Wafer and chip testing services provider Chunghwa Precision Test Technology Co (中華精測) yesterday reported that revenue last month grew 67.8 percent annually, fueled by rising demand for 5G-related chips, and processors for smartphones and servers. As the COVID-19 pandemic has not stalled the deployment of 5G, Chunghwa Precision has “a cautiously optimistic view about the outlook for the third quarter,” it said in a statement. The improving COVID-19 situation and the escalating 5G race between China and the US have also helped bolster demand for its wafer testing services and vertical probe card (VPC) business, it said. For the full year, Chunghwa Precision expects 5G applications and base stations to fuel demand for wafer testing services, given the complexity of 5G chips. As the pandemic is raising uncertainty about the global economy, Chunghwa Precision said it is closely monitoring how the disease would affect consumer demand. Revenue jumped to NT$353.2 million (US$11.81 million) last month, compared with NT$210.46 million a year earlier, hitting a nearly seven-month high. On a monthly basis, revenue expanded 3 percent from NT$343.04 million. That brought the company’s revenue in the first five months of the year to NT$1.6 billion, up 55.7 percent from NT$1.03 billion during the same period last year. “The company’s expansion into the VPC market has borne fruit in May. The VPC is used in [testing] application processors for radio frequency, smartphones and ARM-based servers,” Chunghwa Precision said in a statement. VPC sales last month grew 1.18 times to NT$2.76 billion from a year earlier, benefiting from rising demand for high-performance computing devices such as servers. With its VPC portfolio expanding, the firm expects the risk of a single-customer concentration has dropped significantly. The company has a 70 percent share of the global VPC market for smartphone application processors. Revenue at the company’s probe service for printed circuit boards last month
BUMPY ROAD: Tourism is likely to remain sluggish as border controls are still in place and a US ban on Huawei could have a ripple effect, the lender said
Although Taiwan is scheduled to ease COVID-19 restrictions on Sunday, it is expected to face a slew of economic challenges, including labor market strains, re-escalating US-China trade tensions and the lingering impact of a global recession, in the second half of this year, DBS Bank Ltd said in a report issued on Tuesday. The Singapore-based lender said that a rising unemployment rate and the pandemic’s impact on household income would slow the recovery of private consumption. Government data showed that the seasonally adjusted unemployment rate jumped to 4.1 percent in April, from 3.8 percent a month earlier and 3.7 percent in the first three months, while the number of workers taking unpaid leave hit a 10-year high of 26,000 at the end of last month. DBS economist Ma Tieying (馬鐵英) predicted that the unemployment rate would continue to rise to about 4.5 percent in the second half of the year. The government easing limits for crowd sizes would help retail, food and beverage services to rebound moderately in the next six months, but tourism-related services are likely to remain sluggish as border controls remain in place, Ma said. The report does not estimate the effect of the government’s stimulus coupon program, which permits Taiwanese and foreign spouses to buy NT$3,000 coupons for NT$1,000. Meanwhile, the re-escalating trade dispute between the US and China could pose a risk to Taiwan’s economic recovery, it said. Washington scaling up restrictions by foreign firms on supplies to Huawei Technologies Co (華為) would negatively affect Taiwanese chipmakers, it added. “The new Huawei ban would have a ripple effect on Taiwan,” Ma said, adding that the Chinese company accounts for 15 to 20 percent of Taiwan Semiconductor Manufacturing Co’s (台積電) sales. Huawei has reportedly rushed to stockpile chips in preparation for the US policy, contributing to Taiwan’s strong electronics exports in
PC shipments are forecast to contract by 7 percent on an annual basis this year due to a global recession, Singapore-based market advisory firm Canalys Co said in a report yesterday. Worldwide shipments of desktops, laptops and tablets are expected to decrease from 395.6 million units last year to 367.8 million units this year, the report said, citing the COVID-19 pandemic and the ensuing economic consequences as a reason. While the pandemic has given the PC market a boost over the past few months due to global lockdowns, which drove remote work and distance learning, its impact on consumer spending cannot be neglected, the report said. “The recessionary impact of the coronavirus on global economies will not be minor, and consumers, businesses and governments will prioritize vital spending ahead of PC refresh when times get tough,” it said. The market for desktops would be the most affected, as businesses face