GlobalWafers’ net profit drops on logistics costs

GlobalWafers Co (環球晶圓), the world’s third-largest silicon wafer supplier, yesterday said that net profit last quarter contracted 4 percent annually due to significant increases in logistics expenses, as many countries imposed transportation restrictions amid the COVID-19 pandemic. Net profit fell to NT$3.4 billion (US$115.1 million), from NT$3.54 billion during the same period last year. On a quarterly basis, net profit rose 18 percent from NT$2.88 billion. Earnings per share dropped to NT$7.81 last quarter from NT$8.16 a year earlier, but grew from NT$6.62 the previous quarter. Gross margin fell to 38.6 percent from 40.1 percent a year earlier, but improved from 36.5 percent a quarter earlier. GlobalWafers generated revenue of NT$27.22 billion in the first half of this year, down 10 percent year-on-year. However, the company last quarter benefited from rush orders for medical electronic products and customers building up their inventories. It also benefited from booming demand for e-commerce and digital services due to stay-at-home orders, while the telecommuting trend bolstered demand for computers, cloud services, servers and data centers. The Hsinchu-based company gave a positive outlook for the second half of this year, thanks to robust customer demand for 12-inch advanced wafers and recovering demand for automotive applications, as a growing number of automakers are reopening their plants. Revenue in the second half would be flat or increase modestly from the first half, as governments around the world pump unprecedented amounts of stimulus funds into their economies to alleviate the fallout from the COVID-19 pandemic, GlobalWafers chairperson Doris Hsu (徐秀蘭) told a teleconference yesterday. “First, the automotive [sector] was extremely bad in the first half. We have seen some improvement from May, and we believe that automotive demand will gradually improve quarter-by-quarter in the second half. Second, 12-inch demand will be very strong,” Hsu said. GlobalWafers also plans to ramp up a new 12-inch

By Lisa Wang

Makers to export turnkey factories instead of masks

Rather than exporting masks, the nation’s leading mask manufacturers plan to export turnkey mask factories as the COVID-19 pandemic continues to affect much of the world. As a solution to unmet global demand for masks amid the pandemic, Taiwan Comfort Champ Manufacturing Co (台灣康匠) is offering a “total solution” for mask production, including the raw materials, production equipment and testing technology. “We have miniaturized our mask production line so that it fits in a shipping container. Production can start as soon as you remove the container floor,” Taiwan Comfort Champ chairman Andy Chen (陳勇志) told a news conference in New Taipei City’s Tucheng District (土城) yesterday. Except for the machines that make and package the masks, the “one-stop mask factory” includes all of the equipment and technical support to produce the critical non-woven layer that serves as the mask’s filtration material, Chen said. The news conference was organized by the government-backed Taiwan Textile Research Institute (紡織產業綜合研究所). Each miniature mask factory costs as little as US$5 million and can produce as many as 600,000 masks per day if continuously operated, Taiwan Comfort Champ said. Higher capacity modules capable of producing up to 2 million masks per day are also available, a company release said. The mini-factory allows production to rapidly increase and is more environmentally friendly, Chen said. “Keeping the entire production and packaging process in the same area saves a lot of packaging and transportation costs,” he said. Despite the unprecedented demand for masks internationally, Taiwan Comfort Champ did not get to cash in on the opportunity because the government set pricing controls, he said. “We had to drop a lot of foreign orders,” he added. The company has received inquiries from the US, Canada, Indonesia, Japan and Spain, but investors tend to be hindered by technical hurdles, Taiwan Comfort Champ said, adding that the first turnkey mini factory is to

By Angelica Oung

July housing transactions rose 19%, 26.5% in Taipei

PENT-UP DEMAND: The virus situation stabilized in May, allowing prospective buyers to resume house hunting, an Evertrust Rehouse Co spokesman said

