Qualcomm Inc yesterday said it would maintain its supply chain strategy of sourcing chips from multiple foundry partners, including advanced chips from two major suppliers, to ensure a sufficient chip supply amid the COVID-19 pandemic. Qualcomm is reportedly working with Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and Samsung Electronics Co on advanced products, such as 4-nanometer chips, for its new flagship 5G chips, the Snapdragon 8+ Gen 1 series. Qualcomm is sourcing chips made by mature technologies from several foundry partners, the company said. Alex Katouzian, general manager of Qualcomm Technologies Inc’s mobile, compute and XR business, told a virtual media briefing that the strategy helped the firm deal with a chip shortage. Qualcomm Technologies is a wholly owned subsidiary of Qualcomm. Addressing concerns over weakening smartphone demand amid a slowing global economy and its ripple effects, Katouzian said a transition similar to the one from 3G to 4G is taking place in the transition from 4G to 5G, adding that the 5G penetration rate would keep growing. DIFFERENT CONDITIONS “Obviously, we are in a slightly different circumstance with the pandemic,” Katouzian said. “We see the penetration of 5G being extremely strong... We see a continuous growth path for 5G and the handset market as well.” The company said demand for the overall smartphone market remains strong. “There is some slowdown obviously because of the circumstances we are going through,” Katouzian said. “But we anticipate things to pick back up, but definitely not disappearing. We see still strength in the market, for sure.” Qualcomm’s comments followed an optimistic MediaTek Inc (聯發科) projection about the 5G trend. MediaTek expects the 5G penetration rate to rise to 50 percent this year, compared with 30 percent last year. However, unlike MediaTek’s conservative view about the adoption of the millimeter-wave system due to costly base station deployment, Qualcomm expects the adoption rate
The government will continue to work with the private sector to usher in a new “golden decade” for Taiwan’s technology industry, President Tsai Ing-wen (蔡英文) said yesterday at the opening of Computex at the Taipei Nangang Exhibition Center’s Hall 1. The information and communications technology (ICT) sector will continue to play a major role in the advancement of economic development, and is also key to promoting the digital transformation of other industries, Tsai said in her opening remarks. She also lauded the highly resilient and competitive semiconductor ecosystem the country has built over the past four decades, ranging from foundry and IC design to packaging and testing. In the future, cutting-edge technologies, such as artificial intelligence and cloud computing, will be highly dependent on semiconductors, she said. Taiwan must continue to leverage its strength in high-end hardware manufacturing so the ICT industry can further expand its applications into smart machinery and smart medical care, with the aim of making Taiwan’s economy more internationally competitive, she said. The government will continue to work with the private sector to promote the nation’s digital transformation, drive economic development and usher in another golden decade for the country’s technology industry, Tsai said. Organized by the Taiwan External Trade Development Council (TAITRA, 外貿協會) and the Taipei Computer Association (台北市電腦公會), Computex resumed its physical exhibition this year after a hiatus of two years. The event runs until Friday. Alongside the physical show, the virtual Computer Cyberworld also opened yesterday and will run until June 30, TAITRA said, adding that about 400 foreign and local companies are showcasing their products at 1,000 booths at the two trade fairs. A special online platform, Computex DigitalGo, has been set up to help connect an estimated 3,000 overseas buyers to Taiwanese suppliers, TAITRA said.
