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Business

Toyota, Honda beat profit estimates but warn of extended chip crunch

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  • Toyota has suspended production on one Guangzhou line -source
  • Honda on Aug 3 suspended production in Wuhan
  • Toyota keeps full year car sales, profit outlook
  • Honda lifts full-year guidance by 18%, cuts car sales forecast

TOKYO, Aug 4 (Reuters) – Toyota Motor Corp (7203.T) posted record quarterly earnings and Honda Motor Co (7267.T) raised its annual profit forecast on Wednesday as post-lockdown sales surge, but the pair joined other automakers in warning that the global chip shortage would persist.

A resurgence in COVID-19 cases has disrupted parts supplies and production at car companies, compounding a months-long pandemic-fuelled chip crunch. read more

The two Japanese car makers are facing production problems in China, which on Wednesday reported the most new locally transmitted COVID-19 cases since January.

Honda Executive Vice President Seiji Kuraishi told reporters that the company suspended production at its plant in Wuhan on Aug. 3 due to a COVID-19 case cluster that developed at a supplier. He added that the stoppage was not expected to last long.

Toyota has suspended production at one assembly line in Guangzhou that it operates with its Chinese joint-venture partner Guangzhou Automobile Group Co Ltd (601238.SS), a person familiar with the matter told Reuters on Wednesday.

The person, who declined to be named due to confidentiality reasons, could not say when the suspension began, how long it would last, nor which models were affected.

In Thailand too, Toyota, the world’s largest automaker by sales volumes, had to suspend production last month at three factories due to a pandemic-related parts shortage. read more

Still, the company maintained its forecast to sell 8.7 million cars in the year ending March 2022 and said sales volumes in the first quarter recovered to near 2019 levels.

Toyota shares fell as much as 2%, and closed down 0.9%, with some investors disappointed that the company had not lifted its profit guidance despite beating a first-quarter market estimate.

Honda, Japan’s No.2 automaker by sales, lowered it sales volume outlook to 4.85 million vehicles from 5 million but raised its full-year forecast after swinging to a first-quarter operating profit that was double analyst expectations. read more

“We made a downward revision of our sales volume outlook due to the COVID resurgence around the world but centred around Asia, as well as the impact from the chip shortage,” Kuraishi told reporters.

A man walks past a Toyota logo at the Tokyo Motor Show, in Tokyo, Japan October 24, 2019. REUTERS/Edgar Su/File Photo

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“Still, we decided to revise up our operating profit forecast for the current year … because we believe we can absorb those negative effects by continuing to cut costs.”

Toyota also said cost cuts were helping.

CHIP SHORTAGES

“Despite all the headwinds – from the chip shortage, to a COVID resurgence in Southeast Asia, to the slowdown in demand growth in China, as well as a sharp rise in material costs – this was a strong quarter,” said Masayuki Kubota, Rakuten Securities Inc’s chief strategist, referring to Toyota.

Toyota might revise its outlook for the year after the first half, he added.

The company’s operating profit soared to 997.49 billion yen ($9.15 billion) for the three months ended June 30 from the pandemic-hit first quarter of last year, beating an average analysts’ estimate of 752 billion yen.

Toyota has fared better than rivals through the chip crisis thanks to its much larger stockpile of chips.

The Japanese firm benefitted from a business continuity plan developed in the wake of the Fukushima earthquake in 2011 that required suppliers to stockpile chips, Reuters reported in March. read more

The global semiconductor chip shortage will cost automakers $110 billion in lost revenues this year, consulting firm AlixPartners said in May. read more

BMW (BMWG.DE) and Stellantis (STLA.MI) warned on Tuesday that the shortage will drag on into next year, hitting production and sales even as auto demand booms in markets such as the United States. read more

On Tuesday, General Motors Co (GM.N) said it will shut down several North American plants because of the shortage. read more

($1 = 109.0400 yen)

Reporting by Maki Shiraki in Tokyo and Norihiko Shirouzu in Beijing; Writing by Jamie Freed; Editing by Kirsten Donovan Muralikumar Anantharaman and Sayantani Ghosh

Our Standards: The Thomson Reuters Trust Principles.

