First, he came for the toilet paper factory. Then, late on Friday, Venezuela’s President Nicolás Maduro seized a national chain of electronic stores as part of his battle against galloping inflation and rampant shortages he blames on an “economic war” coming from right-wing contrarians.
Maduro sent soldiers to “occupy” Daka, (similar to Best Buy in the US), accusing them of unjustified price hikes and said it will force them to sell everything at “fair prices”.
Philippine electronics exports, which account for almost half the country’s overseas sales, surged by a surprising 11.2 per cent from a year ago in July to $1.9bn, in what could be the start of a rebound from a plunge of almost a fifth in the first half of the year.
India has succumbed to pressure from governments, multinationals and industry bodies abroad to review its policy of boosting locally-made electronics.
It’s good news for international business. But what are the consequences for the Indian economy if demand for electronic products is increasingly served by imports?
Apple may be souring the market with its unimpressive forecasts, but not all the suppliers who rely on the US tech group for orders are suffering.
Shares in Largan Precision, a Taiwanese lens maker, gained 7 per cent on Friday after it reported stronger than anticipated earnings for the last quarter and, against expectations, forecast more growth ahead. Its secret? Growth of other brands has been strong enough to offset Apple. That’s a change from the days when Apple was component companies’ key driver of growth.
Electronics companies need strong nerves in the face of the industry’s inherent volatility. Analysts had expected the Philippines to see a solid gain of around 6 per cent in exports in January. In the event, Manila on Tuesday posted a 2.7 per cent decline – thanks largely to a 32 per cent plunge in electronics shipments.
The next few months should be better, given the signs of recovery in the US. But the unpredictability of the markets make life tough for the electronics groups and their suppliers.
Here’s a moment in Asian corporate history: Samsung Electronics is buying a stake in Sharp, in the first investment by a South Korean group in a big Japanese company in consumer electronics, one of Japan’s flagship industries.
The deal announced on Wednesday is too small to revive the struggling Sharp: Samsung Electronics is investing only Y10.3bn and buying just 3 per cent. But it’s a sign that the South Koreans think Sharp has a future. At the very least, they want to secure a key source of LCD panels.
It’s not just the Japanese carmakers that have suffered from their country’s territorial dispute with China.
Canon, the camera and office equipment manufacturer, reported on Wednesday that its sales in China fell by more than 30 per cent last year due, as the company put it, to a “cooling off of demand in China during the latter half of the year”.
The Beijing-Tokyo spat compounded difficulties caused by weak economic growth in Europe, consumers switching from cameras to smartphones, and the strength of the yen. The group’s results – and its 2013 forecast – fell well short of analysts’ forecasts.
Some more good news for the global economy. After Friday’s fall in US unemployment, another key indicator – albeit a far smaller one – swung in positive territory: Taiwanese exports jumped back into double digit growth in September.
The 10.4 per cent increase in year on year overseas shipments was led by electronics, and follows a 4.2 per cent drop in the previous month. Analysts had been expecting an increase, but only around the 3 per cent range.
The economic gloom seeping out of western Europe is creating increasing difficulties for the small and open economies of central Europe – with both Hungary and the Czech Republic now in recession.
However, Slovakia, the smallest and most open of the three countries, is powering ahead, notching up 2.7 per cent annual GDP growth in the second quarter, thanks largely to the European motor industry.
Taiwan’s HTC can’t get a break.
Sales are falling, low-cost mainland competitor Xiaomi just released a phone whose specs are competitive with a high-end HTC model, and on Monday the company announced a $40m write off on its stake in an internet gaming company. What’s a company to do?
Taiwan’s exports accelerated their downward slide last month as worried consumers across the world hold off on upgrading or buying new electronics.
Exports fell 11.6 per cent in July compared with last year, after having fallen 3.2 per cent in June. Imports, many of which are of products used by local manufacturers, also fell.
In financial terms, a $300m acquisition is no big deal for Samsung Electronics, given its $150bn market capitalisation. But in terms of technology, strategy and history, the South Korean group’s acquisition of the mobile business of UK-based CSR matters a lot.
As the company’s legal battles with Apple highlight, technology is crucial to Samsung’s future, as it moves from technological follower to technological leader in global markets. As the group itself has acknowledged, this applies in both hardware and software.
For those who moan endlessly about unsightly cables running out of the TV or DVD player, help may at last be at hand. Sweden’s Ikea and China’s TCL Multimedia have come up with an answer, furniture with built-in appliances.
South Korean chipmakers headed by Samsung Electronics could be forgiven for rubbing their hands with glee at the sight of the financial troubles at their Japanese rival Elpida Memory.
With Elpida’s survival in doubt, shares of Samsung hit a record high of Won1.18m on heavy foreign buying on Friday while second-ranked Hynix Semiconductor was trading at Won28,850, near a nine-month high. But what might be good news for the producers won’t be welcome for their customers.
LG Electronics, the world’s third-largest mobile phone maker, is finally seeing light at the end of the tunnel. Its shares have risen nearly 20 per cent so far this year on its improved earnings outlook after the company’s handset business reported a small profit.
The company’s (A066570:KSE) shares closed up 2.41 per cent at Won89,100 on Wednesday, near an eight-month high of Won90,700 touched last Friday, as investors cheer LG’s turnaround. LG swung to an operating profit of Won23bn in the fourth quarter from a Won246bn loss a year earlier, helped by a turnaround in its handset business.