With the global financial turmoil eroding Taiwan’s economy and corporate profits, firms’ ratings have been downgraded this year, bringing an end to six years of upward ratings, a local rating firm said yesterday.
Taiwan Ratings Corporation (TRC, 中華信評), a local arm of Standard & Poor’s, told a teleconference yesterday morning that the company had lowered its forecast for Taiwan’s GDP growth to 0.5 percent next year, prompted by the nation’s worse-than-expected economic performance amid the financial crisis.
Daniel Hsiao (蕭黎明), director of TRC’s corporate fund ratings, said the nation’s key economic pointers suffered rapid and drastic declines in the second half and could continue downwards in the coming months.
“Export orders and industrial output are particularly disappointing,” Hsiao said, adding that the two indicators dropped 28.51 percent and 28.35 percent respectively last month.
Altogether, the TRC made 11 rating downgrades against five upgrades this year, the first negative trend in six years. The drop was led by the financial sector and parts of the high-tech sector.
Chief ratings officer Dan Fukutomi said, however, that most Taiwanese firms would survive the crisis.
“The majority of large corporations and financial institutions in Taiwan have the financial means to withstand this unprecedented downturn,” Fukutomi said. “However, we expect negative rating trends will continue into 2009 as Taiwanese entities confront ongoing pressures on profitability, asset quality and capitalization.”
Echoing the theme, Hsiao said 17 percent of his company’s clients in the non-financial sectors risked outlook downgrades next year, up from 10 percent at the end of last year.
Hsiao put his clients’ chances of being downgraded at 30 percent, adding that the trend could persist for six to 24 months.
“Export-oriented firms such as liquid-crystal-display and memory chip makers as well as shipping liners are bearing the brunt of the [crisis] on shrinking demand,” Hsiao said. “Their ratings could be lowered if their capitalization or profitability figures deteriorate,” he said.
By contrast, Hsiao said, firms in the construction sector fared better on stable rental incomes. Hsiao referred to Cathay Real Estate Development Co (國泰建設), saying the nation’s second-largest developer appeared to have been little affected by the financial crisis, mostly because of its strong capitalization and conservative investment strategy.
The TRC has 47 manufacturing clients and 86 financial customers.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”