Science parks’ revenue grows 20%

The nation’s three major science parks posted record combined revenue of NT$2.05 trillion (US$64.3 billion) for the first half of the year, up 19.63 percent year-on-year, the National Science and Technology Council said in a report yesterday. The council attributed the robust performance to growing demand for artificial intelligence of things, 5G, high-performance computing and other emerging applications, which lifted the sales of semiconductor companies in the three parks. Hsinchu Science Park (新竹科學園區) saw first-half revenue rise 10.94 percent annually to NT$825.4 billion, while the Central Taiwan Science Park (中部科學園區) and the Southern Taiwan Science Park (南部科學園區) posted revenue growth of 18.37 percent to NT$571.5 billion and 34.17 percent to NT$652.1 billion respectively during the same period, the report said. The parks exported a combined NT$1.32 trillion in the first six months of the year, up 2.74 percent from a year earlier, while their combined imports surged 74.28 percent to NT$859.4 billion, as companies continued to build factories and expanded production while increasing purchases of precision machinery and equipment from abroad, the council said. Overall, the three parks saw two-way trade rise 22.63 percent year-on-year to NT$2.17 trillion in the first half, also a new high, it added. The three parks employed a record 313,877 people, up 6.4 percent year-on-year, the council said. “Despite turmoil triggered by the Russian-Ukraine war, China’s [COVID-19] lockdowns and surging inflation, the science parks’ semiconductor clusters — from upstream to midstream and downstream firms — performed strongly in the first half,” the report said. “Coupled with the excellent performance of the information and communications technology industry, the science parks contributed to the nation’s GDP growth and helped strengthen Taiwan’s indispensable role in the global high-tech industry,” it said. Of the six major industries in the parks, the integrated circuit industry placed first in terms of revenue growth, rising 28.34 percent year-on-year to NT$1.57

By Chen Cheng-hui

Recession not a reason to stop investing: Intel

An economic recession would not deter Intel Corp from continuously investing in new processor technologies and capacity expansion to support long-term growth, CEO Pat Gelsinger said on Tuesday. The US chipmaker has adopted a more austere approach to investment in the near term amid an industry downcycle and macroeconomic uncertainty. It has also become more “thoughtful” about operational investment, Gelsinger told reporters in a question-and-answer session following his keynote speech at this year’s Intel Innovation in San Jose, California. “When is the last time that a recession lasts for four or five years,” he asked. “Its impact on the industry may last several quarters like two, three or four quarters.” However, it would take chipmakers 12 to 14 quarters to build a new fab, he said. Developing a new processor architecture, or a core process technology requires multiple years of investments and efforts, he added. “You cannot be driven by near-term financials,” Gelsinger said. “We are investing for the long term. That’s our strategy.” Intel is spending on building process technology to earn technology leadership in four or five years, he said. The company is investing in building fabs to ramp up those technologies across diverse segments from networking, graphics, automotive to data center businesses, he said. Intel is helping build more globally balanced and resilient semiconductor supply chains to help meet growing demand for advanced semiconductors worldwide through the company’s IDM2.0 strategy, he said. At the heart of its course is Moore’s Law, he said. Moore’s Law is alive and well, he said, refuting Nvidia CEO Jensen Huang’s (黃仁勳) claim last week that Moore’s Law “is dead.” He attributed breakthroughs in lithography and core of semiconductor manufacturing with advanced packaging technologies to the assertion. Intel is on schedule, or even ahead of its schedule in developing five nodes in four years, Gelsinger said. Normally, it takes two years to develop a

By Lisa Wang

Animated flight

China Airlines Ltd unveils its “Pikachu Jet CI” at Taiwan Taoyuan International Airport yesterday. The Pokemon-themed liveried aircraft, the first in Taiwan, features 11 Pokemon creatures on its fuselage. It is slated to take travelers on a long-awaited flight from Taipei International Airport (Songshan Airport) to Tokyo’s Haneda Airport on Sunday, China Airlines said.