prolonged uncertainty about the scope of their operations and dedicated office space needs, Canalys analyst Ishan Dutt said. “Tablets, which have the greatest reliance on consumer spending, will face a slump as holiday season demand in Q4 is expected to take a hit this year,” Dutt added. However, laptops are the least likely to face a decline in demand as businesses are choosing to implement remote working at a larger scale after implementing it successfully during lockdowns, Dutt said. Market demand is also likely to be sustained by the education sector, as schools have made investments in digital curricula and are implementing only partial returns to on-premises learning, Dutt said. In a regional breakdown, Canalys forecast a 3 percent and 1 percent decline each in PC shipments this year for China and the Asia-Pacific region respectively. While demand in China is expected to be healthy for the rest of the year after being mostly affected by the pandemic in
Logistics and warehouse capacity would be the keys to determining the success of e-commerce retailers, the Market Intelligence & Consulting Institute (MIC, 產業情報研究所) said yesterday. Although the COVID-19 pandemic has cast a shadow over the retail sector, it has allowed the e-commerce industry to shine. E-commerce sales in Taiwan surged 16.5 percent year-on-year in the first quarter, while sales across the wider retail sector contracted by 0.6 percent. Pointing to the nation’s two largest e-retailers — PChome Online Inc (網路家庭) and Momo.com Inc (富邦媒體) — the institute said that the race to build bigger warehouses and to improve logistics management is on. “Taking a look at their [PChome and Momo] performances last quarter, we can clearly see that the nature of the competition has changed from a focus on boosting merchandise quantity to lowering logistics costs and expanding warehouse capacity,” MIC e-commerce industry consultant and director Wang Yi-chih (王義智) told an online forum. The company that “has a strong logistics and warehouse system will have the highest chance of winning,” Wang said. PChome reported that sales grew 16.05 percent year-on-year to NT$10.68 billion (US$357.13 million) in the first quarter, while Momo posted a 28.72 percent growth in sales to NT$15.11 billion. “Logistics is one of the most important pillars supporting the e-commerce industry,” and major players have been setting up their own fleets, Wang said. Seeking to ensure fast deliveries, Momo last month set up a new logistics subsidiary, Fu Sheng Logistics Co (富昇物流), which has a fleet of 200 couriers and more than 100 vehicles. PChome is one step ahead, having established PChome Express Co (網家速配) in 2018, which has 250 couriers and 200 vehicles. The importance of logistics in the development of e-commerce has been further highlighted by the recent surge in demand for food deliveries, Wang said. As an increasing number of customers choose to eat at home,
Super Micro Computer Inc yesterday said it is expanding capacity in Taiwan to meet strong demand for servers, data storage and Internet-of-Things (IoT) devices in wake of the COVID-19 pandemic. The San Jose, California-based company supplies high-end servers to telecoms, enterprises and data center operators. It produces most of its servers and other products in Taiwan and some in the US, as well as in other parts of the world, such as China and Europe. “Some customers need more servers, storage, IoT devices urgently. They are buying more. So our business was not negatively impacted. Demand has been pretty strong,” Super Micro founder and chairman Charles Liang (梁見後) told a video conference for the Computex show. The annual Taipei show was postponed from this month to September because of the pandemic. “A new 1 million square feet [92,903m2] facility in Taiwan is to be completed in the next 12 to 13 months,” Liang said. Super Micron’s existing facility in Taiwan can also add 30 percent more capacity, he said. The capacity expansion comes as the company sees growing customer demand and lower manufacturing costs in Taiwan, allowing it to make affordable products for its telecom and data center clients, Liang said. A lot of prominent high-tech companies, critical mission applications providers and data center companies are on its customer list, he said, declining to name names. “Our investment in Taiwan will continue,” Liang said. Super Micro last year doubled its investments in Taiwan to NT$20 billion (US$668.78 million) for construction of a new facility in Taoyuan, part of its second-phase expansion plan, which includes building a center devoted to research and development of advanced servers, as well as expanding its logistics center and introducing automated assembly lines. The investment project would create at least 1,700 jobs, the Ministry of Economic Affairs said in November last year when
