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.
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.
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.
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.
An index launched a year ago to give investors greater exposure to China’s Internet giants is now the world’s worst-performing major technology gauge. The Hang Seng Tech Index has been on a roller-coaster ride in the past 12 months. The gauge, which marks its first anniversary on Tuesday, was up 59 percent at its February peak, but has since seen more than US$551 billion in market value wiped out amid Beijing’s clampdown on the sector. That has reduced its gain to nearly 6 percent, compared with more than 40 percent for the MSCI World Information Technology Index and the NASDAQ-100 Index. The
EDUCATION AS WELFARE: New regulations threaten to upend the lucrative private education sector that teaches the public school curriculum to paying families China unveiled a sweeping overhaul of its US$100 billion education tech sector, banning companies that teach the school curriculum from earning profit, raising capital or going public. Beijing on Saturday published an array of regulations that together threaten to overturn the sector and jeopardize billions of dollars in foreign investment. Companies that teach school subjects can no longer accept overseas investment, which could include capital from the offshore registered entities of Chinese firms, according to a notice released by the Chinese State Council. Those in violation of that rule must take steps to rectify the situation, the country’s most powerful administrative
‘IN ITS INFANCY’: The company’s 12-inch fab in Arizona is to be its first major overseas chip manufacturing site, while the fab in Japan would be its second, if it is constructed Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is evaluating the feasibility of constructing a semiconductor fabrication plant in Germany as it continues to expand overseas, it said yesterday. A shareholder at the contract chipmaker’s annual general meeting in Hsinchu City yesterday asked about the possibility following media reports earlier this month that TSMC was approached by the German government about building a chip fab in the country, as Europe joins the US and China in establishing local chip supplies in a bid to avert future chip shortages. “About the German fab, we are seriously looking into it, but it is still in its
The next target for China’s cybersecurity crackdown is to be the pools of data collected by the latest generation of vehicles. This approach risks Beijing shooting itself in the foot, and jeopardizing its ambitious plans to lead the global race for electric and autonomous vehicles. China wants to have control over the information vehicles have about their drivers, the roads they traverse, and the faces and voices they pass, according to a draft law on data-security management for the automotive industry issued in May. It seeks to ensure manufacturers across the auto supply chain keep data in the country and pass