Trade War Cited as TI Reports Sales Decline
  Chipmaker Texas Instruments posted its first year-over-year decline in quarterly sales in more than two years amid what company executives characterized as semiconductor cyclicality and weaker demand in China.  “We believe that after 10 quarters of year-on-year growth, the weakness we are seeing is primarily due to the semiconductor cycle,” said Rafael Lizardi, TI’s chief financial officer, in a post-earnings conference call with analysts. “In addition, the macroenvironment — including uncertainty caused by trade tensions — could impact the depth and duration of this cycle.”  Dave Pahl, vice president and head of investor relations, said that demand in China was weaker than in other regions of the world. “We are seeing signs from our customers and the channel that this weakness is primarily from increased caution due to trade tensions,” Pahl said. “We assume that this weakness is a combination of lower local end demand, as well as reduced exports, but we do not have visibility to distinguish between the two.”  Trade tensions between the U.S. and China have been escalating for over a year, with each country imposing tariffs on products exported by the other beginning last March. However, prior to TI’s quarterly report Wednesday, chip companies have generally not reported any major effects of the trade war.  TI (Dallas) reported sales of $3.72 billion for the fourth quarter of 2018, down 1% compared to the fourth quarter of 2017. The company reported a net income for the quarter of $1.24 billion, up 260% from the fourth quarter of 2017, when non-cash charges related to tax law changes adversely affected TI’s profit.  Fourth-quarter sales came in slightly below consensus analysts’ expectations of $3.75 billion. Earnings per share of $1.27 exceeded consensus analysts’ expectations of $1.24 per share.  For the full-year 2018, TI reported sales of $15.8 billion, up 5% compared to 2017. The company reported a net income for the year of $5.6 billion, up 51% compared to 2017.  TI said that it expects sales for the first quarter of this year to be between $3.34 billion and $3.62 billion, in line with analysts’ expectations.
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Release time:2019-01-25 00:00 reading:4163 Continue reading>>
Apple's China struggles highlight US companies' <span style='color:red'>trade war</span> vulnerabilities
Apple — one of the world's most valuable public companies by market capitalization and a bellwether for the technology sector — slashed its revenue guidance on Wednesday, highlighting just how vulnerable large American companies are to the ongoing U.S.-Chinatrade war.Apple CEO Tim Cook told CNBC's Josh Lipton that the trade dispute between the world's two largest economies is exacerbating economic issues in China, which is an important source of revenue for the company.Other companies could face similar problems, according to experts."Weakening iPhone sales in China highlight the vulnerability of many U.S. multinationals to the U.S.-China trade war, both due the exposure of their manufacturing supply chains to China and because of the growing importance of China as a key consumer market for many U.S. products," said Rajiv Biswas, Asia Pacific chief economist at IHS Markit.Although data showed China's economy holding up for much of 2018, it now appears to be slowing as production metrics and export orders fall amid the country's dispute with the U.S., its largest trading partner.The fallout from a Chinese economic slowdown is likely to extend to other sectors like consumer spending — potentially hitting American companies that are doing business in Asia's largest economy."The U.S. is not the ultimate and unequivocal consumer with powers to dictate U.S.-China trade terms; given ... the undeniably large Chinese market with an aspirational and savvy middle class," said Vishnu Varathan, head of economics and strategy at Mizuho Bank."As such, U.S.-China trade disputes will be bumpy given the gap between U.S. President Donald Trump's perceived sense of leverage and a much more modest reality," Varathan told CNBC.Washington and Beijing agreed in early December to pause tariff escalations, but headlines about the ongoing negotiations have continued to send jitters through the market. Prior to that agreement, China and the U.S. had gone back and forth threatening to implement levies on billions of dollars worth of imports.While high profile, Apple's status in China is unlikely to be a bargaining chip in the trade negotiations, said Dan Wang, analyst at the Economist Intelligence Unit. "It's not a core technolo(gy) that both countries want," she said.However, if the trade dispute escalates, Apple products such as the iPhone may be subjected to higher tariffs imposed by both sides.The "iPhone's vulnerability to the US-China trade war serves as a red flag warning of the importance of concluding a U.S.-China trade deal in early 2019 to end the bilateral trade dispute and remove market fears about further escalation of the trade war," said IHS' Biswas.After all, in the case of smartphones, the Chinese burgeoning consumer class has a plethora of iPhone alternatives to choose from — especially if a trade war with the U.S. sparks anti-American sentiments that extend to products."An antagonistic U.S. may only tip the balance in favor of Chinese consumers adopting home-made devices rather than products like Apple," said Varathan.Louis Kuijs, head of Asia Economics at Oxford Economics, echoed that sentiment, telling CNBC that "this whole trade conflict between the U.S. and China is also affecting a little bit the choices that Chinese people make when they buy phones at the moment."
