MANUFACTURING
Eurozone output slumps
Manufacturing in the eurozone shrank for a sixth month at the start of the third quarter, dragged down by Germany’s worst slump in seven years. The downbeat figures come in the wake of reports showing slower economic growth in France, Spain and the eurozone, with Italy stagnating. IHS Markit said its eurozone manufacturing purchasing managers’ index fell to 46.5 last month from 47.6 in June. In Germany, the factory gauge fell to 43.2 from 45 in June. A measure of export orders dropped to the lowest since 2009. The manufacturing weakness is apparent across the region, with output falling in Italy, France, Spain, Ireland and Austria.
STEEL
Top maker cuts forecast
ArcelorMittal, the world’s largest steelmaker, yesterday revised down its forecast for global steel demand, with a sharper reduction now envisaged in Europe due to a lean automotive market. The Luxembourg-based company said it expects global apparent steel consumption, which includes inventory changes, to rise between 0.5 and 1.5 percent this year, from a previous forecast of 1 to 1.5 percent. The company also reported a second-quarter core profit of US$1.56 billion, slightly above its compiled consensus of US$1.53 billion, but down from US$1.65 billion in the first quarter.
BANKING
Barclays earnings surge
Net income nearly quadrupled at Barclays PLC in the first half of the year on reduced litigation costs, helping compensate for difficult conditions in retail and investment banking. Net profit of £2.1 billion (US$2.5 billion) was a stellar improvement, but when heavy legal costs it suffered in the same period last year are stripped out, earnings slid 15 percent. Last year, the company was hit by a huge US$2 billion fine to resolve a US fraud case involving mortgage derivatives, as well as the costs of settling claims of mis-selling consumer credit insurance in the UK.
AUTOMAKERS
BMW profit dips on spending
Luxury automaker BMW AG yesterday said its net profit fell 29 percent to 1.48 billion euros (US$1.63 billion) in the second quarter from a year earlier as profits were reduced by higher spending on revamping factories and on new technologies such as battery-only cars and smartphone-based services. The company said vehicle sales rose 1.5 percent to 647,500, helped by its BMW Brilliance (華晨寶馬) joint venture in China, and revenue increased 2.9 percent to 25.7 billion euros. The automaker said that it was sticking with its profit forecast for the year.
CONGLOMERATES
Weak demand hits Siemens
Industrial equipment and technology company Siemens AG yesterday said its net profit slipped 6 percent in the past quarter, as weaker demand for factory automation from the auto and machine-building sectors hit earnings. Net profit eased to 1.134 billion euros in the April-June quarter, the company’s fiscal third, from the year-earlier period. Revenue rose 4 percent to 21.27 billion euros. The company’s order backlog hit a record high of 144 billion euros, led by sharp growth in its renewable energy business, which took in two orders for offshore wind farms in Taiwan totaling 2.3 billion euros, and by a 1.2 billion euro order for high-speed trains and maintenance in Russia.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts