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| Here’s your daily business briefing. - 💻 TSMC surpasses Q1 expectations amid AI chip demand
- 🔬 Deep Dive: ABB upgrades Michigan Robotics Hub
- ✈️ Alaska Air predicts strong profits as travel boom
Thanks for reading! Shriram
p/Shriram | |
| 1 | | TSMC exceeded revenue and profit projections for Q1, driven by robust demand for advanced chips, especially in AI applications. The company exceeded expectations, with net revenue reaching $18.87B and net income hitting $6.9B in Q1, surpassing anticipated figures. More: - CEO C.C. Wei states that 2024 will be a "healthy" growth year bolstered by technology leadership and a more extensive clientele.
- TSMC projects Q2 revenue to range between $19.6B and $20.4B, with server AI processor revenue expected to double in 2024.
- In Q4, TSMC dominated global foundry revenue with 61%, boasting a net profit margin of 40%, far exceeding the industry average of 14%.
- Fueled by LLMs like ChatGPT, strong demand for AI chips has caused TSMC's shares to soar 56% over the last 12 months.
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| 2 | | ABB expanded its U.S. robotics headquarters in Michigan in March with a $20M investment. 
What the numbers say: Venture capital funding for the robotics and drones sector decreased to $9.4B in 2023 from $13.3B in 2022 and $16B in 2021 globally. ABB's Robotics and Discrete Automation Business segment's robotics division contributed $3.6B to its revenue of around $30B. Relevance: ABB's expansion in Michigan, fueled by increasing automation demands in industries like construction and healthcare, highlights the advancement of robotics driven by AI software. With support from a $450,000 grant from the Michigan Business Development Program, the initiative will create over 70 jobs and enhance ABB's ability to train customers in robot management and operation. More data: DHL utilizes a fleet of 7,000 robots worldwide for inventory management and logistics, although it is not an ABB customer. In response to labor shortages in Detroit, automakers like Ford, an ABB customer, are increasingly turning to automation technology to tackle operational difficulties.
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| 3 | | Alaska Air Group projects second-quarter profits to surpass expectations, buoyed by robust travel demand. Despite a $162M hit from grounding its 737 MAX 9 planes, the airline's first-quarter adjusted loss of $0.92 per share outperformed analysts' projections of a $1.05. More: - CEO Ben Minicucci credits cost containment, network optimization, and capacity planning for high performance.
- Boeing paid Alaska Air $162M in initial cash compensation, which was not included in the Q1 results.
- The company's Q2 profit forecast of $2.20 to $2.40 per share surpassing estimates of $2.12, has driven its shares up over 4% in morning trading.
- Operating revenue increased 1.6% to $2.23B in the first quarter, above Street estimates of $2.19B.
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| 4 | | In March, European passenger-car sales decreased 2.8%, reaching 1.38 million units, while electric vehicle registrations dropped 11%, especially in Germany, Sweden, and Norway. Diminished subsidies, slower economic expansion, and elevated interest rates influenced this decline. More: - Lower EV sales were recorded in the first quarter of the year by Tesla, Mercedes-Benz, and Volkswagen.
- Sales of plug-in hybrid vehicles increased by 0.7% in the previous month, outpacing full electric and gasoline-powered vehicles.
- In Europe, registrations for diesel cars fell by up to 18%, while sales of petrol cars fell by 8%.
- EV sales fell 34% in Italy and 29% in Germany in March, even with manufacturer rebates.
- Inadequate charging infrastructure hinders broader electric vehicle adoption, despite some market expansion in countries such as France and the U.K.
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| 5 | | Concord Chorus, with Apollo's backing, will acquire U.K. music rights investment company Hipgnosis Songs Fund for $1.4B, valuing each share at $1.16, about one-third above Wednesday's closing price. The acquisition, supported by major shareholders representing approximately 29% of Hipgnosis' issued share capital, signals a significant shift in the music rights investment sector. More: - Founded in 2018 by music executive Merck Mercuriadis, Hipgnosis sought to elevate music rights into a mainstream asset class but encountered hurdles amid rising interest rates.
- Concord, backed by Alchemy Copyrights, intends to fund the acquisition through debt financing and a minority investment from Apollo.
- Concord, having invested more than $2.8B since 2015, plans to merge Hipgnosis' catalogs into its existing portfolio of 1.2 million songs for mutual gains.
- The Hipgnosis board aims to end its agreement with Mercuriadis, offering shareholders up to $25M if successful, citing the Concord deal as the best option amidst alternative paths fraught with risks.
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| 6 | | Adidas collaborates with Stepn, a move-and-earn app, to introduce a limited-edition NFT sneaker collection, named the Stepn x Adidas Genesis Sneakers collection, featuring 1,000 digital items inspired by Adidas running designs. Stepn's marketplace, Mooar, will offer access to these NFTs through a two-phase raffle that began on Wednesday. More: - Adidas and Stepn will collaborate for a year on this project, including actual goods and additional NFT deliveries.
- With this partnership, Adidas is entering the NFT market more deeply than with past initiatives like the Adidas for Prada Re-Nylon collection and the 2022 release of a digital wearables collection.
- With 5 million registered users, Stepn views the collaboration as a chance to grow the "move-to-earn" sector by incentivizing exercise through rewards.
- NFT trading has sharply declined, with Solana blockchain minting dropping from 350,000 to around 15,000 and the market volume decreasing from $3.24B to $75.8M as of April 14.
- Due to unpredictability in the regulatory landscape, several merchants, including GameStop, have left the NFT sector.
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 | Freelance Writer | | Shriram is pursuing Master’s in Business with Marketing at Warwick Business School. He worked as a Senior Consultant in Tech and Political Consultancies before his Masters. He is passionate about Tech, Marketing, Strategy, Anthropology and Politics. He is also the Postgraduate Ambassador for Warwick Business School. | | This newsletter was edited by Shriram Jeevakumar | |
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