PAYDAY: The FSC’s job is not to limit the damage to insurers, but to make sure that consumers’ rights are protected, commission Chairman Thomas Huang said
Insurance companies’ total compensation to COVID-19 insurance policyholders has exceeded total premiums as the number of infections continues rising, the Financial Supervisory Commission’s (FSC) latest data showed yesterday. As of Monday, aggregated compensation paid to those infected with COVID-19 or in quarantine grew 43 percent from a week earlier to NT$2.58 billion (US$87.1 million), higher than cumulative premiums of NT$2.11 billion, which were up 9.9 percent from a week earlier, commission data showed. The data showed that 73,135 policyholders had been compensated, 23,231 more than the previous week, with the number of COVID-19 insurance products sold rising 7.6 percent to 2.69 million. The commission does not yet know the exact loss ratio, which is obtained by dividing total premiums by combined compensation, as insurers are still busy reviewing and approving claims as the number of domestic infections continues to rise. Cathay Financial Holding Co (國泰金控) and Fubon Financial Holding Co (富邦金控) have said that premiums from the sales of COVID-19 insurance policies by their insurance units are still higher than compensation paid. Shin Kong Life Insurance Co (新光人壽), a unit of Shin Kong Financial Holding Co (新光金控), yesterday said its compensation paid on COVID-19 insurance policies would not affect the company’s financial strength. On average, 10 policyholders have claimed compensation each day, with the average amount of compensation less than NT$20,000, Shin Kong said. In light of policyholders’ complaints about insurers’ slow approval of their COVID-19 claims, the commission requested that all insurers speed up their processing and complete underwriting the products by the end of next month, Insurance Bureau Director-General Shih Chiung-hwa (施瓊華) said. As a result, policyholders would know whether they have successfully purchased a policy no later than the end of next month, she said. “So far, about 1 million purchases [of COVID-19 insurance policies] have not been completed,” Shih said. Commission Chairman Thomas Huang (黃天牧) yesterday
About 10 percent of employees in Taiwan plan to change jobs in the coming 12 months, while 22 percent intend to ask for a pay raise, both lower than the global averages of 20 percent and 35 percent respectively, PricewaterhouseCoopers (PwC) Taiwan said yesterday. The figures are from PwC’s “Global Workforce Hopes and Fears” survey of 52,195 workers in 44 countries and territories — one of the biggest surveys of the global workforce. The findings suggest that a phenomenon known as the “Great Resignation” would continue, as employees worldwide want better pay, more control over how they work and professional fulfillment, PwC said. Wage pressure is highest in the tech sector, where 44 percent of employees surveyed plan to ask for a raise, while the ratio is lowest in the public sector at 25 percent, it said. Higher pay is the top motivator for seeking a new job (71 percent), followed by wanting a fulfilling job (69 percent) and wanting to truly be themselves at work (66 percent), the global survey said. For Taiwanese workers, monetary compensation, wanting to truly be themselves at work, and feeling cared for physically and psychologically top the list of concerns, PwC Taiwan said. “There is a tremendous need for business to do more to improve the skills of workers,” PwC global chairman Bob Moritz said. Workers are also becoming more interested in their employers’ impact on the economy, climate and society, PwC said. Fifty-three percent, of workers said it was important that their employer is transparent about their impact on the environment, and 65 percent said transparency about health and safety was critical, the survey found. Sixty percent said transparency about economic impact was important, followed by diversity and inclusion efforts at 54 percent. Women were 7 percentage points less likely than men to say they are fairly rewarded financially, but still 7
‘LONG-TERM GROWTH’: The five-year investment plan would create 80,000 new jobs, mainly in the core businesses including semiconductors and biopharmaceuticals
Samsung Group yesterday unveiled a massive 450 trillion won (US$356 billion) investment blueprint for the next five years aimed at making it a frontrunner in a wide range of sectors from semiconductors to biologics. The new figure is an increase of more than a third over its investments spent over the past five years. The tech giant is South Korea’s largest conglomerate and its overall turnover is equivalent to one-fifth of the national GDP. Samsung Electronics Co, its flagship subsidiary, is the world’s biggest smartphone maker. The investment plan would bring “long-term growth in strategic businesses and help strengthen the global industrial ecosystem of crucial technology,” Samsung said in a statement. The 80,000 new jobs would be created “primarily in core businesses including semiconductors and biopharmaceuticals” through 2026. It also said the investment would “bring forward the mass production of chips