JAPAN
Business bankruptcies rise
Corporate bankruptcies in the first half of the year rose for the first time in 11 years, partly due to the COVID-19 pandemic, which has hit hotel and restaurant businesses. There were 4,001 cases through last month, up 0.2 percent from a year earlier, said Tokyo Shoko Research, which tracks local bankruptcies. The firm yesterday said that 240 companies went bankrupt due to the pandemic. Bankruptcies in industries including accommodation and food services came in at 1,295, up 3.8 percent from last year, it said.
RETAIL
Itochu eyes FamilyMart
Itochu Corp is planning to take full control of convenience-store chain FamilyMart Co through a tender offer, the retailer said yesterday. The offer is to be valued at ￥500 billion to ￥600 billion (US$4.6 billion to US$5.6 billion), the Nikkei reported, without citing how it obtained the information. Itochu owns 50.1 percent of FamilyMart. If the tender offer is successful, it would become a wholly owned subsidiary of Itochu, one of Japan’s largest trading companies, Nikkei said.
AGRICULTURE
China tapping pork reserves
China yesterday said it plans to sell 20,000 tonnes of frozen pork from state reserves as it seeks to contain rallying prices after the top consumer of the meat halted imports from dozens of overseas producers. Domestic wholesale pork prices last month jumped 16 percent, the biggest monthly gain since October last year, after Beijing suspended imports from more than 20 overseas meat plants amid concerns over COVID-19 infections among employees at the slaughterhouses.
AUTOMOBILES
China auto sales down 6.5%
Vehicle sales in China retreated last month following a rare increase in May, the China Passenger Car Association said yesterday. Retail sales of sedans, sports utility vehicles, minivans and multipurpose vehicles declined 6.5 percent to 1.68 million units from a year earlier, it said. Sales had risen 1.9 percent in May, the first increase in a year. The decline is a setback for an industry betting that demand would return as the COVID-19 pandemic eases in the country, and showrooms and malls reopen.
APPAREL
Levi Strauss cutting jobs
Levi Strauss & Co on Tuesday said that it would cut 700 office jobs, or about 15 percent of its worldwide corporate workforce, as it deals with a sharp drop in sales due to the COVID-19 pandemic. The San Francisco-based jeans maker said the layoffs would save it about US$100 million a year and would not affect workers at its stores or factories. Its second-quarter revenue sank 62 percent to US$497.5 million, it said as it reported a loss of US$363.5 million, after reporting a profit a year earlier. Adjusted losses came to US$0.48 per share, beating Wall Street expectations.
LOGISTICS
Deutsche Post offers bonus
German logistics group Deutsche Post DHL on Tuesday said that it would pay all its employees worldwide a 300 euro (US$339) bonus to thank them for their “tireless efforts” during the COVID-19 pandemic. More than 500,000 workers are set to receive the “one-time bonus” in the coming months, costing the group about 200 million euros. “We have navigated our company through this crisis very well so far. We owe this to our committed colleagues worldwide,” chief executive Frank Appel said in a statement.
AI SPLURGE: The four major US tech companies have lost more than US$950 billion in value since releasing earnings and outlooks, while equipment makers were gaining Four of the biggest US technology companies together have forecast capital expenditures that would reach about US$650 billion this year — a flood of cash earmarked for new data centers and all the gear within them. The spending planned by Alphabet Inc, Amazon.com Inc, Meta Platforms Inc and Microsoft Corp, all in pursuit of dominance in the still-nascent market for artificial intelligence (AI) tools, is a boom without a parallel this century. Each of the companies’ estimates for this year is expected either near or surpass their budgets for the past three years combined. They would set a high-watermark for capital spending
China’s top chipmaker has warned that breakaway spending on artificial intelligence (AI) chips is bringing forward years of future demand, raising the risk that some data centers could sit idle. “Companies would love to build 10 years’ worth of data center capacity within one or two years,” Semiconductor Manufacturing International Corp (SMIC, 中芯) cochief executive officer Zhao Haijun (趙海軍) said yesterday on a call with analysts. “As for what exactly these data centers will do, that hasn’t been fully thought through.” Moody’s Ratings projects that AI-related infrastructure investment would exceed US$3 trillion over the next five years, as developers pour eye-watering sums
Bank of America Corp nearly doubled its forecast for the nation’s economic growth this year, adding to a slew of upgrades even after a rip-roaring last year propelled by demand for artificial intelligence (AI). The firm lifted its projection to 8 percent from 4.5 percent on “relentless global demand” for the hardware that Taiwanese companies make, according to a note dated yesterday by analysts including Xiaoqing Pi (皮曉青). Taiwan’s GDP expanded 8.63 percent last year, the fastest pace since 2010. The increase “reflects our sustained optimism over Taiwan’s technology driven expansion and is reinforced by several recent developments,” including a more stable currency,
COLLABORATION: Taiwan and the US could jointly find solutions to weaknesses in supply chain resilience for critical materials, focusing on mining and initial refinement Taiwan is likely to purchase rare earths from the US in the future, and is also in talks with Australia and Canada to strengthen global rare earth supply chain security, Minister of Economic Affairs Kung Ming-hsin (龔明鑫) said yesterday. Taiwan and the US last month concluded the sixth Economic Prosperity Partnership Dialogue, during which both sides signed a joint statement endorsing the principles of the Pax Silica Declaration, pledging to deepen cooperation in areas including critical minerals. At the time, Kung said the two sides would establish working groups to advance cooperation in areas including artificial intelligence, digital infrastructure, critical materials and
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