CHINA
PBOC injects US$13.9bn
The People’s Bank of China (PBOC) yesterday injected short-term cash into the financial system in a sign the authorities are seeking to soothe market nerves frayed by concern over quarter-end funding needs and China Evergrande Group’s (恆大集團) debt crisis. The central bank added 90 billion yuan (US$13.9 billion) of funds on a net basis via seven-day and 14-day reverse repurchase agreements, the most since February. It was the first time this month the authorities added more than 10 billion yuan of short-term liquidity into the banking system in a single day. The funds come as the crisis facing Evergrande fuels concern over the health of the nation’s real-estate and credit markets. Adding to the stress is a seasonal spike in demand for cash as banks become less willing to lend toward quarter-end as they prepare for regulatory checks. Liquidity also tends to diminish at this time of year as the Mid-Autumn Festival approaches.
TECHNOLOGY
S4 Capital to buy Zemoga
Martin Sorrell’s S4 Capital has struck a deal to buy Zemoga, a technology services company that provides a new route for the rapidly growing digital advertising group to win work from multinational clients. Sorrell, the founder of WPP, has turned S4 into a US$6 billion company in the three years since its launch by acquiring businesses to combine data with digital content and serve the likes of Facebook, Google, Burberry and Netflix. The move into tech services is to enable it to better compete with companies like Accenture and Globant, which can sell digital advertising services and advice to clients. Zemoga provides product design, engineering and delivery services to clients such as Bridgestone, Sony, Roku and Morningstar.
SINGAPORE
Fund aims to boost market
Singapore is looking to set up a S$1.5 billion (US$1.1 billion) fund backed by state investment firm Temasek Holdings Pte to bolster its stock market, which has struggled with tepid listings and poor trading volumes. The fund is to invest in high-growth companies and initial public offerings. Separately, the investment arm of the Economic Development Board, a government agency promoting foreign investment, is to invest up to S$500 million into a fund aimed at companies looking to list in two to five years. The plan aims to increase Singapore’s attractiveness as a location for raising capital for local and regional companies, the government said.
STEEL
US Steel to build mini-mill
US Steel Corp is to spend about US$3 billion to build a new mill, the latest sign that steelmakers are growing more comfortable that higher prices will last. The so-called mini-mill is to combine two electric arc furnaces, which primarily use steel scrap and are far more energy-efficient than traditional integrated plants that are fed by coal. The company expects to begin construction in the first half of next year and start producing in 2024. US Steel’s announcement comes as domestic futures prices have more than tripled in the past year. While this has produced a windfall for domestic suppliers, it is driving up the cost of everything from automobiles to wind turbines to kitchen appliances as the world recovers from the COVID-19 pandemic. The company forecast that it would report record earnings for the third quarter on the back of the strong prices, which would allow it to reduce debt.
CHIP RACE: Three years of overbroad export controls drove foreign competitors to pursue their own AI chips, and ‘cost US taxpayers billions of dollars,’ Nvidia said China has figured out the US strategy for allowing it to buy Nvidia Corp’s H200s and is rejecting the artificial intelligence (AI) chip in favor of domestically developed semiconductors, White House AI adviser David Sacks said, citing news reports. US President Donald Trump on Monday said that he would allow shipments of Nvidia’s H200 chips to China, part of an administration effort backed by Sacks to challenge Chinese tech champions such as Huawei Technologies Co (華為) by bringing US competition to their home market. On Friday, Sacks signaled that he was uncertain about whether that approach would work. “They’re rejecting our chips,” Sacks
NATIONAL SECURITY: Intel’s testing of ACM tools despite US government control ‘highlights egregious gaps in US technology protection policies,’ a former official said Chipmaker Intel Corp has tested chipmaking tools this year from a toolmaker with deep roots in China and two overseas units that were targeted by US sanctions, according to two sources with direct knowledge of the matter. Intel, which fended off calls for its CEO’s resignation from US President Donald Trump in August over his alleged ties to China, got the tools from ACM Research Inc, a Fremont, California-based producer of chipmaking equipment. Two of ACM’s units, based in Shanghai and South Korea, were among a number of firms barred last year from receiving US technology over claims they have
BARRIERS: Gudeng’s chairman said it was unlikely that the US could replicate Taiwan’s science parks in Arizona, given its strict immigration policies and cultural differences Gudeng Precision Industrial Co (家登), which supplies wafer pods to the world’s major semiconductor firms, yesterday said it is in no rush to set up production in the US due to high costs. The company supplies its customers through a warehouse in Arizona jointly operated by TSS Holdings Ltd (德鑫控股), a joint holding of Gudeng and 17 Taiwanese firms in the semiconductor supply chain, including specialty plastic compounds producer Nytex Composites Co (耐特) and automated material handling system supplier Symtek Automation Asia Co (迅得). While the company has long been exploring the feasibility of setting up production in the US to address
OPTION: Uber said it could provide higher pay for batch trips, if incentives for batching is not removed entirely, as the latter would force it to pass on the costs to consumers Uber Technologies Inc yesterday warned that proposed restrictions on batching orders and minimum wages could prompt a NT$20 delivery fee increase in Taiwan, as lower efficiency would drive up costs. Uber CEO Dara Khosrowshahi made the remarks yesterday during his visit to Taiwan. He is on a multileg trip to the region, which includes stops in South Korea and Japan. His visit coincided the release last month of the Ministry of Labor’s draft bill on the delivery sector, which aims to safeguard delivery workers’ rights and improve their welfare. The ministry set the minimum pay for local food delivery drivers at
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