|Infineon buys Cypress. EU goes BIG. 20% IC target on horizon. Here's why it's right.|
I once wrote of the need for a new application of Nobless Oblige': the need for larger companies to assist little firms to grow.
Merger isn't the only way.
- Harvesting 'Booo'- berries to drive SCALE: Taurus POTUS buys time for Western consolidation to Get Big and Face Chinese Monsters in the Race to SCALE. Are EU Leaders smart enough to recognize the strategy is intended to Save The Western World? Can Global Captains of Industry respond quickly enough as China tries to divide the EU into East v West? In this moment, can EU Leaders see good relations with Russia are an advantage?
Small cap firms require a new era of Noblesse Oblige' from Large Cap firms: Consolidation Support.
The Rise of a new era: 'First and Most'
In the movie "Pacific Rim", giant monsters called Kaiju emerged from the Pacific and attacked the world forcing a global existential reaction and consolidatiion of efforts to build giant human-piloted attack bots named Jaegers in response.
In the real world, Western industries have been manuevering to form 'jaegers' and often have been blocked by current international trading rules which gives right of refusal to China for a merger.
This right of refusal must be drowned in the bathtub.
JVs and other partnerships and support via Investment Firms too.
China is failing to adopt Worldwide norms of good behavior and is radioactive until a new era of detente emerges - their bankers too.
So the emergence of EU firms is a highly growth-predictive event that suggests a flood of M&A and approvals.
Any objections by PRC should be ignored by World bodies.
I once wrote of Western Jaegers emerging to face the kaijus of PRC.
This looks like it.
I welcome and cheer for this and more.
The rise of PRC tech supported on volume isn't unexpected, but the responses like today's and Friday's notice is very welcome.
Financial contagion must be contained and it is caused by an inflation of currency through multiple devices that are more than a little risky.
We need to protect ourselves.
These diseases of espionage and debt as well as African Swine Flu, H5N6 Bird Flu and more require our dotGOV officers to be strong Leaders and Respondents.
I applaud good enforcement and defenses.
Infineon to acquire Cypress, strengthening and accelerating its path of profitable growth
Jun 2, 2019 | Business & Financial Press
Munich, Germany, and San Jose, California – 3 and 2 June 2019 – Infineon Technologies AG (FSE: IFX / OTCQX: IFNNY) and Cypress Semiconductor Corporation (NASDAQ: CY) today announced that the companies have signed a definitive agreement under which Infineon will acquire Cypress...
accelerate the company’s path of profitable growth of recent years. Cypress has a differentiated portfolio of microcontrollers as well as software and connectivity components that are highly complementary to Infineon’s leading power semiconductors, sensors and security solutions. Combining these technology assets will enable comprehensive advanced solutions for high-growth applications such as electric drives, battery-powered devices and power supplies. The combination of Infineon’s security expertise and Cypress’s connectivity know-how will accelerate entry into new IoT applications in the industrial and consumer segments. In automotive semiconductors, the expanded portfolio of microcontrollers and NOR flash memories will offer great potential, especially in light of their growing importance for advanced driver assistance systems and new electronic architectures in vehicles...
Bloomberg on Industry Consolidation: Marvell + NXP and next Cypress who bought out Broadcom's Wireless RAN tech for IoT in 2016
PRC REFERENCES ON DEBT AND ESPIONAGE
Huawei is a risk so Britain must change course on 5G, ex-MI6... Guy Faulconbridge LONDON (Reuters) - China’s Huawei poses such a grave security risk to the United Kingdom that the government must not allow it to have even a limited role in building 5G networks, a former head of Britain’s MI6 foreign spy service said on Thursday...
