MACROECONOMICS
Foreign debt causes concern
The foreign-debt levels of companies in emerging markets from China to India and Brazil are underestimated, threatening financial stability, the Bank for International Settlements (BIS) said. Companies are raising more foreign funds through their offshore affiliates and accounting practices understate the currency risk in such transactions, the Basel, Switzerland-based institution said in its quarterly report. Almost half of the US$554 billion that the firms raised in the five years through last year came from the affiliates, the BIS said.
BANKING
BOJ to cut forecast: sources
The Bank of Japan (BOJ) looks increasingly likely to cut its inflation forecasts next month, sources say, making its target of 2 percent for this year from April look ever more ambitious. The BOJ surprised markets on Oct. 31 with its decision to flood the market with cash to counter the effect of slumping oil prices and weak domestic demand on inflation expectations, but oil prices have fallen 15 percent since then. Some central bankers now fear core consumer inflation is also set to slow to about 0.5 percent by the middle of next year as gasoline and electricity bills fall, down from May’s peak of 1.4 percent and far below the 2 percent target Bank of Japan Governor Haruhiko Kuroda has committed to achieving.
MACROECONOMICS
German output still rising
German industrial production rose for a second month in October in a sign that a slow recovery in Europe’s largest economy is continuing. Production, adjusted for seasonal swings, gained 0.2 percent from September, when it climbed a revised 1.1 percent, Germany’s Federal Ministry for Economic Affairs said yesterday. The increase was less than the median estimate of 0.4 percent in a Bloomberg News survey. Output advanced 0.8 percent from a year earlier. While the Bundesbank last week cut its economic forecasts for the country through 2016, Bundesbank President Jens Weidmann said there is reason to “hope that the current sluggish phase will prove to be short-lived.” GDP barely grew in the third quarter after a contraction in the three months through June. “That said, the pace is modest and, considering the euro area’s weakness, it will remain so for quite some time,” Frankfurt-based Helaba economist Stefan Muetze said. Yesterday’s report highlighted Germany’s reliance on private consumption for growth, with output of consumer goods climbing 0.5 percent in October.
TECHNOLOGY
BlackBerry invests in health
BlackBerry Ltd’s investment in healthcare technology has produced its first apps targeted at doctors and nurses who use its smartphones. The Canadian phone maker’s networks and devices will run apps developed by Los Angeles-based NantHealth, a healthcare company run by billionaire Patrick Soon-Shiong. BlackBerry invested in NantHealth last April. Healthcare is a key target for BlackBerry, said chief executive officer John Chen (程守宗). The first part of the deal will connect physicians’ BlackBerrys with a NantHealth system that analyzes tumors and recommends treatment options. It is set to be available early next year, the companies said. More applications are planned, Chen and Soon-Shiong said in a joint telephone interview. Chen, who has said he plans to double software revenue to US$500 million by March 2016, declined to comment on what the healthcare business could be worth.
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
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
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