GERMANY
GDP growth flat in Q1
Europe’s largest economy narrowly dodged a recession in the first quarter of this year, but growth stagnated contrary to expectations for a slight rebound, preliminary data showed yesterday. GDP growth was flat in the quarter, federal statistics agency Destatis said. The industrial powerhouse, which had long been heavily reliant on Russian energy, was hit hard after Moscow’s invasion of Ukraine sent gas prices surging. Analysts and the government predicted for months that surging prices, particularly of energy, would push the economy into a sharp winter recession, but expectations changed in the past few weeks as the vast industrial sector rebounded. While the economy appears to have avoided the worst, the first-quarter reading was below expectations from analysts surveyed by financial data firm FactSet for an expansion of 0.2 percent.
TECHNOLOGY
Huawei profit plummets
Huawei Technologies Co’s (華為) profit plunged 46 percent in the first quarter of this year, while revenue barely grew, as the Chinese telecom equipment maker spent heavily on research and development (R&D) to try to get around US sanctions. Net income dived to 3 billion yuan (US$433.5 million). That followed Huawei’s first annual profit decline in more than a decade, as years of US sanctions obliterated a once-thriving smartphone arm that competed with Apple Inc and Samsung Electronics Co. Huawei executives pledged to keep its R&D investment high to stay competitive in the market. The company earlier disclosed that last year’s research spending was 161.5 billion yuan, or about one-quarter of its annual sales.
ELECTRONICS
Sony offers cautious outlook
Sony Group Corp offered a conservative profit outlook for this fiscal year, signaling caution about the effects of a global consumer spending slump on its entertainment businesses. The Tokyo-based firm said it expects operating income of ¥1.17 trillion (US$8.6 billion) in the year ending March next year, below average analyst estimates of ¥1.27 trillion. This was largely down to its PlayStation division, for which Sony’s guidance fell short of consensus and the firm said it expects fewer sales of PlayStation Studios games this year. Sales of its flagship PlayStation 5 console reached 6.3 million units last quarter, more than tripling the supply-constrained numbers from the same period last year and showing Sony is finally able to distribute the hardware at scale. However, game sales fell to 68 million units from 70.5 million in the same period a year earlier. The firm reported operating profit of ¥128.5 billion.
INTERNET
Zuckerberg’s net worth soars
Meta Platforms Inc CEO Mark Zuckerberg’s wealth soared by more than US$10 billion on Thursday, his third-biggest jump on record, after the Facebook parent surprised investors with robust first-quarter sales. Meta shares rose 14 percent after the earnings report, lifting Zuckerberg’s fortune to US$87.3 billion and boosting him up a notch on the Bloomberg Billionaires Index to 12th place. It was the highest Zuckerberg’s wealth has been in more than a year. Thursday’s move reversed the wealth destruction Zuckerberg experienced last year, when his net worth fell 57 percent, or US$71 billion, after a costly pivot to the metaverse and an industry-wide slump stirred concern over the company’s growth prospects. Zuckerberg used Thursday’s results to burnish his case for pressing on with investments in artificial intelligence and virtual reality.
Hon Hai Precision Industry Co (鴻海精密) yesterday said that its research institute has launched its first advanced artificial intelligence (AI) large language model (LLM) using traditional Chinese, with technology assistance from Nvidia Corp. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), said the LLM, FoxBrain, is expected to improve its data analysis capabilities for smart manufacturing, and electric vehicle and smart city development. An LLM is a type of AI trained on vast amounts of text data and uses deep learning techniques, particularly neural networks, to process and generate language. They are essential for building and improving AI-powered servers. Nvidia provided assistance
DOMESTIC SUPPLY: The probe comes as Donald Trump has called for the repeal of the US$52.7 billion CHIPS and Science Act, which the US Congress passed in 2022 The Office of the US Trade Representative is to hold a hearing tomorrow into older Chinese-made “legacy” semiconductors that could heap more US tariffs on chips from China that power everyday goods from cars to washing machines to telecoms equipment. The probe, which began during former US president Joe Biden’s tenure in December last year, aims to protect US and other semiconductor producers from China’s massive state-driven buildup of domestic chip supply. A 50 percent US tariff on Chinese semiconductors began on Jan. 1. Legacy chips use older manufacturing processes introduced more than a decade ago and are often far simpler than
STILL HOPEFUL: Delayed payment of NT$5.35 billion from an Indian server client sent its earnings plunging last year, but the firm expects a gradual pickup ahead Asustek Computer Inc (華碩), the world’s No. 5 PC vendor, yesterday reported an 87 percent slump in net profit for last year, dragged by a massive overdue payment from an Indian cloud service provider. The Indian customer has delayed payment totaling NT$5.35 billion (US$162.7 million), Asustek chief financial officer Nick Wu (吳長榮) told an online earnings conference. Asustek shipped servers to India between April and June last year. The customer told Asustek that it is launching multiple fundraising projects and expected to repay the debt in the short term, Wu said. The Indian customer accounted for less than 10 percent to Asustek’s
Gasoline and diesel prices this week are to decrease NT$0.5 and NT$1 per liter respectively as international crude prices continued to fall last week, CPC Corp, Taiwan (CPC, 台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. Effective today, gasoline prices at CPC and Formosa stations are to decrease to NT$29.2, NT$30.7 and NT$32.7 per liter for 92, 95 and 98-octane unleaded gasoline respectively, while premium diesel is to cost NT$27.9 per liter at CPC stations and NT$27.7 at Formosa pumps, the companies said in separate statements. Global crude oil prices dropped last week after the eight OPEC+ members said they would