▲ AI PRISM* Personalized Economic Briefing
* Editor's note: AI PRISM (Personalized Report & Insight Summarizing Media) is an artificial intelligence-based personalized news recommendation and summary service developed with support from the Korea Press Foundation. It selects and provides six news items tailored to each reader type.
[Key Issue Briefing]
■ AI Foundry Boom: Taiwan's TSMC posted record-high revenue and net profit in the third quarter on surging demand for AI chips, with net profit setting a new record for a sixth consecutive quarter. Margins, however, fell from the previous quarter on costs tied to the early ramp-up of its 2-nanometer process, splitting top-line growth from profitability.
■ Tech Stock Correction: U.S. consumer prices for September came in above market expectations, stoking concerns about higher-for-longer interest rates and rattling technology shares in New York. As a result, the fortunes of Big Tech founders including Michael Dell and Elon Musk shrank by as much as about 20 trillion won each in a single day.
■ Weaponizing Resources: After the European Union sanctioned Chinese companies suspected of supporting Russia, China retaliated by adding Zindelhauser Materials, a German supplier, along with other European firms, to its export control list. The EU is now pursuing the removal of sanctions on the Chinese companies to save the German supplier. Analysts note that while China has used its export licensing system to gather extensive information on global supply chains, the German government has yet to prepare even a strategy to respond.
[News of Interest to Global Investors]
1. TSMC Q3 Revenue Up 17% From Previous Quarter, but Margins Slow
- Key points: TSMC, the world's largest foundry, or contract chipmaker, posted third-quarter net profit of 763.06 billion Taiwan dollars (about 31.8 trillion won), up 68.7% from a year earlier. Revenue rose 50.9% to 1.49424 trillion Taiwan dollars (about 62.2 trillion won), and net profit set a record high for a sixth straight quarter. As AI chip orders from major customers such as Nvidia piled up, high-performance computing accounted for 68% of revenue, up 11 percentage points in a year, while the share from the 2-nanometer process rose to 8% from 3% in the previous quarter. Gross margin, however, narrowed to 66.4% from 67.7% in the previous quarter on costs from the early ramp-up of 2-nanometer output, showing signs of slowing profitability.
2. A Preview of 'France First'? Le Pen Vows to Cut EU Contributions and Halt Aid to Ukraine
- Key points: Marine Le Pen, a lawmaker of France's far-right National Rally, said that if she wins next year's presidential election she will sharply cut France's contributions to the EU and push reforms to return powers concentrated in the European Commission to member states. In an interview with the Financial Times, Le Pen said she was aware that "tough debates, even a trial of strength, will take place," while making clear her determination to see the plan through. She outlined a vision that includes cutting France's EU budget contribution by 11 billion euros (about 17 trillion won) in 2027 and raising net fiscal savings in 2032 to 140 billion euros (about 211 trillion won) compared with 2026. Reducing contributions, however, requires the consent of the other 26 member states. Government debt at 119% of gross domestic product is also cited as an obstacle, and economists have criticized the plan as resting on overly optimistic projections.
3. EU Backs Down as China Weaponizes Resources
- Key points: The European Union is reportedly moving to lift sanctions on Chinese companies in order to rescue Zindelhauser Materials, a German semiconductor component maker whose survival has been put at risk by Chinese measures. After the EU sanctioned Chinese companies suspected of supplying parts used in Russian weapons production, China retaliated in July by placing 14 European companies, including Zindelhauser, on its export control list. The small company, which supplies parts to ASML, the world's largest maker of semiconductor lithography equipment, depends entirely on Chinese rare earths and critical minerals and is said to face closure within months if the sanctions remain in place. Analysts also say that China, over a year and a half, used its export licensing system to collect information on end customers and the uses of raw materials, allowing it to strike precisely at the weak links in Europe's supply chains.
[Reference News for Global Investors]
4. Dell and Musk See Fortunes Evaporate as Tech Shares Wobble, Big Tech Owners Lose 67 Trillion Won
- Key points: New York stocks fell after the U.S. consumer price index for September rose 3.7% over 12 months, slightly above the market consensus of 3.6%. As concerns about higher interest rates rattled technology shares, the fortunes of Big Tech billionaires including Michael Dell, Elon Musk and Mark Zuckerberg evaporated by more than $50 billion (about 67 trillion won). Amid the weakness in tech shares, Dell Technologies fell 11.27% after Barclays cut its rating to neutral from overweight. Founder Michael Dell's net worth dropped by more than $20 billion (about 27 trillion won) in a single day, pushing him to fifth place in the world, while energy prices, which drove inflation higher, remained 20.4% above year-earlier levels.
5. U.S. Humanoid Heavyweight Agility Robotics Is Coming. Will Robot Stocks See Sunshine?
- Key points: Agility Robotics, a leading U.S. humanoid robot developer, will debut on the Nasdaq market next month. Churchill Capital XI, the special purpose acquisition company it is merging with, received approval from the U.S. Securities and Exchange Commission for the effectiveness of its merger registration statement. Trading is expected to begin in mid-November once the merger is completed on Nov. 2, with the enterprise value set at $2.5 billion (about 3.35 trillion won). With Boston Dynamics and Figure AI either delaying listings or turning to private funding, brokerages say the initial redemption rate and the pace at which a $300 million order backlog converts into revenue will determine whether investor sentiment toward robot stocks recovers.
6. Korea and Japan Extend $10 Billion Currency Swap by Three Years, Through 2029
- Key points: South Korea and Japan have agreed to extend their $10 billion currency swap arrangement, due to expire at the end of next month, by three years through the end of November 2029. Lee Hyoung-il, deputy prime minister and minister of finance and economy, reached the agreement in a meeting with Japanese Finance Minister Satsuki Katayama in Bangkok, Thailand, on the 15th. The two sides agreed that their foreign exchange authorities hold ample foreign currency liquidity, but decided to maintain the existing arrangement in view of its symbolic significance for financial cooperation and coordination. The currency swap, a mechanism that allows a country to deposit its own currency and receive foreign currency when the foreign exchange market is unstable, was suspended in 2015 and restored in December 2023. This is the first extension since its restoration.
