JAPAN
S&P lowers ratings
Standard and Poor’s (S&P) yesterday said it had lowered the nation’s long-term sovereign credit ratings to “AA-” from AA, citing the impact of high deficits on the country’s fiscal flexibility in coming years. “The downgrade reflects our appraisal that Japan’s government debt ratios — already among the highest for rated sovereigns — will continue to rise further than we envisaged before the global economic recession hit the country and will peak only in the mid-2020s,” the ratings agency said.
ELECTRONICS
NEC’s net loss triples
Japan’s NEC said yesterday its net loss in the October-December quarter almost tripled from a year earlier, blaming a delay in the recovery of IT-related capital investment in the country. The firm said it logged a ¥26.5 billion (US$322 million) net loss for the fiscal third quarter, compared with a loss of ¥9.61 billion in the same period a year earlier. Its operating loss nearly doubled to ¥13.5 billion, from ¥7.5 billion a year earlier, on revenue of ¥720.72 billion, which was down 13 percent from ¥825.4 billion. For the full fiscal year through March, the company stuck to its forecast of a net profit of ¥15 billion and operating profit of ¥100 billion on revenue of ¥3.3 trillion.
PHARMACEUTICALS
Novartis net profits up 18%
Swiss pharmaceutical group Novartis said yesterday that its annual net profit grew by 18 percent last year as strong sales helped it stay in line with forecasts. However, the company hinted that its performance this year might be affected by moves by cash-strapped governments to cut costs and US health reforms. Net profit reached US$9.97 billion, the group said in a statement. Sales grew by 14 percent year on year to US$50.6 billion.
TELECOMS
Motorola Mobility sees loss
Motorola Mobility Holdings Inc, the mobile-phone maker spun off from Motorola Inc, forecast a loss for the first quarter as Asian rivals boost handset shipments and Apple Inc prepares to widen sales of its iPhone. The company said it expects a loss, excluding some compensation and amortization costs, of US$0.09 to US$0.21 a share this quarter in a statement today. Analysts had estimated a profit of US$0.01 per share, according to a Bloomberg survey.
AUTOMOBILES
Hyundai’s profit rises 48%
Hyundai Motor, South Korea’s top automaker, posted a record quarterly profit, driven by new models and an improving brand image that fuelled strong sales overseas. The company yesterday reported a 48 percent jump in October-December net profit to 1.4 trillion won (US$1.26 billion), beating a consensus forecast of 1.35 trillion won from Thomson Reuters I/B/E/S. It has set a target of 8 percent volume growth this year or 3.9 million cars.
ENTERTAINMENT
Disney plans China store
Walt Disney Co said yesterday it planned to open its first store in China by the middle of next year as it moves to further expand its presence in the fast-growing market. It said its strategy would be to secure locations in upscale shopping centers and department stores, where it will open Disney Stores similar to those in Europe and North America. The Shanghai Disneyland will be the US entertainment giant’s third theme park in Asia, after those in Tokyo and Hong Kong.
Three experts in the high technology industry have said that US President Donald Trump’s pledge to impose higher tariffs on Taiwanese semiconductors is part of an effort to force Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to the negotiating table. In a speech to Republicans on Jan. 27, Trump said he intends to impose tariffs on Taiwan to bring chip production to the US. “The incentive is going to be they’re not going to want to pay a 25, 50 or even a 100 percent tax,” he said. Darson Chiu (邱達生), an economics professor at Taichung-based Tunghai University and director-general of
‘LEGACY CHIPS’: Chinese companies have dramatically increased mature chip production capacity, but the West’s drive for secure supply chains offers a lifeline for Taiwan When Powerchip Technology Corp (力晶科技) entered a deal with the eastern Chinese city of Hefei in 2015 to set up a new chip foundry, it hoped the move would help provide better access to the promising Chinese market. However, nine years later, that Chinese foundry, Nexchip Semiconductor Corp (合晶集成), has become one of its biggest rivals in the legacy chip space, leveraging steep discounts after Beijing’s localization call forced Powerchip to give up the once-lucrative business making integrated circuits for Chinese flat panels. Nexchip is among Chinese foundries quickly winning market share in the crucial US$56.3 billion industry of so-called legacy
Hon Hai Precision Industry Co (鴻海精密) is reportedly making another pass at Nissan Motor Co, as the Japanese automaker's tie-up with Honda Motor Co falls apart. Nissan shares rose as much as 6 percent after Taiwan’s Central News Agency reported that Hon Hai chairman Young Liu (劉揚偉) instructed former Nissan executive Jun Seki to connect with French carmaker Renault SA, which holds about 36 percent of Nissan’s stock. Hon Hai, the Taiwanese iPhone-maker also known as Foxconn Technology Group (富士康科技集團), was exploring an investment or buyout of Nissan last year, but backed off in December after the Japanese carmaker penned a deal
WASHINGTON POLICY: Tariffs of 10 percent or more and other new costs are tipped to hit shipments of small parcels, cutting export growth by 1.3 percentage points The decision by US President Donald Trump to ban Chinese companies from using a US tariff loophole would hit tens of billions of dollars of trade and reduce China’s economic growth this year, according to new estimates by economists at Nomura Holdings Inc. According to Nomura’s estimates, last year companies such as Shein (希音) and PDD Holdings Inc’s (拼多多控股) Temu shipped US$46 billion of small parcels to the US to take advantage of the rule that allows items with a declared value under US$800 to enter the US tariff-free. Tariffs of 10 percent or more and other new costs would slash such