2024-04-19 06:23

TAIPEI, April 19 (Reuters) - TSMC's Taipei-listed shares tumbled 6.7% on Friday following the company's first-quarter earnings report in which it dialled back its expectations for chip sector growth and did not revise up its capital spending plans, contrary to expectations. Taiwan Semiconductor Manufacturing Co (TSMC) (2330.TW) New Tab, opens new tab, the world's largest contract chipmaker, forecast second-quarter sales may rise as much as 30% as it rides a wave of demand chips used in artificial intelligence (AI) applications. Its first-quarter profit also beat estimates. But it left its capital spending plans for this year unchanged at between $28 billion and $32 billion and reiterated it expected 2024 revenue to rise in the low- to mid-20% range in U.S. dollar terms. It lowered its outlook for the global semiconductor industry excluding memory to a growth rate of around 10% from a previous forecast of more than 10%. TSMC, a major supplier to Apple (AAPL.O) New Tab, opens new tab and Nvidia (NVDA.O) New Tab, opens new tab, also downgraded its growth forecast for the global foundry sector to a mid-to-high teens percentage gain from a previous projection of around 20%. Allen Huang, vice president of Mega International Investment in Taipei, said the market was reacting to the revised outlook for the semiconductor industry, adding that TSMC had been expected to increase capital expenditure this year for high-end packaging. "If capital expenditure was only maintained at the previous level, it means that profit is not as expected," he said. Another Taiwan fund manager, who asked not to be identified, said given TSMC's recent stock rally investors had high expectations heading into first-quarter earnings. "Its capex has not been so aggressive, and the percentage of advanced process technologies revenue compared to overall revenue is still pretty low," the manager said. TSMC's poor share price performance dragged on the broader Taipei market (.TWII) New Tab, opens new tab which closed down 3.8%, losing 774 points - the most it has lost in a single day. Sentiment was also hit by a rise in tensions between Israel and Iran. TSMC has other challenges, too. Speaking on Friday after being given an honour for his services to Taiwan, TSMC's retired and much revered founder Morris Chang said the company's current leadership needed "great wisdom" to navigate challenges to "dying" globalisation given how the firm had benefited so much from free trade. "TSMC also faces resources challenges: land, water, power, talent, which need continued support from the government and all others," he said at the presidential office in Taipei, referring to limitations Taiwan's tech industry has long worried about. The Technology Roundup newsletter brings the latest news and trends straight to your inbox. Sign up here. https://www.reuters.com/technology/tsmcs-taipei-listed-shares-drop-4-after-q1-results-2024-04-19/

2024-04-19 06:06

MUMBAI, April 19 (Reuters) - The Indian rupee recovered after slipping to a record low on Friday, on likely intervention by the central bank and comments by an Iranian official that there was no missile attack on the country. The rupee was at 83.5175 to the U.S. dollar at 11:15 a.m. IST, marginally up from 83.5375 on Thursday. The currency had dropped to 83.5750, a lifetime low, in early trading. The Reserve Bank of India (RBI) likely intervened in the onshore over-the-counter market and in non-deliverable forwards to help out the rupee, traders said. The RBI "just completely knocked out" any thoughts "of a big push" higher on USD/INR, a FX trader said. "I suspect a number of traders have been caught on the wrong side due to RBI's resolute defence (of the rupee) and the clarification from Iran." Israel launched an attack on Iranian soil on Friday, sources said, in the latest tit-for-tat exchange between the two arch foes, whose decades of shadow war has broken out into the open and threatened to drag the region deeper into conflict. Iranian media reported explosions, but an Iranian official told Reuters those were caused by air defense systems. The Natanz nuclear site, the centrepiece of Iran’s uranium enrichment program, is in Isfahan province. U.S. equity futures and Asian shares were off the worst levels for the session and Brent crude, having climbed past $90.50 at one point, was last at $88.86 a barrel. Coming soon: Get the latest news and expert analysis about the state of the global economy with Reuters Econ World. Sign up here. https://www.reuters.com/markets/currencies/rupee-off-record-low-likely-cbank-intervention-iranian-officials-comment-2024-04-19/