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World

French protests call for ‘freedom’ amid government vaccine push

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PARIS, July 17 (Reuters) – More than a hundred thousand people marched across France on Saturday to protest against President Emmanuel Macron’s plans to force vaccination of health workers and require a COVID-19 free certificate to enter places such as restaurants and cinemas.

Macron this week announced sweeping measures to fight a rapid surge in coronavirus infections, which protesters say infringe the freedom of choice of those who do not want the vaccination.

The interior ministry said 137 marches took place across the country, gathering nearly 114,000 people, of which 18,000 were in Paris.

The measures had already prompted smaller demonstrations earlier this week, forcing police to use tear gas to disperse protesters.

“Everyone is sovereign in his own body. In no way does a president of the Republic have the right to decide on my individual health,” said one protester in Paris who identified herself as Chrystelle.

Marches also included “yellow vest” protesters seeking to revive the anti-government movement curbed by coronavirus lockdowns.

Visiting a centre in Anglet in southwestern France, Prime Minister Jean Castex said vaccination, which is not mandatory for the general public for now, is the only way to fight the virus.

Florian Philippot, President of French political party Les Patriotes, and Nicolas Dupont-Aignan, head of French political party Debout La France (DLF) attend a protest against the new measures announced by French President Emmanuel Macron to fight the coronavirus disease (COVID-19) outbreak, in Paris, France, July 17, 2021. REUTERS/Pascal Rossignol

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“I hear the reluctance that arises but I think that we must at all costs convince all our fellow citizens to be vaccinated, it is the best way to cope to this health crisis,” Castex said.

Despite the strength of the protests, an Ipsos-Sopra Steria poll released on Friday found more than 60% of French people agree with mandatory vaccination for health workers, as well as a requirement for a health pass in some public places.

Fast-spreading variants of the virus risk undermining economic recovery if allowed to spiral out of control, forcing some governments to rethink their COVID-19 strategies just as citizens start their summer holidays.

Earlier on Saturday Castex’s office said France would reinforce restrictions on unvaccinated travellers from a series of countries to counter a rebound in COVID-19 infections, while opening its doors to those who have received all their shots.

“The Delta variant is here, we must not hide the truth, it is more contagious than the previous ones. We must adapt and face it”, Castex told reporters in southwestern France, referring to the variant first identified in India.

After falling from more than 42,000 per day in mid-April to less than 2,000 per day in late June, the average number of new infections in France has rebounded to reach nearly 11,000 per day.

Some 55.5% of the French had had a single dose of a vaccine as of Saturday and 44.8% were fully inoculated.

Reporting by Antone Paone, Sybille de La Hamaide and Gwenaelle Barzic, Editing by David Holmes and Louise Heavens

Our Standards: The Thomson Reuters Trust Principles.

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Business

Taiwan’s Foxconn, TSMC confirm $350 mln COVID-19 vaccine deal

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Syringes are seen in front of a displayed Biontech logo in this illustration taken November 10, 2020. REUTERS/Dado Ruvic/Illustration/File Photo

TAIPEI, July 12 (Reuters) – Taiwan’s Foxconn (2317.TW) and TSMC (2330.TW) said on Monday they had reached deals to buy 10 million doses of Germany’s BioNTech SE’s (22UAy.DE) COVID-19 vaccine, putting the total cost of the highly politicised deal at around $350 million.

Taiwan’s government has tried for months to buy the vaccine directly from BioNTech and has blamed China, which claims the self-ruled island as its own territory, for nixing an agreement the two sides were due to sign earlier this year. China denies the accusations.

Last month, facing public pressure about the slow pace of Taiwan’s inoculation programme, the government agreed to allow Foxconn’s founder Terry Gou, as well as Taiwan Semiconductor Manufacturing Co (TSMC), to negotiate on its behalf for the vaccines.

