MACROECONOMICS
Japanese output accelerates
Japan’s factory output in April rose at its fastest pace in six years, government data released yesterday showed, in the latest sign the economy is gathering steam. Industrial production expanded 4 percent, rebounding from a decline in March and rising at its quickest rate since June 2011, when it grew 4.2 percent. The figures come a day after separate data showed consumer demand remains weak despite years of government efforts to boost spending. Still, the latest output numbers are good news for Japanese Prime Minister Shinzo Abe, who swept to power in late 2012 on a pledge to reignite Japan’s once-booming economy with a policy blitz comprising massive monetary easing, stimulus spending and structural reforms. The figures “show that production will be strong in the April to June quarter, underpinning the view that the economy is on a recovery path,” Dai-ichi Life Research Institute chief economist Yoshiki Shinke told reporters.
LUXURY GOODS
Handbag breaks price record
Christie’s says a luxury handbag has shattered the world auction record in Hong Kong. The auction house did not identify the buyer of the matte white crocodile skin Hermes Birkin bag with 18 karat gold and diamond hardware at yesterday’s sale. The item fetched HK$2.94 million (US$377,437), which Christie’s says is a record for any handbag sold at auction. The price surpasses the record set a year ago when Christie’s auctioned a similar Birkin bag for US$300,000. The highly coveted bag was created in 1984 by the French luxury label in honor of British singer and actress Jane Birkin. It is famous for a stratospheric price tag, celebrity owners and a years-long waiting list.
SHIPBUILDERS
Saudi Aramco to build wharf
Saudi Aramco is to build the biggest shipyard in its region in a US$5.2 billion joint venture with South Korea’s Hyundai Heavy Industries and others, the partners said yesterday. The yard, to be constructed on the Persian Gulf coast, will have the capacity to produce four offshore rigs and 40 vessels, including three supertankers, a year, the state-owned oil giant said in a statement. Lamprell, a United Arab Emirates-based provider of services to the energy industry, and Bahri, Saudi Arabia’ national shipping company, have also signed on to the venture. Located in the new industrial port city of Ras al-Khair, the yard will also provide maintenance services for rigs and vessels. In a separate statement, Lamprell PLC said the yard will cost an estimated US$5.2 billion to build, of which roughly US$3.5 billion will come from the Saudi government.
AVIATION
Air India could be privatized
Indian Prime Minister Narendra Modi is considering a proposal to privatize state-run Air India, possibly asking the buyer to absorb loans of about 200 billion rupees (US$3.1 billion) linked to aircraft purchases, a person with direct knowledge of the matter said. The deliberations follow recommendations by a government panel for the sale of the money-losing carrier that has nearly US$8 billion in debt, the person said. As for the rest of the flag carrier’s debt, the government has yet to decide whether to write off or reorganize it, the person said. The process may include disposing of Air India’s real estate and other non-core assets worth about US$3 billion before the sale or hiving them off, the person said. Unprofitable for a decade, with taxpayers bailing it out in the past six years, Air India’s appeal to any investor is contingent on the government’s ability to write off the debt not backed by assets. Many state-run lenders have been seeking capital injection from taxpayer funds amid mounting bad loans.
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
ARTIFICIAL INTELLIGENCE: The chipmaker last month raised its capital spending by 28 percent for this year to NT$32 billion from a previous estimate of NT$25 billion Contract chipmaker Powerchip Semiconductor Manufacturing Corp (力積電子) yesterday launched a new 12-inch fab, tapping into advanced chip-on-wafer-on-substrate (CoWoS) packaging technology to support rising demand for artificial intelligence (AI) devices. Powerchip is to offer interposers, one of three parts in CoWoS packaging technology, with shipments scheduled for the second half of this year, Powerchip chairman Frank Huang (黃崇仁) told reporters on the sidelines of a fab inauguration ceremony in the Tongluo Science Park (銅鑼科學園區) in Miaoli County yesterday. “We are working with customers to supply CoWoS-related business, utilizing part of this new fab’s capacity,” Huang said, adding that Powerchip intended to bridge
Microsoft Corp yesterday said that it would create Thailand’s first data center region to boost cloud and artificial intelligence (AI) infrastructure, promising AI training to more than 100,000 people to develop tech. Bangkok is a key economic player in Southeast Asia, but it has lagged behind Indonesia and Singapore when it comes to the tech industry. Thailand has an “incredible opportunity to build a digital-first, AI-powered future,” Microsoft chairman and chief executive officer Satya Nadella said at an event in Bangkok. Data center regions are physical locations that store computing infrastructure, allowing secure and reliable access to cloud platforms. The global embrace of AI
Qualcomm Inc, the world’s biggest seller of smartphone processors, gave an upbeat forecast for sales and profit in the current period, suggesting demand for handsets is increasing after a two-year slump. Revenue in the three months ended in June will be US$8.8 billion to US$9.6 billion, the company said in a statement Wednesday. Excluding certain items, earnings will be US$2.15 to US$2.35 a share. Analysts had projected sales of US$9.08 billion and earnings of US$2.16 a share. The outlook signals that the smartphone market has begun to bounce back, tracking with Qualcomm’s forecast that demand would gradually recover this year. The San