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Release time:2019-01-07 00:00 reading:1165 Continue reading>>
This timeline shows how the US-China <span style='color:red'>trade war</span> led to the latest round of talks in Beijing
The Trump administration and the Chinese government restart trade talks Monday as they scramble to strike a new deal before a March 2 deadline.Washington and Beijing hope to stop a potentially ruinous trade war as concerns grow about China's economy and its effect on American companies. The U.S. delegation to the discussions, slated for Monday and Tuesday in Beijing, will include officials from the Office of the U.S. Trade Representative, along with representatives of the Agriculture, Energy, Commerce and Treasury Departments.The U.S. has already put tariffs on $250 billion in Chinese goods — and has threatened duties on double that value of products. Beijing has responded with tariffs on $110 billion in U.S. goods targeting politically important industries such as agriculture.After a December meeting between President Donald Trump and Chinese President Xi Jinping, the leaders of the world's two largest economies agreed to a temporary truce while they sought an agreement within three months. Trump said he would not carry out a planned increase in the tariff rate on $200 billion in goods to 25 percent from 10 percent. The March deadline is based on the meeting between the two leaders and could easily slip.Trump, who campaigned in 2016 on cracking down on what he called Chinese trade abuses, has a specific set of demands for the talks. He wants to address alleged Chinese theft of intellectual property, forced technology transfers, ownership of American companies in China, and tariffs and nontariff barriers, among other issues.The White House has shown optimism. But Washington and Beijing appear to have a difficult task in striking a concrete trade agreement even as Trump seeks a political win on one of his signature issues.
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Release time:2019-01-07 00:00 reading:1142 Continue reading>>
MIC: USA Trade War to Impact Taiwan’s Annual Growth in 2019
The Market Intelligence & Consulting Institute (MIC) stated that the trade war between the United States and China has already become a protracted conflict, and amid the influence of factors of uncertainty, the economic inertia will slow down for Taiwan’s major trading partners, including the USA, the EU, Japan, South Korea, and Hong Kong. This will be a drag on the global economy and will impact Taiwan’s annual growth next year.Senior industry consultant Chen Zi-ang pointed out that from the results of international forecasting agency observations, the estimated values for Taiwan’s economic growth next year will be worse than those of 2018. Furthermore, an early response will be required in case Taiwan’s economic growth rate is faced with a gross margin crisis. Regarding China’s and the United States’ 90 days of recess in entering into negotiations, it still remains to be seen whether or not the deal will break down and the US restores 25% tariff measures, which will inevitably affect Taiwan's ICT industry.Institute for Information Industry (III) MRC estimates that the most probable development situation will be a protracted war and that the conflicts will not be solved in the short term. Although not every country will be directly impacted, overall international trade activity may slow down as a result, and there will be additional factors of uncertainty.Institute for Information Industry (III) MRC observed that the most recent situation in the trade war between the United States and China is impacting a portion of Taiwan’s telecommunications industry with one Taiwanese manufacturer after another beginning to adopt countermeasures. Some items of semiconductors, information products, and the netcon industry have also been affected, including logic in semiconductors, analog, and memory wafer semi-finished products and modules. Meanwhile, information products such as motherboards, desktop computers, and computer peripherals have been impacted along with broadband terminals and switch and set-top boxes in the communications industry.Two types of response measures are generally being adopted by the most influential information product related enterprises. The first is to transfer their production locations, and Vietnam, Mexico, the Philippines, and even Taiwan are options which businesses are evaluating. The other response is to adjust pricing, and currently some brands have raised prices by 5% to 10%.
