CHINA
Cable makers’ shares sink
A severe price war among cable makers vying to supply the country’s telecom giants’ 5G ambitions have caught investors off guard. Instead of the earnings windfall that many were hoping for, profit margins will likely be squeezed and analysts say some companies might only manage to break even this year. Yangtze Optical Fibre and Cable Joint Stock Ltd (長飛光纖光纜) sank 9.5 percent in Hong Kong yesterday, while Comba Telecom Systems Holdings Ltd (京信通信系統控股), which does not even make cables, lost 6.6 percent. Fiberhome Telecommunication Technologies Co (烽火通信), Hengtong Optic-electric Co (亨通集團) and Jiangsu Zhongtian Technology Co (中天科技) dropped at least 3.3 percent onshore. China Mobile’s (中國移動) order for fiber-optic cable last month sent shares of anything with a hint of 5G rallying.
APPAREL
Adidas expects slow growth
Adidas AG shares yesterday slumped after the company said it expects sales growth to slow this year, with the retro footwear boom losing momentum on the company’s European home turf. Sales growth this year would be as much as 3 percentage points behind last year’s 8 percent, the company said. Adidas is facing growing momentum from archrival Nike Inc, which is benefiting from a raft of hot-selling new products. Adidas has been struggling in Western Europe, which accounted for about 23 percent of sales in the fourth quarter of last year. Sales fell in the region last year, but the company forecast a “slight increase” this year, adjusted for currency swings.
UNITED KINGDOM
No tariffs after Brexit
The government is not to apply tariffs on most goods imported into the country in the event of a no-deal Brexit, under a temporary plan announced yesterday. About 87 percent of goods by value would be eligible for tariff-free access. The remainder, including some meat and dairy, as well as finished vehicles, would have tariffs to protect domestic industry. The list does not include vehicle parts imported from the EU. The government also said any tariffs would not apply to goods imported into Northern Ireland from Ireland.
INDIA
Google unveils music app
Alphabet Inc’s Google has introduced its YouTube music app in the country, offering local and global songs to a booming market that saw the entry of Spotify AB just a few days ago. The YouTube Music streaming and download service includes popular Bollywood Hindi scores and other local-language music, the Mountainview, California-based technology giant said in a blog post. The free service is supported by commercials, while a premium version with no advertisements costs 99 rupees (US$1.42) a month. YouTube is already the country’s most popular online music source via its free mainstay video service. While streaming services have about 100 million users in the country, only a tiny fraction of that pays.
SOUTH KOREA
Unemployment drops
Jobs data provided some surprisingly good news for President Moon Jae-in, who is under fire over his economic policies — particularly his aggressive minimum wage hikes. The unemployment rate last month fell to 3.7 percent, the lowest in eight months and better than economists’ forecast of 4.2 percent. The economy added 263,000 new jobs last month, the most since January last year. The hiring was mainly in services.
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
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
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)