TECHNOLOGY
Flat-panel shortage forecast
TrendForce Corp (集邦科技) has forecast that a supply shortage of flat panels might worsen next quarter, as production at one of LG Electronics Co’s G8.5 production lines was disrupted earlier this month due to a fatal accident. The incident at LG is likely to have a major effect on the supply of large-size panels next quarter, as LG could sustain a capacity loss of about 715,000m2 per month, TrendForce said in a report on Tuesday. That would provide a cushion to weak panel prices lately, as supply would only outpace demand by 2.8 percent in the best-case scenario, down from a 4 percent estimate, the researcher said. Almost all flat-panel makers would benefit from rising demand, the market researcher said.
BIOTECHNOLOGY
IBMI reaffirms role
The Institute for Biotechnology and Medicine Industry (IBMI, 國家生技醫療產業策進會) yesterday said that it would continue to facilitate collaborations between the government and the biotechnology sector. The statement came after media reports said that the IBMI and the Taiwan Biotechnology Industry Alliance (TBIA, 台灣生技產業聯盟) — a new organization with a similar mission formed by President Tsai Ing-wen’s (蔡英文) administration earlier this month — might become the latest battlefront between the pan-blue and pan-green camps, creating redundancy. IBMI, which is led by Chinese Nationalist Party (KMT) Legislator Wang Jin-pyng (王金平), said that the institution has gone through three rotations of the ruling party in its near-20 year history and that its relationship with the TBIA would not be adversarial.
BANKING
Pension savings predicted
State-run Bank of Taiwan (臺灣銀行) yesterday said that it would see savings of between NT$9 billion and NT$10 billion (US$297 million and US$330 million) per year as the government’s pension reform ends the 18 percent preferential interest rate for retired civil servants. The bank said that about NT$450 billion of deposits are eligible for the 18 percent preferential interest rate and that the savings would translate into additional profits.
MANUFACTURING
TSMC ranked 45th in value
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) was ranked the world’s 45th-most valuable company by market capitalization this year, up three notches from last year, a report published by PricewaterhouseCoopers said yesterday. As of March 31, TSMC’s market capitalization stood at US$161 billion, an increase of US$31 billion, or 24 percent, from last year, the Global Top 100 Companies by Market Capitalization report said. TSMC was the only Taiwanese company on the list.
INVESTMENT
Shares drop by 1 percent
Shares in Taiwan fell by more than 1 percent yesterday as investors reacted to losses overnight on US markets by cutting their holdings, dealers said. Concerns over the delay on a vote on healthcare legislation sent major US indices lower on Tuesday, with the tech-heavy NASDAQ the biggest loser, dropping 1.61 percent. In Taipei, the weighted index on the Taiwan Stock Exchange closed down 121.51 points, or 1.16 percent, at 10,390.55, after moving between 10,382.81 and 10,459.17 on turnover of NT$121.18 billion. The bellwether electronics sector fell 1.18 percent, while fuel and electricity stocks plunged 10.1 percent.
INVESTOR RESILIENCE? An analyst said that despite near-term pressures, foreign investors tend to view NT dollar strength as a positive signal for valuation multiples Morgan Stanley has flagged a potential 10 percent revenue decline for Taiwan’s tech hardware sector this year, as a sharp appreciation of the New Taiwan dollar begins to dent the earnings power of major exporters. In what appears to be the first such warning from a major foreign brokerage, the US investment bank said the currency’s strength — fueled by foreign capital inflows and expectations of US interest rate cuts — is compressing profit margins for manufacturers with heavy exposure to US dollar-denominated revenues. The local currency has surged about 10 percent against the greenback over the past quarter and yesterday breached
MARKET FACTORS: Navitas Semiconductor Inc said that Powerchip is to take over from TSMC as its supplier of high-voltage gallium nitride chips Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday in a statement said that it would phase out its compound semiconductor gallium nitride (GaN) business over the next two years, citing market dynamics. The decision would not affect its financial targets announced previously, the world’s biggest contract chipmaker said. “We are working closely with our customers to ensure a smooth transition and remain committed to meeting their needs during this period,” it said. “Our focus continues to be on delivering sustained value to our partners and the market.” TSMC’s latest move came unexpectedly, as the chipmaker had said in its annual report that it has
Gudeng Precision Industrial Co (家登精密), the sole extreme ultraviolet pod supplier to Taiwan Semiconductor Manufacturing Co (台積電), yesterday said it has trimmed its revenue growth target for this year as US tariffs are likely to depress customer demand and weigh on the whole supply chain. Gudeng’s remarks came after the US on Monday notified 14 countries, including Japan and South Korea, of new tariff rates that are set to take effect on Aug. 1. Taiwan is still negotiating for a rate lower than the 32 percent “reciprocal” tariffs announced by the US in April, which it later postponed to today. The
SECURITY WARNING: The company possesses key 3-nanometer technology, and Taiwan should prevent it from being transferred to China, a lawmaker said The Ministry of Economic Affairs yesterday said it would conduct a “strict review” of any proposed acquisition of Taiwanese tech company Source Photonics Co (索爾思光電), following media reports that a Chinese firm was planning to buy the company in the Hsinchu Science Park (新竹科學園區). Local media reported that Suzhou Dongshan Precision Manufacturing Co (東山精密), China’s largest printed circuit board manufacturer, had announced plans to acquire Source Photonics for 5.9 billion yuan (US$823.1 million). The ministry said it has not received an application from Source Photonics and has formally notified the company that any buyout would constitute a change in its ownership structure. The
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