■ Investment
Funds may buy bonds abroad
Local state-controlled investment funds may lower holdings in local-currency government bonds and buy US Treasuries, or European and Japanese debt, to pursue higher returns, the Chinese-language Economic Daily News reported, without saying where it got the information. Managers of the funds, such as pensions and insurance, are allowed to make the change after restrictions on their investments are eased, the Taipei-based paper said. Returns from US Treasuries and European government bonds are at least 2 percentage points higher than those of Taiwan's government bonds, the paper said.
■ Mobile phones
Fuji Photo to build lens plant
Fuji Photo Film Co will spend about ¥2 billion (US$17.2 million) to build a plant in China that will produce lenses used in camera-equipped mobile phones, the Nihon Keizai newspaper said. The company will start construction on the plant this summer, the paper said, without saying where it obtained the information. The factory will be completed by the end of the year, employ 1,000 people and have the capacity to make 5 million units a month, the newspaper said. The plant will be Fuji Photo's third in China, the newspaper reported.
■ Arms trade
Thales plans ADI takeover
French defense giant Thales yesterday announced plans for a complete takeover of Australia's largest military manufacturer, ADI, in a move that could raise concerns in Washington. Thales and Australian construction giant Transfield currently each own a half share in ADI, which was privatized by the Australian government in 1999 for almost A$350 million (US$260 million). No figures were given for the ADI takeover bid.
■ Labor
South Korean rail strike ends
South Korean railway workers yesterday called off their three-day-old strike and decided to return to work, a labor union spokesman said. "Union members will end their strike and they will immediately return to work," Cho Yun-ho, a spokesman for the union of Korea Railroad (KORAIL), told journalists. "However, this decision does not mean an end to our struggle. We will push through with our demand even after we return to work," he said. Cho said the union would demand that management reinstates 2,244 union activists who had been suspended from their jobs on Thursday and Friday as a prelude to further action against them, including dismissal or wage cuts.
■ Commodities
CAO approves restructuring
Shareholders of China Aviation Oil (Singapore) Corp (CAO) voted in a new board of directors and approved a restructuring plan that would pave the way for a resumption of trading in its shares by the end of this month, the company said. CAO's shares have been suspended from trading on the Singapore Exchange since late 2004 after its revelation that it had incurred some US$550 million in undisclosed losses from trading oil derivatives. Under the restructuring plan approved on Friday, creditors can opt for an upfront cash payment of US$0.45 on every US$1 owed, or a higher repayment rate of US$0.58 a dollar spread over five years, the company said. A large part of the money will come from CAO's Chinese state-owned parent China Aviation Oil Holdings, which will inject US$75.7 million for 34.4 percent of CAO's post-restructuring share capital, bringing its total stake to 51 percent.
TARIFF TRADE-OFF: Machinery exports to China dropped after Beijing ended its tariff reductions in June, while potential new tariffs fueled ‘front-loaded’ orders to the US The nation’s machinery exports to the US amounted to US$7.19 billion last year, surpassing the US$6.86 billion to China to become the largest export destination for the local machinery industry, the Taiwan Association of Machinery Industry (TAMI, 台灣機械公會) said in a report on Jan. 10. It came as some manufacturers brought forward or “front-loaded” US-bound shipments as required by customers ahead of potential tariffs imposed by the new US administration, the association said. During his campaign, US president-elect Donald Trump threatened tariffs of as high as 60 percent on Chinese goods and 10 percent to 20 percent on imports from other countries.
Taiwanese manufacturers have a chance to play a key role in the humanoid robot supply chain, Tongtai Machine and Tool Co (東台精機) chairman Yen Jui-hsiung (嚴瑞雄) said yesterday. That is because Taiwanese companies are capable of making key parts needed for humanoid robots to move, such as harmonic drives and planetary gearboxes, Yen said. This ability to produce these key elements could help Taiwanese manufacturers “become part of the US supply chain,” he added. Yen made the remarks a day after Nvidia Corp cofounder and chief executive officer Jensen Huang (黃仁勳) said his company and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) are jointly
United Microelectronics Corp (UMC, 聯電) expects its addressable market to grow by a low single-digit percentage this year, lower than the overall foundry industry’s 15 percent expansion and the global semiconductor industry’s 10 percent growth, the contract chipmaker said yesterday after reporting the worst profit in four-and-a-half years in the fourth quarter of last year. Growth would be fueled by demand for artificial intelligence (AI) servers, a moderate recovery in consumer electronics and an increase in semiconductor content, UMC said. “UMC’s goal is to outgrow our addressable market while maintaining our structural profitability,” UMC copresident Jason Wang (王石) told an online earnings
MARKET SHIFTS: Exports to the US soared more than 120 percent to almost one quarter, while ASEAN has steadily increased to 18.5 percent on rising tech sales The proportion of Taiwan’s exports directed to China, including Hong Kong, declined by more than 12 percentage points last year compared with its peak in 2020, the Ministry of Finance said on Thursday last week. The decrease reflects the ongoing restructuring of global supply chains, driven by escalating trade tensions between Beijing and Washington. Data compiled by the ministry showed China and Hong Kong accounted for 31.7 percent of Taiwan’s total outbound sales last year, a drop of 12.2 percentage points from a high of 43.9 percent in 2020. In addition to increasing trade conflicts between China and the US, the ministry said
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