MACROECONOMICS
US trade deficit balloons
The US’ trade deficit swelled in December to the biggest in two years as a strengthening US dollar propelled a surge in imports. The gap jumped 17.1 percent to US$46.6 billion, the widest since November 2012, from a revised US$39.8 billion in November, according to Department of Commerce data issued on Thursday in Washington. Other reports showed fewer Americans than forecast filed claims for jobless benefits last week and worker productivity ebbed in the fourth quarter. When combined with gains in the US dollar that are making foreign goods cheaper, an improving job market is giving households the confidence to buy automobiles and electronics made overseas. US companies also took advantage of the plunge in oil prices to restock fuel inventories, widening the gap in petroleum trade to an eight-month high.
MAcROECONOMICS
Russian inflation hits 15%
Russian inflation topped forecasts by economists, accelerating to the fastest pace in almost seven years as the country’s worst currency crisis since 1998 ignited price growth. Consumer prices rose 15 percent last month from a year earlier, compared with 11.4 percent in December, the Federal Statistics Service in Moscow said yesterday in an e-mailed statement. That exceeded the median estimate of 15 economists in a Bloomberg survey for 13.5 percent. Prices jumped 3.9 percent from the previous month. The surprise increase, which brings inflation to the current level of the Bank of Russia’s benchmark interest rate, underscores the challenges facing Russian President Vladimir Putin as the economy teeters on the edge of a recession. “The sharp rise in inflation is unlikely to prevent the central bank from cutting rates further over the coming months,” Capital Economics Ltd economist Liza Ermolenko said by e-mail.
ELECTRONICS
RadioShack files bankruptcy
Electronics retailer Radio-Shack Corp on Thursday filed for US bankruptcy protection and said it had a deal in place to sell as many as 2,400 stores to an affiliate of hedge fund Standard General, its lender and largest shareholder. Wireless company Sprint Corp would operate as many as 1,750 of those stores under an agreement with Standard General, Sprint said separately. RadioShack’s bankruptcy, which has been expected for months, follows 11 consecutive unprofitable quarters as the company has failed to transform itself into a destination for mobile phone buyers. Sprint would occupy about one-third of each RadioShack store, selling “mobile devices across Sprint’s brand portfolio as well as RadioShack products, services and accessories,” Sprint said in its statement.
CONGLOMERATES
Siemens to cut 2% of staff
Siemens AG plans to cut about 7,800 jobs, about 2 percent of its global workforce, as CEO Joe Kaeser needs to slash costs at Europe’s biggest engineering company to revive profits. About 3,300 of the jobs will be cut at Siemens’ German operations, the Munich-based company said in a statement yesterday. Kaeser said last year he planned to slash about 1 billion euros (US$1.1 billion) in costs by creating a leaner divisional structure and simplifying regional operations. The cuts come at a time when Siemens’ healthcare and energy generation divisions, once the prized assets of the company, risk jeopardizing Kaeser’s turnaround plan. Profit at the two units fell a combined 27 percent, dragging overall first-quarter profit down 4.1 percent to 1.8 billion euros, Siemens said last month.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by