Major local hotels are offering cutthroat discounts for their lodging and dining facilities as the government plans to launch stimulus coupons next month. Cosmos Hotel & Resorts Group (天成飯店集團) is offering a free stay at its Taipei Garden Hotel (台北花園大酒店) near Ximen MRT Station and Hua Shan Din (華山町) near Zhongxiao-Xinsheng MRT Station for customers who spend NT$3,000 stimulus coupons to dine at its restaurants. Guests can also opt to stay at the group’s Cosmos Hotel Taipei (台北天成大飯店) for NT$3,000 and receive restaurant vouchers equivalent to NT$3,000 in value, said Blythe Chao (趙芝綺), the group’s head of marketing and communication who forecast that the discount promotions would boost food and room sales by 10 to 20 percent. Imperial Hotel Taipei (台北華國大飯店) said that for NT$3,000 of stimulus coupons, guests can stay for one night and enjoy a luxurious hotpot meal or a top-grade steak set for two for NT$2,880 or a duck set for four for NT$2,580, it said. The Courtyard by Marriott Taipei (六福萬怡) in Nangang District (南港) is offering a one-night stay plus a meal featuring steak and lobster for two guests for NT$4,200. The Just Sleep (捷絲旅) hotel chain said that NT$3,000 worth of coupons can buy one night stay for three guests at its Ximen property, including three steak dinner sets. For NT$6,000, four guests can stay at its resort property in Yilan, with breakfast and hot-pot dinner for four, it said.
SOME GOOD NEWS: Main subsidiary First Commercial Bank posted overall loan growth of 5.4 percent, thanks to increased lending to small and medium-sized firms
State-run First Financial Holding Co (第一金控) on Tuesday said that it might need to trim its profit targets for this year after net income tumbled nearly 40 percent in the first quarter as the value of its security holdings fell. The bank-focused conglomerate posted net profit of NT$2.94 billion (US$98.3 million) for last quarter, a 38.9 percent decline from the same period last year, or earnings per share of NT$0.24, First Financial executive vice president Frank Fang (方螢基) told an online investors’ conference. The lackluster results came even as the company’s main subsidiary, First Commercial Bank (第一銀行), reported overall loan growth of 5.4 percent, thanks to a 5.8 percent increase in mortgage operations, and a 6.4 percent pickup in lending to small and medium-sized enterprises. Global economic activity came to an abrupt stop in March after the COVID-9 pandemic swept across Europe and the US, driving panic sell-offs in financial markets around the world, Fang said. Volatility took a toll on the market value of the group’s security holdings, although they have since recovered some of the losses, Fang said. First Financial is pressing ahead with its goal of achieving loan growth of 6 to 7 percent this year, but might need to lower earnings expectations amid heightened uncertainty, the company said. The US and European economies are reopening, but rates of COVID-19 transmission are rising in many parts of the world, which hurts corporate and consumer confidence, the company said. The SARS outbreak only weighed down GDP growth for one quarter in 2003, it added. The novel coronavirus has dealt a bigger blow to the conglomerate’s overseas operations, which might not return to normal until the US and Europe lift travel and social gathering restrictions, the company said, adding that interest rate cuts by central banks at home and abroad are also putting pressure on banks’ assets
PharmaEssentia Corp (藥華醫藥) on Monday said that Besremi (Ropeginterferon alfa-2b), its treatment for people with polycythemia vera, a rare form of blood cancer, has gained marketing approval from the Food and Drug Administration (FDA). It was the drug’s second regulatory approval, following approval from the European Medicines Agency in February last year. PharmaEssentia would soon begin to mass produce the drug, it said in a statement, adding that it would apply to the National Health Insurance Administration to have the drug included in the National Health Insurance (NHI) system. There are about 3,000 people with polycythemia vera in Taiwan and the company plans to offer the drug to those who can pay for it out of pocket until it is accepted into the NHI system, it said. Each dose of Besremi sold for about 3,000 euros (US$3,362) in Europe last year, the company said, adding that the local price has yet to be decided. The company submitted the application for Besremi to the FDA on July 31 last year, saying that it took the regulator a relatively shorter review period to give it the green light. PharmaEssentia said that after submitting an application in March, it expects the drug to gain approval from the US Food and Drug Administration at the beginning of next year. The US regulator on May 22 gave approval for PharmaEssentia to test Besremi for use against COVID-19 under the Coronavirus Treatment Acceleration Program. The interferon drug modulates immune response by interfering with viral proliferation. The firm plans to recruit 40 volunteers to test if the drug can reduce the possibility of a COVID-19 infection, it said.
