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.
Semiconductor shares in China surged yesterday after Reuters reported the US had ordered chipmaking giant Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to halt shipments of advanced chips to Chinese customers, which investors believe could accelerate Beijing’s self-reliance efforts. TSMC yesterday started to suspend shipments of certain sophisticated chips to some Chinese clients after receiving a letter from the US Department of Commerce imposing export restrictions on those products, Reuters reported on Sunday, citing an unnamed source. The US imposed export restrictions on TSMC’s 7-nanometer or more advanced designs, Reuters reported. Investors figured that would encourage authorities to support China’s industry and bought shares
FLEXIBLE: Taiwan can develop its own ground station equipment, and has highly competitive manufacturers and suppliers with diversified production, the MOEA said The Ministry of Economic Affairs (MOEA) yesterday disputed reports that suppliers to US-based Space Exploration Technologies Corp (SpaceX) had been asked to move production out of Taiwan. Reuters had reported on Tuesday last week that Elon Musk-owned SpaceX had asked their manufacturers to produce outside of Taiwan given geopolitical risks and that at least one Taiwanese supplier had been pushed to relocate production to Vietnam. SpaceX’s requests place a renewed focus on the contentious relationship Musk has had with Taiwan, especially after he said last year that Taiwan is an “integral part” of China, sparking sharp criticism from Taiwanese authorities. The ministry said
US President Joe Biden’s administration is racing to complete CHIPS and Science Act agreements with companies such as Intel Corp and Samsung Electronics Co, aiming to shore up one of its signature initiatives before US president-elect Donald Trump enters the White House. The US Department of Commerce has allocated more than 90 percent of the US$39 billion in grants under the act, a landmark law enacted in 2022 designed to rebuild the domestic chip industry. However, the agency has only announced one binding agreement so far. The next two months would prove critical for more than 20 companies still in the process
CHANGING JAPAN: Nvidia-powered AI services over cellular networks ‘will result in an artificial intelligence grid that runs across Japan,’ Nvidia’s Jensen Huang said Softbank Group Corp would be the first to build a supercomputer with chips using Nvidia Corp’s new Blackwell design, a demonstration of the Japanese company’s ambitions to catch up on artificial intelligence (AI). The group’s telecom unit, Softbank Corp, plans to build Japan’s most powerful AI supercomputer to support local services, it said. That computer would be based on Nvidia’s DGX B200 product, which combines computer processors with so-called AI accelerator chips. A follow-up effort will feature Grace Blackwell, a more advanced version, the company said. The announcement indicates that Softbank Group, which until early 2019 owned 4.9 percent of Nvidia, has secured a
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