12/08/2025

BIZ & FINANCE TUESDAY | AUG 12, 2025 17 SK Hynix expects robust growth for AI memory market SEOUL: South Korea’s SK Hynix forecasts that the market for a specialised form of memory chip designed for artificial intelligence will grow 30% a year until 2030, a senior executive said in an interview with Reuters. The upbeat projection for global growth in high-bandwidth memory (HBM) for use in AI brushes off concern over rising price pressures in a sector that for decades has been treated like commodities such as oil or coal. “AI demand from the end user is pretty much, very firm and strong,” said Choi Joon-yong, head of HBM business planning at SK Hynix. The billions of dollars in AI capital spending that cloud computing companies such as Amazon, Microsoft and Alphabet’s Google are projecting will likely be revised upwards in the future, which would be “positive” for the HBM market, Choi said. The relationship between AI build-outs and HBM purchases is “very straightforward” and there is a correlation between the two, Choi said. But the memory business is undergoing a significant strategic change during this period as well. HBM – a type of dynamic random access memory or DRAM standard first produced in 2013 – involves stacking chips vertically to save space and reduce power consumption, helping to process the large volumes of data generated by complex AI applications. SK Hynix expects this market for custom HBM to grow to tens of billions of dollars by 2030, Choi said. Due to technological changes in the way SK Hynix and rivals such as Micron Technology and Samsung Electronics build next-generation HBM4, their products include a customer-specific logic die, or “base die”, that helps manage the memory. That means it is no longer possible to easily replace a rival’s memory product with a nearly identical chip or product. Part of SK Hynix’s optimism for future HBM market growth includes the likelihood that customers will want even further customisation than what SK Hynix already does, Choi said. At the moment it is mostly larger customers such as Nvidia that receive individual customisation, while smaller clients get a traditional one-size-fits-all approach. “Each customer has different taste,” Choi said, adding that some want specific performance or power characteristics. – Reuters Indonesia tells palm oil producers to raise local sales of cooking oil JAKARTA: Indonesian authorities are asking palm oil producers to increase their average sales of cooking oil to the local market under the so-called Domestic Market Obligation scheme to reduce prices, a Trade Ministry official said yesterday. Producers in Indonesia, the world’s biggest exporter of palm oil, have to sell some of their output locally at a capped price to gain export permits. Jakarta banned exports of all palm oil products for three weeks in 2022 to control domestic cooking oil prices. The Domestic Market Obligation (DMO) scheme was introduced after that to manage local prices. Palm oil producers were asked to maintain the DMO level at 175,000 metric tons of cooking oil per month until the end of the year by Trade Ministry officials last week, said Nawandaru Dwi Putra, a director at the ministry. Sales in the April to June period under the scheme were just under 157,500 tons of cooking oil on average per month, but had already improved to 204,559 tons in July, according to ministry data. “We hope all producers can consistently realise DMO at the 175,000-ton level to ensure adequate supply domestically,” Nawandaru said. The government wants to bring down the price of cooking oil sold under the “Minyakita” brand, which is pegged to the DMO, he said. – Reuters

Japan’s political woes cloud budget, rate hike timing

o Ruling party debates holding rare leadership race

complicate the Bank of Japan’s decision on how soon to resume interest rate hikes. While few analysts expect the BOJ to hike rates at its next policy meeting in September, some see a good chance of action in October, December or January next year when more data becomes available on the impact of US tariffs on the economy. Known as a fiscal hawk, Ishiba has endorsed the central bank’s efforts to gradually wean the economy off a decade-long, massive stimulus as inflation remains above its 2% target for well over three years. But his bitter election defeat has made his administration vulnerable to calls for big spending and loose monetary policy. Many opposition parties have urged the BOJ to hold off, or go slow, in raising rates and focus on supporting the economy. If the LDP were to hold a leadership race, the event could put the spotlight on the views of candidates like Sanae Takaichi, a reflationist minded lawmaker who in the past blasted the idea of interest rate hikes as “stupid”. All this could discourage the BOJ from raising rates in coming months to avoid drawing unwanted political attention. “All we can say is that we would continue to take appropriate policies to sustainably and stably achieve our 2% inflation target,” Governor Kazuo Ueda told a news briefing earlier this month, when asked how the BOJ would respond if political changes lead to fresh demands on monetary policy. “It’s impossible to predict how politics will unfold, which means for the BOJ it’s best to take a wait-and-see stance,” said a source familiar with the bank’s thinking. – Reuters