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Release time:2018-12-25 00:00 reading:919 Continue reading>>
China's Xi is about to deliver a speech that could have major consequences for the <span style='color:red'>trade war</span>
Chinese President Xi Jinping is set to signal on Tuesday whether his idea of progress aligns with the West's increasingly vocal demands for less state control. That could have significant consequences for whether the U.S. reaches a trade deal with China by the end of its 90-day tariff ceasefire.Xi is scheduled to address his nation at 10 a.m. in Beijing (9 p.m. ET Monday) on the 40th anniversary of China's "reform and opening up."Dec. 18 commemorates how former Chinese leader Deng Xiaoping spearheaded the restructuring of the economy in 1978, paving the way for individual ownership in many industries and allowing foreign companies some access. Many credit the policy change for helping lift hundreds of millions out of poverty and turning China into an economic powerhouse that now ranks second only to the United States.However, many in the West say China did not achieve its success without stealing intellectual property and undermining global market forces with state support. Critics add that Beijing has benefited from joining the World Trade Organization in 2001 but has not followed commitments to reduce government control. After Xi assumed power in 2012, Beijing's initial policy was more market-oriented. But, in recent years, the direction has reversed and, as of this fall, reform is not moving forward in eight of 10 areas tracked by The China Dashboard, a joint project between the Asia Society Policy Institute and the Rhodium Group."China's private sector is shrinking for the first time in two decades — an extraordinary development contrary to the hopes seeded by the 2013 economic reform objectives and decades of talk about withdrawing the state from the marketplace," the Dashboard said in its Fall 2018 report.This year, Xi abolished the presidential term limit for his one-party-led country. The clause "Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era" was also added to the Chinese constitution, following mentions of former Chairman Mao Zedong's and Deng's contributions.Meanwhile, the U.S. under President Donald Trump is stepping up pressure on China with tariffs on the bulk of the country's exports to America. Beijing retaliated with duties of its own, and the escalating trade tensions between the world's two largest economies have roiled global markets. Trump and Xi reached a temporary ceasefire earlier this month with the U.S., agreeing not to increase tariffs if the two countries can reach some resolution on issues such as forced technology transfer within 90 days.However, differing accounts of the temporary deal by Chinese state media and the White House hint at potential challenges in reaching an agreement. This month's arrest of Meng Wanzhou, chief financial officer of Chinese tech giant Huawei, in Canada for alleged violation of U.S. sanctions has only increased tensions. Adding to geopolitical concerns is China's detainment of two Canadians in the last week.China's leader may save the biggest pronouncements for negotiations with the U.S. on trade. Still, some hope the pressure from the West will push Xi to speed up restructuring of the economy and his remarks on Tuesday will be watched for signs of willingness to see "reform and opening up" as continued implementation of market-oriented policies. But if Xi chooses not to, he is likely setting China on a course that runs counter to an increasingly oppositional U.S., highlighted by Vice President Mike Pence's speech in October.As The China Dashboard put it: "The United States is closing the door to the prospect of compromise with China over economic practices and henceforth insisting on a decisive return to the earlier spirit of reform and opening as it was understood internationally.“
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Release time:2018-12-18 00:00 reading:1091 Continue reading>>
Trump's <span style='color:red'>trade war</span> is forcing Beijing to retreat from its own anti-debt battle