EQUITIES TAIEX rides US rally The TAIEX yesterday rose almost 200 points on the back of an overnight rally on US markets as lockdowns aimed at containing COVID-19 are eased. Buying focused on large-cap stocks, especially in the bellwether electronics sector, and spread to old economy and financial stocks, causing the index to surpass 11,300 points on expanded turnover, dealers said. The TAIEX ended up 192.23 points, or 1.73 percent, at 11,320.16 on turnover of NT$211.297 billion (US$7.07 billion). Foreign institutional investors bought a net NT$17.64 billion of shares on the main board, Taiwan Stock Exchange data showed. SHIPPING Wisdom hit by US$1m loss Wisdom Marine Group (慧洋海運集團), the nation’s largest dry bulk shipper, yesterday reported that operating income last month fell 79.8 percent year-on-year to US$1.78 million, while revenue declined 17.96 percent to US$30.76 million, with pretax losses of US$1.17 million, or losses per share of US$0.05. Wisdom attributed the poor performance to a downturn in the dry bulk market amid the COVID-19 pandemic. The decline was worse than a month earlier, due to non-operating losses, including foreign-exchange gains and bond investment gains. In the first five months of this year, the company posted pretax losses of US$10.2 million, or losses per share of US$0.44, while consolidated revenue fell 16.67 percent to US$153.42 million. CHIPMAKERS Nanya revenue rises 31% DRAM chipmaker Nanya Technology Corp (南亞科技) yesterday reported that revenue last month increased 30.76 percent annually to NT$5.55 billion as prices rose amid strong demand, but declined 1.24 percent from the previous month. In the first five months of this year, cumulative revenue increased 29.71 percent to NT$25.59 billion from a year earlier, the company said in a statement. Nanya Technology said that its operations have not been affected by the COVID-19 outbreak, but that lockdowns in Europe and the US, as well as renewed US-China tensions, would
Warner Music Group Corp, the world’s third-largest recording label, yesterday said that its upsized initial public offering (IPO) raised US$1.93 billion, the biggest US listing so far this year. The company increased the offering to 77 million class A shares at US$25 per share, valuing it at US$12.75 billion. It had initially proposed offering 70 million shares. The entire offering comprises existing investors selling stock. Warner Music, home to artists such as Cardi B, Ed Sheeran and Bruno Mars, had set a target range of US$$23 to US$26 per share. The upsized offering points to improving appetite for new issues, which came to a halt in March as stocks plunged following the global spread of COVID-19. Warner Music had planned to price the IPO on Tuesday, but postponed by one day to mark #BlackOutTuesday, a social media event to show support for racial justice. The music industry is seen as more resilient to weakness in the broader US economy, although Warner Music has cautioned that the pandemic has hurt physical revenue streams and delayed the release of new recordings, movies and television programs. Warner Music, majority owned by billionaire Len Blavatnik’s Access Industries Inc, posted net loss of US$74 million in the second quarter that ended on March 31, compared with a profit of US$67 million a year earlier. Its debt totals US$2.98 billion. With companies and investors unable to meet in person due to the COVID-19 outbreak, Warner Music is the latest firm to complete its IPO through a virtual roadshow. Virtual roadshows have meant that companies have been able to complete their IPOs in as little as four days. The shorter roadshows have also served as a hedge against volatile financial markets.
