Aerospace Industrial Development Corp (AIDC, 漢翔航空工業) yesterday said it is fully committed to the government’s bid to build a fleet of indigenously developed air force trainer jets and downplayed concerns about a memorandum of understanding (MOU) it inked with an Italian company.
AIDC, the nation’s largest civilian and military aircraft manufacturer, said the terms of the MOU signed in 2014 with Italy’s Alenia Aermacchi, a subsidiary of the Italian aerospace firm Leonardo-Finmeccanica, are no long applicable.
The Italian company developed the M-346 two-engine transonic trainer aircraft, which would compete against a locally developed option along with the T-50 trainer aircraft developed by Korea Aerospace Industries and Lockheed Martin in the US.
“We have stipulated that the terms of the arrangement would be canceled when the government finalizes its decision to develop indigenous trainer jets,” AIDC chairman Anson Liao (廖榮鑫) said in a statement.
The company’s board of directors last month ratified a resolution to align its operating goals with the government’s goal of boosting domestic development, Liao said.
Liao also rejected suggestions that AIDC has set itself up to profit no matter the decision on the trainer jet fleet upgrade, which is expected to provide a revenue stream of about NT$200 billion (US$6.3 billion) in procurement and maintenance over two decades.
Taiwan’s aerospace sector would benefit little if the contract is awarded to a foreign designer, even if the aircraft are manufactured by local companies, industry experts have said.
AIDC reported its net income in the first half of the year rose 22.7 percent annually to NT$1.07 billion. Earnings per share were NT$1.17, it said.
Sales in the first seven months of the year rose 8 percent annually to NT$16.05 billion, meeting expectations, the company said.
In related news, Leonardo-Finmeccanica on Friday rejected local media reports that it slashed its asking price for a fleet of 66 M-346 trainer jets from NT$69.1 billion to about NT$50.4 billion.
No price reduction has been proposed, the company said, adding that its M-346 offering is fully in line with the air force’s requirements in terms of technical and operational specifications, as well as production schedule.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
PRESSURE EXPECTED: The appreciation of the NT dollar reflected expectations that Washington would press Taiwan to boost its currency against the US dollar, dealers said Taiwan’s export-oriented semiconductor and auto part manufacturers are expecting their margins to be affected by large foreign exchange losses as the New Taiwan dollar continued to appreciate sharply against the US dollar yesterday. Among major semiconductor manufacturers, ASE Technology Holding Co (日月光), the world’s largest integrated circuit (IC) packaging and testing services provider, said that whenever the NT dollar rises NT$1 against the greenback, its gross margin is cut by about 1.5 percent. The NT dollar traded as strong as NT$29.59 per US dollar before trimming gains to close NT$0.919, or 2.96 percent, higher at NT$30.145 yesterday in Taipei trading
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