FAST FOOD
Yum cuts profit outlook
Yum Brands cut its profit outlook for the year on Tuesday, citing the latest food scare in China that pummeled sales at its flagship KFC chain. The US company said it now expects earnings per share to rise between 6 and 10 percent from a year ago, instead of the growth of at least 20 percent it previously forecast. Yum, which also owns Pizza Hut and Taco Bell, is trying to recover from a TV report this summer that showed one of its suppliers using expired meat. During the quarter, KFC’s sales fell 14 at established locations in China, while Pizza Hut’s sales dropped 11 percent.
AVIATION
Strike cost Air France-KLM
Air France-KLM says a 14-day pilots’ strike that grounded about half the airline’s flights cost the company 500 million euros (US$631 million). The company gave the estimate in a statement yesterday, and said it hoped to accelerate development of Transavia, a low-cost affiliate that was at the center of the standoff. The pilots union said it was not against plans for the new business, but objected to the proposed labor conditions. They fear the company could outsource their jobs to countries with lower taxes and labor costs. Air France is hoping Transavia will tap into new markets in France and elsewhere in Europe, allowing it to compete with the low-cost carriers that have cut into the once-dominant market share held by giant European airlines.
FINANCE
Top CFO gives up bonus
The World Bank’s top chief financial officer (CFO) Bertrand Badre gave up a controversial US$94,000 bonus after a staff uproar over the issue, officials said on Tuesday. World Bank president Jim Yong Kim announced the change in a meeting with staff called urgently on the eve of the global crisis lender’s annual meetings in Washington, spokesman David Theis confirmed. Badre’s bonus, granted despite Kim’s budget-slashing austerity program at the bank, had sparked anger, and last week the World Bank Group Staff Association demanded Kim meet them to explain the issue.
TOBACCO
Japan Tobacco plans layoffs
Japan Tobacco said it may close two European factories and cut production at a third in a move that could see about 1,100 layoffs. The company plans to hold talks with unions representing workers in Lisnafillan, Northern Ireland, and Wervik, Belgium, about shutting the sites, while some production at its Trier plant in Germany is to be relocated, it said in a statement issued late on Tuesday. The firm — one of the world’s biggest tobacco companies, whose international brands include Winston and Camel — said some production could be moved to other sites, including in Poland and Romania.
ELECTRONICS
Samsung chairman recovers
Samsung chairman Lee Kun-hee is recovering steadily after suffering in May from a heart attack that left him hospitalized for months, a group spokesman said yesterday. Lee, 72, is credited with turning the once-obscure South Korean company into the electronics giant currently leading the world’s memorychip and smartphone markets. It is not known when Lee will be able to leave hospital, but a lift was recently installed at his Seoul home to “prepare for various possibilities including his release from hospital,” Samsung group spokesman Lee June 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