MACROECONOMICS
RBA explains rate cut
The Reserve Bank of Australia (RBA) yesterday said lower growth and higher unemployment concerns prompted it to cut official interest rates to a historic low of 2 percent this week in an bid to spur the economy. Ahead of Canberra releasing its national budget on Tuesday, the central bank said that a long-awaited pickup in non-mining investment, which is holding back the economy, would likely take longer than anticipated. In its quarterly statement on monetary policy, the bank said GDP growth in the year to June was expected to slip to 2 percent — down from the 2.25 percent it predicted three months ago. The bank said the growth forecasts implied that there would also be excess capacity in the labor market for longer than previously thought.
AUTOMAKERS
BMW plant boosts solar
BMW AG, the world’s biggest maker of luxury cars, intends to meet 20 percent of its electricity needs from solar power at its factory in India by the end of next year. The German company will seek bids to build a solar farm in the first quarter of next year, said Robert Frittrang, managing director of the factory near Chennai. The successful bidder can install panels on top of the plant. The tariff for solar electricity is fixed for five years and works out cheaper than electricity purchased from the local grid, Frittrang said. The Munich-based carmaker currently gets 6 percent of its electricity at the Chennai plant from rooftop solar cells.
BIOTECHNOLOGY
Syngenta rejects Monsanto
Swiss biotechnology company Syngenta yesterday said that it had rejected a takeover offer from Monsanto Co which it said greatly undervalued its prospects. However, Syngenta’s shares jumped 17 percent on the interest. Monsanto had offered to buy the company at a price of 449 Swiss francs per share, Syngenta said. Based on the number of shares issued, that would value Syngenta at SF41.7 billion (US$45.5 billion). Directors unanimously rejected the offer because it “fundamentally undervalues Syngenta’s prospects” and underestimates “significant” risks to a deal including regulatory and public scrutiny in many countries, the company said in a statement. Syngenta chairman Michel Demare said the proposal does not reflect “the significant future value potential of the company’s crop-focused innovation” and market-leading positions.
INVESTMENTS
Fitbit files for IPO
Fitbit, the maker of a popular line of wearable fitness-tracking devices, on Thursday filed for an initial public offering (IPO) worth up to US$100 million. Fitbit’s watch-sized devices can track how many steps a wearer takes and estimate how many calories they are burning, how far they have traveled and how long they have been active. More advanced devices can track sleep duration and quality, heart rate and running speed, and they can be synced up with smartphone apps. The San Francisco company’s basic Zip activity tracker costs US$59.95, while its Surge “super watch” costs US$249.95. Fitbit also makes a Wi-Fi-enabled scale that records data like body fat in addition to weight. Fitbit says it has sold almost 21 million devices since 2011, but more than half of those sales were made last year. The company reported US$745.4 million in revenue last year, almost triple its total a year earlier, and that pace has continued this year. In the first quarter Fitbit’s revenue more than tripled to US$336.8 million from US$108.8 million a year ago.
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