AVIATION
US Airways proposes merger
US Airways Group Inc has made a formal merger proposal to American Airlines parent AMR Corp and its creditors that could value the combined airline at about US$8.5 billion, two people familiar with the matter said on Friday. Details of the proposal emerged as American Airlines pilots voted to ratify a new union contract on Friday, ending a years-long labor dispute and stabilizing the carrier as it tries to emerge from bankruptcy. Under an all-stock merger that US Airways proposed last month at a meeting with AMR’s unsecured creditors committee, AMR creditors would own 70 percent of the merged company and US Airways shareholders 30 percent, the sources said. The combined AMR and US Airways could have a value similar to Delta Air Lines Inc, which has a market capitalization of about US$8.5 billion, the sources said.
TECHNOLOGY
Kodak patents under offer
Apple Inc and Google Inc have joined forces to offer more than US$500 million to buy Eastman Kodak Co’s patents out of bankruptcy, two people with knowledge of the situation said. The two companies, competing for dominance of the smartphone market, have partnered after leading two separate consortia this summer to buy Kodak’s 1,100 imaging patents, said the sources, who asked not to be identified because the process is private. Unlikely partnerships are common in patent sales as they allow competitors to neutralize potential infringement litigation. The Apple-led group pursuing Kodak’s patents included Microsoft and Intellectual Ventures Management LLC as of this summer, the sources said, while Google’s consortium included patent aggregation firm RPX Corp and Asian manufacturers of Google’s Android phones.
AUTOMAKERS
Fiat plans workforce cuts
Fiat Auto Poland, plans to cut one third of its workforce in Poland, where it makes its popular Fiat 500 minicar, as a sales slump that has forced automakers to shut plants in western Europe hits one of Fiat’s most productive factories. Fiat, Poland’s largest car manufacturer, plans to cut about 1,500 jobs. The plant, located in Tychy, in the south of Poland, employed 4,967 workers at the end of October and is one of Fiat’s most productive. Excess production capacity is piling pressure on carmakers’ profitability as sales stagnate.Fiat’s output in Poland will be below 350,000 cars this year and will drop below 300,000 next year, less than half its 2009 total, the company said on Friday.
FINANCE
US consumer debt rises
US citizens swiped their credit cards more often in October and borrowed more to attend school and buy cars. The increases drove US consumer debt to an all-time high. The US Federal Reserve said on Friday that consumers increased their borrowing by US$14.2 billion in October from September. Total borrowing rose to a record US$2.75 trillion. Borrowing in the category that covers autos and student loans increased by US$10.8 billion. Borrowing on credit cards rose by US$3.4 billion, only the second monthly increase in the past five months. The strong rise in borrowing came in a month when US citizens cut back on consumer spending, reflecting in part disruptions from superstorm Sandy.
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