BANKING
Europe in good shape
European banks are in “extremely solid” shape and their situation is not similar to that of some US lenders, Banque de France Governor Francois Villeroy de Galhau said yesterday, amid fears of a crisis in the sector. The failure of two US lenders has raised fears of contagion to the wider sector, with troubled European banking giant Credit Suisse having to borrow up to US$54 billion from the Swiss central bank. “European banks are not in the same situation as certain American banks for a very simple reason which is that they are not subjected to the same rules,” Villeroy de Galhau told BFM Business television. Basel III rules that were set after the 2008 financial crisis to ensure that banks have adequate capital and liquidity have been “effective,” he said. Four hundred European banking groups are subject to the Basel III requirements compared with only 13 in the US, he said.
SOFTWARE
Microsoft Office goes AI
Microsoft Corp is infusing artificial intelligence (AI) tools into its Office software, including Word, Excel and Outlook. The company on Thursday said the new feature, named Copilot, is a processing engine that would allow users to do things like summarize long e-mails, draft stories in Word and animate slides in PowerPoint. Microsoft spokesperson Jessica Dash said the new Office features are currently only available for 20 enterprise customers. It will roll it out for more enterprise customers over the coming months. Microsoft is marketing the feature as a tool that would allow workers to be more productive by freeing up time they usually spend in their inbox, or allowing them to more easily analyze trends in Excel. The firm is also to add a chat function called Business Chat. It takes commands and carries out actions — such as summarizing an e-mail about a particular project to co-workers — using user data.
AVIATION
Firms look to India for talent
Boeing Co and Airbus SE are increasingly looking to India for highly skilled, low-cost engineers to meet a boom in demand for aircraft and expand their manufacturing presence in the world’s fifth-largest economy. Airbus plans to hire 1,000 people in India this year out of 13,000 globally. Boeing and its suppliers, which already employ about 18,000 workers in the nation, have been growing by about 1,500 staff every year, the US jet manufacturer’s India head Salil Gupte told Bloomberg News in an interview. With about 1.5 million engineering students graduating annually, India is a rich source of talent for planemakers facing record orders from airlines as travel surges again after the COVID-19 pandemic. Boeing can hire an engineer in Bengaluru, India, for 7 percent of the cost of a similar role in Seattle, salary data compiler Glassdoor said.
CHINA
PBOC cuts reserve ratio
The People’s Bank of China (PBOC) yesterday said it would cut the amount of cash that banks must hold as reserves to release liquidity and support the economy. The bank said it would cut the reserve requirement ratio (RRR) for all banks, except those that have implemented a 5 percent reserve ratio, by 25 basis points, effective March 27. That follows a reduction of 25 basis points for all banks in December last year. The PBOC has promised to make its policy “precise and forceful” this year to support the economy, keeping liquidity reasonably ample and lowering funding costs for businesses. It said weighted average RRR for financial institutions is 7.6 percent after the latest cut.
TARIFF TRADE-OFF: Machinery exports to China dropped after Beijing ended its tariff reductions in June, while potential new tariffs fueled ‘front-loaded’ orders to the US The nation’s machinery exports to the US amounted to US$7.19 billion last year, surpassing the US$6.86 billion to China to become the largest export destination for the local machinery industry, the Taiwan Association of Machinery Industry (TAMI, 台灣機械公會) said in a report on Jan. 10. It came as some manufacturers brought forward or “front-loaded” US-bound shipments as required by customers ahead of potential tariffs imposed by the new US administration, the association said. During his campaign, US president-elect Donald Trump threatened tariffs of as high as 60 percent on Chinese goods and 10 percent to 20 percent on imports from other countries.
Taiwanese manufacturers have a chance to play a key role in the humanoid robot supply chain, Tongtai Machine and Tool Co (東台精機) chairman Yen Jui-hsiung (嚴瑞雄) said yesterday. That is because Taiwanese companies are capable of making key parts needed for humanoid robots to move, such as harmonic drives and planetary gearboxes, Yen said. This ability to produce these key elements could help Taiwanese manufacturers “become part of the US supply chain,” he added. Yen made the remarks a day after Nvidia Corp cofounder and chief executive officer Jensen Huang (黃仁勳) said his company and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) are jointly
United Microelectronics Corp (UMC, 聯電) expects its addressable market to grow by a low single-digit percentage this year, lower than the overall foundry industry’s 15 percent expansion and the global semiconductor industry’s 10 percent growth, the contract chipmaker said yesterday after reporting the worst profit in four-and-a-half years in the fourth quarter of last year. Growth would be fueled by demand for artificial intelligence (AI) servers, a moderate recovery in consumer electronics and an increase in semiconductor content, UMC said. “UMC’s goal is to outgrow our addressable market while maintaining our structural profitability,” UMC copresident Jason Wang (王石) told an online earnings
MARKET SHIFTS: Exports to the US soared more than 120 percent to almost one quarter, while ASEAN has steadily increased to 18.5 percent on rising tech sales The proportion of Taiwan’s exports directed to China, including Hong Kong, declined by more than 12 percentage points last year compared with its peak in 2020, the Ministry of Finance said on Thursday last week. The decrease reflects the ongoing restructuring of global supply chains, driven by escalating trade tensions between Beijing and Washington. Data compiled by the ministry showed China and Hong Kong accounted for 31.7 percent of Taiwan’s total outbound sales last year, a drop of 12.2 percentage points from a high of 43.9 percent in 2020. In addition to increasing trade conflicts between China and the US, the ministry said
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