South Korea's largest credit-card issuer, LG Card Co, said customers could withdraw cash again later yesterday after creditors agreed to extend emergency loans, averting a liquidity crunch that threatened South Korea's financial system. \nLG Card was forced to suspend cash advances over the weekend because of its liquidity crunch, raising the specter of a spiralling series of defaults as many South Koreans use their credit cards to pay bills and service other credit card debts. \nLG Card has 14 million customers, almost a third of South Korea's population. \n"We will be able to resume cash-advance services in the afternoon," said a spokesman for LG Card. \nWoori Bank and other lenders agreed late on Sunday to provide 2 trillion won (US$1.68 billion) of fresh loans and to roll over LG's outstanding debt for one year, helping avert its insolvency. \nBut they warned they could write down LG family stakes in LG Card and sell other collateral if the LG Group parent failed to turn around the card firm. \nThey also said a debt-to-equity swap and a sale of LG Card to strategic investors was possible if trouble persisted. \nAnalysts said the loans had not resolved LG Card's problems. \n"We think this liquidity support package may only be able to stabilize rather than resolve LG Card's liquidity situation," said Philippa Rogers, an analyst at Goldman Sachs. "We think LG Card needs to find a strategic investor." \n"Despite the emergency financial aid, the company is at a very critical point," said Park Seok-hyun, an analyst at Kyobo Securities. \nThe card industry is struggling to cope with the aftermath of a credit boom that has left consumers unable to repay loans and card issuers with piles of bad debt. \n"This is a necessary step to not only prevent any bigger turmoil in [the] financial system, but also help out the stabilization of credit-card issuers given a significant squeeze in credit markets for credit cards seen over the recent months," said Yun Seok, analyst at Credit Suisse First Boston. \nCredit card firms' problems came to a head in March after an accounting scandal at a conglomerate scared investors off lower-quality securities, making it difficult for card issuers to roll over bonds issued to finance their lending. \nSouth Korean adults carry more than three credit cards each on average, encouraged by government tax breaks aimed at reviving domestic spending and ensuring transparent tax collection. \nLG Card had faced a default on its debts because its lenders and its parent LG Group, South Korea's second-largest conglomerate, disagreed over collateral the group had originally offered in return for the bailout. \nAlready, one won in every nine owed on a credit card was at least one month overdue at the end of August. Overdue loans at eight credit-card firms stood at 8.6 trillion won (US$7.20 billion) at the end of August, 11 percent of total credit card loans. \n"I was startled to find I could not use my LG Card to withdraw cash to buy a present for a friend," Jang Eun-ju, a teacher living in a posh neighborhood in southern Seoul. "I won't be carrying that card any more."
TIMING: 'The CHIPS Act funding is crucial for us. In other words, if the act’s passage is delayed for too long, we will certainly need to adjust,’ chairwoman Doris Hsu said GlobalWafers Co (環球晶圓) plans to start construction on a US$5 billion wafer fabrication facility in Texas in November, after passage of the US$52 billion Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act. The fab would be the largest of its kind in the US and one of the largest in the world, with a monthly capacity of 1.2 million wafers, GlobalWafers said, adding that the investment would be the first new fab in the US in more than 20 years and critical to closing a semiconductor supply chain gap. The world’s No. 3 silicon wafer supplier said the project, which
Samsung Electronics Co yesterday commenced mass production of 3-nanometer chips that are more powerful and efficient than predecessors, beating rival Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to a key milestone in the race to build the most advanced chips in the world. South Korea’s largest company said in a statement that it was beginning with 3-nanometer semiconductors for high-performance and specialized low-power computing applications before expanding to mobile processors. By applying so-called Gate-All-Around transistor architecture, Samsung’s 3-nanometer products reduce power consumption by up to 45 percent and improve performance by 23 percent compared with 5-nanometer chips, it said. Samsung’s push to be first
COUNTERING CHINA: ‘When democracies demonstrate what we can do ... I have no doubt that we’ll win that competition every time,’ US President Joe Biden said US President Joe Biden rebooted his effort to counter China’s Belt and Road Initiative (BRI) after an earlier campaign faltered, enlisting the support of G7 leaders at their summit in Germany. The Build Back Better World initiative, named after Biden’s domestic spending and climate agenda, struggled to get off the ground because not enough G7 partners contributed financially when it was unveiled a year ago, people familiar with its lack of progress said. “When democracies demonstrate what we can do — all that we have to offer — I have no doubt that we’ll win that competition every time,” Biden said during
Three to four tropical storms or typhoons are expected to hit Taiwan this year due to a weak La Nina effect in the northwest Pacific Ocean, the Central Weather Bureau (CWB) said yesterday, as typhoon season begins next month. Taiwan’s typhoon season generally lasts from July to September, with most typhoons occurring in August. Weather Forecast Center Director Lu Kuo-chen (呂國臣) told a news conference that a weakening La Nina is expected to have less of an effect on Taiwan. “The climate simulation we conducted, and those conducted by other meteorological agencies around the world, showed that the number of typhoons that
RSS