UNITED KINGDOM
Strikes slow economy
The British economy stalled unexpectedly in February, when strikes crippled public services, but is still likely to perform better than the Bank of England has forecast. GDP was unchanged from January instead of eking out the 0.1 percent growth analysts had expected, the British Office for National Statistics said yesterday. The figure for January was revised upward to 0.4 percent. Together, the readings bring output in the UK above its pre-2020 level and suggest that the economy is unlikely to shrink in the first quarter. That further reduces the risk of a recession, but leaves the UK on track for an extended period of stagnation. Weak February figures reflect the effect of widespread strikes during the month. Services output fell 0.1 percent, hit by walkouts by teachers and civil servants.
GERMANY
Measures tame inflation
Inflation in Germany eased to 7.4 percent last month, mainly due to government measures to bring down energy prices, data showed yesterday. A downward trend was charted by the German Federal Statistical Office since annual inflation peaked at 10.4 percent in Europe’s biggest economy in October last year — revised to 8.8 percent by new methodology. The slowdown has been helped by easing energy prices as a result of European efforts to source liquefied natural gas and a huge government relief package. Berlin has committed 200 billion euros (US$220.5 billion) to help bring energy prices down until next year, including a cap on gas and electricity prices. Energy prices rose by only 3.5 percent year-on-year last month, after jumping by 19.1 percent in February and 23.1 percent in January. However, food prices rose by 22.3 percent, up from 21.8 percent in February and 20.2 percent in January.
SEMICONDUCTORS
Merck to boost US industry
The electronics subsidiary of German multinational pharmaceutical company Merck KGaA on Wednesday said it would spend US$300 million to expand its specialty gas production facility in eastern Pennsylvania in a step that state officials said would boost the area’s appeal to the fast-growing semiconductor industry. The subsidiary, EMD Electronics, said the expansion would create the world’s largest integrated specialty gas facility as part of its program to invest more than US$3.5 billion on projects by 2025, including at sites in Arizona, Texas and California. The state has pledged more than US$1 million for the expansion.
LUXURY BRANDS
China lifts LVMH sales
Chinese shoppers helped LVMH bounce back from the world’s strictest COVID-19 lockdowns and splashed out on luxury handbags and jewelry. The shares rose to a record. Organic sales at the group’s biggest unit, which sells fashion and leather goods, rose 18 percent in the first quarter, LVMH said on Wednesday. That is almost twice the gain that analysts were expecting from Europe’s most valuable company. The division’s growth in China hit a double-digit percentage, LVMH chief financial officer Jean-Jacques Guiony told analysts, adding that the company is “extremely optimistic” for China this year. Demand grew in every region in the first three months as shoppers snapped up luxury items from Christian Dior handbags to Tiffany rings. Japan saw the strongest quarterly growth, rising 34 percent on an organic basis, followed by a 24 percent uplift in Europe and a 14 percent jump in Asia outside of Japan.
The New Taiwan dollar is on the verge of overtaking the yuan as Asia’s best carry-trade target given its lower risk of interest-rate and currency volatility. A strategy of borrowing the New Taiwan dollar to invest in higher-yielding alternatives has generated the second-highest return over the past month among Asian currencies behind the yuan, based on the Sharpe ratio that measures risk-adjusted relative returns. The New Taiwan dollar may soon replace its Chinese peer as the region’s favored carry trade tool, analysts say, citing Beijing’s efforts to support the yuan that can create wild swings in borrowing costs. In contrast,
Nvidia Corp’s demand for advanced packaging from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) remains strong though the kind of technology it needs is changing, Nvidia CEO Jensen Huang (黃仁勳) said yesterday, after he was asked whether the company was cutting orders. Nvidia’s most advanced artificial intelligence (AI) chip, Blackwell, consists of multiple chips glued together using a complex chip-on-wafer-on-substrate (CoWoS) advanced packaging technology offered by TSMC, Nvidia’s main contract chipmaker. “As we move into Blackwell, we will use largely CoWoS-L. Of course, we’re still manufacturing Hopper, and Hopper will use CowoS-S. We will also transition the CoWoS-S capacity to CoWos-L,” Huang said
Nvidia Corp CEO Jensen Huang (黃仁勳) is expected to miss the inauguration of US president-elect Donald Trump on Monday, bucking a trend among high-profile US technology leaders. Huang is visiting East Asia this week, as he typically does around the time of the Lunar New Year, a person familiar with the situation said. He has never previously attended a US presidential inauguration, said the person, who asked not to be identified, because the plans have not been announced. That makes Nvidia an exception among the most valuable technology companies, most of which are sending cofounders or CEOs to the event. That includes
INDUSTRY LEADER: TSMC aims to continue outperforming the industry’s growth and makes 2025 another strong growth year, chairman and CEO C.C. Wei says Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), a major chip supplier to Nvidia Corp and Apple Inc, yesterday said it aims to grow revenue by about 25 percent this year, driven by robust demand for artificial intelligence (AI) chips. That means TSMC would continue to outpace the foundry industry’s 10 percent annual growth this year based on the chipmaker’s estimate. The chipmaker expects revenue from AI-related chips to double this year, extending a three-fold increase last year. The growth would quicken over the next five years at a compound annual growth rate of 45 percent, fueled by strong demand for the high-performance computing
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