COMMUNICATIONS
Reliance to buy Sistema unit
Indian billionaire Anil Ambani’s Reliance Communications Ltd agreed to buy AFK Sistema’s Indian wireless unit in an all-stock deal that would create a carrier with 118 million subscribers. Sistema, controlled by Russian tycoon Vladimir Evtushenkov, will hold about a 10 percent stake in the merged entity and pay off its Indian unit’s existing debt before closing the deal, Reliance Communications said in a statement to exchanges. The discussions between the two parties had been going on since June. The deal marks the start of consolidation in the world’s second-largest wireless market where stiff competition between 12 carriers for more than 988 million subscribers, has resulted in tariffs that are among the lowest globally.
WIRELESS
SK Telecom earnings drop
A service fee price war with archrivals saw South Korea’s top wireless operator, SK Telecom, hemorrhage profits in the third quarter, according to a company earnings report yesterday. SK Telecom and two other major players in South Korea’s small and saturated wireless market have focused all their efforts on competing for domestic customer share after efforts to go global stalled. Earlier this year, the company rolled out a series of discounts in monthly and subscription fees to counter similar moves by rivals KT and LG Uplus. The company’s net profit for July to last month amounted to 381.8 billion won (US$334.8 million), down 28.1 percent from a year earlier, the Seoul-based firm said in a statement. Operating profit fell 8.6 percent to 490.6 billion won during the same period, while sales also sagged 2.4 percent to 4.2 trillion won.
KAZAKHSTAN
Aide named bank chairman
Kazakh President Nursultan Nazarbayev named his aide Daniyar Akishev as central bank chairman yesterday, replacing Kairat Kelimbetov after just two years in the job. The reshuffle, quickly approved by the Senate upper chamber, follows a sharp depreciation of the Kazakh tenge, which has lost about a third of its value against the US dollar since the central bank abandoned its pegged exchange rate policy on Aug. 20. The policy change was a response to the sharp drop in the price of oil, Kazakhstan’s main export, and devaluations carried out by the Central Asian state’s major trading partners, Russia and China, as their economic growth slowed. The central bank resumed interventions on the foreign exchange market in mid-September and has since spent at least US$1.7 billion on protecting the tenge from what it described as overshooting driven by speculation. New chairman Akishev, 39, worked at the central bank for 18 years before joining Nazarbayev’s administration last year.
AUTOMAKERS
Nissan predicts profit rise
Nissan Motor Co yesterday raised its full-year profit forecast as Japan’s second-largest automaker benefits from an increase in demand in the US. Net income might rise to ¥535 billion (US$4.4 billion) in the 12 months through March from ¥457.6 billion a year earlier, Nissan said. That is up from the company’s ¥485 billion forecast made in May. That compares with the ¥534 billion average of 26 analysts’ estimates compiled by Bloomberg. The company also raised its operating income forecast to ¥730 billion from ¥675 billion. Nissan is benefiting from a robust US market that registered the fastest pace of sales growth in more than a decade, offsetting weak demand in Japan and China. The automaker boosted US deliveries faster than rivals.
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
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday held its first board of directors meeting in the US, at which it did not unveil any new US investments despite mounting tariff threats from US President Donald Trump. Trump has threatened to impose 100 percent tariffs on Taiwan-made chips, prompting market speculation that TSMC might consider boosting its chip capacity in the US or ramping up production of advanced chips such as those using a 2-nanometer technology process at its Arizona fabs ahead of schedule. Speculation also swirled that the chipmaker might consider building its own advanced packaging capacity in the US as part
A move by US President Donald Trump to slap a 25 percent tariff on all steel imports is expected to place Taiwan-made steel, which already has a 25 percent tariff, on an equal footing, the Taiwan Steel & Iron Industries Association said yesterday. Speaking with CNA, association chairman Hwang Chien-chih (黃建智) said such an equal footing is expected to boost Taiwan’s competitive edge against other countries in the US market, describing the tariffs as "positive" for Taiwanese steel exporters. On Monday, Trump signed two executive orders imposing the new metal tariffs on imported steel and aluminum with no exceptions and exemptions, effective