SECURITY: BCE and Telus have picked European firms to build their 5G networks, ahead of an announcement by the prime minister on whether Canada would ban Huawei
Two major Canadian wireless companies said they would build out their next-generation 5G wireless networks with equipment from European providers, sidelining China’s Huawei Technologies Co (華為). Montreal-based BCE Inc said that Ericsson AB would provide the radio access network equipment — the critical antennas and base stations — for its 5G network. Telus Corp announced in a separate statement that it has selected Ericsson and Nokia Oyj “to support building” its network, without elaborating. Those announcements came ahead of a closely watched — and long overdue — decision by Canadian Prime Minister Justin Trudeau on whether to ban Huawei from participating in the nation’s 5G infrastructure amid deeply troubled relations with Beijing. Huawei previously played a large role in Canadian wireless networks, but has faced growing national security concerns from Western governments. BCE would still consider working with Huawei if the government allows their participation in 5G, the Canadian company said in an e-mailed response to questions. US President Donald Trump’s administration has lobbied allies to ban Huawei 5G, saying its equipment would make networks vulnerable to exploitation by the Chinese government. The UK in January said it would allow Huawei a limited role, but British Prime Minister Boris Johnson’s government has since backtracked, saying it seeks to reduce reliance on the company’s technology and on China. Telus and BCE awarded Huawei its first major project in North America in 2008 — a pivotal contract that helped cement the Chinese provider’s reputation as a global player that could compete on quality. The deal paved the way for it to become a major supplier to all three of Canada’s biggest telecoms over the next decade. The Telus announcement came as a particular surprise after chief financial officer Doug French told the National Post in February that “we’re going to launch 5G with Huawei out of the gate”
Australia is heading for its first recession in nearly three decades after the economy shrunk in the January-March quarter, with a “far more severe” reading expected in the next three months as the effects of the COVID-19 pandemic shutdown bite. The 0.3 percent contraction was the first quarterly drop since the global financial crisis in 2009 and came as the lockdown exacerbated the impact of a prolonged drought and massive bushfires. While it was smaller than the forecast 0.4 percent drop, Treasurer of Australia Josh Frydenberg said the nation was on track to enter its first recession since 1991 “on the basis of the advice that I have from the Treasury Department about where the June quarter is expected to be.” “The economic impact will be severe. Far more severe than what we have seen today,” he said. Authorities ordered numerous businesses shut and closed the nation’s international borders to stem the spread of COVID-19, costing the economy billions of US dollars, but achieving success in containing the virus. Frydenberg said the negative March quarter “compared very well” to results in countries including China, France and Britain, showing the Australian economy’s “remarkable resilience.” “We were on the edge of the cliff. What we were facing was an economist’s version of Armageddon,” he said. “We have avoided the economic fate, and the health fate, of other nations because of the measures that we have taken as a nation,” he said. The government has effectively bankrolled swathes of the economy — subsidizing wages and urging rent deferrals to keep businesses on life support until normal life returns. Millions of Australians have lost their jobs or seen hours slashed, but officials hope a three-stage approach to lifting virus restrictions would help restore the economy. National Australia Bank economist Kaixin Owyong said the economy would likely shrink 8.4 percent in the next three months,
Tiffany & Co shares plunged after Women’s Wear Daily reported LVMH Moet Hennessy Louis Vuitton SE’s deal to buy the luxury jewelry company is uncertain as the US economy faces widespread upheaval. LVMH board members arranged to meet on Tuesday to discuss the proposed deal, the trade journal said, citing unidentified individuals. Board members are concerned about the COVID-19 pandemic, which has disrupted the US economy, and growing unrest over police violence, it said. They also expressed concern about Tiffany’s ability to cover its debt covenants at the end of the transaction, it added. Tiffany representatives did not immediately respond to a request for comment. LVMH declined to comment. The French company’s shares rose 0.8 percent in early trading in Paris yesterday. Tiffany shares, which were halted for several minutes due to volatility, on Tuesday fell as much as 13 percent, the steepest intraday drop since 2015, before closing down 8.9 percent. “I would imagine it is normal that LVMH internally discusses the proposed Tiffany acquisition — given the size of the deal, the COVID-19 situation and the recent social unrest in the US,” Sanford C. Bernstein analyst Luca Solca wrote. “Having said that, the Tiffany takeover would provide a unique strategic opportunity to LVMH, boosting its position in branded jewelry.” It is an “open question” whether LVMH would try to renegotiate better terms, Solca said. The economic fallout from the pandemic has disrupted or derailed a number of prominent deals, including L Brands Inc’s agreement to sell a majority stake in Victoria’s Secret to private equity firm Sycamore Partners. If the LVMH-Tiffany tie-up falls apart, it would be one of the largest related to COVID-19. The New York-based jeweler’s Web site said that as of Monday, its stores are temporarily closed until further notice. The pandemic has also affected the company’s ability to offer next-day and