based on the 3-nanometer process,” the latest technology to further shrink down the size of semiconductors and boost computing power. It would also invest heavily in biopharmaceuticals with its affiliates Samsung Biologics Co and Samsung Bioepis Co in the field. The new plan represents a 36 percent increase in investment over its total investments over the past five years. Of the 450 trillion won Samsung plans to spend over the next five years, it would commit 360 trillion won to South Korea. The announcement comes after US President Joe Biden toured Samsung Electronics’ massive Pyeongtaek semiconductor factory on Friday, underscoring the South Korean giant’s role in securing global supply chains of microchips, on his first Asia trip as US leader. South Korea and the US need to work to “keep our supply chains resilient, reliable and secure,” Biden said, calling semiconductors manufactured there as “a wonder of innovation” and crucial to the global economy. Jay Y. Lee, the firm’s vice chairman and the de facto leader of the wider
Toyota Motor Corp is suspending more production due to parts shortages caused by the COVID-19 lockdown in Shanghai, a sign that supply-chain bottlenecks could persist even as the city starts to gradually reopen. The world’s biggest automaker issued a statement yesterday listing production lines that would be suspended in Japan, including at five plants early next month on top of stoppages already announced for this month. “The shortage of semiconductors, spread of COVID-19 and other factors are making it difficult to look ahead,” Toyota said in the statement. “Due to parts supply shortages caused by the lockdown in Shanghai, we have decided to suspend operations in May and in June.” Toyota’s global production plan for next month stands at about 850,000 vehicles, 250,000 of which are to be made in Japan and the rest overseas. The company aims to produce an average of 850,000 units a month through August and is keeping its fiscal year output target of 9.7 million vehicles. “We will continue to make every effort possible to deliver as many vehicles to our customers at the earliest date,” Toyota said. Shanghai, which went into lockdown in March to combat a COVID-19 outbreak, has been moving to officially ease restrictions that have severely disrupted business activity and kept millions of people stuck in their homes. While curbs are loosening, the lockdown might continue to cause “a considerable amount of damage to global supply chains” as backlogs hinder the movement of goods, the UK-based Business Continuity Institute has said. Earlier this month, Toyota forecast a 20 percent decline in operating profit for this fiscal year due to an unprecedented increase in logistics and raw materials costs.
China has rolled out a broad package of measures to support businesses and stimulate demand as it seeks to offset the damage from COVID-19 lockdowns on the world’s second-largest economy. The 33-point package includes 140 billion yuan (US$21 billion) in additional tax rebates and 300 billion yuan in railway construction bonds, Xinhua news agency reported, citing a decision from a meeting of the State Council chaired by Chinese Premier Li Keqiang (李克強). “Without a certain level of GDP growth, stable employment cannot be realized,” Li said. “One good thing is that we refrained from excessive money supply and mass stimulus in the past few years, and we still have policy tools in reserve.” The additional tax cuts represent about 0.1 percent of China’s GDP last year and push the government’s total planned reduction in taxes this year to 2.64 trillion yuan — slightly more than the relief Beijing offered in 2020 when China was first hit by the COVID-19 pandemic. Economists were cautious about whether the measures would provide a material boost to growth as China’s strict “zero COVID-19” policy causes major disruption to business activity. Many economists expect that the government will not meet its annual GDP growth target of about 5.5 percent this year, with UBS Group AG the latest to downgrade its forecast to just 3 percent. “We believe these measures will provide some help and alleviate the severity of the growth slowdown or even contraction, but we remain cautious about growth prospects for this year,” Nomura Holdings Ltd economists led by Lu Ting (陸挺) wrote in a note. The State Council said the policies are intended to “stabilize” the economy and get it back onto its normal track. Authorities will improve policies to help supply chains function, ensure domestic cargo transport runs smoothly, and increase the number of domestic and international flights, it