Just as China started to come to grips with the scale of its massive debt accumulation, the impact of the trade war with the U.S. is forcing a retreat.One expert said that could prove "disastrous" for the country's economy.Years of big-ticket investment projects helped spur double-digit growth in China's gross domestic product, sending the country into position as the world's second-largest economy — trailing only the United States.The price tag, however, was a mountain of debt that needed to be drawn down as authorities refashioned growth to a more sustainable model. The plan has been to base the more mature economy on the increasing spending power of China's rising consumer class rather than old-fashioned investments in infrastructure.But the trade war is denting China's economic growth and forcing a rethink in debt reduction — known as deleveraging — as authorities look for ways to juice the economy to make up for hits resulting from U.S. President Donald Trump's tariffs on Chinese exports.Economists increasingly see future tariffs as likely to apply to all shipments from China to the United States, meaning Beijing is set to even further loosen financial taps.That's already been seen in the form of cuts to reserve requirement ratios for banks, which set the amount of funds they must keep on hand. The recent moves mean banks have more money to lend out, stimulating the economy with more debt.Li-Gang Liu, chief economist for China at Citi, said that a major stimulus announced last month by Guangdong Province, China's export center, that includes tax, land and utilities measures, is a prime example of the new trend in the country."Such kind of policy suggests that going forward China's deleveraging has more or less halted," Liu said on CNBC's "Squawk Box" on Wednesday. "We will see more fiscal and monetary stimulus ahead."'Could be disastrous'A Citi report on Monday estimated that the deleveraging pause will increase China's debt-to-GDP ratio by 12.3 percentage points to 274.5 percent by the end of this year, reversing a small decline in 2017."The markets are right, in our view, to feel more concerned about the sustainability of China's debt and the increased financial risks," Citi said.Andrew Collier, managing director at Orient Capital Research in Hong Kong, said that there's likely to be "leakage" in China's debt economy — meaning that those who need credit will find a way to get it through the shadow banking system."So I'm not optimistic that there will be significant deleveraging in 2019 and that means that the existing debt level is likely to maintain at the current levels or even rise, which could be disastrous," Collier said at a conference on Oct. 10."At some point you're going to have a defaulting situation in different parts of the system," he said.Collier raised the possibility of municipal government defaults, which he described as "more or less unheard of in China."Ray Heung, senior vice president in the Financial Institutions Group at Moody's Investors Service, said the Chinese government will continue to support the banking system, focusing on larger banks — but attending to smaller ones that have a relationship with a local government or play a social role."We do think that one of the overriding factors is actua
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Release time:2018-10-22 00:00 reading:1288 Continue reading>>
China's central bank still has plenty of tools to counter detrimental effects of <span style='color:red'>trade war</span>, says governor
China's central bank still has plenty of tools that it can use to counter the detrimental effects of a trade war, its governor, Yi Gang, said on Sunday.The Asian economic giant is in the center of a tariff fight with the U.S. The world's two largest economies have imposed tit-for-tat tariffs on each other's products, which have made investors nervous and is seen as a major risk in derailing the global economy."I think the downside risks from trade tensions are significant," Yi said at the International Banking Seminar, which was organized on the sidelines of the annual meetings of the International Monetary Fund and the World Bank in Bali, Indonesia."We still have plenty of monetary instruments in terms of interest rate policy, in terms of required reserve ratio. We have plenty of room for adjustment, in case we need it," he said, adding that China still wants a "constructive solution" to the ongoing trade frictions.Yi's comments came just days after the IMF downgraded global growth forecasts for this year and next year to 3.7 percent, citing ongoing trade tensions that could hurt confidence. China's economy is expected to grow 6.6 percent this year — maintaining an earlier forecast — but slashed the country's 2019 growth estimate by 0.2 percentage points to 6.2 percent.The IMF also said that at its worst, the tariff fight could knock 1.6 percentage points off China's economic growth over two years, although it added that it expects much of that impact to be offset by the Chinese government's policies to stimulate the economy.Yi said he largely agrees with the IMF's assessment on how an escalating trade war could impact the global economy. But he said China is on track to meet its growth target of 6.5 percent this year and "maybe a little bit more."'No ease, no tight'The People's Bank of China has on four occasions this year cut the amount of reserves that banks must hold, unlocking