Privatization has freed Chunghwa Telecom Co (
The five-year privatization process was completed last month with the sale of a 17 percent stake to local and foreign investors, helping trim the government shareholding to 44 percent. A company is considered privatized when the state's shareholding falls below 50 percent.
As a state-controlled company, Chunghwa had to submit its annual budget to the legislature for approval, a process that could take a year or longer. Also, it was the subject of intense political battles over tariff increases and talk of job cuts. The company's labor union and opposition parties repeatedly tried to derail the privatization process.
"Certainly privatization will make things easier" for Chunghwa, says Macquarie Securities analyst Dominic Grant.
The privatization, part of efforts to open Taiwan's telecommunications sector, began in 2000 with the initial public offering of a small stake in the former monopoly.
But analysts say they will need to see Chunghwa deliver on its promised cost cuts and prove it can make money on its new third-generation mobile services before they will turn bullish about the company's prospects.
Early last month, Chunghwa chairman Hochen Tan (
Senior vice president Hank Wang (
"We shall begin discussing it before the end of this year, though," he said.
The company's net profit for the first half of the year fell 7.8 percent from the same period a year earlier to NT$24.33 billion. Revenue for the first half declined to NT$89.72 billion from NT$90.82 billion.
For the full year, Chunghwa projects a net profit of NT$42.34 billion, a drop of 15 percent from the NT$49.87 billion reported for all of last year.
The privatization move comes as growth in the nation's telecom market is slowing, and competition is increasing. Standard & Poor's said Tuesday it expects Taiwan's telecom industry to record growth in the low single digits over the next few years, because the market is highly saturated.
Price competition is expected to intensify further after the entry of Vibo Telecom Inc (
ARTIFICIAL INTELLIGENCE: The chipmaker last month raised its capital spending by 28 percent for this year to NT$32 billion from a previous estimate of NT$25 billion Contract chipmaker Powerchip Semiconductor Manufacturing Corp (力積電子) yesterday launched a new 12-inch fab, tapping into advanced chip-on-wafer-on-substrate (CoWoS) packaging technology to support rising demand for artificial intelligence (AI) devices. Powerchip is to offer interposers, one of three parts in CoWoS packaging technology, with shipments scheduled for the second half of this year, Powerchip chairman Frank Huang (黃崇仁) told reporters on the sidelines of a fab inauguration ceremony in the Tongluo Science Park (銅鑼科學園區) in Miaoli County yesterday. “We are working with customers to supply CoWoS-related business, utilizing part of this new fab’s capacity,” Huang said, adding that Powerchip intended to bridge
Microsoft Corp yesterday said that it would create Thailand’s first data center region to boost cloud and artificial intelligence (AI) infrastructure, promising AI training to more than 100,000 people to develop tech. Bangkok is a key economic player in Southeast Asia, but it has lagged behind Indonesia and Singapore when it comes to the tech industry. Thailand has an “incredible opportunity to build a digital-first, AI-powered future,” Microsoft chairman and chief executive officer Satya Nadella said at an event in Bangkok. Data center regions are physical locations that store computing infrastructure, allowing secure and reliable access to cloud platforms. The global embrace of AI
RIDING AI WAVE: : Most of its NT$15bn capital budget would be spent on packaging technologies used in AI and HPC chips and advanced testing technology, it said Chip testing and packaging service provider Powertech Technology Inc (PTI, 力成科技) plans to increase this year’s capital expenditure by 50 percent to expand capacity to meet growing demand for advanced memorychips used in artificial intelligence (AI) products. The company proposed to spend NT$15 billion (US$460.94 million) to expand advanced capacity and equipment, compared with a budget of NT$10 billion it planned three months ago. “We are seeing a recovery in market demand as well as new business opportunities. We will spend heavily on advanced packaging” equipment, Powertech chief executive officer Boris Hsieh (謝永達) told investors on Tuesday. “We will focus on ramping
INFLATION WATCH: A rate hike in March would help keep inflation at 2.16 percent this year, although a weak currency and higher electricity rates are an issue, S&P said Moody’s Ratings and S&P Global Ratings have reaffirmed Taiwan’s sovereign credit ratings at “As3” and “AA+” respectively with a stable outlook on the back of high income and wealth levels, a strong institutional framework and robust external positions. The affirmations came as Taiwan’s economy is gaining momentum after quarters of slowdown induced by stubborn global inflation and monetary tightening. Taiwan’s strong fiscal and external buffers have improved relative to peers as evidenced by recent shocks linked to the COVID-19 pandemic and the ongoing US-China technology dispute, the two ratings firms said. “Taiwan stands as the epicenter of the global semiconductor supply chain, accounting