INDUSTRY
German production falls
German industrial production fell more than expected in March, partly due to a weak performance by the automotive sector, spurring recession fears in Europe’s largest economy. Production decreased by 3.4 percent on the previous month following a slightly revised increase of 2.1 percent in February, the Federal Statistical Office said yesterday. “After a buoyant performance by industrial production at the beginning of the year, there was an unexpectedly sharp decline in March,” the Federal Ministry for Economic Affairs and Climate Action said. The manufacture of motor vehicles and automotive parts fell by 6.5 percent on the previous month. Production in machinery and equipment fell by 3.4 percent, and output in the construction sector decreased by 4.6 percent from a month earlier. In the first quarter, production was 2.5 percent higher than in the final quarter of last year, the statistics office said.
DEBT
Chinese ratio hits 279.7%
The Chinese economy’s debt ratio reached a record high in the first quarter of this year, with bank loans to companies surging as the nation emerged from its “zero COVID-19”policy. The macro leverage ratio — or total debt as a percentage of GDP — soared to 279.7 percent in the first quarter, Bank of China and National Bureau of Statistics data compiled by Bloomberg showed. That was an increase of 7.7 percentage points from the previous quarter, the biggest jump in three years. The debt ratio held by non-financial corporates rose 5.8 percentage points. Leverage ratios for the household and government sectors were each up by about 1 percentage point. The data does not include bank loans to local government financing vehicles.
MINING
Plant gets rules extension
Malaysia granted a six-month extension to Australian miner Lynas Rare Earths Ltd to get its rare earth plant in line with environmental requirements. The deadline for the plant to be radiation-free has been extended to January next year, Science, Technology and Innovation Minister Chang Lih Kang (鄭立慷) said. The Lynas rare earths refinery in Malaysia is the largest outside China, but has been dogged by environmental concerns and community opposition. The government in February issued a new three-year license to Lynas’s plant in the state of Pahang, with one of the conditions requiring that “cracking and leaching” of lanthanide concentrate move to an area outside of Malaysia by July 1. The business unit generates radioactive waste, authorities said.
FINANCE
Venture announces funds
Mitsubishi UFJ Financial Group Inc plans to start two debt funds alongside Liquidity Capital with as much as US$400 million to provide financing for middle and later-stage start-ups in Japan and Europe. The funds would be established under Mars Growth Capital Pte, a joint venture between Japan’s largest bank and the Israeli tech lender, the companies said in a statement. The Japan fund would have a maximum of ￥20 billion (US$14.8 million) and the European fund up to US$250 million, they said. The move is the latest by Japan’s biggest banks to ramp up start-up finance, where they increasingly see potential for new business. Mars Growth Capital, based in Singapore, launched in 2021 and has been providing debt finance to start-ups in Asia and elsewhere.
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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