Big banks fined over lax recordkeeping

NO OVERSIGHT: Staff at 16 banks in the US used personal devices to discuss deals and trade, and failed to preserve records of such transactions, US regulators said

US regulators on Tuesday fined 16 financial firms, including Barclays PLC, Bank of America Corp, Citigroup Inc, Credit Suisse Group AG, Goldman Sachs Groups Inc, Morgan Stanley, Nomura Holdings Inc and UBS Group AG, a combined US$1.8 billion after staff discussed deals and trades on their personal devices and apps. The sweeping industry probe, first reported by Reuters last year and subsequently disclosed by multiple lenders, is a landmark case for the US Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC), marking one their largest collective resolutions. From January 2018 through September last year, the banks’ staff routinely communicated about business matters, such as debt and equity deals, with colleagues, clients and other third-party advisers using applications on their personal devices, such as text messages and WhatsApp, the agencies said. The institutions did not preserve the majority of those personal chats, contravening federal rules that require broker-dealers and other financial institutions to preserve business communications. That impeded the agencies’ ability to oversee financial markets, ensure compliance with key rules and gather evidence in other, unrelated investigations, the agencies said. Spokespeople for UBS, Morgan Stanley and Citi said the banks were pleased to have resolved the matter. Bank of America, Barclays, Goldman Sachs, Nomura and Credit Suisse declined to comment. “Today’s actions — both in terms of the firms involved and the size of the penalties ordered — underscore the importance of recordkeeping requirements: They’re sacrosanct. If there are allegations of wrongdoing or misconduct, we must be able to examine a firm’s books and records,” said Gurbir Grewal, director of the SEC’s Division of Enforcement. The failings occurred across all 16 firms and involved employees at multiple levels, including senior and junior investment bankers and traders, the SEC said. In a major victory for the agencies, the institutions admitted the facts and acknowledged that they

IMF, Moody’s censure UK’s economic policy

The IMF and ratings agency Moody’s criticized Britain’s new economic strategy, as investors braced for more havoc in bond markets that has already forced the Bank of England (BOE) to promise “significant” action. The statements overnight from the IMF and Moody’s piled more pressure on new British Chancellor of the Exchequer Kwasi Kwarteng to reassess his policy, which sparked a collapse in the value of British assets in the past few days. New British Prime Minister Liz Truss of the Conservative Party came into office on Sept. 6 saying she wanted to snap the economy out of years of stagnant growth with deep tax cuts and deregulation. Kwarteng on Friday set out a plan to cut taxes through huge increases in borrowing that he believed would be paid back by doubling Britain’s rate of economic growth. At the same time, the government is subsidizing energy bills for households and businesses at a cost of ￡60 billion (US$63.5 billion) in the next six months alone. The IMF said the proposals, which sent the pound to an all-time low of US$1.0327 on Monday, would likely increase inequality and it questioned their wisdom. “Given elevated inflation pressures in many countries, including the UK, we do not recommend large and untargeted fiscal packages at this juncture, as it is important that fiscal policy does not work at cross purposes to monetary policy,” an IMF spokesperson said. Deutsche Bank AG research strategist Jim Reid described the “rebuke” as “quite scathing.” The IMF holds symbolic importance in British politics: Its bailout of Britain in 1976 following a balance-of-payments crisis has long been regarded as a low point in the kingdom’s modern economic history. In a blunt release, Moody’s said large unfunded tax cuts were “credit negative” for the UK. “A sustained confidence shock arising from market concerns over the credibility of the government’s fiscal strategy