Housing transactions in the six special municipalities totaled 23,588 units last month, up 19.3 percent from a month earlier, propelled by pent-up demand and excessive liquidity, brokers said, citing government data. Transactions rose 2.8 percent on an annual basis and represented the strongest showing since January 2016, when the government raised property taxes to stem short-term speculation, they said. “Housing transactions have switched back to growth mode for two consecutive months as people who had delayed purchases because of the virus outbreak rejoined the market,” Evertrust Rehouse Co (永慶房屋) spokesman Jay Hsieh (謝志傑) said yesterday. The COVID-19 situation stabilized in May, allowing prospective buyers to resume house hunting while postponing closings, Hsieh said. Transactions surged 26.5 percent month-on-month in Taipei to 2,892 units — the municipality with the largest increase — while rising 23.6 percent in Kaohsiung to 3,634 units and 20.3 percent in Taoyuan to 4,615 units, data from the local governments showed. Transactions rose 19.4 percent month-on-month in New Taipei City to 6,142 units, while rising 17 percent in Tainan to 2,246 units and 11.2 percent in Taichung to 3,649 units, data from the local governments showed. Transactions for presale and existing markets have heated up, aided by real demand and excessive liquidity, Sinyi Realty Inc (信義房屋) research manager Tseng Ching-der (曾敬德) said. The pandemic has prompted global central banks to cut interest rates to record lows to ward off a credit crunch and to ease the financial burden of firms and households, with some idle money flowing into the property market in search of better yields, market observers have said. For the first seven months of this year, combined housing transactions in the six special municipalities declined minus-1.2 percent from a year earlier to 131,539 units as fallout from the nation’s virus situation eased, brokers said. However, people should not be unduly optimistic, Hsieh said, adding

By Crystal Hsu

Firm seeks tariff for China ‘dumping’

CS Aluminium Corp (中鋼鋁業) has asked the government to impose anti-dumping tariffs on Chinese-made aluminum foil products, the Ministry of Finance said in a public notice on its Web site yesterday. An investigation is under way, and a provisional tariff could be put in place as early as late November if the allegations are verified, ministry sources said. CS Aluminium’s petition says that artificially cheap Chinese-made aluminum foil products have been decimating local Taiwanese production, with prices as low as US$3,024 per tonne. This is markedly lower than the price of similar South Korean products shipped to the US for at least US$4,197 per tonne, the petition says. The dumping has caused almost all domestically produced aluminum products to be replaced by Chinese imports, resulting in a contraction in the domestic industry, it says. Two key conditions have to be met before an anti-dumping tariff can be levied: There must be proof that the goods are being sold at below market prices and evidence that the artificially low pricing is hurting Taiwanese businesses, a Customs Administration auditor said in a telephone interview. “If the same goods are being sold at higher prices domestically in China than here in Taiwan, that is evidence of possible dumping,” said the auditor, who asked not to be named. “In addition, there must be cause and effect between the artificially low prices and Taiwanese businesses being negatively affected,” the auditor said. While a provisional tariff could be put in place as early as late November, the final judgement would take approximately a year, they said. Once the final judgement is reached, the tariff would remain in place for five years, with the possibility of being renewed. Taiwan levies anti-dumping tariffs on 14 different product categories, all of them from China or China plus additional countries. For example, Portland cement from China incurs an additional anti-dumping

By Angelica Oung

Banks’ overseas branches post pretax loss of NT$50m

Overseas branches of the nation’s banks reported a pretax loss of NT$50 million (US$1.69 million) in June as banks suffered sour loans amid the COVID-19 pandemic, the Financial Supervisory Commission (FSC) said yesterday. That was the first loss for banks’ overseas branches during a single month in more than three years, the commission said. The commission attributed the loss to CTBC Bank (中國信託銀行), which last month wrote off half of its US$90 million in loans to Singapore oil trader Hin Leong Trading Pte Ltd (興隆貿易) after writing off the first half of the bad loan in May, as the debtor filed for bankruptcy protection in April. In light of higher credit risks, several other banks’ overseas branches also set aside more loan-loss provisions, which eroded their profits, Banking Bureau Deputy Director-General Lin Chih-chi (林志吉) told a news conference in New Taipei City. The previous time that banks’ overseas branches reported a pretax loss was in August 2016, with a combined pretax loss of NT$3.74 billion, Lin said. That was mainly attributed to Mega International Commercial Bank’s (兆豐銀行) New York branch being fined NT$180 million by the New York State Department of Financial Services for contravening the state’s rules against money laundering, he said. In December 2009, banks’ overseas branches reported a pretax loss of NT$2.74 billion amid the global financial crisis, he added. In the first six months of this year, banks’ overseas branches were still in the black, but they saw their combined profit before tax drop 46 percent from a year earlier to NT$11.73 billion, FSC data showed. The banks’ domestic operations also reported an annual decline of 16.9 percent in their cumulative pretax profit to NT$97.12 billion for the first six months, whereas their offshore banking units and Chinese branches posted an annual gain of 1.7 percent and 19.6 percent respectively to NT$52.73 billion and

By Kao Shih-ching

Taiwan Business Quick Take

EQUITIES TAIEX rebounds on tech TAIEX shares yesterday rebounded from a fall on Monday as the bellwether electronics sector got a boost from a solid showing by the tech-heavy NASDAQ Composite overnight. Led by contract chipmaker Taiwan Semiconductor Manufacturing Co (台積電), the market cleared technical hurdles ahead of the 12,700-point mark to finish above it by the end of the session, dealers said. The TAIEX closed up 196.89 points, or 1.57 percent, at the day’s high of 12,709.92, on turnover of NT$211.511 billion (US$7.16 billion). Foreign institutional investors bought a net NT$5.47 billion in shares after a net sell of NT$30.24 billion on Monday, Taiwan Stock Exchange data showed. MANUFACTURING Fabrics firm to be listed The Securities Listing Review Committee of the Taiwan Stock Exchange (TWSE) yesterday approved an initial listing application submitted by technical fabrics manufacturer Cathay Consolidated Inc (八貫企業), the TWSE said in a statement. Cathay Consolidated produces thermoplastic polyurethane for applications in the healthcare and aviation sectors. The company reported earnings per share of NT$2.2, NT$2.8 and NT$3.08 from 2017 to last year respectively. In the first quarter, it posted earnings per share of NT$0.97. ELECTRONICS Sinbon sales increase 12% Sinbon Electronics Co (信邦電子), which produces cables, connectors and modems, yesterday reported consolidated sales of NT$1.91 billion for last month, up 4 percent month-on-month and 12.1 percent year-on-year. Cable assemblies contributed 77.52 percent of the company’s total sales last month, while connectors and other components and accessories made up 22.48 percent, Sinbon said in a statement. Last month’s figure represented a new monthly sales record for the company, it said. The company attributed the increase to contributions from the automotive, green energy, and communications and electronic peripheral component sectors. Accumulated revenue for the first seven months of this year reached NT$11.77 billion, up 10.5 percent from a year earlier, Sinbon said. TEXTILES Firms’ ratings downgraded Taiwan Ratings Corp

Trump seeks TikTok payment to US

NO CLEAR AUTHORITY: The president said the money would come from China or a US buyer, after he announced that TikTok would have to close in the US by Sept. 15

US President Donald Trump on Monday repeatedly insisted that any sale of TikTok’s US operations would have to include a substantial payment to the US — but it was not clear under what authority he could extract a payout. It would be unprecedented, based on recent history, for the US government to collect a cut of a transaction involving companies in which it does not hold a stake. Trump said that the money would come from China or a US buyer such as Microsoft Corp. “The United States should get a very large percentage of that price, because we’re making it possible,” Trump told reporters at a news conference on Monday evening. “Whatever the number is, it would come from the sale, which nobody else would be thinking out but me, but that’s the way I think, and I think it’s very fair,” he said. Earlier in the day, Trump said that TikTok would have to close in the US by Sept. 15 — unless there is a deal to sell the social network’s domestic operations to Microsoft or another US company. Microsoft said in a blog post that it was aiming to complete a deal for TikTok’s operations in the US, as well as in Canada, Australia and New Zealand, no later than Sept. 15. The White House had insisted upon that deadline, people familiar with the matter said. It could prove an uphill climb, with key details for the deal — including price — still not worked out, people familiar with the discussions said. Microsoft said in a blog post that it is committed to “providing proper economic benefits to the United States, including the United States Treasury.” That language referred to tax revenue and job creation, a person familiar with the matter said, rather than some sort of special transaction fee. Trump

Sony reports April-to-June net profit rise of 53.3%

GAMBLE: The much-anticipated PlayStation 5 has helped sustain the firm’s share price, but one analyst warned that it is too early to judge the console’s popularity

