EUROPE
Inflation hits all-time high
Eurozone inflation climbed to another all-time high, supporting calls for the Central Bank to follow up its first interest rate increase since 2011 with another big move. Consumer prices so far this month jumped 8.9 percent from a year earlier — up from 8.6 percent last month and driven once again by soaring energy and food costs. The number overshot the expectations of economists surveyed by Bloomberg, who saw a gain of 8.7 percent. After slowing last month, a gauge of underlying inflation that excludes energy and food also hit a record of 4 percent. The intensifying price pressures prompted the Central Bank to surprise economists by delivering a half-point increase in its deposit rate this month.
ELECTRONICS
Sony downgrades outlook
Sony Group Corp downgraded its profit outlook for the fiscal year, with its PlayStation division expected to contribute less than previously forecast. The Tokyo-based entertainment conglomerate yesterday said that it now expects ¥1.11 trillion (US$8.3 billion) in operating profit, down from ¥1.16 trillion previously. The gaming and network services group, which houses the PlayStation business, accounted for the full revision, which was down from ¥305 billion to ¥255 billion. Sony cited costs related to its acquisition of Bungie Inc and lower expectations for third-party software sales on the platform as reason for the change. Sony’s second-quarter operating profit beat estimates, coming in at ¥307 billion, higher than the average analyst estimate of ¥286.7 billion. The outlook downgrade came after Sony’s hardware production was limited by supply chain bottlenecks exacerbated by COVID-19 lockdowns in China.
TECHNOLOGY
Smartphone shipments fall
Global smartphone shipments last quarter fell to their lowest in two years after consumer confidence was sapped by inflation and recession fears. The quarter saw a 9 percent drop to about 290 million units shipped, market trackers Canalys and Counterpoint said, with Chinese vendors leading the declines. Market leader Samsung Electronics Co retained the top spot with about 62 million units, while Apple Inc held second, followed by Xiaomi Corp (小米), Oppo Mobile Telecommunications Corp (歐珀) and Vivo Communication Technology Co (維沃). The Chinese trio each registered double-digit percentage drops in shipments, with Xiaomi down 25 percent. Prolonged COVID-19 lockdowns in Shanghai and Beijing took a toll on domestic sales in China, while the wider market is now challenged by a glut of lower-priced devices and reluctant consumers, the analysts said.
UNITED STATES
Economy contracts in Q2
The economy contracted for a second straight quarter between April and last month, official data released on Thursday showed, adding fuel to recession fears and creating a headache for President Joe Biden ahead of midterm elections. GDP declined at an annual rate of 0.9 percent in the second quarter, following a bigger drop in the first three months of the year, the Department of Commerce said. Biden said the economy is “on the right path,” despite the slowdown, touting the strong labor market. After a 1.6 percent decline in the first quarter, the report said the slowdown in the second quarter was largely due to drops in government spending and private spending in vehicles and housing, despite an increase in exports. Personal consumption expenditures continued to rise, although slower than in the previous quarter, the data showed.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
ARTIFICIAL INTELLIGENCE: The chipmaker last month raised its capital spending by 28 percent for this year to NT$32 billion from a previous estimate of NT$25 billion Contract chipmaker Powerchip Semiconductor Manufacturing Corp (力積電子) yesterday launched a new 12-inch fab, tapping into advanced chip-on-wafer-on-substrate (CoWoS) packaging technology to support rising demand for artificial intelligence (AI) devices. Powerchip is to offer interposers, one of three parts in CoWoS packaging technology, with shipments scheduled for the second half of this year, Powerchip chairman Frank Huang (黃崇仁) told reporters on the sidelines of a fab inauguration ceremony in the Tongluo Science Park (銅鑼科學園區) in Miaoli County yesterday. “We are working with customers to supply CoWoS-related business, utilizing part of this new fab’s capacity,” Huang said, adding that Powerchip intended to bridge
Qualcomm Inc, the world’s biggest seller of smartphone processors, gave an upbeat forecast for sales and profit in the current period, suggesting demand for handsets is increasing after a two-year slump. Revenue in the three months ended in June will be US$8.8 billion to US$9.6 billion, the company said in a statement Wednesday. Excluding certain items, earnings will be US$2.15 to US$2.35 a share. Analysts had projected sales of US$9.08 billion and earnings of US$2.16 a share. The outlook signals that the smartphone market has begun to bounce back, tracking with Qualcomm’s forecast that demand would gradually recover this year. The San
Clambering hand-over-hand, sweat dripping into his eyes, a durian laborer expertly slices a cumbersome fruit from a tree before tossing it down to land with a soft thump in his colleague’s waiting arms about 15m below. Among Thailand’s most famous and lucrative exports, the pungent “king of fruits” is as distinctive in its smell as its spiky green-brown carapace, and has been farmed in the kingdom for hundreds of years. However, a vicious heat wave engulfing Southeast Asia has resulted in smaller yields and spiraling costs, with growers and sellers increasingly panicked as global warming damages the industry. “This year is a crisis,”