Deflation looms in China amid property crisis

China faces increasing risks from deflation as demand crumbles under the weight of an ongoing property crisis and is threatened by continued COVID-19 restrictions — a stark contrast with other major economies, a private survey showed. Companies reported the weakest growth in sales prices since the last quarter of 2020 in the three months through September, according to indices compiled by China Beige Book International (CBBI) in a report published on Tuesday. That is despite wages and input costs picking up slightly from the previous quarter. CBBI, a provider of independent economic data, polled 4,354 firms during the period. “While nearly the whole world panics over surging inflation, the specter of deflation looms over China thanks to the demand-crushing effects of COVID Zero,” CBBI chief executive officer Leland Miller said in a statement. The bulk of the deflationary pressure has so far come from the property industry, said the report, adding that retail and services industries each saw prices accelerate in the third quarter. Lockdowns in areas such as Shanghai and Jilin Province, which curbed activity earlier in the year, were lifted by the summer, although other cities such as Chengdu have been locked down more recently. Home prices last month slumped for the 12th straight month and homeowners are citing a wider range of concerns — from poor construction to noise pollution — as justification to boycott mortgage payments, deepening the property crisis. “A closer look at our sector results provides some relief,” the report said, noting the pickup in retail and services. “So no need to worry. Unless, of course, you think winter could bring broader lockdowns, undo retail and services price gains, and shove deflation concerns to the foreground.” China’s headline consumer price index rose 2.5 percent last month, as pork prices continued to climb and fuel costs remained elevated. However, the pace of the

Queensland plans biggest pumped hydro scheme

CLIMATE ACTION: The Australian state expects to complete the project in 2035, which would be able to store 5 gigawatts of renewable energy

Australia’s eastern state of Queensland yesterday unveiled plans to build the world’s largest pumped hydroelectric energy storage scheme in a major shift toward renewables for the fossil fuel-rich region. The project, promised to be delivered by 2035, would be able to store 5 gigawatts of renewable energy — more than double Australia’s largest pumped hydro scheme, Snowy 2.0. GLOBAL LEAD “This is world-leading,” Queensland Premier Annastacia Palaszczuk told reporters. “We know that Queenslanders understand climate change. Today, the government understands that we need to take action.” Queensland has long been one of Australia’s fossil fuel heartlands, with mining pouring nearly A$40 billion (US$25.5 billion) into the state’s economy in 2019-2020 — the largest contributor by far. The pumped hydro scheme sits at the center of a new A$62 billion “energy and jobs plan,” which will also see Queensland legislate a target to generate 80 percent of its energy from renewable sources by 2035. Pumped hydro technology allows for the long-term storage of renewable energy — such as power generated by solar and wind — which is a key challenge for the transition to net zero carbon dioxide emissions by 2050. ‘GIANT BATTERY’ “We will use cheap solar electricity during the day to pump water up the mountain to store it,” Queensland Deputy Premier Steven Miles said. “Then at night we can release the water to generate electricity. It’s like a giant battery.” While mining continues to dominate Queensland’s economy, voters in the state’s big cities have become increasingly concerned about climate change — many backing Green and climate-aware candidates in May elections. A recent poll conducted by YouGov in resource-rich northern Queensland found 75 percent of those surveyed under 35 want the government to invest in renewables over coal or gas.

World’s biggest air-con maker Daikin upbeat on India

Daikin Industries Ltd, the world’s largest maker of air-conditioners, is betting that sales and production in India would eventually make up a bigger part of the company as the nation outpaces global growth. “The market has a huge potential,” said Kanwal Jeet Jawa, chief executive officer of Daikin’s India operations. “We see India as a market, post-COVID recovery, as the best among all the other markets in the world.” The goal is to more than double sales by 2025, after boosting revenue 10-fold over the past decade, Jawa said. Just 5 percent of India’s homes and businesses have air-conditioners, said the manufacturer, which competes against local provider Voltas Ltd. Daikin’s global sales are poised to benefit from two key trends: global warming and growing affluence in emerging economies. A deadly heat wave in India earlier this year underscored the need for better access to cooling products, as well as the need for supporting infrastructure. The local market is worth about ￥300 billion (US$2.1 billion), the company said. Daikin is currently building a third factory in India, investing ￥15 billion in a facility that can produce 3 million units a year. The company is seeking to ramp up production for domestic buyers, as well as for export to the Middle East and Africa, said Jawa, who is also the only foreigner on Daikin’s board. “We have a huge opportunity in the Middle East and Africa as far as we are concerned,” Jawa said.