Sony Corp yesterday said its net profit surged 53.3 percent in the April-to-June quarter, but warned that annual profits were likely to see double-digit declines as the COVID-19 pandemic continues to cloud the forecast. The PlayStation giant said that net profit for the three months through June reached ￥233.25 billion (US$2.2 billion), with “significant increases” in its game and network services and financial services segments. The surge was also helped by a strong performance in equities, which pushed up the firm’s pre-tax income. However, operating profit slipped 1.1 percent to ￥228.39 billion on sales of ￥1.97 trillion, up 2.2 percent. While global demand for game downloads spiked this year as lockdowns forced people to stay at home, the pandemic has brought a string of negative factors for Sony, including a slump in manufacturing, music event cancelations and movie theater shutdowns. “Lockdowns have continued affecting Sony’s production lines while hitting hard sales of its electronics products and at theater-release movies,” Hideki Yasuda, an analyst at Ace Research Institute in Tokyo, told reporters ahead of the results. “It was quite a tough quarter for Sony, as negative factors outnumbered positive ones. Sony is still expected to recover gradually for the rest of the fiscal year, but on the condition that a major second wave of the pandemic doesn’t emerge.” If there is a serious resurgence of the virus, “it will be a different story,” Yasuda said. Annual net profit for the year to March would drop 12.4 percent to ￥510 billion, with annual operating profit dropping 26.7 percent to ￥620 billion, Sony said. Annual sales are expected to edge up 0.5 percent to ￥8.3 trillion. The much-anticipated next version of the PlayStation is expected later this year, which analysts say has helped sustain the firm’s share price. During the April-to-June period, the

Google launches low-priced phone

Google has started selling a long-delayed budget smartphone boasting the same high-quality camera and several other features available in fancier Pixel models that cost hundreds of US dollars more. The Pixel 4a unveiled on Monday is to be available on Aug. 20 after months of delay caused by supply problems triggered by the pandemic. It costs US$349, a US$50 discount from a cheap Pixel released last year. It is also a major markdown from other higher-end models in the existing product lineup that start at US$799. The next versions of Google’s top-of-the-line Pixel phones would be released sometime this fall, Google said, without revealing their prices. “Last year, Pixel 3a gave people a chance to get the helpful features of Pixel at a more affordable price,” Google product management vice president Brian Rakowski said. “This year, Pixel 4a and the first 5G-enabled Pixels, Pixel 4a (5G) and Pixel 5 coming this fall, will continue to bring the features people love packaged in sleek new hardware at more affordable prices,” he said. The coming Pixel 4a synched to 5G networks still being built would start at US$499, and be available in Australia, Britain Canada, France, Germany, Ireland, Japan, Taiwan and the US, Rakowski said. The budget-minded Pixel 4a is coming out four months after Apple Inc released a discount iPhone, the SE, priced at US$399. The low price helped spur iPhone sales at a time of soaring unemployment, as the US economy plunged into a deep recession that is causing millions of households to curb their spending so that they can pay rent and buy food. The availability of a lower-priced model was one of the big reasons iPhone shipments during the April-to-June period climbed 11 percent from the same time, research firm Internal Data Corp (IDC) said. That was in stark contrast to the overall smartphone

Oil giant BP dives into US$16.8bn quarterly loss

BP PLC plunged into a net loss of almost US$16.85 billion in the second quarter, the British oil giant announced yesterday, as the COVID-19 pandemic ravaged demand for oil, sending prices tumbling. “The ongoing severe impacts of the COVID-19 pandemic continue to create a volatile and challenging trading environment,” BP said in its earnings statement. “Looking ahead, the outlook for commodity prices and product demand remains challenging and uncertain,” it added. The quarterly loss after tax of almost US$16.85 billion compared with a net profit of US$1.82 billion in the second quarter of last year, BP said. “In particular, our reset of long-term price assumptions and the related impairment and exploration write-off charges had a major impact,” chief executive officer Bernard Looney said. Alongside its results, BP set out details on how it expects to achieve “net zero” carbon emissions for the company by 2050. Switching from an international oil company to an “integrated energy company,” BP said that over the next decade its oil and gas production is expected to reduce by at least 1 million barrels of oil equivalent a day, or 40 percent when compared with last year’s levels. “This coming decade is critical for the world in the fight against climate change, and to drive the necessary change in global energy systems will require action from everyone,” Looney said. The Irish national, who became chief executive of BP in February, had previously said that he wanted “net zero” carbon emissions for the company by the middle of the century. In the immediate future, BP must rebuild its finances and Looney has already decided to cut about 10,000 jobs, or 15 percent of its global workforce owing to the coronavirus fallout on energy demand and prices. After companies worldwide closed their doors and airlines grounded planes at the height of the COVID-19 outbreak toward

