MANUFACTURING
China bounces back
Growth in China’s sprawling manufacturing industry unexpectedly ticked higher this month, according to a report yesterday, easing concerns about the No. 2 economy’s recovery. HSBC’s purchasing manager index edged up to 50.5 this month from 50.2 in August, based on a 100-point scale on which numbers below 50 indicate contraction. The modestly upbeat number comes after an official report earlier this month showed China’s factory output slowed sharply last month, which sparked fears momentum was fading and prompted some analysts to lower their full-year economic growth forecasts.
MANUFACTURING
New orders fall in Germany
German manufacturing expanded at the slowest pace in 15 months this month as new orders fell, signaling uneven momentum in Europe’s largest economy. Markit Economics said its Purchasing Managers Index fell to 50.3 from 51.4 in August, the weakest since June last year. A gauge of services rose to 55.4 from 54.9, offsetting the drop in factory output and pushing the composite index up to 54 from 53.7. A reading above 50 indicates expansion. In June, Germany’s central bank predicted growth of 1.9 percent this year and 2 percent next year.
BANKING
New restrictions on deposits
Sri Lanka yesterday unveiled tough new restrictions on deposits as it looks to encourage commercial banks to boost lending and help sustain the country’s healthy economic growth. The Central Bank of Sri Lanka’s monetary board said after its monthly review it would keep its key repurchase rate at 6.5 percent to lenders, but slashed it to 5.0 percent for any more than three deposits a month. The central bank retained its own lending rate to commercial banks at 8.0 percent, which has remained unchanged since a cut in January.
TRADE
Canada, S Korea sign FTA
Canada and South Korea signed a long-sought free-trade deal on Monday that will see the two countries remove tariffs on most products over the next 10 years. At a joint press conference in Ottawa, Canadian Prime Minister Stephen Harper and visiting South Korean President Park Geun-hye pledged to have the agreement quickly ratified. It is the first free-trade agreement (FTA) Canada has signed with an Asian country, and is set to see the two countries remove tariffs on more than 97 percent of products within 10 years. The trade pact is expected to boost bilateral trade by as much as 30 percent, according to government figures.
AUTOMAKERS
GM compensates victims
The death toll from crashes involving General Motors (GM) small cars with faulty ignition switches has risen to at least 21. Compensation expert Kenneth Feinberg said in an Internet posting he had received 143 death claims as of Friday. He determined that 21 are eligible for compensation so far. Last week 19 death claims were deemed eligible for payments. Feinberg also has received 532 injury claims. Of those, 16 are eligible for compensation thus far. The rest are still being reviewed.
GM has admitted knowing about the ignition switch problem in small cars like the Chevrolet Cobalt for more than a decade. Yet it did not begin recalling the cars until February. The switches can unexpectedly shut off the engine and cause crashes. GM hired Feinberg to compensate crash victims.
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