The US must be “strategic” when it comes to a decision on whether to remove China tariffs, US Trade Representative Katherine Tai (戴琪) said a day after US President Joe Biden mentioned he would review Trump-era levies as consumer prices surge. “With respect to the tariffs, our approach as with everything in this relationship, is to be strategic,” Tai said yesterday in an interview with Bloomberg Television. “We have to keep our eye on the ball in terms of how to effectively realign the US-China trade and economic relationship.” Tai would not say whether the administration would remove the tariffs, or give a time frame for making a decision. “All options are on the table in terms of how we address our short-term economic needs, but our eye must be on the ball with respect to the medium and long-term needs for the United States to realign this economic and trade relationship,” she said. Biden on Monday said he is considering removing some of the tariffs and would talk with US Secretary of the Treasury Janet Yellen about it after returning to the US from Asia. Tai earlier this month said that while relief from US tariffs on China is one option under consideration to confront the fastest inflation in four decades, the duties should be studied in the context of broader economic policy. She dismissed March research from the Peterson Institute for International Economics, which estimated that eliminating a wide array of tariffs, including those on Chinese goods, could reduce inflation by 1.3 percentage points. Her comments contrasted with Yellen, who last month suggested the US is open to scaling back the widespread Trump-era tariffs on merchandise imports from China to help provide relief to Americans. While Yellen has tended to focus more on the cost that tariffs impose on US consumers, Tai has
SUPPLY-SIDE WOES: The ECB is likely to exit negative monetary policy by the end of the third quarter, with a first interest-rate hike set for July, Christine Lagarde said
The European Central Bank (ECB) would not be rushed into withdrawing monetary stimulus as officials act to contain inflation running at almost four times their 2 percent target, ECB President Christine Lagarde said. “I don’t think that we’re in a situation of surging demand at the moment,” she told Francine Lacqua on Bloomberg Television from the World Economic Forum in Davos, Switzerland, yesterday. “It’s definitely an inflation that is fueled by the supply side of the economy. In that situation, we have to move in the right direction, obviously, but we don’t have to rush and we don’t have to panic,” she said. Lagarde spoke a day after laying out her vision for the central bank’s next steps in a blog post. The ECB is likely to exit negative monetary policy by the end of the third quarter, with a first interest-rate increase set for July, she said. That prospective timetable signaling two quarter-point interest-rate hikes in the third quarter has irked some colleagues, because it would effectively exclude moving with a half-point increment, according to people familiar with the matter. Some officials, including Bank of France Governor Francois Villeroy de Galhau, have also suggested that the ECB might end the year with positive interest rates. Traders are wagering on four 25-basis-point hikes by the ECB by the end of this year. “When you’re out of negative, you can be at zero, you can be slightly above zero,” Lagarde said. “This is something we will determine on the basis of our projections, on the basis of our forward guidance.” Lagarde refused to be drawn on whether the central bank might consider a 50 basis-point move. Policymakers are walking a fine line as Russia’s invasion of Ukraine sent prices surging while denting confidence among businesses and households. New COVID-19 restrictions in China are putting additional strains on supply
TOURISM Airbnb exits China Airbnb Inc yesterday announced that it would stop representing short-term rental properties in China and focus its business in the nation on serving Chinese tourists looking for lodgings abroad. Airbnb joins a series of foreign Internet companies, including Yahoo Inc and eBay Inc, that have pulled out of China after running into fierce local competition and regulatory barriers. “We have made the difficult decision to refocus our efforts in China on outbound travel and suspend our homes and Experiences of Hosts in China, starting from July 30, 2022,” Airbnb China chief strategy officer Nathan Blecharczyk said in a statement on its social media account. AUDITORS KPMG, Sykes fined The UK’s Financial Reporting Council has fined KPMG and its partner Anthony Sykes over its 2010 audit of Rolls-Royce Group PLC, the latest in a long list of audit scandals surrounding the firm. KPMG was ordered to pay ￡3.4 million (US$4.3 million), reduced from an original fine of ￡4.5 million because the firm admitted its shortcomings, the Financial Reporting Council said in a statement yesterday. An external independent expert is to assess the firm’s policies, guidance and procedures for audit work. Sykes must pay a sanction of ￡112,500, which was also reduced for admissions and early disposal from ￡150,000. SOCIAL MEDIA Snap lowers its forecasts Snap Inc has cut its revenue and profit forecasts below the low end of its previous guidance, sending its shares plunging as much as 31 percent on Monday. The company is also to slow hiring, filling 500 roles before the end of the year, Snap chief executive officer Evan Spiegel said in a note to staff. “Like many companies, we continue to face rising inflation and interest rates, supply chain shortages and labor disruptions, platform policy changes, the impact of the war in Ukraine, and more,” he wrote in the memo.
