Downstream firms hurting
Fitch Ratings yesterday said in a report that crude oil prices at high levels pose a squeeze in margins faced by some Asian downstream oil and gas companies.
“The financial performance of Indian Oil Corp, Sinopec [中石化] and CPC Corp, Taiwan [台灣中油], has suffered significantly over the last two years because governments, wanting to control inflation and maintain economic growth momentum, have not allowed the companies to fully pass through the higher costs of crude oil,” said Steve Durose, regional co-head of Fitch’s Asia-Pacific energy and utilities team.
The oil and gas price environment over the last 18 to 24 months has generally benefited the oil and gas companies.
Unprecedented high real wholesale prices mostly led to a significant increase in cash flows and margins, it said, adding that some firms without significant upstream exploration and production assets have, conversely, faced a significant margin squeeze.
Fitch expects oil prices to continue to decline and urged companies whose margins are under threat from high crude oil and gas prices to be prepared for crude oil prices to remain in the range of US$50 to US$100 per barrel.
CPC re-appoints chairman
CPC Corp, Taiwan, the nation’s state-run oil refiner, said Pan Wenent (潘文炎) was reappointed yesterday as its chairman.
Pan, 63, was elected by the company’s 12 board members.
His two-year term will end on Sept. 1, 2010, CPC spokeswoman Jessica Tang (唐苑莉) said in a telephone interview in Taipei yesterday. All CPC board members were appointed by the government.
The oil refiner’s board of directors also approved the resignation of its retiring president Chen Bao-lang (陳寶郎). Former vice president Chu Shao-hua (朱少華) will succeed Chen as the company’s acting president.
Park approves two new firms
The Central Taiwan Science Park has approved the applications of two more companies to set up in the park with a combined investment of NT$650 million (US$20.4 million), the park’s administration said on Saturday.
The two high-tech companies are Fulgent-tec Industries Co (富比利實業), which will invest NT$50 million to make carbon prepreg, a strong composite resin pre-impregnated with carbon fibers used in the information technology, medical and construction sectors, and Lof Solar Corp (樂福太陽能公司), which will invest NT$600 million to produce silicon wafer solar cells.
As of the end of last year, a total of 92 enterprises in several high-tech industries, including optoelectronics, integrated circuits, precision machinery, and computers and peripherals had been admitted to the park, with planned investments totaling NT$1.7 trillion.
The park has three separate sites, in Taichung City, in Taichung County’s Houli (后里) and in Yunlin County’s Huwei (虎尾), with construction of a fourth site in Changhua County’s Erlin (二林) planned to begin next July.
Compal cuts deliveries
Compal Electronics Inc (仁寶電腦), the world’s second-largest maker of notebook computers, cut its forecast for annual laptop shipments, citing slowing demand from the US.
Deliveries of laptop computers to its clients including Hewlett-Packard Co and Dell Inc will be about 28 million units to 29 million this year, Compal president Ray Chen (陳瑞聰) said yesterday in Taipei.
In July, the company had projected 32 million units.
Intel Corp chief executive officer Lip-Bu Tan (陳立武) is expected to meet with Taiwanese suppliers next month in conjunction with the opening of the Computex Taipei trade show, supply chain sources said on Monday. The visit, the first for Tan to Taiwan since assuming his new post last month, would be aimed at enhancing Intel’s ties with suppliers in Taiwan as he attempts to help turn around the struggling US chipmaker, the sources said. Tan is to hold a banquet to celebrate Intel’s 40-year presence in Taiwan before Computex opens on May 20 and invite dozens of Taiwanese suppliers to exchange views
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) is expected to share his views about the artificial intelligence (AI) industry’s prospects during his speech at the company’s 37th anniversary ceremony, as AI servers have become a new growth engine for the equipment manufacturing service provider. Lam’s speech is much anticipated, as Quanta has risen as one of the world’s major AI server suppliers. The company reported a 30 percent year-on-year growth in consolidated revenue to NT$1.41 trillion (US$43.35 billion) last year, thanks to fast-growing demand for servers, especially those with AI capabilities. The company told investors in November last year that
Application-specific integrated circuit designer Faraday Technology Corp (智原) yesterday said that although revenue this quarter would decline 30 percent from last quarter, it retained its full-year forecast of revenue growth of 100 percent. The company attributed the quarterly drop to a slowdown in customers’ production of chips using Faraday’s advanced packaging technology. The company is still confident about its revenue growth this year, given its strong “design-win” — or the projects it won to help customers design their chips, Faraday president Steve Wang (王國雍) told an online earnings conference. “The design-win this year is better than we expected. We believe we will win
United Microelectronics Corp (UMC, 聯電) forecast that its wafer shipments this quarter would grow up to 7 percent sequentially and the factory utilization rate would rise to 75 percent, indicating that customers did not alter their ordering behavior due to the US President Donald Trump’s capricious US tariff policies. However, the uncertainty about US tariffs has weighed on the chipmaker’s business visibility for the second half of this year, UMC chief financial officer Liu Chi-tung (劉啟東) said at an online earnings conference yesterday. “Although the escalating trade tensions and global tariff policies have increased uncertainty in the semiconductor industry, we have not
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