ENERGY
Exxon to cut expenses
Exxon Mobil Corp is notifying contractors and vendors of planned near-term cuts in capital and operating expenses over the COVID-19 pandemic, and would announce the plans once they are final, company spokesman Jeremy Eikenberry said on Sunday. Exxon on Saturday reduced production at its refinery in Baton Rouge, Louisiana, and cut 1,800 contract workers on Friday, sources said. The company is also expected to delay a US$30 billion liquified natural gas plant in Mozambique.
ENERGY
Shell to slash costs
Royal Dutch Shell PLC yesterday said that it would cut costs and capital expenditure by billions of US dollars due to the worsening coronavirus pandemic, which has sparked an oil price collapse. The Anglo-Dutch energy major announced in a statement that it would lower operating costs by US$3 billion to US$4 billion over the next 12 months, and would reduce its annual spending to US$20 billion from US$25 billion.
CONSTRUCTION
Vinci targets out of reach
French construction and concessions group Vinci SA yesterday said that it would not be able to meet its targets for this year as the COVID-19 outbreak has significantly affected its activities. The company also said in a statement that it was not possible at this stage to estimate the effect of the health crisis on its financial statements given uncertainty about the duration and the scale of the pandemic. Vinci expects a pronounced but time-limited decline in revenue.
RETAIL
Primark shuttering all stores
Primark is closing all of its stores, a loss of about £650 million (US$756 million) worth of net sales a month, and would stop placing new orders with suppliers, its parent company said yesterday as the coronavirus outbreak worsens. Associated British Foods PLC said that the clothing retailer, which accounts for about half of the group’s revenue and profit, has shut all of its 376 outlets in 12 countries until further notice. AB Foods said it has not seen a material impact on its sugar, grocery, ingredients and agriculture operations.
MALAYSIA
GDP to slow to 2%: analysts
Malaysia’s economy is set to grow at its slowest pace since the 2009 financial crisis as it struggles with a trio of troubles: COVID-19, an oil-price crash and political upheaval. Analysts from Fitch Ratings to United Overseas Bank Ltd (大華銀行) expect Malaysia’s economy to grow about 2 percent this year. That compares with the government’s estimate that GDP would expand 3.6 to 4 percent, which already accounts for the effects of the virus. The central bank is set to release its annual report on the economy tomorrow, where it is expected to revise its outlook.
ECONOMY
Worse recession forecast
Morgan Stanley and Goldman Sachs Group Inc said that COVID-19 would inflict greater economic pain than they previously expected as they warned of a record plunge in US output in the second quarter and a deeper global recession. Morgan Stanley on Sunday forecast that the US’ GDP would fall 30.1 percent in the April-to-June quarter. Goldman predicted that the world economy would contract about 1 percent this year, which would be a bigger decline than even that witnessed in 2009 amid the financial crisis. Goldman had already projected a 24 percent drop in US output in the next quarter.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to