SUPERMARKETS
Tesco plans China expansion
British supermarket chain Tesco plans to quadruple annual sales in China over the next five years to about ￡4 billion (US$6.4 billion), a newspaper report said yesterday. Tesco, the world’s third-biggest supermarket group by sales after Wal-Mart and Carrefour, also plans to invest ￡2 billion in new shopping malls in China, the Financial Times said. The company revealed its plans during an investor and analyst trip to China and South Korea as Britain’s largest retailer steps up expansion efforts in Asia, the report said. Tesco plans to build 50 malls in China over the next five years and develop a further 30 shopping centers, it said.
TECHNOLOGY
Netflix moving to streaming
Netflix introduced a new plan on Monday that, for the first time, relies solely on video streamed over the Internet rather than the DVDs that it has mailed to customers since the company was founded more than a decade ago. The shift demonstrates how quickly consumers have transitioned from physical media players to digital entertainment that can be browsed, watched again, or discarded without ever having handled a disk. The company has already said that its members are watching more content streamed over the Internet than on DVDs. To keep customers happy, the company said it will spend more to license streaming content this quarter than it will on buying DVDs.
TECHNOLOGY
Attachmate to buy Novell
US enterprise software maker Novell announced on Monday that it had agreed to be acquired for US$2.2 billion by Attachmate, an investment group made up of three private equity firms. The deal calls for Attachmate, which is owned by Francisco Partners, Golden Gate Capital and Thoma Bravo, to buy Novell for US$6.10 per share in cash, a 9 percent premium over Friday’s closing price in New York. The Waltham, Massachusetts-based Novell also said it had agreed to sell unspecified intellectual property assets to CPTN Holdings, a consortium of technology companies led by Microsoft for US$450 million in cash.
MEDIA
Murdoch eyeing education
News Corp said on Monday that it had agreed to acquire 90 percent of education technology company Wireless Generation for US$360 million in cash. “Wireless Generation is at the forefront of individualized, technology-based learning that is poised to revolutionize public education for a new generation of students,” News Corp chairman and chief executive Rupert Murdoch said. Education of children aged five through 18 is a “500 billion dollar sector in the US alone that is waiting desperately to be transformed by big breakthroughs that extend the reach of great teaching,” he said in a statement.
AUTOMOBILES
Indian firm buys Ssangyong
India’s Mahindra & Mahindra has signed a deal with Ssangyong Motor to acquire the struggling South Korean automaker for US$463 million in shares and debt in a bid to create a global force in sport utility vehicles. Ssangyong, which mostly manufactures SUVs and also makes a luxury sedan, the Chairman, went into court-approved bankruptcy protection early last year amid falling sales, mounting red ink and a history of labor strife. The South Korean company was once majority-owned by SAIC Motor Corp. until the Chinese company lost management control during the bankruptcy process.
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
ELECTRONICS: Strong growth in cloud services and smart consumer electronics offset computing declines, helping the company to maintain sales momentum, Hon Hai said Hon Hai Precision Industry Co (鴻海精密) on Saturday announced that its sales for last month rose 10 percent year-on-year, driven by strong growth in cloud and networking products amid the ongoing artificial intelligence (AI) boom. The company, also known internationally as Foxconn Technology Group (富士康科技集團), reported consolidated sales of NT$540.24 billion (US$18.67 billion) for the month, the highest ever for the period, and a 10.09 percent increase from a year earlier, although it was down 12.26 percent from the previous month. Hon Hai, which is Apple Inc’s primary iPhone assembler and makes servers powered by Nvidia Corp’s AI accelerators, said its cloud
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