MORE THAN BUZZ: The chip designer said it has received numerous orders from automakers to supply 5G modem chips, as it works to expand beyond smartphones
MediaTek Inc (聯發科) yesterday said it would ship the first 5G chips for vehicles to customers in the Asia-Pacific region by the end of the year, as it moves to expand the reach of its 5G chips beyond smartphones. The Hsinchu-based chip designer said it has been developing 5G chips for connected vehicles over the past few years, targeting applications such as telematics and in-vehicle information systems. “We are seeing demand for 5G technology from numerous makers of connected cars, including electric vehicle makers. We have obtained numerous orders from automakers to supply 5G modem chips with highly integrated features,” J.C. Hsu (徐敬全), MediaTek vice president in charge of wireless communications, told a media briefing in Taipei. “We expect the chips to be on the market by the end of this year. First, in the Asia-Pacific market and next year, they should be available in Europe. We have made quite good progress,” Hsu said. Smartphone chips are the company’s biggest revenue contributor, accounting for about 60 percent. With multiple revenue sources, the company said it was sticking to its annual revenue growth target of 20 percent and that 5G chip shipments would remain unchanged. “There is buzz about market demand, but we believe there is also a clear trend of increasing 5G penetration,” MediaTek chief financial officer David Ku (顧大為) said. “In addition to smartphones, other MediaTek business groups are growing.” Ku’s remarks came after TF International Securities (天風國際證券) analyst Kuo Ming-chi (郭明錤) wrote on Twitter yesterday that MediaTek has slashed 5G chip orders by between 30 and 35 percent for delivery in the fourth quarter. Kuo attributed the order cuts to sluggish demand from almost all Chinese smartphone vendors, from Xiaomi Corp (小米) to Oppo Mobile Telecommunications Corp (歐珀). MediaTek’s rival, Qualcomm Inc, has had orders for chips used in high-end 5G phones increase by as much as
The depreciation of the New Taiwan dollar against the US dollar and increases in bond yields in the first quarter helped Cathay Life Insurance Co (國泰人壽) maintain decent investment returns, despite a global stock market correction, the insurer said yesterday. The flagship arm of Cathay Financial Holding Co (國泰金控) reported an after-hedging investment return of 4.74 percent, down from 6.31 percent a year earlier, but still the second-highest figure for the first quarter, the insurer said. While last year’s record investment returns were driven by an equity boom, this year’s came from lower foreign-exchange hedging costs, capital gains and higher yields from overseas bonds, Cathay Life executive vice president Lin Chao-ting (林昭廷) told an investors’ conference in Taipei. The insurer reported a hedging gain of 0.43 percent for the first quarter, as its proxy hedging strategy worked as the local currency weakened against the greenback by about 3 percent, Lin said. “We usually forecast a forex hedging cost of 1 to 1.5 percent, but it seems that the costs might be even lower this year,” Lin said. The insurer disposed some stocks to realize capital gains in the first quarter, reducing its investments in local stocks by 6.5 percent from the end of last year to NT$485 billion (US$16.4 billion) and those in overseas stocks by 2.3 percent to NT$454 billion, company data showed. Returns on its investments in local stocks nearly halved from 20.9 percent a quarter earlier to 10.5 percent and returns on foreign stock investments fell from 11.6 percent to 8.8 percent, the data showed. “The stock market corrections have provided us with a chance to buy on dips, and we will focus on blue-chip stocks and those with rosy dividends,” Lin said. Meanwhile, Cathay Financial Holding Co (國泰金控) president Lee Chang-ken (李長庚) said that Cathay Life Insurance and Cathay Century Insurance Co
While Taiwan has not been included in the new US-led Indo-Pacific economic initiative, the economic and trade relationship between Taipei and Washington would only deepen, Minister of Economic Affairs Wang Mei-hua (王美花) told a meeting of the legislature’s Economics Committee yesterday. “There is definitely something new” that the two sides can work out to strengthen bilateral relations, Wang said, adding that Taiwan has received majority support in the US Senate and House of Representatives. Wang cited US National Security Adviser Jake Sullivan’s remarks on Sunday that even though Taiwan had not been invited to join the Indo-Pacific Economic Framework (IPEF), Washington still expects to deepen its economic relationship with Taipei, especially on issues related to semiconductors and supply chains. She added that a meeting between Minister Without Portfolio John Deng (鄧振中) and US Trade Representative Katherine Tai (戴琪) in Bangkok on Friday paved the way for the two sides to deepen their economic relationship, adding that the pair is to meet again in the coming weeks for further discussions. US President Joe Biden formally launched the IPEF in Tokyo yesterday, with the US, Australia, Brunei, India, Indonesia, Japan, Malaysia, New Zealand, the Philippines, Singapore, South Korea, Thailand and Vietnam as members. Neither Taiwan nor China were included. Taiwan’s exclusion has raised concerns from ruling and opposition lawmakers. Democratic Progressive Party (DPP) Legislator Chen Ting-fei (陳亭妃) said the US has always encouraged Taiwan to participate in international organizations, and yet Washington did not invite Taipei to join the IPEF, even after more than 50 US senators wrote Biden a letter urging him to include Taiwan. There should be concrete measures to deepen Taiwan-US relations, she said, adding that the government should express to the US Taiwan’s determination to join the framework. New Power Party Legislator Chiu Hsien-chih (邱顯智) asked Wang if it would be possible for Taiwan
