MACROECONOMICS
Japan’s inflation stays flat
Japan says its economy remained stalled last month, as wages fell further and household spending dropped, while industrial production grew less than expected. Data released yesterday showed inflation remained flat, with the core consumer price index, excluding volatile fresh food prices, standing at 3.3 percent, the same as a month earlier. Real incomes fell 6.2 percent, as the unemployment rate edged higher, to 3.8 percent from the 3.7 percent recorded in June. Meanwhile, factory production edged up 0.2 percent last month from June after tumbling 3.4 percent the previous month. While the fresh reading marked a modest rebound, it was well below market expectations of a 1.2 percent rise in industrial production.
SOUTH KOREA
Industrial output grows
South Korea’s industrial output grew for the second straight month last month, raising expectations that the country’s sluggish economy might be gaining some strength, government data showed yesterday. Production in the mining, manufacturing, gas and electricity industries expanded 1.1 percent last month from June, Statistics Korea said. This followed a revised 2.6 percent gain a month earlier. Production of cars and other vehicles rose 10.7 percent from the previous month and oil refinery products were up 7.5 percent. However, semiconductors and parts fell 4.9 percent month-on-month.
INVESTMENT
Tesco issues profit warning
Troubled British supermarket giant Tesco PLC yesterday issued another profit warning and slashed its shareholder dividend by 75 percent to £0.0116 (US$0.02) per share, blaming challenging trade and the high cost of investment. The company added that new chief executive officer Dave Lewis would start next Monday — one month earlier than planned — in order to carry out a review of “every aspect” of the business. Trading profit was forecast to be in the range of £2.4 billion to £5 billion for this financial year.
BANKING
Huarong to launch IPO
China’s biggest manager of bad debt said on Thursday that it had attracted about US$2.4 billion from eight investors, including Goldman Sachs and Warburg Pincus, before an expected initial public offering in China. China Huarong Asset Management Co (中國華融資產管理), the biggest of the four state-owned companies set up in the late 1990s to take bad loans off the books of the country’s biggest banks, said it sold a 20.98 percent stake to the group of Chinese and foreign investors for 14.54 billion yuan (US$2.36 billion), valuing Huarong at about US$11 billion.
BANKING
US banks’ profits rise 5.2%
US banks’ earnings rose 5.2 percent in the April-to-June quarter from the same period a year earlier, as banks reduced their expenses and lending was at its fastest rate since 2007. The data issued on Thursday by the US Federal Deposit Insurance Corp (FDIC) showed a robust picture as the banking industry continues to recover from the 2007 to 2009 financial crisis. The improving economy has brought greater demand for loans and stepped-up lending. The FDIC reported that US banks earned US$40.2 billion in the second quarter of this year, up from the US$38.2 billion posted in the same period last year. The number of banks on the FDIC’s “problem list” fell to 354 in the second quarter, the lowest number in more than five years and down from 411 in the January-to-March period.
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