German airline giant Deutsche Lufthansa AG yesterday said that it would undergo “far-reaching” restructuring as it posted a first-quarter net loss of 2.1 billion euros (US$2.35 billion), hammered by the COVID-19 pandemic. “Global air traffic has come to a virtual standstill in recent months. This has impacted our quarterly results to an unprecedented extent,” it said. “In view of the very slow recovery in demand, we must now take far-reaching restructuring measures to counteract this,” Lufthansa chief executive Carsten Spohr said in a statement. On top of the collapse in passenger numbers, depreciation of some company assets sapped the bottom line, the statement said. Falling fuel prices cost the airline 950 million euros, because it had hedged its purchases with much higher-priced contracts. The first quarter — a slow season for travel — was much worse than the loss of 342 million euros booked a year earlier. The airline’s supervisory board on Monday approved a bailout deal of 9 billion euros from the German government. The group is to ask its shareholders to back the accord at an online meeting on June 25. The bailout would see the German government take a 20 percent stake in the group, with an option to claim a further 5 percent plus one share to block hostile takeovers. That would make the federal government Lufthansa’s biggest shareholder. Like its rivals, Lufthansa Group — which also includes Eurowings GmbH, Swiss International Airlines AG, Brussels Airlines and Austrian Airlines — has been battered by the pandemic. The airline said it plans to increase seat capacity in September to “up to 40 percent” of what was expected before the pandemic, and compared with about 3 percent last month. However, of its 760 aircraft, 300 are expected to remain parked next year and 200 in 2022. Even with the hoped-for gradual ramp-up of passenger traffic, Lufthansa’s push to repay the
Facebook Inc and PayPal Holdings Inc yesterday said they are investing in Gojek, a big boost for the Indonesian start-up’s digital payments business that propels the US companies into a fast-growing Asian Internet arena. It is the second international investment Facebook has made in the past six weeks, with a goal of getting more local businesses online, after the social media giant paid US$5.7 billion for about 10 percent of India’s Reliance Jio. It plans to build a commerce and payments business around WhatsApp, on top of letting businesses use the messaging service to interact with customers. The deal marks Facebook’s first investment in an Indonesian company and is a major boost for the nation’s largest start-up, a ride-hailing giant that has morphed into a provider of services like payments and meal delivery. Gojek is now backed by some of the world’s largest Internet companies from Alphabet Inc’s Google to China’s Tencent Holdings Ltd (騰訊), helping it compete against Singapore’s Grab Holdings Inc. “WhatsApp in particular can be instrumental in creating a more digital Indonesia by bringing more people into one of the fastest-growing digital economies in the world,” Facebook said in a blog post. It did not specify how much it is investing and a spokesperson declined to share details. Facebook and PayPal joined Gojek’s current funding round, which closed at US$1.2 billion around March at the height of the COVID-19 pandemic. Gojek and Grab aim to become Southeast Asian consumers’ default, all-purpose app, similar to Tencent’s WeChat. Gojek has drawn hundreds of thousands of merchants to its platform, giving them access to more than 170 million users across the region. The Indonesian start-up, whose backers also include Singaporean state investor Temasek Holdings Pte, has said it would deploy fresh capital to keep expanding, despite global economic turbulence. It recently acquired a mobile point-of-sale start-up
INVASION OF PRIVACY: Users of Chrome can turn off the data collection function, but not when they visit Web sites that use other Google tools
Google surreptitiously amasses billions of bits of information — every day — about Internet users, even those who opt out of sharing their information, three consumers have alleged in a proposed class-action lawsuit. “Google tracks and collects consumer browsing history and other Web activity data no matter what safeguards consumers undertake to protect their data privacy,” a complaint filed on Tuesday in federal court in San Jose, California, said. The lawsuit says that while Google lets users turn off data collection when using its Chrome Web browser, other Google tools used by Web sites scoop up their data anyway. The suit includes claims of invasion of privacy and breaches of US federal wiretapping law. Google is up front with consumers that whenever they opt for private browsing, other Web sites might still collect information, spokesman Jose Castaneda said. “We strongly dispute these claims and we will defend ourselves vigorously against them,” Castaneda said in an e-mail. The case was filed by Boies Schiller Flexner LLP, a high-profile litigation firm that previously defended Uber Technologies Inc when the ride-hailing firm was accused three years ago by Alphabet Inc’s self-driving unit of stealing trade secrets. It alleges that Google collects information, including Internet protocol addresses and browsing histories, whenever users visit Web pages or use an app tied to common Google services, such as Google Analytics and Google Ad Manager. This has helped Google amass a nearly unending trove of data that could be stolen or hacked by governments and criminals, it says. A consumer suit accusing Google of illegally tracking and storing geolocation data with its mobile apps and operating system was thrown out by a California federal judge in December last year. Arizona’s attorney general filed a similar complaint last month. Google disputed the claim and said that it is looking forward to setting the record straight.