2024-04-19 06:05

LITTLETON, Colorado, April 19 (Reuters) - Wholesale power prices coming under pressure from surging solar output is not a new concept in power markets, but looks set to become a potentially divisive issue across Europe as rampant expansions in solar output upend market pricing patterns. Power generated by solar panels is the cheapest source of electricity in several regions, and tends to drive down the price of wholesale power during peak solar output periods, eroding margins for power producers. The phenomenon, known as the renewables cannibalization effect, is particularly acute in Europe's electricity system which prioritizes clean electricity supplies and where politicians have set ambitious decarbonization goals designed to reduce reliance on imported fossil fuels. Renewables-driven price disruptions have gained widespread attention in the United States due to the creation of a so-called 'Duck Curve' in Californian power prices, where massive volumes of solar output during the middle of the day flood the market just as overall power demand is at a lull. To accommodate that surplus power load, power prices tend to plunge in a way that is similar to the shape of a duck's belly, before rising again later as solar output declines. Europe's integrated power markets must brace for similar periods of price disruption, following rapid expansions in solar capacity across the continent. These disruptions have the potential to temporarily undermine the economics of power production from all sources, and may therefore deter investments in further regional generation capacity at a critical time. For policymakers who support a rapid transition of energy systems away from fossil fuels while ensuring continued power sector stability, bouts of potentially loss-making power prices due to surplus solar output may be unnerving. But authorities can take heart from the fact that energy consumers are already seeing the benefits of greater renewables output in the form of lower prices. And in the longer term, consumers will also be better protected from future fuel price shocks once the build out of home-grown renewable power capacity is complete. But over the nearer term, policymakers, energy consumers and power producers alike must prepare for further swings in power costs as the generation mix in Europe continues to evolve from primarily fossil fuel-based to being overwhelmingly run on clean fuels. FAST TRACK After Asia, Europe has been the fastest growing market for new solar capacity for the past decade, adding 172 gigawatts (GW) of capacity between 2012 and 2022, according to energy think tank Ember. That compares to nearly 600 GW of capacity additions across Asia, and around 110 GW of capacity growth in North America over the same period. Capacity data for 2023 has yet to be confirmed, but renewable industry analysts and consultants estimate that Europe will have set a new installation record again last year. That rapid growth pace has allowed for solar power to grab a growing share of Europe's total electricity generation mix, which has doubled from around 5% during the summer of 2019 to just under 11% last summer, and the highest of all regions. In contrast, solar's share of electricity generation in Asia topped out below 7% last summer, while in North America peaked at around 6.37%, Ember data shows. CAPTURING THE PRICING IMPACT The impact of such a rapid climb in solar output has already distorted Europe's power markets, and has resulted in utilities earning shrinking revenues from renewables. As additional solar capacity has been brought online in several countries, regional power prices responded by trending broadly lower, especially during high solar output periods. Price forecasting models have also had to be updated to account for the growing share of renewable power in generation systems, with so-called capture prices and capture rates being used to measure the impact of renewable cannibalization. The capture price is a weighted average price during which the power generation asset produces electricity, and is expressed relative to the baseload contract price paid to fossil fuel-based power producers. The capture rate is a measure of the capture price divided by market price available for the power produced, expressed as a percentage. In the case of a natural gas plant that only produces power during peak demand periods, the typical capture rate can be 100%, as the plant can despatch maximum volumes to fulfil demand needs at peak prices, and then reduce or stop output when demand and prices decline. For renewables assets, the capture rate is typically less than 100%, and can be far lower for solar assets that only produce electricity when the sun shines and often hit peak output just when demand and prices may be near their lowest during a typical day. GERMANY AND SPAIN FEEL THE PAIN Power price models in Germany and Spain clearly show the impact of declining capture prices and rates due to expanding solar output. Due in part to rapidly rising electricity from solar farms, the wholesale power price from solar assets in Germany declined to the lowest in nearly four years this month, according to pricing models compiled by LSEG. In turn, the lower solar-driven prices have dragged the overall German wholesale price lower. The capture rate for German solar assets has also declined this month, plunging to as low as 50% of the baseload power contracts, LSEG data shows. The capture rate is even lower in Spain, where abundant sunshine results in a surge in solar output that can often far exceed system demand needs during the day. Spain's solar capture rates are expected to average around 85% for the rest of 2024, but decline steadily over the coming years to around 60% by 2030 and 45% by 2035. Power developers concerned about the profit impact of such capture rate erosion could slow their development pace, and thereby potentially threaten national or regional energy transition momentum. But if policymakers keep a long-term view in mind of the benefits from a fully developed renewable energy system, appropriate incentives for power developers could be created to ensure the pace of the region's energy transition is maintained. The Reuters Power Up newsletter provides everything you need to know about the global energy industry. Sign up here. https://www.reuters.com/business/energy/plunging-solar-capture-rates-test-nerve-europes-policymakers-maguire-2024-04-19/

