth high-tech company has its headquarters in Palo Alto, California.
ECONOMY
IMF to cut global growth
The IMF will lower its growth forecasts for the global economy next month, an IMF official said on Thursday. “The global economy has weakened. We are shaving off our forecast for global growth by a few decimal points,” Hoe Ee Khor, assistant director of the IMF’s Asia and Pacific Department, said in a conference call on South Korea’s economy. In its last estimates, the Washington-based global lender projected global growth of 3.5 percent this year and 3.9 percent next year. On Thursday, the IMF cut its growth estimate for South Korea to 3 percent, from a June forecast of 3.25 percent, citing the eurozone crisis and high household debt problems.
EMPLOYMENT
US jobless claims still high
The number of Americans filing new claims for jobless benefits held near two-month highs last week, suggesting some weakening in labor market conditions. Initial claims for state unemployment benefits slipped 3,000 to a seasonally adjusted 382,000, the US Department of Labor said on Thursday. The prior week’s figure was revised up to show 3,000 more applications than previously reported. Economists polled by Reuters had forecast claims falling to 375,000 last week. The four-week moving average for new claims, a better measure of labor market trends, rose 2,000 to 377,750 — the highest level since June. It was the fifth consecutive weekly increase in the measure.
BANKING
Banks face capital shortfall
The world’s top banks need to step up efforts to raise cash or hold on to more profits after regulators estimated they would have had a shortfall of 374 billion euros (US$488 billion) had new capital rules been in place last year. Banks have in recent years been bolstering capital ahead of the new regime, designed to create a bigger safety net to protect taxpayers from having to bail out banks and avoid a repeat of the 2007 to 2009 financial crisis. The new rules will be phased in from January and be fully in place in 2019, but investors and regulators want banks to implement them early. The Basel Committee of global regulators said on Thursday that if the new rules, known as Basel III, had been in force at the end of December, the biggest banks would have needed 374.1 billion euros to hold core capital of 7 percent of assets, the target level banks will have to meet. That capital shortfall was down 111 billion euros from a previous assessment made in April.
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
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
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