CONGLOMERATES
Samsung fends off challenge
The most powerful corporate family in South Korea got help from another dynasty in its campaign to fend off a challenge from billionaire activist investor Paul Elliott Singer. A unit of Samsung Group on Wednesday agreed to sell shares valued at more than US$600 million to a company with ties to the Hyundai conglomerate. That sale unlocks voting rights the Lee family can use to push through a merger that Singer’s Elliott Associates LP opposes on grounds the offer is too low. The deal escalates a battle between the Lee dynasty that controls a US$270 billion business empire and an investor known for taking on the likes of Argentina’s government. Elliott’s opposition threatens to disrupt a restructuring needed by the Lee family to solidify its control over Samsung. Samsung C&T Corp said it would sell all its 8.99 million treasury shares to KCC Corp, a company headed by a member of the Hyundai family.
FINANCE
Fitch questions HSBC plan
Fitch Ratings Ltd questioned HSBC Holdings PLC chief executive Stuart Gulliver’s three-year plan to boost the comapny’s profitability by expanding in Asia, saying it could spark a downgrade. The plan, which includes cutting as many as 25,000 jobs, would only have a positive impact if the lender “outperforms on the execution of its strategy” while boosting “capitalization significantly,” Fitch said yesterday. “In particular, how HSBC manages its significant planned growth in China and Southeast Asia could hurt the ratings if this leads to a higher overall risk profile and concentration.” Gulliver’s plan, announced on Tuesday, includes cutting staff by about 10 percent, selling operations in Turkey and Brazil, stepping up investment in Asia, and expanding asset management and insurance in places such as China’s Pearl River Delta.
AUSTRALIA
Unemployment rate falls
The nation’s unemployment rate unexpectedly declined to 6 percent last month, Australian Bureau of Statistics data showed yesterday, in a sign the economy could be starting to better adapt to the end of a mining investment boom. About 42,000 positions were added last month, much higher than the 10,000 predicted by analysts, as the jobless rate ticked down from an adjusted 6.1 percent in April. The increase in employment was driven by part-time jobs, which rose 27,300, while full-time roles were up 14,700, the bureau said. The fall comes on the back of data this month showing the mining-driven economy grew a stronger-than-expected 0.9 percent in the first quarter of the year, boosted by exports and consumer spending.
ENTERTAINMENT
Line launches music service
Mobile messaging giant Line Corp yesterday launched a digital music streaming service in Japan, stepping into a largely untapped market still dominated by sales of compact discs. The new business — which comes weeks before Apple Inc is expected to enter the Japanese market with its own streaming service — offers unlimited access to a collection of more than 1.5 million songs for ¥1,000 (US$8) a month. For those on a budget, a ¥500 fee buys 20 hours of listening time. Line said it would expand its music library to 5 million tunes by the end of the year and to 30 million next year. The service is to feature top-selling artists, from Sam Smith to Michael Jackson, as well as likes of Japanese diva Ayumi Hamasaki and South Korean band Big Bang.
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