ECONOMY
Moody’s lifts Spain’s rating
Moody’s raised Spain’s sovereign credit rating by one notch on Friday, citing progress in reforms to put the economy on a more sustainable track. Moody’s Investors Service upgraded the rating to “Baa2” from “Baa3” and gave the country a “positive outlook,” suggesting the potential of a further upgrade. Spain has made faster-than-expected progress in rebalancing its economy away from real-estate investment — where a 2008 price bubble crash sent the economy reeling — toward exports, the ratings firm said. Moody’s highlighted Spanish authorities’ progress in implementing broad structural reforms. Spain’s economy shrank by 1.2 percent over the whole of last year, but exited recession in the third quarter with 0.1 percent growth.
BAILOUTS
Fannie Mae plans payment
US mortgage-finance giant Fannie Mae said on Friday it plans to pay the US Treasury US$7.2 billion in dividends in March, reimbursing in full its 2008 taxpayer-funded bailout. Fannie Mae reported net income of US$6.5 billion in the fourth quarter, its eighth consecutive quarterly profit, and a net profit of US$84 billion for all of last year, nearly four times that of the previous year. With the March dividend payment, Fannie Mae will have paid US$121.1 billion in dividends, eclipsing the US$116.1 billion in funding it has drawn since 2008. The company benefited from a large number of settlements related to the subprime mortgage crisis, including an US$11.6 billion payment from Bank of America over bad loans it sold to Fannie. The company said it expects to remain profitable in the foreseeable future, though income levels are expected to be “substantially lower” than last year.
ECONOMY
Detroit’s exit plan misfires
Detroit’s plan to end its US$18 billion bankruptcy assumes bondholders offered US$0.20 on the US dollar will eventually swallow a deal that guarantees city police and firefighters collect 90 percent of their pensions. The city’s debt-adjustment plan, filed on Friday in the US Bankruptcy Court in Detroit, is built on US$820 million in contributions from private foundations and the state. Those groups say no money will flow without a settlement that protects the city’s valuable art collection from liquidation by bondholders and other creditors. Within hours of the plan being filed, the creditors that city officials must win over rejected the proposal. Unions and bond insurers also registered their displeasure.
HEALTHCARE
Singapore to spend S$9bn
Singapore said it will spend S$9 billion (US$7.1 billion) on healthcare and other benefits for the elderly, while providing companies with more funds to increase efficiency as the economy adjusts to a tighter labor supply. Foreign-worker growth has slowed “significantly” in the past two years, and curbs on the inflow of overseas labor have prompted companies to improve the way they do business, Singaporean Minister of Finance Tharman Shanmugaratnam said in his budget speech in Parliament yesterday. “Without good productivity growth, if we try to push wages up, we will end up with either higher consumer prices or squeezed profit margins that hurt both businesses and ultimately jobs,” Shanmugaratnam 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