World Business Quick Take

AUSTRALIA Retail sales edge up 0.6% Retail sales climbed for an eighth straight month last month, indicating that the nation’s cashed-up households are coping well with rapid interest rate increases to tackle inflation. Sales advanced 0.6 percent from July, Bureau of Statistics data showed yesterday. The rise was driven by “the combined increase in food related industries, with cafes, restaurants and takeaway food services up,” said Ben Dorber, head of retail statistics at the bureau. Department store sales rose to a new record, while household goods retailing had its largest increase since March. THAILAND BOT raises rate again The Bank of Thailand (BOT) yesterday increased the benchmark policy rate for the second straight meeting to tame the fastest inflation in 14 years and shore up the battered baht. The bank’s monetary policy committee voted to unanimously raise the one-day repurchase rate by 25 basis points to 1 percent, as forecast by 18 of 23 economists in a Bloomberg survey, with the rest predicting a hike of 50 basis points. Even after yesterday’s move, the BOT continues to be among the least hawkish in Asia, where many counterparts — including India and the Philippines — moved early and aggressively to tighten policy amid high inflation and weakening currencies. GERMANY Consumer confidence dips Consumer confidence remains on a record downward slide, as Europe’s largest economy faces soaring inflation and an energy crisis heading into winter, a key survey showed yesterday. GfK’s forward-looking barometer fell to minus-42.5 points for next month, hitting a record low for the fourth month in a row, following a revised reading for this month of minus-36.8 points. “The currently very high inflation rates of almost 8 percent are leading to large real income losses among consumers and thus to a significant reduction in purchasing power,” GfK consumer expert Rolf Buerkl said. TOYS Lego sales rise 17%

Street trade

A man holds Indonesia banknotes as he performs a transaction at a traditional market in Lambaro, Aceh Besar, Indonesia, yesterday. Indonesian Minister of Finance Sri Mulyani Indrawati said that the nation would face an economic struggle as the world economy would enter the brink of recession next year, in line with the trend of increasing interest rates, carried out by most of the world’s central banks.

Consumer confidence hits 13-year low

WORRIES: More than half of respondents expect a significant rise in consumer prices, and public confidence in the local economy fell to an eight-year low, a survey showed

The consumer confidence index (CCI) this month slid by 0.49 points to 62.59 from a month earlier, the lowest in 13 years, amid concerns that global inflation and a recession would hit Taiwan’s export-reliant economy, National Central University said yesterday. The index gauges the public’s confidence toward employment, household finances, consumer prices, the local business climate, stock market and durable goods purchases over the next six months. It is often used to predict consumer spending, which is a major pillar of GDP. Among the six sub-indices, consumer prices increased 0.4 points to 26.9 last month, according to the university’s Research Center for Taiwan Economic Development, which released the results of a survey it conducted from Sept. 18 to Wednesday last week. The survey showed that 50.8 percent of respondents expect consumer prices would increase significantly in the next six months, while 45.6 percent expect a mild increase, center director Dachrahn Wu (吳大任) told a news conference. The other five sub-indices weakened this month, with durable goods purchases dropping 1.05 points to 108.35, the lowest in 15 months, as consumers delayed making big purchases given inflationary and recession risks, the survey showed. Public confidence in the local economy slid 0.8 points to 78.9, the lowest in eight years, while household income declined 0.75 points to 73.6, the lowest in 12 years, it said. About 47 percent of respondents expect household income to remain flat over the next six months, while 45 percent expect it to further deteriorate, the survey showed. The sub-indices on employment and the stock market moved lower by 0.4 and 0.3 to 63.3 and 24.5 respectively this month. The stock market reading hit a new low since the university began compiling CCI data in early 2001. As for timing on buying a home, a separate index jointly compiled by the university and Taiwan Realty Co