BioNTech’s Chinese sales agent Shanghai Fosun Pharmaceutical Group Co Ltd (600196.SS) said on Sunday that an agreement had been signed, though no details of a delivery timeframe have been revealed yet.

Gou wrote on his Facebook page that he was “gratified” the deal had been completed, which will see Foxconn and TSMC each buy 5 million doses, to be donated to the government for distribution.

“But we can’t relax, because we will continue to work hard to push for the delivery time and quantity,” he said, adding the vaccines will come directly from Germany.

“However, this batch of vaccines delivered directly from the German factory I believe will help Taiwanese society to increase confidence and offer respite in the face of the epidemic.”

TSMC and Foxconn are major Apple Inc (AAPL.O) suppliers.

Taiwan’s government said it would comment later on Monday.

Gou said Beijing did not interfere in the talks.

“During the negotiation period after my donation was proposed, there was no guidance or interference from the Beijing authorities in the mainland on the vaccine procurement process.”

A person familiar with the negotiations said the first batch of vaccine is expected in September at the earliest, but it was not immediately clear how many doses could be delivered.

The German firm has yet to comment, and Fosun deleted an earlier statement from its WeChat account citing BioNTech Chief Executive Ugur Sahin as saying the company was “very grateful” to be able to supply the vaccine to Taiwan.

Fosun did not immediately respond to a request for comment on why those comments were removed.

The BioNTech vaccine drama has transfixed Taiwan and dominated headlines. A major Taiwanese Buddhist group, the Tzu Chi Foundation, is also trying to buy the shots.

Taiwan has millions of vaccines on order, mainly from AstraZeneca Plc (AZN.L) and Moderna Inc (MRNA.O), while the United States and Japan have together donated almost five million doses to the island to help speed up vaccinations.

The person familiar with the talks said the involvement of TSMC and the unconditional U.S. and Japanese vaccine donations had created a global environment that was favourable to Taiwan and made it hard for China to obstruct the deal.

Around one-tenth of Taiwan’s 23.5 million people have received at least one of the two-shot regimen, though Taiwan’s own relatively small domestic coronavirus outbreak is now largely under control.

Reporting by Ben Blanchard and Yimou Lee; Additional reporting by Beijing newsroom; Editing by Muralikumar Anantharaman and Kim Coghill

Our Standards: The Thomson Reuters Trust Principles.

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Business

TSMC, Foxconn say they are in process of signing deal for BioNTech COVID-19 vaccines

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Syringes with the Pfizer-BioNTech vaccines to be administered against the coronavirus disease (COVID-19) lie on a tray during a program without an appointment in Sant Vicenc de Casteller, north of Barcelona, Spain, July 6, 2021. REUTERS/ Albert Gea

TAIPEI, July 11 (Reuters) – Taiwan’s TSMC (2330.TW)and Foxconn said on Sunday they were in the middle of the contract signing process to buy COVID-19 vaccines from Germany’s BioNTech SE (22UAy.DE), part of a drawn out and highly politicised process for Taiwan to access the shot.

Taiwan’s government has tried for months to buy the vaccine directly from BioNTech and has blamed China, which claims the self-ruled island as its own territory, for nixing a deal the two sides were due to sign earlier this year. China denies the accusations.

Last month, facing public pressure about the slow pace of Taiwan’s inoculation programme, the government agreed to allow Terry Gou, the billionaire founder of Taiwan’s Foxconn (2317.TW), as well as Taiwan Semiconductor Manufacturing Co (TSMC) to negotiate on its behalf for the vaccines, which would be donated to Taiwan’s government for distribution.

“There are multiple parties. We are in the middle of the contract signing process. We will make announcements once the process is completed,” TSMC said a statement.

Foxconn used almost exactly the same wording in a separate statement. Neither elaborated.

Both companies are major Apple Inc (AAPL.O) suppliers.

BioNTech and Fosun did not immediately respond to requests for comment.

Gou’s spokesperson said: “When there is further news, we will formally explain it to the outside world”. She gave no details.

