SEMICONDUCTORS
TSMC hit by Huawei jitters
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) shares yesterday fell amid concerns over the company’s position as a supplier for Chinese telecom equipment maker Huawei Technologies Co (華為), which was on Thursday last week blacklisted by the US government. Selling of TSMC led a decline in local semiconductor shares as investors took cues from a 4.02 percent fall in the Philadelphia Semiconductor Index overnight. Shares of TSMC fell 1.68 percent to close at NT$234, while the TAIEX ended up 0.64 percent at 10,464.50. Foreign institutional investors sold a net NT$7.07 billion (US$224.7 million) of shares yesterday after a net sell of NT$4.50 billion on Monday, Taiwan Stock Exchange data showed.
TECHNOLOGY
Ban might benefit Taiwan
Taiwan is likely to benefit from Washington barring US companies from doing business with Huawei Technologies Co (華為), as other smartphone brands would place orders with Taiwanese suppliers, Minister of Economic Affairs Shen Jong-chin (沈榮津) said yesterday. Speaking on the sidelines of a technology forum in Taipei, Shen said that Huawei’s competitors are expected to see shipments rise and Taiwanese suppliers could secure more orders from other brands. Local suppliers have flexible strategies and would be able to position themselves well in a new global trade environment, he said.
SEMICONDUCTORS
Weltrend upbeat for this year
Weltrend Semiconductor Inc (偉詮電子) yesterday said the rate of revenue growth this year would outpace last year’s 7.83 percent as it expressed optimism about its business outlook, despite a US-China trade spat and increasing economic uncertainty worldwide. The company reported that revenue last quarter fell 15 percent annually to NT$500.44 million. However, a 399 percent increase in non-operating income to NT$131.93 million lifted the company’s net income by 152 percent to NT$2110.78 million, it said. Earnings per share rose from NT$0.2 to NT$0.62 over the period, it added.
ENERGY
Xinyi raises US$465m in IPO
Xinyi Energy Holdings Ltd (信義能源控股), a Chinese solar farm operator, has raised US$465 million after pricing its Hong Kong initial public offering (IPO) near the bottom of a marketed range, people with knowledge of the matter said. The unit of Xinyi Solar Holdings Ltd (信義光能控股) sold 1.88 billion shares at HK$1.94 apiece, the people said. Xinyi Energy offered the shares at HK$1.89 to HK$2.35 each, according to its prospectus. It plans to begin trading on Tuesday next week. BNP Paribas SA was the sole sponsor for the IPO.
CHINA
Central bank details plan
The People’s Bank of China yesterday unveiled the details of a three-phase plan to reduce the reserve requirement ratio for county-level rural commercial banks. The central bank announced the move on May 6 and launched the first phase on Wednesday last week. The reduction would free about 280 billion yuan (US$40.54 billion) for the rural banks, the central bank said. The plan aims to help struggling companies amid an economic slowdown, it said, adding that the remaining two phases would be launched on June 17 and July 15. The first phase saw the ratio reduced by 100 basis points, the central bank said.
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
Rick Cassidy, the chairman of Taiwan Semiconductor Manufacturing Co's (TSMC, 台積電) US subsidiary, TSMC Arizona Corp, plans to retire, but the company has yet to name a successor. After Cassidy made his intention to retire known, TSMC Arizona held a special general meeting and approved a resolution that Cassidy would not continue as chairman and would not remain as a director, TSMC said in a statement filed with the Taiwan Stock Exchange last night. The meeting also approved a plan to appoint TSMC Arizona president Rose Castanares as a director, the company said, adding that Cassidy has been named as an advisor
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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