AUTOMAKERS
Mitsubishi forecasts loss
Mitsubishi Motors Corp yesterday forecast its first loss in eight years after setting aside compensation costs related to manipulating fuel-efficiency ratings and falsifying test data. The net loss in the year ending March 31 will probably be ¥145 billion (US$1.4 billion), the company said. Mitsubishi Motors sees a ¥205 billion impact from the fuel economy scandal this fiscal year. Chairman Osamu Masuko aims to resume minicar production early next month and has said he is prepared to cut prices on models that are not as efficient as previously advertised.
TOYMAKERS
Hornby to cut product lines
British toymaker Hornby PLC said it would decrease its product lines by 40 percent and exit a majority of its concession agreements in the UK in a turnaround plan aimed at boosting its gross margins. Hornby, famous for its model railways, appointed finance director Steve Cooke as its CEO in April, two months after its previous head, Richard Ames, left in the wake of its third profit warning. The new business plan will focus on its core hobby customers, Cooke said in a statement, adding that revenue would fall by about one-quarter. The company reported an underlying pretax loss of £5.7 million (US$8.35 million) for the year ended March 31.
FASHION RETAIL
Hennes & Mauritz profit falls
Hennes & Mauritz AB says second-quarter net profit fell 17 percent as the Swedish fashion retailer continued to be hit by a strong US dollar causing high costs. The group’s sales increased 2 percent in the quarter to 54.3 billion kronor (US$6.6 billion), while profit dropped to 5.3 billion kronor from 6.4 billion a year earlier, with increased markdowns and investments. CEO Karl-Johan Persson described the first half of the year as “challenging,” but yesterday said he expects future growth for the Stockholm-based company that has 4,000 stores in 62 markets, with plans to open more than 400 more this year.
DELIVERIES
FedEX loses US$70m
FedEx Corp lost US$70 million in the latest quarter because of large pension and acquisition items, and the delivery giant gave a cautious outlook for the next 12 months. The company’s results still beat Wall Street expectations, as FedEx and other delivery companies continue to benefit as consumers do more shopping online. FedEx on Tuesday said that it expects earnings excluding one-time items in the new fiscal year to be between US$11.75 and US$12.25 per share. Last quarter, the loss amounted to US$0.26 per share and compared with a year-earlier loss of US$895 million, or US$3.16 per share.
TELECOMS
Softbank’s Arora to resign
Nikesh Arora, the heir apparent at Softbank Group Corp, will step down from the Japanese company in a surprise departure after founder Masayoshi Son made it clear he would not get the top executive role in the near future. The former Google executive had come under fire from some investors over his qualifications for the job. However, Son said those criticisms played no part in the departure. Rather, the 58-year-old founder said that he wants to remain at the helm of the company for a few more years, while Arora aspired to be chief executive officer more quickly. Arora, 48, will remain an adviser to Softbank.
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