AUTOMAKERS Renault finalizes state loan Renault SA yesterday finalized a 5 billion euro (US$5.6 billion) loan from the French government, strengthening its finances in the wake of the COVID-19 pandemic, which has ravaged the auto industry. Renault said that the credit facility carried a guarantee from the French state — which owns a 15 percent stake in Renault — of up to 90 percent of the total amount borrowed. Banks BNP Paribas, Credit Agricole Group, HSBC France, Natixis and SocGen were involved in the credit deal. TAXES US probing digital services US President Donald Trump’s administration is starting investigations into digital services taxes considered by several trading partners that could lead to tariffs being imposed on the countries’ exports to the US. The probe, announced on Tuesday, encompasses digital taxes that have been either adopted or are under consideration in Austria, Brazil, the Czech Republic, the EU, India, Indonesia, Italy, Spain, Turkey and the UK, the US Trade Representative’s Office in Washington said. The investigation could take months before a decision is made on whether to impose tariffs. SWITZERLAND GDP shrinks 2.6% in Q1 The economy slumped the most in at least four decades as a result of the pandemic, with private consumption and investment plummeting. First-quarter GDP plunged 2.6 percent, data from the State Secretariat for Economic Affairs showed. That was the biggest three-month contraction since the start of the time series in 1980. The government expects the economy to shrink 6.7 percent this year before staging a slow recovery next year. INDIA Services sector edges up Services sector activity picked up slightly last month, signaling the reopening of Asia’s third-largest economy after a more than two-month lockdown to contain COVID-19. The nation’s main services index rose to 12.6 last month, data published by IHS Markit showed yesterday. That was up from 5.4 in April, the world’s
BULK PURCHASE: The French chain and Hong Kong-based Dairy Farm International reached a deal covering 224 stores, which is expected to be finalized by year’s end
Carrefour SA yesterday announced it would acquire Wellcome Taiwan Co (惠康百貨) for 97 million euros (US$108.33 million), and bring all the Wellcome supermarkets (頂好超市) and Jasons Market Place stores nationwide under its banner within 12 months of the deal closing. The France-based hypermarket chain reached an agreement with Hong Kong-based Dairy Farm International Holdings (牛奶國際控股), the pan-Asian retailer that launched Wellcome Taiwan in 1987. The transaction involves 199 Wellcome supermarkets, which have average sales areas of 420m2 and 25 high-end Jasons Market Place stores, which have an average sales area of 820m2, as well as a warehouse in Taoyuan, Carrefour Taiwan (家樂福) said in a statement. Carrefour Taiwan would continue to run the 224 stores it is gaining under the deal, but would consider whether to adjust their locations as their leases mature, a Carrefour Taiwan official told the Taipei Times by telephone. However, it plans to place the Wellcome outlets under its Carrefour Market (家樂福便利購) banner within one year of the deal being finalized, and convert the Jasons Market Place outlets to a Carrefour premium banner, given most of those stores are located in shopping malls and department stores, said the official, who declined to be named. “We would have different strategies to operate the two supermarket chains, as they target different groups of customers and offer different products,” the official said. Carrefour Taiwan has not decided how it would handle the employees of the two supermarket chains, the official added. Carrefour Taiwan currently operates 137 stores nationwide: 68 hypermarkets and 69 supermarkets. It expects to accelerate its development in the supermarket industry, Carrefour Taiwan said. Once the deal goes through, Carrefour Taiwan would have 361 outlets, which would make it the second-largest supermarket chain operator in Taiwan in terms of sales, behind Pxmart Co Ltd (全聯實業), the official said. “By combining these businesses, customers and team members