BEFORE THE STORM: The unemployment data were collected from April 10 to 16 and do not reflect the latest surge in COVID-19 infections, the statistics agency said
The unemployment rate last month dropped 0.04 percentage points to 3.62 percent, as more first-time jobseekers landed positions and fewer people lost work to business downsizing and closures, the Directorate-General of Budget, Accounting and Statistics said yesterday. The latest unemployment data, gathered from April 10 to April 16, when daily COVID-19 cases stood between 500 and 1,300, do not reflect the effect of surging cases on the job market, agency Deputy Director Chen Hui-hsin (陳惠欣) said. “We saw a mild advance in the number of people who work for fewer than 35 hours per week, and we will pay close attention to any changes,” Chen said. Restaurants, hotels and travel agencies have encouraged employees to use annual leave to deal with a business slowdown, and said they would introduce unpaid leave programs if hardships endure. Many people have been avoiding non-essential activity since daily infections surpassed 60,000 earlier this month. The jobless rate reached 3.68 percent after seasonal adjustments, a 0.02 percentage dip from one month earlier, the agency said. The retreat came after the number of first-time jobseekers declined by 2,000, and people quitting or losing work due to downsizing or closures fell by 1,000 each, it said. The government allows many business sectors to maintain normal operations in an attempt to coexist with the virus, lending support to the job market, Chen said, adding that negative effects from this approach might appear later this month. People who work fewer than 35 hours per week grew from 203,000 in March to 234,000 last month. As of May 15, 15,013 employees from 2,369 firms used unpaid leave. The Ministry of Labor has revived wage subsidy programs to mitigate the financial burden of workers on unpaid leave and let them receive occupational training. By educational status, 5.17 percent of university graduates were unemployed, followed by high-school graduates at 3.35 percent and
The industrial production index rose 7.33 percent year-on-year to 132.7 last month, marking the best April performance, thanks to strong demand for chips used in high-performance computing (HPC) devices, vehicles and Internet-of-Things (IoT) devices, the Ministry of Economic Affairs said yesterday. Manufacturing, a major contributor to industrial production, jumped 7.5 percent annually to 135.19, landing on the higher end of the ministry’s forecast of 5 to 8.2 percent annual growth. China’s COVID-19 lockdowns did not have a significant impact on local production, but did affect supply of some components, the ministry said. Some manufacturers, such as server makers, received rush orders last month, as production in China was disrupted, it said. “Wider adoption of emerging technologies continued to drive up semiconductor demand in April, and semiconductor companies are expanding capacity to cope with the high demand,” Department of Statistics Deputy Director-General Huang Wei-jie (黃偉傑) said by telephone. “Rising demand for HPC devices such as servers continued boosting demand for the electronic component segment,” Huang said. “The growth was partly moderated by sagging demand for consumer electronics, such as mobile phones in China.” The ministry expects the uptrend to extend into this month and forecast robust manufacturing production expansion of between 5.2 percent and 8.3 percent year-on-year to between 137.55 and 144.55, supported mainly by electronic components, computers and other electronics segments. Electronic component production climbed 17.81 percent annually last month, led by the semiconductor sub-index’s 27.65 percent year-on-year expansion. Display and related products tumbled 14.6 percent year-on-year, ending 24 months of growth. The production of computers and other electronics grew at an annual pace of 5.48 percent last month, benefiting from robust demand for cloud-enabled servers and relaxed component shortages that helped boost output of computers, routers and network switches. The petrochemicals sector saw production drop 5.18 percent year-on-year, mainly due to reduced demand for products to
Taipei Computer Association chairman Paul Peng, left, and Taiwan External Trade Development Council chairman James Huang yesterday pose for a photograph at a news conference in Taipei ahead of the opening of the Computex trade show today. The annual event is resuming its in-person exhibition at Taipei Nangang Exhibition Center after a two-year hiatus. Running from today to Friday, it is to feature diverse metaverse applications and immersive experience zones for visitors, with many companies displaying gadgets related to the artificial intelligence of things and high-performance computing, Huang said.