more cash into the economy so that businesses and households could borrow more money to spend.Many investors and economists — such as UBS and Nomura — have interpreted those moves as China's signal to ease monetary conditions. But Yi on Sunday maintained that China's monetary policy stance is still prudent and neutral.A neutral monetary policy means the central bank is neither trying to slow nor stimulate the economy. When policy is said to be accommodative, it means the central bank is making it cheaper for businesses and households to borrow in hopes that they will increase spending and lift the economy.The governor pointed to the growth of M2 money supply, which has grown at a slower pace this year to more align with China's economic expansion. M2 measures the amount of money in the economy that includes cash and other assets such as mutual funds and time deposits. In the last few months, that indicator has grown by around 8 percent year-over-year, down from previous year's double digits level and coming closer to growth in the overall economy, Yi said.At the same time, the growth in China's total social financing — which measures credit in the economy such as loans and bonds — have maintained in a "reasonable range," he added."So if you look at the broad money, if you look at the interest rate and you look at monetary conditions, basically you can have the conclusion that we have a prudent and neutral stance monetary policy," Yi said
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Release time:2018-10-18 00:00 reading:1035 Continue reading>>
Trade war could cut China's growth by nearly 2 percentage points over two years: IMF
At its worst, the ongoing trade tensions could knock 1.6 percentage points off China's economic growth over the first two years, according to an analysis by the International Monetary Fund.The assessment took into account all current and proposed tariffs on Chinese goods that enter the U.S., as well as knock-on effects the trade tensions have on investor confidence and financial markets. But much of that impact is expected to be offset by the Chinese government's policies to stimulate the economy, noted Changyong Rhee, director of the IMF's Asia and Pacific Department.The analysis was published on Friday in the IMF's Regional Economic Outlook report focusing on the Asia Pacific region.Rhee told reporters that direct economic impact from the tariff fight between the U.S. and China is actually "quite small." What's more detrimental is the hit to investor confidence, which has rattled financial markets and is likely to last for a while, he said."This is one of the reasons why we feel that headwinds may last longer," Rhee said. "I don't know what will be the end ... I think the lessons we have taken is how much the global financial markets and real economy are well integrated, no one can be free from such shocks.""In the end, there will be no winner from the global trade war," he said in Bali, Indonesia where the IMF and the World Bank are holding their annual meetings.The U.S. has implemented additional tariffs on around $250 billion worth of Chinese goods that enters its borders, and China has retaliated with extra levies on roughly $110 billion of imports from the U.S.President Donald Trump's administration has said that it would target another $267 billion of Chinese products, which is nearly all of its remaining imports from the Asian giant.The tit-for-tat tariffs between the world's two largest economies has hit investor confidence. This week, renewed worries about the global economy — weighed down by trade tensions — led to a sell-off in global markets. Chinese stocks have been among the worst hit, having declined more than 20 percent this year.The IMF earlier this week downgraded growth forecasts for the global economy for 2018 and 2019, and China hasn't been spared.The world's second-largest economy is expected to grow at 6.6 percent this year — maintaining an earlier forecast, but its estimated growth next year has been lowered by 0.2 percentage points to 6.2 percent, according to the report. Without the recent steps taken by Chinese authorities, the Asian giant's growth prospects could be even lower amid the escalating trade tensions with the U.S., the IMF said in the report.China's central bank has cut the amount of reserves held by Chinese banks four times this year, which have helped to stimulate economic activity. But doing so may delay China's structural reforms, the IMF noted in the report."Macro policies in China have been focused on addressing the economy's significant and longstanding financial vulnerabilities, but the shift toward stabilizing growth may mean slower progress on deleveraging and thus heightened medium-term risks for China and the entire region," the report said.