package to cushion the economic blow from US tariffs. But if the race does not take place in September, it may have to wait until early next year to avoid disrupting the government’s drafting of next fiscal year’s budget, they say. “We would not be surprised if the LDP calls for a leadership election in September,” UBS analysts said in a research note. “It seems that uncertainties regarding politics are unlikely to resolve soon.” In Japan, the Ministry of Finance collects spending requests from ministries in August and finalises the government’s draft budget in late December. The budget must pass parliament in time to take effect from the April start of a new fiscal year. Failure to pass the budget through parliament would force the government to compile a stop-gap budget, which could hurt the economy by causing delays in expenditure. Some ruling party lawmakers say there is no choice but for Ishiba to step down to resolve the deadlock. Having lost control in both houses of parliament, the LDP-led ruling coalition needs opposition party support to pass legislation and budget through parliament. Opposition parties have ruled out forming a coalition unless Ishiba steps down. “Japan needs a stable coalition government. Otherwise, it’s impossible to pursue consistent policies,” LDP heavyweight Ken Saito told Reuters last week. “It’s best for the LDP to seek a coalition partner under a new leader.” Ishiba’s weak political standing and prolonged political uncertainty also

TOKYO: political uncertainty risks prolonging policy paralysis that could affect the drafting of next year’s budget and the timing of the central bank’s next interest rate hike, analysts say, clouding the outlook for the fragile economy. Prime Minister Shigeru Ishiba is facing increased calls from within his ruling Liberal Democratic Party (LDP) to step down and take responsibility for the party’s huge defeat in an upper house election in July and a lower house poll last year. While Ishiba has denied he has any plans to resign, his fading support has triggered inevitable questions about his political future and analysts say a leadership change would likely have implications for the outlook for fiscal and monetary policy. In a meeting on Friday, lawmakers decided to consider holding a rare leadership race even with party head Ishiba still presiding. Under LDP rules, such a race would take place if the majority of the party’s lawmakers and regional heads agreed to hold one. But it is uncertain how long it would take for the party to decide, according to lawmakers and government officials familiar with the procedure told Reuters. That contest could happen in September at the earliest, they say, which would allow the new administration to compile a spending Japan’s deepening

A man walking past the Bank of Japan headquarters in Tokyo. – AFPPIC

NZ central bank proposes cutting roughly a fifth of its staff WELLINGTON: New Zealand’s central bank said yesterday it was proposing cutting roughly a fifth of its workforce to save costs after the government reduced its operating budget. “the final phase of a structure design and implementation process” but it expected to have finalised layoffs by Oct 13.

The conservative government has implemented significant cuts across the public sector since it was elected at the end of 2023, as part of its drive to return the government’s accounts to surplus. A cabinet paper released alongside the government’s April announcement said the Treasury had reviewed the central bank’s funding request of NZ$1.03 billion ( RM2.6 billion) for the five year period and found it “did not provide good value for money”. – Reuters

“We recognise that this is an uncertain time for our people and are committed to handling this process with care and consideration,” the spokesperson said. In April, the bank said it expected to review staffing levels and other costs after the government announced its operating budget would be cut by roughly 25% in the current fiscal year.

A Reserve Bank of New Zealand spokesperson said in an e-mail it was planning to cut a net 142 positions, including 32 currently vacant positions. In January, the bank employed 660 people. It said is currently progressing through