EQUITIES
TAIEX higher, TSMC falls
Local shares yesterday closed marginally higher, but the TAIEX returned to the 10,500-point mark as contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) came under pressure amid concerns over a cut in orders by Apple Inc, dealers said. The TAIEX closed up 15.08 points, or 0.14 percent, at 10,506.52, after moving between 10,472.39 and 10,526.41 on turnover of NT$94.14 billion (US$3.14 billion). TSMC, the most heavily weighted stock on the local market, fell 1.30 percent to close at NT$227 with 14.54 million shares changing hands after local media reported that the chipmaker has become the victim of weaker-than-expected demand for the premium iPhone X, as Apple has cut its orders with the firm by 30 percent for the first quarter of next year.
STEELMAKERS
Tung Ho to issue bonds
Tung Ho Steel Enterprise Corp (東和鋼鐵) yesterday said its board has approved a plan to raise nearly NT$2.51 billion from the issuance of convertible bonds to repay bank loans, a company filing with the Taiwan Stock Exchange said. The bonds would have a maturity of five years with a face value of NT$100,000, the statement said. In a separate filing, Tung Ho said it would inject new capital of US$40 million into its Vietnamese unit to add production lines as part of the company’s long-term strategy to cement its position in the Vietnamese market.
TELECOMS
Campaign adds subscribers
Taiwan Star Telecom Co (台灣之星) yesterday said a promotion campaign last month helped increase its number of mobile subscribers to 1.92 million. Last month alone, the company added 80,000 new subscribers after it launched a new service package that carries a minimal monthly charge of NT$188 for an all-you-can-use Internet connection on its 4G network. The one-year contract can be renewed without any increase in the monthly charge. The growth in subscribers also helped double revenue last month from a year ago, Taiwan Star said. As a newcomer, Taiwan Star has been undercutting its rivals to solicit mobile subscribers.
TIRE MAKERS
Cheng Shin downgraded
Taiwan Ratings Co (中華信評) yesterday revised down its outlook on local tire maker Cheng Shin Rubber Co (正新橡膠) to “negative” from “stable,” while keeping its credit rating unchanged. The outlook revision reflects the view that Cheng Shin’s debt leverage could elevate over the next one to two years amid slowing demand in China and intense competition. The tire maker’s profitability has weakened, with its margin falling to 15 percent in the third quarter of this year, down from 24.2 percent a year earlier, due to weak product pricing. A decline in the sales of passenger car tires, depreciation of the yuan and volatile raw material costs also weighed on Cheng Shin’s profit, Taiwan Ratings said.
FINANCIAL SERVICES
CTBC ratings unchanged
Fitch Ratings yesterday said penalties imposed by the Financial Supervisory Commission on CTBC Financial Holding Co (中信金控) are unlikely to affect the ratings of the conglomerate or its subsidiaries. Fitch said it does not expect the penalties to change the group’s financial profile, particularly that of its flagship subsidiary, CTBC Bank (中國信託銀行). The bank’s rating reflects its sound capitalization, solid asset quality and diverse earnings mix, Fitch said.
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