SOUTH KOREA
Central bank raises key rate
The Bank of Korea yesterday hiked its key interest rate by half a percentage point to a decade high as it tries to tackle surging inflation and support the plunging won. The central bank lifted borrowing costs to 3 percent — the highest since 2012 — marking the latest in a series of increases since last year, when they were at rock bottom to fight the impact of the COVID-19 pandemic. It was the bank’s fifth consecutive hike and a return to a faster pace of tightening, after a quarter point raise in August, highlighting efforts to support the won, which is at a 13-year low.
RUSSIA
Current account surplus falls
The current-account surplus grew less than forecast, in the latest sign that a critical source of hard currency for the government is coming under pressure as the war in Ukraine escalates. The surplus in the current account — roughly the difference between exports and imports — reached an estimated US$51.9 billion in the third quarter, down from a record US$76.7 billion in the previous three months, central bank data published on Tuesday showed. It was the smallest quarterly total so far this year, with the surplus appearing to narrow last month from August.
CONGLOMERATES
Toshiba picks preferred bidder
Toshiba Corp has granted a consortium led by Japan Industrial Partners Inc (JIP) preferred bidder status for a buyout of the iconic Japanese firm, people with knowledge of the situation said. Private equity firm JIP was looking to acquire Toshiba in partnership with multiple domestic companies including Orix Corp and Chubu Electric Power Co, the people said. Toshiba considered that a sale to JIP would keep the company as one entity, according to the people. Midori Hara, a spokeswoman for Toshiba, declined to comment on the matter, saying to do so may undermine a fair process.
AUTOMAKERS
Honda to build battery JV
Honda Motor Co said it would build a US$3.5 billion joint venture (JV) battery factory in rural southern Ohio and hire 2,200 people to staff it as the company starts to turn the state into its North American electric vehicle hub. Honda, which announced its first Ohio factory 45 years ago, also plans to invest US$700 million and add 300 jobs at three of its own Ohio factories to prepare them to start making electric vehicles and components. The battery plant, to be built jointly with LG Energy Solution Ltd of South Korea, could see a total investment of US$4.4 billion.
SINGAPORE
Rental prices jump 31%
The rental market could get even hotter due to the latest property curbs and a tightening housing supply. Rents for private apartments had soared nearly 31 percent by last month compared with a year earlier, jumping for 21 consecutive months, data from real-estate portals 99.co and SRX showed. Property austerity measures last month aimed at housing purchases could cause more people to rent, driving leasing prices higher, 99 Group head of research Pow Ying Khuan (傅穎寬) said. Rents in the core central region, typically popular with expatriates, increased 29 percent during the same period. The city-state tightened home loan limits, raising the interest rate floor used to calculate the total debt-servicing ratio and mortgage-servicing ratio. It also added a 15-month waiting period for private homeowners looking to move into resold public-housing apartments.
The New Taiwan dollar is on the verge of overtaking the yuan as Asia’s best carry-trade target given its lower risk of interest-rate and currency volatility. A strategy of borrowing the New Taiwan dollar to invest in higher-yielding alternatives has generated the second-highest return over the past month among Asian currencies behind the yuan, based on the Sharpe ratio that measures risk-adjusted relative returns. The New Taiwan dollar may soon replace its Chinese peer as the region’s favored carry trade tool, analysts say, citing Beijing’s efforts to support the yuan that can create wild swings in borrowing costs. In contrast,
Nvidia Corp’s demand for advanced packaging from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) remains strong though the kind of technology it needs is changing, Nvidia CEO Jensen Huang (黃仁勳) said yesterday, after he was asked whether the company was cutting orders. Nvidia’s most advanced artificial intelligence (AI) chip, Blackwell, consists of multiple chips glued together using a complex chip-on-wafer-on-substrate (CoWoS) advanced packaging technology offered by TSMC, Nvidia’s main contract chipmaker. “As we move into Blackwell, we will use largely CoWoS-L. Of course, we’re still manufacturing Hopper, and Hopper will use CowoS-S. We will also transition the CoWoS-S capacity to CoWos-L,” Huang said
Nvidia Corp CEO Jensen Huang (黃仁勳) is expected to miss the inauguration of US president-elect Donald Trump on Monday, bucking a trend among high-profile US technology leaders. Huang is visiting East Asia this week, as he typically does around the time of the Lunar New Year, a person familiar with the situation said. He has never previously attended a US presidential inauguration, said the person, who asked not to be identified, because the plans have not been announced. That makes Nvidia an exception among the most valuable technology companies, most of which are sending cofounders or CEOs to the event. That includes
INDUSTRY LEADER: TSMC aims to continue outperforming the industry’s growth and makes 2025 another strong growth year, chairman and CEO C.C. Wei says Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), a major chip supplier to Nvidia Corp and Apple Inc, yesterday said it aims to grow revenue by about 25 percent this year, driven by robust demand for artificial intelligence (AI) chips. That means TSMC would continue to outpace the foundry industry’s 10 percent annual growth this year based on the chipmaker’s estimate. The chipmaker expects revenue from AI-related chips to double this year, extending a three-fold increase last year. The growth would quicken over the next five years at a compound annual growth rate of 45 percent, fueled by strong demand for the high-performance computing
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