Federal Reserve officials talk up urgency of fiscal aid as US lawmakers squabble

US Federal Reserve officials on Monday said that another round of fiscal relief would be critical for the US economy, as lawmakers continued to negotiate the contours of additional aid. Tens of millions of Americans who lost their jobs as a result of the COVID-19 pandemic have in the past few months relied on the enhanced unemployment insurance payments authorized by the US Congress in March to pay their bills and put food on the table, while temporary moratoriums on evictions have kept roofs over their heads. “It’s very important that something be done,” Chicago Fed President Charles Evans told reporters on Monday. “If we go very long without somehow addressing the reduction and evaporation of that support, I think it’s going to show up in lower aggregate demand, and that would be very costly for the economy.” Lawmakers allowed the enhanced payments of US$600 a week to expire on Friday and have yet to agree on an extension. The lapse comes as high-frequency indicators suggest the economic recovery is at risk of stalling due to renewed outbreaks across the country. Democrats in Congress want to extend the US$600 payments — which were added to regular unemployment insurance benefits as part of the package passed in March — through January. Republicans say that the payments should be reduced because they are too generous and discourage people from returning to work. The enhanced benefits would need to be extended in some form, Dallas Fed President Robert Kaplan said, adding that the extra spending power households have been provided with has probably kept more people employed than would otherwise be the case. “The increased incomes, while it may have made it harder for certain individual businesses to hire, it’s helped create jobs because it’s helped bolster consumer spending, so the net effect still has probably been positive for

World Business Quick Take

AIRLINES EasyJet bookings improve British low-cost airline EasyJet PLC said that it plans to fly at about 40 percent of its capacity over the rest of the summer, more than originally scheduled, as there were more bookings than expected, despite ongoing restrictions due to the COVID-19 pandemic. It also said that its fourth-quarter loss would be smaller than the headline loss before tax of ￡324.5 million (US$424.1 million), which it posted for the three months to the end of June. EasyJet yesterday said that its operational cost cash burn during its third quarter is lower than the previously guided ￡30 to 40 million per week, putting total cash burn at ￡774 million for the quarter, lower than guidance of ￡1 billion. BEVERAGES Diageo reports drop in sales Diageo PLC’s sales slumped as the COVID-19 pandemic led to the closure of bars and restaurants, with rising e-commerce and supermarket purchases failing to fill the gap. Revenue fell 8 percent in the 12 months through June on an organic basis, the London-based company said yesterday. Analysts expected a decline of 6.4 percent. Diageo recorded a ￡1.3 billion impairment due to COVID-19 effects. The results are somewhat worse than already low expectations, with the company saying in February that it would see organic net sales cut by ￡225 million to ￡325 million for the financial year. CHEMICALS Suit hits Bayer profits German chemicals giant Bayer AG yesterday reported a second-quarter net loss of 9.5 billion euros (US$11.2 billion), reflecting the “exceptional impact” of a US settlement of thousands of claims that its glyphosate weed killer causes cancer. The heavy loss compared with a profit of 404 million euros in the same three-month period of last year. In the three months to June, sales slipped 2.5 percent to 10.7 billion euros. Bayer said it now expected sales for this year to

Shares fall sharply on virus fears

NERVOUS MARKET: With the infection sources still unknown for three COVID-19 cases that had departed Taiwan, investors have become uneasy, an analyst said

