AUTOMAKERS
War trims Volvo income
Volvo AB said Russia’s war in Ukraine has forced it to make provisions in the first quarter totaling 4 billion kronor (US$422.4 million) and could negatively affect operating income. All of the Swedish automaker’s sales, service and production in Russia have been suspended since the war began and sanctions were imposed, the company said yesterday. About 3 percent of Volvo’s net sales last year stemmed from Russia, with the provision related to expected credit losses from customers there. Volvo has about 9 billion kronor in assets related to Russia, of which 6 billion kronor are classified as cash items, it said. The assets are related to its leasing business, which is financed through the bond market.
AUTOMAKERS
Nissan making new batteries
Nissan Motor Co is betting that experience in pioneering lithium-ion batteries more than a decade ago could give it an upper hand in producing a new, yet relatively unproven battery that some think could unlock the potential of electric vehicles (EVs). Nissan is producing prototype solid-state battery cells, which would replace the electrical current-conducting liquid found in conventional batteries with a solid substance. Nissan is making the batteries in a pop-up laboratory inside research grounds near its Yokohama headquarters. The Japanese automaker plans to bring the batteries to market by 2028, using a pilot plant that should be ready by 2024. Solid-state batteries would potentially unlock cheaper, safer and faster-charging EVs, automotive executives and battery experts have said.
LABOR
Pay soars in UK
British companies are raising starting salaries at a record pace, and some of the country’s biggest grocery chains are already boosting pay as labor shortages hand workers unprecedented bargaining power. The latest signs of wage pressure could add to concern at the Bank of England, which has raised interest rates three times since December to slow inflation, and is forecast to deliver further hikes this year. Officials are worried about the possibility of a wage-price spiral, where demands for higher pay lead firms to keep raising prices to protect their profit margins. The Recruitment and Employment Confederation yesterday said the average salary for new permanent staff members rose more last month than at any time since its survey began in 1997. Tesco PLS, the country’s largest grocer, on Thursday said that it is lifting wages by almost 6 percent.
METALS
Toho fills titanium shortage
Toho Titanium Co is boosting output of the metal used to make aircraft amid a shortfall caused by Boeing Co and Airbus SE avoiding purchases from Russia, the world’s largest supplier said. The Japanese company has won orders from US aviation customers looking for alternatives to Russian supply, said Hiromu Tomeba, manager of the corporate planning division. Toho has been asked to ship 2,000 to 3,000 tonnes of titanium sponge to new customers by the end of the year, he said. “Customers asked us to expand supplies as they seem to be concerned about future procurement and wanted to pile up stocks,” Tomeba said, adding that they want to be prepared for a threat to business continuity after Boeing stopped buying from Russia. Toho and its larger peer, Osaka Titanium Technologies Co, are among the few non-Russian suppliers of the metal that buyers can turn to.
RUN IT BACK: A succesful first project working with hyperscalers to design chips encouraged MediaTek to start a second project, aiming to hit stride in 2028 MediaTek Inc (聯發科), the world’s biggest smartphone chip supplier, yesterday said it is engaging a second hyperscaler to help design artificial intelligence (AI) accelerators used in data centers following a similar project expected to generate revenue streams soon. The first AI accelerator project is to bring in US$1 billion revenue next year and several billion US dollars more in 2027, MediaTek chief executive officer Rick Tsai (蔡力行) told a virtual investor conference yesterday. The second AI accelerator project is expected to contribute to revenue beginning in 2028, Tsai said. MediaTek yesterday raised its revenue forecast for the global AI accelerator used
TEMPORARY TRUCE: China has made concessions to ease rare earth trade controls, among others, while Washington holds fire on a 100% tariff on all Chinese goods China is effectively suspending implementation of additional export controls on rare earth metals and terminating investigations targeting US companies in the semiconductor supply chain, the White House announced. The White House on Saturday issued a fact sheet outlining some details of the trade pact agreed to earlier in the week by US President Donald Trump and Chinese President Xi Jinping (習近平) that aimed to ease tensions between the world’s two largest economies. Under the deal, China is to issue general licenses valid for exports of rare earths, gallium, germanium, antimony and graphite “for the benefit of US end users and their suppliers
Dutch chipmaker Nexperia BV’s China unit yesterday said that it had established sufficient inventories of finished goods and works-in-progress, and that its supply chain remained secure and stable after its parent halted wafer supplies. The Dutch company suspended supplies of wafers to its Chinese assembly plant a week ago, calling it “a direct consequence of the local management’s recent failure to comply with the agreed contractual payment terms,” Reuters reported on Friday last week. Its China unit called Nexperia’s suspension “unilateral” and “extremely irresponsible,” adding that the Dutch parent’s claim about contractual payment was “misleading and highly deceptive,” according to a statement
The Chinese government has issued guidance requiring new data center projects that have received any state funds to only use domestically made artificial intelligence (AI) chips, two sources familiar with the matter told Reuters. In recent weeks, Chinese regulatory authorities have ordered such data centers that are less than 30 percent complete to remove all installed foreign chips, or cancel plans to purchase them, while projects in a more advanced stage would be decided on a case-by-case basis, the sources said. The move could represent one of China’s most aggressive steps yet to eliminate foreign technology from its critical infrastructure amid a
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