FRANCE
Consumer spending dips
Consumer spending last month fell unexpectedly sharply, official data showed yesterday, flagging a weak start to the year even before the COVID-19 outbreak began taking its toll. National statistics agency INSEE said that consumer spending fell 1.1 percent from December, which crushed the forecast for an increase of 0.1 percent in a Reuters poll of 14 economists in which none had expected anything lower than minus-0.6 percent. INSEE blamed much of the decrease on a sharp drop in sales of new autos as a government scheme to increase the price of more polluting vehicles took effect last month. The economy increasingly faces a broader challenge from the virus outbreak, which the government estimates could shave 0.1 percentage points from its growth forecast of 1.3 percent for this year.
JAPAN
No Olympics to jolt economy
If COVID-19 forces the government to cancel the Tokyo Olympics, it would jolt the nation’s financial system, BNP Paribas SA economist Ryutaro Kono said yesterday. In addition to the loss of inbound tourism spending, it would trigger a jump in nonperforming loans in the tourism and real-estate sectors, Kono said. The government would likely have to respond with spending support for the economy and with bailouts for struggling regional banks, he said. The Bank of Japan might also eventually step in to provide loans to the banking sector at negative rates and buy more exchange-traded funds, Kono said. In the worst-case scenario, should the global economy also fall into a recession, Japan could see a negative spiral similar to the one in Europe in the 2010s, where government loans to suffering banks caused financial difficulties for the state that in turn impacted the banking sector in a loop, he said.
TOURISM
Industry faces US$22bn hit
The COVID-19 outbreak would cost world tourism at least US$22 billion owing to a drop in spending by Chinese tourists, the head of the World Travel and Tourism Council (WTTC) said on Thursday. “It is too soon to know, but the WTTC has made a preliminary calculation in collaboration with Oxford Economics, which estimates that the crisis will cost the sector at least US$22 billion,” Gloria Guevara told El Mundo. “This calculation is based on the experience of previous crises, such as SARS or H1N1, and is based on losses deriving from Chinese tourists who have not been travelling in recent weeks,” she said. “The Chinese are the tourists who spend most when they travel.” The loss figure is the most optimistic scenario envisaged by the study published on Feb. 11 by Oxford Economics.
TELECOMS
Huawei plans French plant
Huawei Technologies Co (華為) on Thursday said that it would begin manufacturing radio equipment for next-generation 5G networks in France, its first such facility outside of China. Its planned 200 million euro (US$220.7 million) facility would employ 500 people and produce equipment for the European market, Huawei chairman Liang Hua (梁華) told a news conference in Paris. “The site will begin manufacturing radio equipment and then branch out to other products in the future, depending on the needs of the European market,” Liang said. The US has been pressuring European allies to exclude Huawei from their 5G networks, but France and Britain have so far refused to be swayed.
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