ELECTRONICS
Bailout rumors quashed
Hon Hai Precision Industry Co (鴻海精密) yesterday denied media reports that a bailout of Sharp Corp would be approved and signed on Thursday, a day after the Hon Hai board meets. Progress in talks to acquire the troubled Japanese electronics maker would determine whether the deal is discussed at the board meeting, which is to go ahead as scheduled, Hon Hai said in a stock exchange filing. The two companies are set to approve a revised bailout plan at their board meetings on Wednesday and sign the acquisition agreement the following day, the Nikkei daily reported on Saturday. Sharp’s banks are ready to push back the deadline for most of the company’s ¥510 billion (US$4.51 billion) in loans and credit lines beyond Thursday, giving the Japanese firm more time to reach a renegotiated deal to be acquired by Hon Hai, sources said.
ACQUISITIONS
ASE buys more SPIL shares
Advanced Semiconductor Engineering Inc (ASE, 日月光半導體) has raised its stake in Siliconware Precision Industries Co (SPIL, 矽品精密) after it aggressively bought into the company on the open market. Under Taiwan’s regulations, ASE would need the Fair Trade Commission’s approval if the company plans to increase its stake in SPIL to more than 33 percent. In a filing to the Taiwan Stock Exchange on Friday, ASE said it acquired 154 million SPIL shares by spending NT$8.21 billion (US$250.56 million) to boost its stake in the company to 30.44 percent. It was the second move by ASE in just two days to acquire a large chunk of SPIL shares. On Thursday, ASE bought about 15.21 million SPIL shares to raise its stake in the company to 25.49 percent from the previous 25 percent.
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