CHEMICALS
Bayer boosts forecasts
German chemicals and pharmaceuticals powerhouse Bayer AG upped its growth forecasts for the year after a strong second quarter saw profits surge by 19 percent. While revenues fell 1.4 percent to 11.8 billion euros (US$13 billion), profits hit 1.4 billion euros. The company pointed to strong growth in sales of prescription and non-prescription drugs as the main contributor to the boost. Annual revenues are expected to hit about 35 billion euros, excluding income from the recently separated plastics business Covestro, the company said. Earnings before interest, tax and special items are expected to see almost 10 percent growth over the whole year, it said.
AVIATION
Airbus profits rise
Airbus Group’s profits rose in the first half of the year thanks to asset sales and a satellite launch merger, but the planemaker suffered losses linked to its troubled A400M military transporter and A350 passenger jet, its long-delayed rival to Boeing’s popular 787. The Toulouse, France-based company reported profit of 1.76 billion euros, up from 1.52 billion in the first half of last year. First-half sales were steady at 28.8 billion euros, compared with 28.9 billion last year. Overall orders were down despite a spate of deals announced at the recent Farnborough Air Show.
BANKING
Deutsche Bank profit falls
Deutsche Bank AG yesterday blamed a weak economic environment and its complicated restructuring for a 98 percent plunge in its second-quarter net profit. Net earnings in the second quarter totaled 20 million euros, compared with 796 million in the same period of last year. Deutsche’s performance fell well short of the average of 188 million euros expected by analysts surveyed by Factset. Revenue for the quarter was 7.4 billion euros, down 20 percent year-on-year. The bank also said it is nearing an agreement with the US Department of Justice to settle a long-running investigation into its mortgage-backed securities business.
CHIPMAKERS
Analog Devices buys Linear
Analog Devices Inc has agreed to acquire Linear Technology Corp for about US$14.8 billion, potentially restarting a scramble by chipmakers to add scale amid record industry consolidation. Analog will pay US$60 a share for rival Linear, in cash and stock — a premium of 24 percent to its closing price on Monday — the two companies said in a statement on Tuesday. They expect to close the transaction by the first half of next year. The deal is expected to give Analog Devices, which specializes in data converters and chips that translate real world things into electronic signals, access to the market for chips that control power in devices.
AUTOMAKERS
Nissan profit drops
Japanese automaker Nissan Motor Co yesterday reported a ￥136.4 billion (US$30.7 million) profit for the fiscal quarter through last month, down nearly 11 percent from the same period last year. The result was in line with forecasts from analysts surveyed by FactSet. Quarterly sales shrank 8.4 percent to 2.65 trillion yen due to a stronger yen. The Yokohama-based automaker kept its full-year forecast for a ￥525 billion profit, up slightly from the ￥524 billion earned the previous fiscal year. Nissan blamed volatility in emerging markets for the lower profit, noting vehicle sales dipped in South America, the Middle East and Africa.
CHIP HANG-UP: Surging memorychip prices would deal a blow to smartphone sales this year, potentially hindering one of MediaTek’s biggest sources of revenue MediaTek Inc (聯發科), the world’s biggest smartphone chip designer, yesterday said its new artificial intelligence (AI) chips used in data centers are to account for 20 percent of its total revenue next year, as cloud service providers race to deploy AI infrastructure to meet voracious demand. MediaTek is believed to be developing tensor processing units for Google, which are used in AI applications. While it did not confirm such reports, MediaTek said its new application-specific IC (ASIC) business would be a new growth engine for the company. It again hiked its forecast for the addressable ASIC market to US$70 billion by 2028, compared
Motorists ride past a mural along a street in Varanasi, India, yesterday.
MediaTek Inc (聯發科), the world’s biggest smartphone chip supplier, yesterday said it plans to double investment in data center-related technologies, including advanced packaging and high-speed interconnect technologies, to broaden the new business’ customer and service portfolios. The chip designer is redirecting its resources to data centers, mainly designing application-specific integrated circuits (ASIC) with artificial intelligence (AI) capabilities for cloud service providers. The data center business is forecast to lead growth in the next three years and become the company’s second-biggest revenue source, replacing chips used in smart devices, MediaTek president Joe Chen (陳冠州) told a media event in Taipei. “Three or four years
AT HIGH CAPACITY: Three-month order visibility on stable customer demand would push factory utilization to between 80 and 85 percent, Vanguard’s president said Foundry service provider Vanguard International Semiconductor Corp (世界先進) yesterday said it is unable to fully satisfy surging demand for chips used in artificial intelligence (AI) servers and data centers, amid an AI infrastructure investment boom that is crowding out production of less advanced chips. Vanguard is facing an “undersupply of chips” made using mature process technologies, due to strong demand for AI products and improving demand from customers in the commercial, industrial and auto sectors, which are digesting excess inventory to a healthier level, company chairman Fang Leuh (方略) told a virtual investors’ conference. However, Vanguard gave a more conservative view on
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