Scooter sales rose 4.1 percent last month, driven by rising demand from graduating students and Mother’s Day marketing campaigns, statistics showed yesterday. Sales reached 69,242 units, up from 66,487 in April, and an increase of 0.39 percent over the 68,976 units sold in May last year, data released by Kwang Yang Motor Co (光陽工業) and the Ministry of Transportation and Communications showed. “Entering the graduation season, demand was fueled mostly by graduating students, who bought new scooters for work or commuting. The effect was even more marked in the middle of May,” said Kwang Yang, the nation’s biggest scooter manufacturer, which sells scooters under its KYMCO brand. Gasoline-powered scooters took a bigger share, 90.7 percent, of the sales, up from 86.75 percent in April, while sales of electric scooters accounted for 9.3 percent, down from 13.25 percent, mainly due to a major shift in the government’s subsidy policy for new scooter purchases. Subsidiaries for buying a new scooter to replace one being retired previously applied just to electric models in the past few years, but would now apply to any type. Sales by electric scooter maker Gogoro Inc (睿能創意) tumbled 28 percent to 5,244 units from April’s 7,296, a decline of 55 percent from the previous year. Gogoro last week introduced a flat rate of NT$299 a month on new batteries for the first year a buyer of a Gogoro VIVA series scooter owns the model. Electric scooter sales, including those from Aeon Motor Co (宏佳騰) and Motive Power Industry Co (摩特動力), dropped 26.73 percent to 6,455 units. Kwang Yang posted the strongest growth, 12 percent and 23,751 units, which is attributable to the launches of new gasoline-powered models that meet the government’s Phase 7 emissions standards. Kwang Yang said that it expects scooter sales to recover at a faster pace this month as COVID-19 fears ease. The
OVERSEAS LOSSES: Profitability last year fell to NT$97 million, compared with 2018’s NT$1.94 billion, but CEC’s head said it has a backlog worth 3.5 years of turnover
Top Continental Holdings Corp (CHC, 欣陸控股) officials yesterday pledged that the company would emerge stronger from overseas investment losses last year that saw the group’s profitability plummet 95 percent from its 2018 earnings. Profitability last year was NT$97 million (US$3.23 million), or earnings per share (EPS) of NT$0.12, compared with NT$1.94 billion and EPS of NT$2.36 the previous year. As of this year, losses linked to projects in India and overseas investments would no longer impact the group’s civil engineering subsidiary, Continental Engineering Corp (CEC, 大陸工程), CHC chief executive Cindy Chang (張方欣) told a media briefing in Taipei ahead of the group’s annual shareholders’ meeting on Friday next week. The conglomerate also owns Continental Development Corp (CDC, 大陸建設) and HDEC Corp (欣達環工), which specializes in wastewater treatment. ENGINEERING PLANS CEC chief executive officer Simon Buttery said that the company closed last year with a NT$70 billion backlog, equivalent to three-and-a-half years of turnover, and in line with its strategic business growth plan through 2025. A sizeable proportion of the backlog came from new contracts, including the Taoyuan MRT Project and Nangang Depot Public Housing project, Buttery said. He is confident Taiwan would make further investment in civil infrastructure, he added. NEW OPPORTUNITIES CEC would explore civil opportunities related to conventional and renewable energy, as well as business opportunities from building demand in the residential and hospitality sectors, he said. The COVID-19 pandemic has disrupted supply of construction materials and workers for projects in Hong Kong, but the situation might stabilize in the second half of the year, Buttery said. To mitigate the global shortage of construction manpower, CEC is looking at new technologies to reduce its dependence on human labor, he said. CDC chairman Christopher Chang (張良吉) said the group’s development arm sold NT$5.9 billion of properties in Taiwan last year, a 28 percent increase from 2018. PROPERTY DEVELOPMENT CDC plans