BIG PAYOUT: While a legislator said that the government should help non-life insurers handle the claims, the FSC said that firms should instead seek to raise their capital size
The local insurance industry is expected to face more than NT$41 billion (US$1.38 billion) in COVID-19 claims amid a surge in domestically transmitted cases, Financial Supervisory Commission (FSC) Chairman Thomas Huang (黃天牧) said yesterday. In a meeting of the legislature’s Finance Committee, Huang cited an internal assessment that forecast insurance claims would surpass a NT$41 billion estimate made by a legislator. Chinese Nationalist Party (KMT) Legislator Lai Shyh-bao (賴士葆) said that non-life insurance companies had sold about 7.6 million COVID-19 policies that are to pay holders if they test positive for the disease or are placed in quarantine as close contacts of positive cases. Based on a 15 percent infection confirmation rate and an average policy value of NT$36,000, the insurance industry could face about NT$41 billion in claims, Lai said. Huang said that with the number of local COVID-19 cases still rising, the amount of total claims could surpass that estimate, but added that he could not yet give an exact figure. Worries about an increase in COVID-19 insurance claims have risen amid a surge in local cases, particularly in the local equity market as stocks of financial companies with large insurance assets have come under pressure due to expectations of heavy financial burdens, dealers said. Democratic Progressive Party Legislator Chiang Yung-chang (江永昌) said that based on his estimates, if the COVID-19 confirmation rate rises to 20 percent among an anticipated 8 million insurance policies, total claims could reach NT$100 billion, putting more financial pressure on the local insurance industry. Chiang said that the government should help non-life insurance firms manage the problem by providing financial relief with funds from the national insurance guaranty fund, but Huang dismissed the proposal. He said that the commission would encourage insurance firms to raise their capital size by having shareholders contribute more toward financial restructuring. The commission was not inclined to
Interest rates for new loans at the nation’s five major state-run banks last month rose 0.128 percentage points to 1.421 percent, as lenders increased borrowing costs nearly across the board in response to the central bank in March raising interest rates 25 basis points, the monetary policymaker said yesterday. The average lending rate rose to 1.557 percent, up 0.206 percentage points, after stripping interest rates for US Treasury notes, the central bank said, after comparing data at Bank of Taiwan (臺灣銀行), Land Bank of Taiwan (土地銀行), Taiwan Cooperative Bank (合作金庫銀行), Hua Nan Commercial Bank (華南銀行) and First Commercial Bank (第一銀行). However, loan demand cooled as companies and people became more cautious due to monetary tightening, soaring COVID-19 infections and global economic uncertainty, the central bank said. Interest rates for new mortgages rose 0.183 percentage points, but volume fell by NT$12 billion (US$405.13 million), central bank data showed. The bank attributed the retreat to cautious sentiment induced by four waves of credit controls, interest rate hikes and rampant COVID-19 infections. Buying interest cooled somewhat this month, much as it did during a level 3 COVID-19 alert last year, the central bank said, adding that more observation is necessary to determine if it was just a transient phenomenon or an indicator of a market turnaround. People with real demand might refrain from searching for real estate to avoid possible COVID-19 infection, but would come out once the outbreak stabilizes, the central bank said. Interest rates for consumer loans added 0.085 percentage points with loan demand gaining momentum, thanks to an increase in student loans, the central bank said, adding that student loans usually peak in April and May.
President Chain Store Corp’s (統一超商) 7-Eleven convenience store chain yesterday launched private work spaces in Taoyuan to cater to people seeking an alternative to working from home amid the COVID-19 pandemic. The spaces, which can be rented by the hour, are on the second floor of its Ching Hang branch near the Taoyuan high-speed railway station, President Chain Store said in a statement. The store has 14 rooms, 11 of which are can be used by one person at a rate of NT$100 per hour, it said. Two rooms can accommodate two people and cost NT$180 per hour, while one room is designed for four people and costs NT$300 per hour, it added. Each compartment has Wi-Fi, a desk and outlets to charge personal electronics, and the spaces are clearly partitioned to ensure privacy, the statement said. The new offering reflects the company’s interest in tapping into the space sharing business as working remotely becomes a new norm, it said. President Chain Store said it currently has more than 6,000 7-Eleven stores in Taiwan.
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