Local shares yesterday came under heavy downward pressure, falling more than 1 percent as renewed fears over a possible increase in domestic COVID-19 infections hit market sentiment after the nation last week reported a case related to a Belgian national. Selling focused on the bellwether electronics sector, led by contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which pushed down the broader market as investors ignored gains posted by tech heavyweights on the US market at the end of last week, dealers said. The TAIEX closed down 151.77 points, or 1.2 percent, at 12,513.03, on turnover of NT$231.43 billion (US$7.84 billion). Foreign institutional investors sold a net NT$30.4 billion worth of shares on the main board, Taiwan Stock Exchange data showed. On Saturday, the Central Epidemic Command Center (CECC) reported seven new COVID-19 infections, including one Belgian engineer who might have been infected in Taiwan, although the CECC has not yet confirmed it as a domestic case. The weakness on the main board continued as downward pressure increased, starting in the late morning session, pushing the TAIEX below the nearest technical support at about the 10-day moving average of 12,520 points by the end of the session, dealers said. Mega International Investment Services Corp (兆豐國際投顧) analyst Alex Huang (黃國偉) said the Belgian national case reminded many investors of earlier cases involving a Thai migrant worker and a Japanese student who tested positive for COVID-19 soon after returning from Taiwan. “The infection sources of the three cases remain unknown, which raises fears over the domestic situation, although the nation has not officially reported any domestic cases” since April 12, Huang said. “Local investors simply seized on the negative leads to cut their holdings by ignoring gains on the NASDAQ, and the electronics sector fell victim to such mentality,” Huang said. “The TAIEX fell below the 10-day moving average today

Q2 housing transactions hit NT$382 billion

RESILIENT MARKET: Although the housing market appeared unaffected by COVID-19, Cathay Real Estate Development still warned of possible fallout in the long term

Presale and new housing transactions last quarter totaled NT$382.7 billion (US$12.96 billion), rising by double-digit percentages from the previous quarter and a year earlier, as the market emerged from the COVID-19 pandemic unscathed, thanks to real demand and ample liquidity, a survey released by Cathay Real Estate Development Co (國泰建設) showed. The transaction volume surged 42.9 percent from three months earlier and increased 14.7 percent from the same period last year, it said. “The market appeared unaffected by the virus outbreak in light of the second-quarter results, but people had better be cautious and watch out for the pandemic’s fallout in the long run,” the quarterly report said on Thursday last week. Housing prices soared 24.14 percent in Taichung to NT$274,700 per ping (3.3m2) in Taichung and jumped 12.34 percent to NT$266,800 in Taoyuan, the report showed. Prices gained 7.59 percent to NT$264,700 per ping in Hsinchu and grew 5.91 percent to NT$228,800 per ping in Tainan. Taipei reported a 2.42 percent pickup in housing prices to NT$823,700 per ping and Kaohsiung witnessed a 1.53 percent increase to NT$237,100 per ping, the report said. Housing prices in New Taipei City bucked the trend with a 1.93 percent decline to NT$403,100 per ping, it said. Jinwen University of Science and Technology finance professor Chang Ting-hsuan (章定煊) said he was surprised at the rapid increase in housing prices, which reflected confidence on the part of developers and acceptance on the part of buyers. Usually, it takes several years to see prices advance by double-digit percentages, Chang said. Although real demand lent support, a sizable number of investors likely rejoined the market because of ultra-low interest rates in most other investment tools around the world, he said. The central bank in March cut its policy rates to a record low of 1.125 percent, while peers in the US, Europe and Japan kept

By Crystal Hsu

DBS Bank raises GDP growth to zero, citing success in containing COVID-19

DBS Bank Ltd yesterday revised upward its forecast for Taiwan’s GDP growth this year to 0 percent, compared with the minus-1 percent estimate it made in April, citing the nation’s success in containing the COVID-19 pandemic and competitiveness in the technology sector. The adjusted forecast came after a quarterly contraction of 8.8 percent in the second quarter was more moderate than expected, DBS economist Ma Tieying (馬鐵英) said in a report. The lender expects Taiwan’s economy this quarter to post a 7 percent quarterly gain followed by a quarterly increase of 2 to 3 percent in the fourth quarter, Ma said. With the number of domestic COVID-19 cases in Taiwan contained at near zero for about 100 consecutive days, Taiwan’s retail and recreation activities, as measured by Google’s location services data, almost normalized last month, compared with a 6 percent fall in June and a 12 percent decline during the April-to-May period, she said. A second wave of infections, which would be a drag on economic recovery in many countries, would not affect domestic demand, given that there has been no tightening of COVID-19 restrictions after most of them were lifted in June, she added. However, a second wave of infections and renewed lockdowns in other countries could indirectly hurt Taiwan, as the US, Europe and Japan, where the number of COVID-19 cases is resurging, are important export markets for Taiwan, accounting for a combined share of about 30 percent of exports, Ma said. Private investment is likely to grow, given that Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) last month revised up its capital expenditure plan for this year to top US$17 billion, from an original budget of US$15 billion to US$16 billion, Ma said. TSMC is also likely to benefit from Intel Corp’s plan to outsource some chip production to a third-party due to the delay

