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.
Elon Musk’s lieutenants have reached out to chip industry suppliers, including Applied Materials Inc, Tokyo Electron Ltd and Lam Research Corp, for his envisioned Terafab, early steps in an audacious and likely arduous attempt to break into the production of cutting-edge chips. Staff working for the joint venture between Tesla Inc and Space Exploration Technologies Corp (SpaceX) have sought price quotes and delivery times for an array of chipmaking gear, people familiar with the matter said. In past weeks, they’ve contacted makers of photomasks, substrates, etchers, depositors, cleaning devices, testers and other tools, according to the people, who asked not to
The EU and US are nearing an agreement to coordinate on producing and securing critical minerals, part of a push to break reliance on Chinese supplies. The potential deal would create incentives, such as minimum prices, that could advantage non-Chinese suppliers, according to a draft of an “action plan” seen by Bloomberg. The EU and US would also cooperate on standards, investments and joint projects, as well as coordinate on any supply disruptions by countries like China. The two sides are additionally seeking other “like-minded partners” to join a multicountry accord to help create these new critical mineral supply chains, which feed into
Japan approved ￥631.5 billion (US$3.97 billion) in additional subsidies to hasten Rapidus Corp’s entry into the high-stakes artificial intelligence (AI) chipmaking arena, ramping up support for a project widely regarded as a long shot. The capital is intended to bankroll Rapidus’ work for information technology firm Fujitsu Ltd, one of the initial customers that Tokyo hopes would get the signature endeavor off the ground. The new money raises the fees and investments that the government is injecting into the start-up to ￥2.6 trillion by the end of the current fiscal year to March next year, the Japanese Ministry of Economy, Trade and
The founder of Chinese property giant Evergrande Group (恆大集團) has pleaded guilty to charges of fraud and bribery, a court said yesterday, the latest blow for what was once the country’s leading developer. Evergrande’s rise was propelled by decades of rapid urbanization and rising living standards, but in 2020, its access to credit dramatically narrowed when the government introduced curbs on excessive borrowing and speculation. The company defaulted in 2021 after struggling to repay creditors. Founder Xu Jiayin (許家印), 67, known as Hui Ka Yan in Cantonese, was reportedly held by police in 2023, with Evergrande saying he had been subjected to
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