Speaking to reporters on Sunday, Premier Su Tseng-chang would only say that talks for the vaccine were ongoing.

“Once there is an definite outcome, we’ll naturally report it to everyone.”

A source briefed on the matter told Reuters that contract talks were “not yet 100% complete”, while another source said while they were close to finalising the deal, uncertainties remained.

“It has become increasingly clear that it is not the Taiwan side who is complicating the signing of the contract,” the second source said, referring to extra “obstacles” set up by Beijing.

China’s Taiwan Affairs Office did not answer calls seeking comment outside of business hours on Sunday.

FOSUN CONTRACT

Gou and TSMC this month reached an initial agreement with a subsidiary of Shanghai Fosun Pharmaceutical Group Co Ltd (600196.SS), which has a contract with BioNTech to sell the COVID-19 vaccines in China, Hong Kong, Macau and Taiwan, sources told Reuters previously. read more

Both Gou and TSMC are seeking 5 million doses each.

The BioNTech vaccine drama has transfixed Taiwan and dominated headlines. A major Taiwanese Buddhist group, the Tzu Chi Foundation, is also trying to buy the shots, which were developed jointly with Pfizer (PFE.N). read more

China’s government has repeatedly said that if Taiwan wants the vaccine, it has to respect commercial rules and do it through Fosun.

Germany’s government has also been involved, saying it has been helping in the direct talks between Taiwan and BioNTech.

Taiwan has millions of vaccines on order, mainly from AstraZeneca Plc (AZN.L) and Moderna Inc (MRNA.O), while the United States and Japan have together donated almost five million doses to the island to help speed up vaccinations.

Around one-tenth of Taiwan’s 23.5 million people have received at least one of the two-shot regimen, though Taiwan’s own relatively small domestic coronavirus outbreak is now largely under control.

Reporting by Ben Blanchard and Yimou Lee; Additional reporting by Taipei newsroom, and Andrew Galbraith in Shanghai; Editing by Lincoln Feast and William Mallard

Our Standards: The Thomson Reuters Trust Principles.

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World

Canada judge won’t allow Huawei CFO to use HSBC documents in U.S. extradition case

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VANCOUVER, July 9 (Reuters) – A Canadian judge has denied Huawei Chief Financial Officer Meng Wanzhou’s application to add a trove of documents her legal team received from HSBC as evidence to her U.S. extradition case, the judge announced on Friday.

Meng, 49, is facing extradition from Canada to the United States on charges of bank fraud for allegedly misleading HSBC about Huawei’s business dealings in Iran, potentially causing the bank to break U.S. sanctions. She has been held under house arrest in Vancouver since December 2018, when she was first detained.

Her legal team received over 300 pages of internal documents from HSBC through a court on Hong Kong, which the defence argued should be entered as evidence because they would disprove the basis for the United States’ extradition claim. read more

Associate Chief Justice Heather Holmes, who has been overseeing the case in the British Columbia Supreme Court since its inception, disagreed. Her reasons will be released in writing in approximately ten days, Holmes said.

“We respect the court’s ruling, but regret this outcome,” Huawei Canada said in a statement released after the ruling, insisting that the documents showed HSBC was aware of Huawei’s business dealings in Iran, proving that the United States’ account of the case was “manifestly unreliable.”

The Canadian government did not immediately respond to a request for comment.

Meng is set to appear in court in early August. Her extradition hearings are scheduled to finish by the end of that month.

Reporting by Moira Warburton in Vancouver; editing by Diane Craft

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Business

U.S. judge ends Amazon challenge to $10 bln cloud contract after Pentagon cancellation

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WASHINGTON, July 9 (Reuters) – A U.S. judge on Friday dismissed Amazon.com’s legal challenge to the Defense Department’s2019 decision to award a $10 billion JEDI cloud-computing project to rival Microsoft Corp (MSFT.O) after the Pentagon canceled the contract.

