AUTOMAKERS
Hyundai still in doldrums
South Korean automaker Hyundai Motor Co posted its 10th consecutive sequential decline in profits in the second quarter and warned of a tough second half, as it soaks up stiff competition and shrinking demand for its mainstay sedans in the US. The world’s fifth-biggest automaker, together with affiliate Kia Motors, yesterday said its April-to-June net profit slipped 2.6 percent year-on-year to 1.66 trillion won (US$1.46 billion). That was just below a consensus forecast of 1.67 trillion won from a Reuters poll of 19 analysts. Over the past couple of years, the automaker has bet on new versions of former hit sedans to help it reverse out of its long-term profit slowdown. To offset the sedan weakness, Hyundai vice president in charge of investor relations Koo Za-yong said that the firm has started production of Santa Fe sport utility vehicles at its plant in Alabama, targeting annual output of 50,000 vehicles.
SEMICONDUCTORS
SK Hynix profit slumps
SK Hynix Inc, a supplier of memory chips to Apple Inc, posted a slump in second-quarter profit, as semiconductor prices dropped on slack demand for smartphones and PCs. Operating income fell 67 percent to 452.9 billion won in the three months ending June, the Icheon, South Korea-based company said. That compares with a projection of 454.3 billion on average by analysts, according to data compiled by Bloomberg. Deteriorating demand for smartphones saw the average selling price of benchmark DDR3 4-gigabit DRAM chips drop to US$1.58 in the second quarter, a year-on-year decline of 47 percent, according to InSpectrum Tech Inc. SK Hynix forecast that demand for DRAM chips would surge in the current quarter, driven by new handsets. Apple, Hynix’s biggest customer, typically releases new iPhones in September.
SEMICONDUCTORS
Texas upbeat on profit
Texas Instruments Inc, the largest maker of analog semiconductors, forecast sales and profit that might beat analysts’ estimates on stronger orders for chips used in cars and industrial machinery. Third-quarter net income would be between US$0.81 and US$0.91 per share, the Dallas, Texas-based company said in a statement on Monday. Sales would be US$3.34 billion to US$3.62 billion, it predicted. Those forecasts compare with average analyst estimates of US$0.81 per share on sales of US$3.38 billion, according to data compiled by Bloomberg. In the second quarter, Texas Instruments’ net income rose to US$779 million, or US$0.76 per share, from US$696 million, or US$0.65, in the same period last year. Revenue rose 1.3 percent to US$3.27 billion, the firm said. Analysts on average had projected net income of US$0.73 per share on sales of US$3.2 billion.
ENERGY
BP posts 45% profit slump
BP PLC posted a 45 percent slump in earnings, as oil production barely broke even and profits from refining sputtered. The UK firm said adjusted profit fell to US$720 million from US$1.3 billion in the same period last year, missing analysts’ estimates. Weak refining margins weighed on downstream results. BP’s earnings signal trouble for the world’s major energy producers, which relied on refining profits last year to weather crude’s collapse. While BP CEO Bob Dudley continues to rein in spending, he faces a difficult road ahead as debts climb and oil’s rally fades amid slowing demand growth and returning production from Canada to Nigeria. The company’s top global competitors report later this week.
EXTRATERRITORIAL REACH: China extended its legal jurisdiction to ban some dual-use goods of Chinese origin from being sold to the US, even by third countries Beijing has set out to extend its domestic laws across international borders with a ban on selling some goods to the US that applies to companies both inside and outside China. The new export control rules are China’s first attempt to replicate the extraterritorial reach of US and European sanctions by covering Chinese products or goods with Chinese parts in them. In an announcement this week, China declared it is banning the sale of dual-use items to the US military and also the export to the US of materials such as gallium and germanium. Companies and people overseas would be subject to
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) founder Morris Chang (張忠謀) yesterday said that Intel Corp would find itself in the same predicament as it did four years ago if its board does not come up with a core business strategy. Chang made the remarks in response to reporters’ questions about the ailing US chipmaker, once an archrival of TSMC, during a news conference in Taipei for the launch of the second volume of his autobiography. Intel unexpectedly announced the immediate retirement of former chief executive officer Pat Gelsinger last week, ending his nearly four-year tenure and ending his attempts to revive the
WORLD DOMINATION: TSMC’s lead over second-placed Samsung has grown as the latter faces increased Chinese competition and the end of clients’ product life cycles Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) retained the No. 1 title in the global pure-play wafer foundry business in the third quarter of this year, seeing its market share growing to 64.9 percent to leave South Korea’s Samsung Electronics Co, the No. 2 supplier, further behind, Taipei-based TrendForce Corp (集邦科技) said in a report. TSMC posted US$23.53 billion in sales in the July-September period, up 13.0 percent from a quarter earlier, which boosted its market share to 64.9 percent, up from 62.3 percent in the second quarter, the report issued on Monday last week showed. TSMC benefited from the debut of flagship
TENSE TIMES: Formosa Plastics sees uncertainty surrounding the incoming Trump administration in the US, geopolitical tensions and China’s faltering economy Formosa Plastics Group (台塑集團), Taiwan’s largest industrial conglomerate, yesterday posted overall revenue of NT$118.61 billion (US$3.66 billion) for last month, marking a 7.2 percent rise from October, but a 2.5 percent fall from one year earlier. The group has mixed views about its business outlook for the current quarter and beyond, as uncertainty builds over the US power transition and geopolitical tensions. Formosa Plastics Corp (台灣塑膠), a vertically integrated supplier of plastic resins and petrochemicals, reported a monthly uptick of 15.3 percent in its revenue to NT$18.15 billion, as Typhoon Kong-rey postponed partial shipments slated for October and last month, it said. The
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