SEMICONDUCTORS
US tax credit proposed
US senators on Thursday proposed a new 25 percent tax credit for investments in semiconductor manufacturing as the US Congress works to speed US chip production. The proposal, sponsored by US senators Ron Wyden — chairman of the Finance Committee — Mike Crapo, Mark Warner, John Cornyn, Debbie Stabenow and Steve Daines would provide “reasonable, targeted incentives for domestic semiconductor manufacturing,” they said in a statement. Last week, the Senate voted 68-32 to approve spending US$52 billion to increase US production and research into semiconductors and telecommunications equipment, including US$2 billion dedicated to chips used by automakers.
CHINA
Meituan CEO Wang grilled
The government summoned Meituan (美團) chief executive officer Wang Xing (王興) to a meeting recently and warned him to keep a low profile, after the founder of China’s third-largest tech corporation last month posted a poem that convulsed markets and sparked a social media furor. Beijing officials called Wang in after the food delivery mogul posted a millennium-old poem regarded by many as implicit criticism of the government, people with knowledge of the matter said. They warned him to refrain from courting the spotlight, at least temporarily, the people said, asking not to be identified as they were not authorized to discuss the matter. The Tang Dynasty poem — describing the burning of books under China’s first emperor — was widely seen as anti-establishment and triggered a US$26 billion selloff in Meituan’s shares over two days. Wang later said that his post had been targeted at the short-sightedness of his own industry.
AUTOMAKERS
Ford reverses outlook
Ford Motor Co on Thursday switched gears on a previously dour financial outlook, saying it now expects stronger second-quarter results thanks to growing demand for its vehicles and a sharp rise in the prices people pay for them. “Our pricing is just strengthening every day,” Ford chief executive officer Jim Farley told a Deutsche Bank automotive conference. “It’s pretty breathtaking actually.” Ford projects that earnings before interest and taxes in the current quarter will be “significantly better” than last year, when the company lost US$1.9 billion on that basis, it said in a statement. Farley also credited cost cutting, especially in overseas operations that he said had been a “[US]$2 billion to [US]$3 billion drag on our business,” but now turn a small profit. The automaker is seeing robust demand for its newest models, including a revived Bronco sport utility vehicle, its electric F-150 Lightning pickup and the Maverick compact truck.
UNITED KINGDOM
Retail sales decline
Retail sales fell unexpectedly last month as the reopening of restaurants and bars prompted consumers to cut spending at supermarkets. “Following a sharp increase last month coinciding with post-lockdown reopening, retail sales dipped slightly in May,” Office for National Statistics director of economic statistics Darren Morgan said yesterday. “However, they remain well above both their pre-[COVID-19]-pandemic levels and those seen in March before shops reopened.” The Confederation of British Industry revised upward its forecasts for growth this year to 8.2 percent from 6 percent and expects a 6.1 percent expansion next year.
DIVIDED VIEWS: Although the Fed agreed on holding rates steady, some officials see no rate cuts for this year, while 10 policymakers foresee two or more cuts There are a lot of unknowns about the outlook for the economy and interest rates, but US Federal Reserve Chair Jerome Powell signaled at least one thing seems certain: Higher prices are coming. Fed policymakers voted unanimously to hold interest rates steady at a range of 4.25 percent to 4.50 percent for a fourth straight meeting on Wednesday, as they await clarity on whether tariffs would leave a one-time or more lasting mark on inflation. Powell said it is still unclear how much of the bill would fall on the shoulders of consumers, but he expects to learn more about tariffs
Meta Platforms Inc offered US$100 million bonuses to OpenAI employees in an unsuccessful bid to poach the ChatGPT maker’s talent and strengthen its own generative artificial intelligence (AI) teams, OpenAI CEO Sam Altman has said. Facebook’s parent company — a competitor of OpenAI — also offered “giant” annual salaries exceeding US$100 million to OpenAI staffers, Altman said in an interview on the Uncapped with Jack Altman podcast released on Tuesday. “It is crazy,” Sam Altman told his brother Jack in the interview. “I’m really happy that at least so far none of our best people have decided to take them
PLANS: MSI is also planning to upgrade its service center in the Netherlands Micro-Star International Co (MSI, 微星) yesterday said it plans to set up a server assembly line at its Poland service center this year at the earliest. The computer and peripherals manufacturer expects that the new server assembly line would shorten transportation times in shipments to European countries, a company spokesperson told the Taipei Times by telephone. MSI manufactures motherboards, graphics cards, notebook computers, servers, optical storage devices and communication devices. The company operates plants in Taiwan and China, and runs a global network of service centers. The company is also considering upgrading its service center in the Netherlands into a
NOT JUSTIFIED: The bank’s governor said there would only be a rate cut if inflation falls below 1.5% and economic conditions deteriorate, which have not been detected The central bank yesterday kept its key interest rates unchanged for a fifth consecutive quarter, aligning with market expectations, while slightly lowering its inflation outlook amid signs of cooling price pressures. The move came after the US Federal Reserve held rates steady overnight, despite pressure from US President Donald Trump to cut borrowing costs. Central bank board members unanimously voted to maintain the discount rate at 2 percent, the secured loan rate at 2.375 percent and the overnight lending rate at 4.25 percent. “We consider the policy decision appropriate, although it suggests tightening leaning after factoring in slackening inflation and stable GDP growth,”
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