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Release time:2018-10-16 00:00 reading:987 Continue reading>>
U.S. LED Light Bulb Prices Rose in September due to Trade War
Terri Wang, LEDinside analyst, points out that the scales of the price drop of high- and mid-power products varied in September, with those of the 0.2 W and 0.5 W 2835 LEDs reaching 2% and 3% on average, respectively. Meanwhile, prices of high power ceramic-substrate LEDs declined by 2-3%, as their shares in the markets of architectural, outdoor, and commercial lighting have been gradually taken over by 5050 LEDs. To further expand their market share, suppliers have been dedicated to increasing their products' added value and upgrading their performance. CREE, for example, has released the XLamp XP-G3 S Line LED suitable for connected lighting, and featuring more reliable cycling and dimming cycling performance, higher sulfur-resistance, and higher light output and luminescent efficiency than the standard XP-G3.On the automotive market, higher luminosity of high/low beams increases the scope of visibility and alleviates the problem of glare. ADB headlights have been introduced to the medium-tier auto market in 2018, such as the lateral eight-pixel solution which has been employed by Chinese auto brands.LED bulb prices experience slight growth on the global market; US prices to be impacted the most due to trade warIn September, the average retail price of 40W equivalent LED light bulbs rose by 1.2% to US$6.2, while that of 60W equivalent LED light bulbs inched up by 0.7% to US$7.3.Affected by trade war, branded LED light bulb suppliers in the U.S. have begun to raise prices to pass increased costs from higher tariffs to consumers, as a result of which the average retail prices of 40W and 60W equivalent LED light bulbs rose by 4.3% and 3.6%, respectively, in September. Another reason for the price hike was the return of higher-priced smart lighting products to the market. In Germany, the ban imposed on halogen light bulbs by the EU starting from September 1st of this year has spurred demands for LED light bulbs. This has caused the average retail prices for Germany’s 40W and 60W equivalent LED light bulbs to advance by 3.8% and 3.1%, respectively. The LED light bulb prices from the major brands, such as Osram and Philips, all rose during this period.As for the other markets, the prices of 40W and 60W equivalent LED light bulbs in Japan and China all dropped by 0.1-1.3%, while those in South Korea have remained stable. 
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Release time:2018-10-12 00:00 reading:1265 Continue reading>>
Electronics healthy but <span style='color:red'>trade war</span>s loom
Production of electronic equipment is healthy, reports Semiconductor Intelligence. According to the analyst company, China, the largest electronics producer, showed three-month-average change versus a year ago (3/12) of 13.8% in August.Growth for China has been in the 12%-15% range since January 2017, picking up from the 8%-11% range in 2016. South Korea’s electronics production has been more volatile, but was more than 12% in June and July; while the United States has shown accelerating growth since turning negative in 2016.European Union (EU) total industrial production growth has been in the 2%-3% range from April to August, slowing from 5% earlier in the year. “Our global index of electronics production has been relatively robust in the last two years, in the 7%-9% range since January 2017,” says Semiconductor Intelligence.Electronics production change in key Asian countries has been mixed. India and Vietnam have led with way, with India’s electronics growth accelerating from 15% in 2017 to 27% year-to-date through July 2018. Vietnam has decelerated from 33% growth in 2017 to a still robust 18% year-to-date.China and Thailand have maintained growth in the 12%-14% range over the last year and a half. Semiconductor Intelligence believes India and Vietnam will continue to outperform other Asian countries because of their low labour rates and improving infrastructures.Total electronics exports in 2017 were $1.8 trillion while imports were $2.1 trillion, according to the World Trade Organization (WTO). China continued as the largest electronics exporting country in 2017 at $592 billion, says Semiconductor Intelligence. However, the total other Asian countries became larger than China at $627 billion. China was also the largest importing country with $408 billion in 2017. The U.S. was second at $336 billion.The U.S. and China are currently in a trade war, with each country imposing tariffs on imports. The US is also renegotiating the North American Free Trade Agreement (NAFTA). A preliminary agreement was reached with Mexico and discussions are on-going with Canada.According to the US Census Bureau, the majority of US electronics imports in 2017 came from China at 59%. Mexico was the second largest source of imports at 18%. Most of the rest was from other Asian countries at 19%.“Electronics and semiconductors are truly global industries. Free trade is necessary to keep these industries running efficiently. Hopefully the current trade issues can be resolved in a reasonable time,” Semiconductor Intelligence concludes.
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Release time:2018-09-29 00:00 reading:1037 Continue reading>>

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