February 25, 2019 China's technology challenge is bigger than just Huawei, British spymaster says
May 27, 2019 China's Baoshang Bank takeover raises contagion fears SHANGHAI/BEIJING (Reuters) - A takeover by Chinese regulators of a troubled lender with links to a missing tycoon jolted markets on Monday, lifting interbank financing costs for some smaller banks and raising worries about broader risks to the country’s financial system. The China Banking and Insurance Regulatory Commission (CBIRC) will take control of Inner Mongolia-based Baoshang Bank for a year from May 24, as it posed serious credit risks, the regulator and the central bank said on Friday, in a rare move to seize direct control of a bank. The seizing of Baoshang fanned concerns about indebted small banks across the country, pushing up yields on some negotiable certificates of deposit (NCD) issued by regional banks by more than 10 basis points on Monday, traders said...
China’s central bank said on Sunday that it would offer “timely and sufficient funds to ensure that (Baoshang Bank’s) payment system is operating smoothly.” The People’s Bank of China (PBOC) also said that it and the CBIRC would give more policy support to improve small- and mid-sized banks’ corporate governance...
The PBOC on Sunday said it would guarantee all principal and interest of corporate deposits and interbank liabilities below 50 million yuan, which analysts said helped to contain the market reaction...
April 17, 2019 / 3:51 AM / China's troubled Anbang to slash registered capital by a third
BEIJING/SINGAPORE (Reuters) - China’s Anbang Insurance Group Co said it would reduce its registered capital by nearly one-third, the latest government-directed step of a massive restructuring of the debt-laden conglomerate to curb financial risks. A state takeover work group, which has seized control of Anbang since February last year, has decided to trim the company’s registered capital to 41.5 billion yuan ($6.21 billion) from 61.9 billion yuan, pending approval from the China Banking and Insurance Regulatory Commission, Anbang said in a statement released on Tuesday. The capital reduction will not influence the company’s operations or cause any major impact on its solvency and financial situations, Anbang said.
The move is the latest step by Beijing to steadily clean up the aftermath of a harsh government crackdown on Anbang - once one of China’s most aggressive dealmakers overseas with a series of major acquisitions that have caught the attention of global regulators and investors... Creditors of the company may request Anbang to pay off its debts or provide repayment guarantees within 45 days after the announcement, the company added.
March 13, 2019 China's property investment growth hits five-year high driven by smaller cities BEIJING (Reuters) - China’s property investment accelerated in the first two months of the year driven by strong demand in its hinterland and defying a decline in sales, government curbs in bigger markets and a broader economic slowdown. Real estate investment, which mainly focuses on the residential sector but also includes commercial and office space, is a key driver of growth for the world’s second-largest economy. It rose 11.6 percent in January-February from a year earlier, up from the 9.5 percent growth reported for the 2018 full year, data from National Bureau of Statistics (NBS) showed on Thursday.
That marks the strongest growth for the January-February period since 2014, when it rose 19.3 percent. The NBS said robust investment in the property sector was due to steady housing prices and an increase in property construction... Developers say market sentiment has improved recently thanks to looser credit policies. Beijing has also become less worried about cities easing existing curbs and is more concerned about the broader economic impact of the trade war with the United States... Housing transactions slowed as property sales by floor area fell 3.6 percent year-on-year in the first two months of 2019, easing from the 0.9 percent gain in December. New construction starts measured by floor area were also much weaker, rising 6 percent in January-February from a year earlier compared with the 20.5 percent in December, according to Reuters calculations
March 13, 2019 China orders banks to boost financial support to small firms BEIJING (Reuters) - China’s banking and insurance regulator on Wednesday urged banks to continue increasing lending to smaller firms and further cut their financing costs, as policymakers work to avert an economic slowdown. Banks should work hard to achieve targets on increasing loans for small companies and keep the lending rates on a reasonable level, the China Banking and Insurance Regulatory Commission (CBIRC) said in a statement on its website. Big state-owned commercial banks should increase outstanding loans to smaller companies by more than 30 percent in 2019, the CBIRC said, adding that it would also increase its tolerance for non-performing loans at small companies. The regulator reiterated its demands for state-owned banks to target faster growth in loans to small businesses as economic growth slowed to its weakest in nearly three decades in 2018. Chinese banks have been wary of lending to smaller firms with higher credit risks, preferring state-backed customers. But authorities have been urging lenders to help keep cash-strapped private firms afloat, sparking concerns that looser lending standards will expose banks to more bad loans. China’s central bank chief said on Sunday that lending rates for small firms were still relatively elevated due to high risk premiums and that the country will push ahead with interest rate reforms to resolve the issue. Commercial banks are also encouraged to issue special financial bonds, and ensure that proceeds raised are used for loans to small and micro firms. The regulator also said it would support insurers to provide credit-boosting support for smaller firms if the risks are manageable. Insurance companies are encouraged to invest in financial products including securitisation products backed by loans to smaller firms to ensure more flexible support for those companies.