By Kao Shih-ching

Far EasTone calls on NCC to resolve spectrum dispute

Far EasTone Telecommunications Co (遠傳電信) yesterday urged the National Communications Commission (NCC) to deal fairly with a 5G spectrum dispute, as Taiwan Mobile Co (台灣大哥大) would own a bigger slice of prime frequency band than regulations allow following the acquisition of a smaller rival. The commission is to hold two public hearings tomorrow and on Sunday to address potential problems related to Far EasTone’s acquisition of Asia Pacific Telecom Co (亞太電信) and the merger between Taiwan Mobile and Taiwan Star Telecom Corp (台灣之星). Taiwan Mobile’s merger would give it a combined 60 megahertz (MHz) of the 5G spectrum in the 1 gigahertz (GHz) band, surpassing the upper limit of one-third, or 50MHz, of the total auctioned spectrum of 150MHz, as the Regulations for Administration of Mobile Broadband Businesses (行動寬頻業務管理規則) stipulate. Taiwan Mobile said the restrictions would be unreasonable after the nation’s telecommunications market again becomes dominated by the three major operators. It suggested that the commission relax the rules and raise the limit to 40 percent. It added that it would continue fighting for the right to retain the 10MHz spectrum in exchange for offering services that benefit the public, such as deploying more 5G base stations in rural areas. Far EasTone and Chunghwa Telecom Co (中華電信) have called on Taiwan Mobile to abide by the regulations and return the 10MHz to the government for a second auction, or other arrangements. “Our rival would own a bigger spectrum than the rules stipulate. That will have a big impact,” Far EasTone president Chee Ching (井琪) told reporters on the sidelines of a press conference in Taipei. With a larger spectrum in the low-band, Taiwan Mobile would gain a competitive edge in cost, as the 1GHz band — dubbed the “golden frequency band” — would allow a wireless carrier to achieve a similar 5G network coverage

By Lisa Wang

Leading indicators slow for 10th straight month

The nation’s economy continued to show signs of a slowdown, with the index of leading indicators for last month falling 0.94 percent to 96.38 points from July, marking the 10th consecutive month of decline, the National Development Council said yesterday. The index is used as a gauge for the economy’s direction in the coming six months. Among the index’s seven components, only the readings on imports of semiconductor equipment and net accession rate of employees made a positive contribution last month, the council said in a report. Five other components — manufacturing sector, export orders, the TAIEX, floor area of building permits and real M1B money supply — weighed on the composite index, it said. Last month’s index of coincident indicators, which tracks the current pace of economic activity, decreased by 1.43 percent to 96.89, falling for a seventh consecutive month, the report showed. All seven components of the index fell from the previous month, the council said. Apart from slowing industrial production, exports and capital equipment imports, power consumption, retail sales and wholesale trade also weakened, it added. The total score of monitoring indicators for last month was 23 points, down from 24 points in July, flashing a “green light” for a sixth consecutive month, implying steady growth, the report showed. The council uses a five-color spectrum to gauge economic health, with “blue” signaling recession, “green” suggesting steady growth and “red” indicating overheating. Dual colors mean it is in transition. The government will be closely monitoring the economic situation, the council said in the report.

By Chen Cheng-hui

StarLux chairman quits as Uni Airways chair

FLYING HIGH: Chang Kuo-wei said he had completed his mission at Uni Air and would focus on StarLux, as international travel picks up with border openings

StarLux Airlines Co (星宇航空) chairman Chang Kuo-wei (張國煒) yesterday announced that he has resigned as chairman of Uni Airways Co (立榮航空) — six months after assuming the post. Chang said in a statement that he would concentrate on StarLux, as it is a key moment for the airline to optimize its operations as countries around the world relax their borders. Chang is to host an investors’ conference in Taipei today, ahead of StarLux’s debut on the Emerging Stock Board on Friday. Chang said he had completed his mission at Uni Air, leveraging his experience in the aviation industry to optimize the airline’s internal organization. Chang was appointed head of Uni Air in April following infighting within the Evergreen Group (長榮集團). In the statement, Chang said that as members of the group had resumed communication, he decided it was time to leave Uni Air. “To my understanding, my eldest brother, Chang Kuo-hua (張國華), and my third-eldest brother, Chang Kuo-cheng (張國政), have met multiple times,” he said in the statement. “It is expected that our family disputes could be addressed in a harmonious and good way,” he added. In related news, Cheng Shen-chih (鄭深池) yesterday also resigned as chairman of Evergreen International Corp (長榮國際, EIC) — Uni Airways’ largest shareholder. A foundation founded by Chang Kuo-ming (張國明), the second son of the group’s late founder, Chang Yung-fa (張榮發), also withdrew as a board member, EIC said in a statement.

