15/08/2025

FRIDAY | AUG 15, 2025

17

BIZ & FINANCE

Foxconn sees robust AI demand continuing

Japan venture seeks to export ‘espresso’ of hot springs TOKYO: Japan’s famous onsen hot springs were long considered unexportable, until an idea struck Naoki Mita one day: what if he could condense them like espresso coffee? Mita’s Tokyo-based venture firm, Le Furo, has invented a technology it calls “craft onsen ” – whereby hot spring ingredients are extracted and filtered into an ultra-high concentration. Le Furo now seeks to use that patented technology to export Japan’s hot springs overseas, with a view toward opening several onsen facilities in the Gulf region in 2026. Transporting hot springs overseas long seemed logistically impossible because of the sheer volume of water involved, as well as their susceptibility to germs. But with Le Furo’s invention,“just like you extract coffee as espresso, we grind the mineral resources to fine, sand-like powders”, CEO Naoki Mita told AFP. The CEO said many commercially available “ onsen powders”are synthetic and put an emphasis on mimicking the relaxing colour and scent, and do not necessarily contain the necessary ingredients. Only after solid metals such as iron, magnesium and zinc dissolve into water does it become possible to chemically resemble onsen and recreate the therapeutic effect, Mita said. Le Furo’s technology sticks to the natural soil and minerals of hot spring sources, and uses a special method to make them soluble in water. Its “craft onsen ” concentrate comes in bottles or small tanks, which can then be distributed and poured into water in other countries to feel like the real thing. – AFP Lenovo says US-China tariff pause positive sign BEIJING: China’s Lenovo said yesteday the tariff pause between Washington and Beijing was positive and growth in China’s AI infrastructure remained strong despite US-China tech tensions. “The truce is a positive situation,” said Lenovo CEO Yang Yuanqing in an interview with Reuters after the world’s largest maker of personal computers released its fiscal first-quarter results. “We feel better than the previous quarter – it brings us more certainty rather than uncertainty.” The US and China have extended a tariff pause for another 90 days to November, averting triple-digit duties on each other’s goods. Lenovo’s overall revenue for the three months ended June 30 climbed 22% year-on-year to US$18.8 billion, exceeding analysts’ expectations of US$17.4 billion, according to LSEG data. Yang attributed the performance to strong AI demand in its three major business segments, each scoring double-digit growth in the first quarter. Chinese exports to the US, including PCs, currently face a 30% levy, despite the tariff truce. Yang said the US accounted for less than 20% of Lenovo’s total revenue, and that the tariffs on Chinese goods had not had much impact on its business so far due to its global manufacturing footprint. – Reuters

would be used to manufacture cloud-related products. Foxconn has also expanded beyond its traditional role as an iPhone assembler into other areas too. Last month it formed a strategic partnership with industrial motor maker Teco Electric & Machinery to build data centres. Net profit for the April-June period was T$44.4 billion (RM6.2 billion), higher than the consensus estimate of T$38.8 billion compiled by LSEG, the company said. Foxconn, formally called Hon Hai Precision Industry, last month reported record second-quarter revenue on strong demand for AI products but cautioned about geopolitical and exchange rate headwinds. For its full-year revenue, it forecast significant year-on-year growth, in line with previous guidance given in May. It did not elaborate and the company does not provide numerical guidance. Foxconn’s shares have risen 8.4% so far this year, outperforming the broader Taiwan index’s 5.2% gain. Its shares closed up 0.5% yesterday ahead of the earnings release. – Reuters

consumer electronics – such as iPhones – for the first time ever in the second quarter. Yet, global trade uncertainty could dim the prospects for its outlook this year, as it has a major manufacturing presence in China, though Washington and Beijing this week extended a tariff truce for another 90 days. Most of the iPhones Foxconn makes for Apple are assembled in China, but the bulk of those sold in the United States are now produced in India. The firm is also building factories in Mexico and Texas to make AI servers for Nvidia. Foxconn has also been looking to expand its footprint in electric vehicles, which the company sees as a major future growth generator, though that has not always gone smoothly. Earlier this month, Foxconn said it had struck a deal to sell a former car factory at Lordstown, Ohio, for US$375 million (RM1.5 billion), including its machinery, that it purchased in 2022 to manufacture EVs. However, it will continue to occupy the facility. The company said in its earnings call with analysts and media yesterday the Ohio plant

o Q2 net profit soars 27% on-year, beating market forecasts

TAIPEI: Foxconn expects higher third-quarter revenue, it said yesterday, on robust demand for artificial intelligence servers, which helped the world’s largest contract electronics maker report a forecast-beating 27% increase in second-quarter profit. Foxconn said it should see significant year-on-year revenue growth in the third quarter, with AI server revenue expected to leap more than 170% year-on-year. Nvidia’s biggest server maker and Apple’s top iPhone assembler has been riding a data centre boom, as cloud computing firms such as Amazon, Microsoft and Alphabet’s Google spend billions of dollars to expand their AI infrastructure and research capacity. That boom helped Foxconn’s revenue from its cloud and networking business, which includes AI servers, exceed that from smart

The logo of Foxconn, the trading name of Hon Hai Precision Industry, is seen on top of the company’s building in Taipei. – REUTERSPIC

South Korea to restructure petrochemical sector SEOUL: South Korea’s government will announce a plan this month to restructure the country’s petrochemical sector, which is in a “grave” situation, Industry Minister Kim Jung-kwan said yesterday. Demand has also been sluggish over the last three to four years.

Total exports of petrochemical products were US$48 billion in 2024, accounting for 7% of South Korea’s total exports and a top-five export item after semiconductors, automobiles, machinery and petroleum products. South Korea is one of the world’s largest importers of naphtha, a derivative of crude oil that is refined into chemical products used in plastics for automobiles, electronics, clothing and construction. If the country is forced to cut capacity, it could impact global oil markets. Other South Korean petrochemical firms besides YNCC are also seeing asset reshuffling. HD Hyundai is looking to acquire Lotte Chemical’s naphtha cracker, or the companies may merge their cracker operations, trade sources have said. – Reuters

loans coming due at the end of August. South Korea’s DL Holdings said in a regulatory filing yesterday its subsidiary DL Chemical Co will issue a 150 billion won loan to YNCC, in which it holds a major stake. South Korea’s government can use YNCC’s travails as an opportunity for a large-scale restructuring in the industry, said Hwang. Analysts do not expect global petrochemical margins to recover before 2027. The last major restructuring for South Korea’s petrochemical industry was in 1999 during the Asian Financial Crisis, when YNCC was formed. South Korea’s exports of petrochemical products stood at US$21.7 billion in the first half of this year, down 11.1% from a year earlier, amid price declines and global oversupply.

“A restructuring in the petrochem industry has been highly expected, given the industry is running merely 80% of total capacity in Korea now – meaning we have about a 20% glut here,” said Hwang Kyu-won, an analyst at Yuanta Securities Korea. Kim, who was speaking at a shipyard, said the petrochemical industry needed to take voluntary measures, including the “adjustment” of facilities, his ministry quoted him as saying. There have been concerns as well over the financial health of South Korea’s loss-making Yeochun NCC Co (YNCC), a Yeosu-based petrochemical maker that local media says faces 180 billion won (RM548 million) in

South Korean petrochemical companies must take lessons from the restructuring of the country’s shipbuilding industry in the late 2010s, when shipmakers had to liquidate assets and streamline business areas amid a sharp drop in orders, Kim said. Margins have plunged for petrochemical companies in South Korea and across the globe due to an oversupply of products caused by relentless capacity additions in the last decade, particularly in China, the biggest petrochemical market.