March 9, 2019 'Zombie' enterprises hampering China's economic transformation: Chinalco
BEIJING (Reuters) - China’s “zombie” enterprises are impeding the country’s economic transformation, said the country’s biggest state aluminum producer, even though thousands of such unprofitable and indebted state-owned firms have been eliminated. There are three difficulties when it comes to getting rid of zombie firms, the official Xinhua news agency said, citing Ge Honglin, chairman of Aluminum Corporation of China (Chinalco). Local governments, financial institutions, stakeholders and suppliers are keeping such zombie firms alive to protect their own interests, said Ge, who is also a member of China’s top political advisory body. The land assets of such firms also lack value, and resettlement of workers is costly, he said. China plans to eliminate thousands of zombie firms by 2020...
Beijing could allow local governments to issue off-budget bonds to finance acquisitions of land from zombie firms to expedite the process, Ge said, adding that those special-bond issuances should not be included in local governments’ debt assessment. The central government can also give out subsidies to support the resettlement of workers, while social insurance fees can also be reduced to lighten the burden of the firms, Ge said. Earlier in January, President Xi Jinping warned that China must be on guard against “grey rhino” events, or highly obvious yet ignored threats. Zombie firms would be properly resolved, Xi said.
March 6, 2019 China says to collect more profits from state-owned financial institutions amid tax cuts BEIJING (Reuters) - China’s finance minister said on Thursday that the government will collect more profits from certain state-owned financial institutions and centrally-owned firms, in a bid to support fiscal revenue as the government makes sweeping tax cuts. The pressure to balance fiscal revenue and spending is very pronounced in 2019, finance minister Liu Kun told a news conference on the sidelines of an annual parliamentary meeting in Beijing.
February 14, 2019 China to cut private firms' financing costs, improve access to funds - Xinhua BEIJING (Reuters) - China’s state council said on Thursday it aims to cut private firms’ financing costs to reasonable and stable levels and improve their ability to raise funds through various measures including issuing bonds, the Xinhua news agency... China’s trade surplus with the United States narrowed to $27.3 billion in January, the lowest since May 2018, Thursday’s data showed. Exports to the U.S. declined 2.4 percent on-year, while imports fell 41.2 percent....Many analysts also expect sweeping corporate tax cuts to be announced after the annual meeting of parliament in March, but all of the moves will take time to kick in. Top officials have repeatedly said they will not resort to massive stimulus like that deployed in past downturns, though some analysts believe interest rate cuts are possible if conditions continue to deteriorate and job losses mount.
MORE BAD LOANS
About $1.4 trillion of soured loans - including NPLs, distressed debt and loans in the “special mention” category - sit within banks and the four big AMCs, according to PwC. It expects distressed debts to grow as the economy slows and regulators push lenders to clean up their books. “I think this is the very beginning of China’s ... NPL cycle and it will have many years to run,” said Osborn, who heads PwC’s China and Hong Kong Restructuring & Insolvency team. Chinese banks’ non-performing loans reached 2 trillion yuan in 2018, driving the industry’s NPL ratio to a decade-high of 1.89 percent, regulators say, even after lenders resolved nearly 2 trillion yuan in soured assets that year..