2024-04-19 06:05

April 19 (Reuters) - Cryptocurrencies fell heavily and bitcoin broke below $60,000 on Friday in a rush out of risky assets following reports of an Israeli missile strike on Iran. Bitcoin slid more than 5.5% to $59,961 in the Asia session as the U.S. dollar rose broadly. Ether fell by a similar margin, dropping below the $3,000 barrier to $2,895. Israel launched an attack on Iranian soil on Friday, sources said, days after Iran launched a drone strike on Israel. Iranian media reported explosions, but an Iranian official told Reuters those were caused by air defense systems. State media said three drones over the central city of Isfahan had been shot down. Israel's leadership and the military were silent early on Friday. By 0600 GMT, as these details emerged, safe-haven assets such as oil, gold and bonds which had rallied sharply on initial news of the attack were off their highs. "I think markets are at this stage in a flight to safety mode," said Moh Siong Sim, currency strategist at Bank of Singapore. "Right now, we're still in a situation where we know something has happened. But we need to understand the degree of the degree of retaliation." Bitcoin was back up at $62,300 but still down 2% on the day. Ether was also back above $3,000. The decline in bitcoin comes just hours ahead of the cryptocurrency's 'halving' on Friday - a change to its underlying technology designed to cut the rate at which new bitcoins are created. The Technology Roundup newsletter brings the latest news and trends straight to your inbox. Sign up here. https://www.reuters.com/technology/bitcoin-slides-below-60000-reports-israel-strikes-iran-2024-04-19/

2024-04-19 05:59

DUBAI, April 19 (Reuters) - British security firm Ambrey said on Friday merchant vessels transiting the Gulf and Western Indian Ocean were advised to stay alert in case of increased uncrewed aerial vehicle (UAV) activity in the region. Ambrey said it had received information that indicated an "Israeli military strike" was conducted on Isfahan, Iran. Earlier, the United Kingdom Maritime Trade Operations (UKMTO) agency said it had seen similar reports but that there were no indications commercial maritime vessels were the intended target of the strike. Oil prices jumped as high as $3 a barrel on Friday in reaction to reports of the strike, sparking concerns that Middle East oil supply could be disrupted. Brent crude gave up some of those gains, trading up 1.85% at $88.74 at 0551 GMT after reaching a high of $90.75. Israel has attacked Iran, three people familiar with the matter said. Iranian state media reported early on Friday that its forces had destroyed drones, days after Iran launched a retaliatory drone strike on Israel. Iran's Fars news agency reported three explosions were heard near an army base in the central city of Isfahan. An Iranian official told Reuters there was no missile attack and the explosions were the result of the activation of Iran's air defence systems. The Reuters Daily Briefing newsletter provides all the news you need to start your day. Sign up here. https://www.reuters.com/world/ambrey-ships-transiting-gulf-western-indian-ocean-should-stay-alert-2024-04-19/

2024-04-19 05:45

NEW DELHI, April 19 (Reuters) - Russia became the top oil supplier to India during the fiscal year 2023/24 for a second year in a row, squeezing the market share of Middle Eastern and OPEC producers to historic lows, ship tracking data from industry sources showed. New Delhi has been gorging on Russian oil sold at a discount after Western nations shunned purchases and imposed sanctions on Moscow over its invasion of Ukraine. As a result Russia is now the top supplier to the world's third-largest oil importer. India has continued to buy Russian oil despite problems posed by a raft of sanctions aimed at reducing Moscow's oil revenue to fund the war. Russia is an ally of the Organization of Petroleum Exporting Countries (OPEC) but it has eaten into the share of India's crude diet from key OPEC producers in the Middle East. Russian oil accounted for about 35% of India's overall 4.7 million barrels per day (bpd) crude imports in the fiscal year to March 31 compared with about 22% a year ago, the data shows. India imported 1.64 million bpd of Russian oil in fiscal 2023/2024, up about 57% from the previous year, the data shows. That lifted the share of oil from Russia, Kazakhstan and Azerbaijan, members of the Commonwealth of Independent States (CIS), in India's imports to 39% in 2023/24 from 26% a year ago, the data shows. In contrast, the share of Middle Eastern oil in Indian imports fell to an all-time low of 46% from 55%. Iraq continued to be the second-largest supplier to India followed by Saudi Arabia in 2023/24. India imported an equal amount of oil from OPEC and non-OPEC nations for the first time in 2023/2024, the data showed. The fall in Saudi oil imports followed higher official selling prices set by state-owned Saudi Aramco for most of the year, while imports from Kuwait have also dropped sharply after the producer diverted its crude to a new domestic refinery. Get a look at the day ahead in U.S. and global markets with the Morning Bid U.S. newsletter. Sign up here. https://www.reuters.com/markets/commodities/russia-squeezes-mideast-opec-shares-indias-oil-market-historic-lows-2024-04-19/