■ Asian consumers upbeat
Consumers in most of Asia are optimistic about the region's prospects as economies grow and job prospects improve, according to a MasterCard International survey. "Consumer confidence over the outlook for the rest of the year is relatively strong in the region," MasterCard's economic adviser, Yuwa Hedrick-Wong (王月魂), said at a press conference yesterday in Hong Kong. "Strong economic and employment growth is certainly a key factor." Consumers are optimistic in 10 of 13 markets in the survey. Positive sentiment should support "double digit" growth in retail sales, outbound travel and household spending, Wong said. Confidence in Vietnam, Hong Kong, China, Thailand, Singapore, Korea and Japan improved from six months ago. Consumers in Taiwan, Indonesia, the Philippines, Malaysia, Australia and New Zealand were less optimistic. The twice-yearly survey interviewed 5,440 consumers in 13 markets from May 3 to May 29.
■ Competitiveness at risk: Shih
Taiwan needs to further expand its technological edge over other countries, or its current advantage may last only another five to 10 years, Acer Group Chairman Stan Shih (施振榮) said Wednesday. Addressing the American Chamber of Commerce in Taipei on how to strengthen Taiwan's competitiveness, Shih pictured the future Taiwan as "the digital life-enabling center in Asia." Shih said Taipei, Taoyuan and Hsinchu should become Taiwan's "corridor of science and technology" in a bid to attract talent from all over the world to set up businesses there. In his view, it is important to stay close to the market to provide a motive for innovation. In addition, Taiwan needs to improve its relationship with China to create a more attractive environment for multi-national enterprises. Shih said that another way to increase Taiwan's competitiveness is for the next generation to be able to speak better English than their parents.
■ Merck buys rights to drug
Merck KGaA, Germany's fourth-largest drugmaker, bought most of the global rights to a Taiho Pharmaceutical Co (大鵬藥品) colon-cancer treatment to get another oncology product to market alongside its Erbitux cancer medicine. The drug, called UFT, is an orally administered chemotherapy given to patients whose cancer has spread, Darmstadt-based Merck said in a statement. Taiho will keep rights in Japan, South Korea, Taiwan, Malaysia and Singapore, Merck said, without giving financial terms of the agreement.
■ Labor limits may be scrapped
The government is planning to scrap the current six-year stay limit for foreign workers in response to industry groups' suggestions, a Chinese-language newspaper reported yesterday. The Council of Labor Affairs' proposal to abolish the stay limit for foreign workers by the end of this year is expected to help local businesses cut hiring and training costs, the paper said. The plan would benefit nearly 15,000 local manufacturers, the paper added. Currently, foreign workers can be hired to work in Taiwan for a period of three years and can be extended by one term, or a total of six years.
■ Taiwan dollar up for third day
The New Taiwan dollar strengthened for the third day in four after the benchmark stock index climbed to its highest in almost 15 months, raising speculation foreign investors will accelerate buying of equities. The NT dollar rose NT$0.062 to close at NT$31.917 against its US counterpart on the Taipei foreign exchange market, on turnover of US$782 million.
INVESTOR RESILIENCE? An analyst said that despite near-term pressures, foreign investors tend to view NT dollar strength as a positive signal for valuation multiples Morgan Stanley has flagged a potential 10 percent revenue decline for Taiwan’s tech hardware sector this year, as a sharp appreciation of the New Taiwan dollar begins to dent the earnings power of major exporters. In what appears to be the first such warning from a major foreign brokerage, the US investment bank said the currency’s strength — fueled by foreign capital inflows and expectations of US interest rate cuts — is compressing profit margins for manufacturers with heavy exposure to US dollar-denominated revenues. The local currency has surged about 10 percent against the greenback over the past quarter and yesterday breached
MARKET FACTORS: Navitas Semiconductor Inc said that Powerchip is to take over from TSMC as its supplier of high-voltage gallium nitride chips Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday in a statement said that it would phase out its compound semiconductor gallium nitride (GaN) business over the next two years, citing market dynamics. The decision would not affect its financial targets announced previously, the world’s biggest contract chipmaker said. “We are working closely with our customers to ensure a smooth transition and remain committed to meeting their needs during this period,” it said. “Our focus continues to be on delivering sustained value to our partners and the market.” TSMC’s latest move came unexpectedly, as the chipmaker had said in its annual report that it has
Gudeng Precision Industrial Co (家登精密), the sole extreme ultraviolet pod supplier to Taiwan Semiconductor Manufacturing Co (台積電), yesterday said it has trimmed its revenue growth target for this year as US tariffs are likely to depress customer demand and weigh on the whole supply chain. Gudeng’s remarks came after the US on Monday notified 14 countries, including Japan and South Korea, of new tariff rates that are set to take effect on Aug. 1. Taiwan is still negotiating for a rate lower than the 32 percent “reciprocal” tariffs announced by the US in April, which it later postponed to today. The
SECURITY WARNING: The company possesses key 3-nanometer technology, and Taiwan should prevent it from being transferred to China, a lawmaker said The Ministry of Economic Affairs yesterday said it would conduct a “strict review” of any proposed acquisition of Taiwanese tech company Source Photonics Co (索爾思光電), following media reports that a Chinese firm was planning to buy the company in the Hsinchu Science Park (新竹科學園區). Local media reported that Suzhou Dongshan Precision Manufacturing Co (東山精密), China’s largest printed circuit board manufacturer, had announced plans to acquire Source Photonics for 5.9 billion yuan (US$823.1 million). The ministry said it has not received an application from Source Photonics and has formally notified the company that any buyout would constitute a change in its ownership structure. The
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