By Kao Shih-ching

Officials float FX, short-sale control if outflows worsen

Taiwanese officials raised the prospect of foreign-exchange controls and a ban on stock short sales if capital outflows worsen significantly, underscoring growing concern among global policymakers over the destabilizing effects of tighter monetary policy. Taiwan will closely monitor foreign outflows before considering control measures in case of significant foreign outflows due to US rate hikes or cross-strait tensions, central bank Governor Yang Chin-long (楊金龍) said in response to a question from lawmakers. Outflows are so far under control, he said. The government is cautiously considering a ban on short-selling, Financial Supervisory Commission Chairman Thomas Huang (黃天牧) said. The remarks followed the New Taiwan dollar’s drop on Monday to the weakest since 2017. Pressure on the local currency is rising after global funds sold more than US$43 billion of Taiwanese stocks this year to put the market on course for its biggest ever annual outflow. The TAIEX has plunged more than 24 percent this year, making it the worst performer in Asia. The weighted index yesterday closed up 0.35 percent at 13,826.59 points after plunging 2.41 percent the previous day. After Monday’s tumble, Deputy Minister of Finance Frank Juan (阮清華), who serves as executive secretary of the National Stabilization Fund committee, said the fund was determined to work with related agencies to stabilize the local stock market, adding that the fundamentals in Taiwan remain sound. Adopting foreign-exchange controls “would be a more effective way of supporting the currency,” said Stephen Chiu (趙志軒), chief Asia FX and rates strategist at Bloomberg Intelligence in Hong Kong. Even the major economies might have to take this route if the greenback continues to strengthen, he added. US dollar strength has roiled global currency markets. The British pound slid to a record low on Monday, while the Bank of Japan last week intervened to support the yen for the first time since 1998

Dreams of flight

Elementary-school students watch a plane on a runway at Taiwan Taoyuan International Airport yesterday — part of a series of activities arranged by Taoyuan International Airport Corp for students to learn about airplanes and aviation-related information on World Tourism Day.

World Bank cuts E Asia, Pacific growth

CHINA DRAG: Economic growth in the region is forecast to moderate to 3.2%, as the world’s second-largest economy slows due to COVID restrictions and a property slump

The World Bank has lowered its growth forecasts for East Asia and Pacific amid headwinds from slowing global demand, rising debt and inflation challenges. Growth in the region is forecast to slow to 3.2 percent this year from 7.2 percent last year —much lower than the 5 percent forecast in April — before rebounding to 4.6 percent next year, the global lender said. The region is weighed by China’s growth, which is forecast to decelerate to 2.8 percent this year from 8.1 percent last year amid ongoing COVID-related restrictions and a property market slump. That pace of growth means the rest of the region would grow faster than China for the first time in decades. In April, the World Bank had tipped China to grow by 5 percent this year. It sees a recovery to 4.5 percent next year. World Bank’s downgrade to its China forecasts comes as economists are increasingly pessimistic about the outlook for next year, expecting any rebound to be bumpy under Beijing’s “zero COVID” strategy and disruptions likely when the country eventually reopens. The Asian Development Bank (ADB) last week cut its outlook on China growth to 3.3 percent from its prior forecast of 4 percent — a pace that the ADB said would be slower than the rest of developing Asia for the first time in more than three decades. Investment banks are also cutting their outlook. Nomura Holdings Inc last week slashed its growth forecast for China next year to 4.3 percent from 5.1 percent. Goldman Sachs Group Inc downgraded its outlook to 4.5 percent from 5.3 percent, while Societe Generale SA estimated output expansion would be under 5 percent next year. T The median estimate in Bloomberg’s latest survey of economists is for GDP to expand 5.1 percent next year, down from a previous projection of 5.2 percent. The