Amazon.com had accused then-President Donald Trump, alleging that the former president exerted improper pressure on military officials to steer the contract away from Amazon. The Pentagon said on Tuesday it expected the new multi-billion dollar contract would be split between Amazon and Microsoft.

Amazon did not object to dismissing its 2019 lawsuit.

Judge Patricia E. Campbell-Smith of the U.S. Court of Federal Claims agreed to dismiss the lawsuit at the government’s request, saying the case was now moot.

Trump publicly derided then-Amazon CEO Jeff Bezos and repeatedly criticized the company. Amazon had sought to question Trump about his role in the contract decision.

The Pentagon hopes to have the first awards by April 2022 for its new Joint Warfighter Cloud Capability (JWCC).

John Sherman, acting chief information officer for the Defense Department, said on Tuesday he expects both Microsoft and Amazon will get cloud contracts.

Microsoft said in a statement that the company was confident it will “continue to be successful as the DoD selects partners for new work.”

Amazon’s Amazon Web Services cloud unit said it agreed with the Pentagon’s decision to cancel the contract. It said the initial award was “not based on the merits of the proposals and instead was the result of outside influence that has no place in government procurement.”

In April, Campbell-Smith refused to dismiss Amazon’s claims alleging the Trump administration interfered in the Pentagon’s award to Microsoft after putting it on hold indefinitely in February 2020.

The now-canceled Joint Enterprise Defense Infrastructure Cloud (JEDI) contract was budgeted for as much as $10 billion and was part of a broader digital modernization of the Pentagon aimed at making it more technologically agile.

Reporting by David Shepardson; Editing by Dan Grebler

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Science

Smart foam material gives robotic hand the ability to self-repair

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SINGAPORE, July 6 (Reuters) – Singapore researchers have developed a smart foam material that allows robots to sense nearby objects, and repairs itself when damaged, just like human skin.

Artificially innervated foam, or AiFoam, is a highly elastic polymer created by mixing fluoropolymer with a compound that lowers surface tension.

This allows the spongy material to fuse easily into one piece when cut, according to the researchers at the National University of Singapore.

“There are many applications for such a material, especially in robotics and prosthetic devices, where robots need to be a lot more intelligent when working around humans,” explained lead researcher Benjamin Tee.

To replicate the human sense of touch, the researchers infused the material with microscopic metal particles and added tiny electrodes underneath the surface of the foam.

When pressure is applied, the metal particles draw closer within the polymer matrix, changing their electrical properties. These changes can be detected by the electrodes connected to a computer, which then tells the robot what to do, Tee said.

“When I move my finger near the sensor, you can see the sensor is measuring the changes of my electrical field and responds accordingly to my touch,” he said.

This feature enables the robotic hand to detect not only the amount but also the direction of applied force, potentially making robots more intelligent and interactive.

Tee said AiFoam is the first of its kind to combine both self-healing properties and proximity and pressure sensing. After spending over two years developing it, he and his team hope the material can be put to practical use within five years.

“It can also allow prosthetic users to have more intuitive use of their robotic arms when grabbing objects,” he said.

Reporting by Lee Ying Shan and Travis Teo; Writing by Xu Xiao; Editing by Karishma Singh and Stephen Coates

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Technology

Apple, Intel become first to adopt TSMC’s latest chip tech – Nikkei

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A 12-inch wafer is seen at Taiwan Semiconductor Manufacturing Co. (TSMC) in Hsinchu June 15, 2010. REUTERS/Pichi Chuang

July 2 (Reuters) – Apple Inc (AAPL.O) and Intel Corp (INTC.O) will be the first adopters of Taiwan Semiconductor Manufacturing Co’s (2330.TW) next-generation chip production technology ahead of its deployment, possibly next year, Nikkei Asia reported on Friday.

Apple and Intel are testing their chip designs with TSMC’s 3-nanometer production technology, the report added, citing several sources briefed on the matter. Commercial output of such chips is expected to start in the second half of next year, Nikkei Asia said.

Reporting by Kanishka Singh in Bengaluru; Editing by Christian Schmollinger

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