By Kao Shih-ching

Three insurers cut declared interest rates this month

Cathay Life Insurance Co (國泰人壽), Taiwan Life Insurance Co (台灣人壽) and China Life Insurance Co (中國人壽) this month cut their declared interest rates for interest-sensitive products due to lower bond yields. The declared rates are used by insurers to calculate policyholders’ distributions, based primarily on their investment returns. Cathay Life, the nation’s leading insurer with a market share of 19.19 percent, yesterday announced reductions of 5 to 10 basis points for the benchmark rates of its 62 US dollar-denominated policies, and reductions of 1 to 15 basis points for its 77 policies denominated in New Taiwan dollars. After the revision, the rates for its US dollar products fell to 1.85 percent to 3.15 percent, while those of its NT dollar policies dropped to 0.46 percent to 1.75 percent, Cathay said in a statement. The insurer trimmed the rates as yields of corporate bonds continued to retreat last month, with the 10-year US Treasury yields falling to about 0.54 percent, a historically low level, Cathay Life executive vice president Lin Chao-ting (林昭廷) told the Taipei Times by telephone. As the insurer buys bonds every month, the decline in bond yields would lead to a reduction in its investment returns, Lin said. Taiwan Life kept the rates for its US dollar policies unchanged, but cut the rates for some of its NT dollar products by 1 basis point due to the fall in Taiwan’s 10-year government bonds. China Life reduced the rates for its five NT dollar products by 10 basis points to a range of 2.03 percent to 2.15 percent. However, three other major insurers — Nan Shan Life Insurance Co (南山人壽), Shin Kong Life Insurance Co (新光人壽) and Fubon Life Insurance Co (富邦人壽) — kept their declared rates unchanged for this month. Insurers’ moves on their declared rates reflect their expectation on long-term investment returns rather than their

By Kao Shih-ching

Ample Electronic’s net profit soars to record NT$35.03m

Ample Electronic Technology Co (勤凱科技), which supplies conductive paste to passive components maker Yageo Corp (國巨), yesterday said that net profit soared to a record high of NT$35.03 million (US$1.19 million) last quarter thanks to robust demand from solar and passive components customers. Net profit jumped from NT$4.05 million a year earlier and surpassed the company’s net profit of NT$29.43 million for the whole of last year. On a quarterly basis, net profit grew 32.59 percent from NT$26.42 million. Earnings per share (EPS) surged to NT$1.27 last quarter, compared with NT$0.14 a year earlier and NT$0.96 a quarter earlier. In the first half of the year, Ample accumulated NT$61.44 million in net profit, up from NT$13.83 million a year earlier. EPS climbed to NT$2.23 from NT$0.49. Revenue almost doubled to NT$557 million in the first half from NT$282 million a year earlier. The company generated 90 to 95 percent of its revenue from conductive paste used in passive components. Ample expects growth momentum to extend into next quarter, driven by new orders and new customers. Pent-up demand created by the COVID-19 pandemic is also expected to fuel growth later this year, it said. In light of growing demand for cloud-based and artificial intelligence applications amid the pandemic, as well as 5G applications, the company in May added a second shift to its production lines to boost capacity, Ample said. Yageo and its subsidiary Chilisin Electronics Corp (奇力新) are Ample’s biggest customers, although they make up less than 50 percent of the company’s annual revenue. Ample said earlier this year that it was diversifying its customer portfolio by increasing shipments to Walsin Technology Corp (華新科) and securing new customers in South Korea and Japan. Ample’s board of directors has approved the issuance of convertible corporate bonds worth NT$150 million to repay debts and replenish operational capital.

By Lisa Wang