Taiwanese banks’ credit exposure to domestic flat-panel makers is too high because these loans account for more than 20 percent of the lenders’ overall net worth, Fitch Ratings said yesterday.
“TFT-LCD makers ranked the highest in terms of the banks’ exposure to mono-line subsectors, with the top three players’ outstanding loans totaling 2.3 percent of the system’s loans,” Jonathan Lee (李信佳), senior director of Fitch Taiwan’s financial institutions team, told a media briefing.
The viability of display panel makers, which are highly sensitive to global business cyclicality, has a bearing on the banks’ credit profiles, Lee said.
Chimei Innolux Corp (奇美電子) and AU Optronics Corp (AUO, 友達光電), the nation’s largest and second--largest LCD panel makers, owe NT$309.1 billion (US$10.64 billion) and NT$128 billion in bank loans — 14.4 percent and 6 percent of the entire banking sector’s equity respectively, Lee said, adding a ratio higher than 10 percent is considered risky.
Chimei posted a loss of NT$13.01 billion in the second quarter.AUO posted a loss of NT$10.77 billion.
With Chunghwa Picture Tubes Ltd (中華映管), the three firms have outstanding loans equal to 2.3 percent of all system loans, Fitch said.
However, there is no imminent default risk from any of the three given their cash flows, it said.
The New Taiwan dollar is on the verge of overtaking the yuan as Asia’s best carry-trade target given its lower risk of interest-rate and currency volatility. A strategy of borrowing the New Taiwan dollar to invest in higher-yielding alternatives has generated the second-highest return over the past month among Asian currencies behind the yuan, based on the Sharpe ratio that measures risk-adjusted relative returns. The New Taiwan dollar may soon replace its Chinese peer as the region’s favored carry trade tool, analysts say, citing Beijing’s efforts to support the yuan that can create wild swings in borrowing costs. In contrast,
Nvidia Corp’s demand for advanced packaging from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) remains strong though the kind of technology it needs is changing, Nvidia CEO Jensen Huang (黃仁勳) said yesterday, after he was asked whether the company was cutting orders. Nvidia’s most advanced artificial intelligence (AI) chip, Blackwell, consists of multiple chips glued together using a complex chip-on-wafer-on-substrate (CoWoS) advanced packaging technology offered by TSMC, Nvidia’s main contract chipmaker. “As we move into Blackwell, we will use largely CoWoS-L. Of course, we’re still manufacturing Hopper, and Hopper will use CowoS-S. We will also transition the CoWoS-S capacity to CoWos-L,” Huang said
Nvidia Corp CEO Jensen Huang (黃仁勳) is expected to miss the inauguration of US president-elect Donald Trump on Monday, bucking a trend among high-profile US technology leaders. Huang is visiting East Asia this week, as he typically does around the time of the Lunar New Year, a person familiar with the situation said. He has never previously attended a US presidential inauguration, said the person, who asked not to be identified, because the plans have not been announced. That makes Nvidia an exception among the most valuable technology companies, most of which are sending cofounders or CEOs to the event. That includes
INDUSTRY LEADER: TSMC aims to continue outperforming the industry’s growth and makes 2025 another strong growth year, chairman and CEO C.C. Wei says Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), a major chip supplier to Nvidia Corp and Apple Inc, yesterday said it aims to grow revenue by about 25 percent this year, driven by robust demand for artificial intelligence (AI) chips. That means TSMC would continue to outpace the foundry industry’s 10 percent annual growth this year based on the chipmaker’s estimate. The chipmaker expects revenue from AI-related chips to double this year, extending a three-fold increase last year. The growth would quicken over the next five years at a compound annual growth rate of 45 percent, fueled by strong demand for the high-performance computing
RSS