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Wire & Cable ASIA – November/December 2007
35
From the
americas
Alcoa International (Asia) Ltd, a wholly-owned subsidiary
of Alcoa, of the US, announced on 12
th
September that
it had sold its holdings in Aluminium Corp of China Ltd
(Chalco) for approximately $2 billion. Pittsburgh-based
Alcoa was an investor in Chalco since its initial public
offering in 2001, and held a 7% stake.
Alcoa – the world’s leader in alumina production, with
operations in 44 countries – reiterated its commitment
to the aluminium industry of China and said it would
continue to pursue opportunities there.
Alain Belda, Alcoa’s chairman and CEO, cited
Chalco’s healthy financial position as the reason for
the divestiture. He said: “[Alcoa can now] redeploy its
capital into other value-adding options, including
projects in China.”
Telecom
Lifting of import ban in the Qualcomm-
Broadcom case is good news for
Motorola and other cell phone makers
In response to a request by Motorola Inc and several
other mobile phone manufacturers to stay an order issued
by the federal government in June, a US Court of Appeals
judge on 12
th
September halted the import ban on mobile
phones made with semiconductors from Qualcomm Inc.
In August, the White House refused the request to overturn
the ban.
The US International Trade Commission had barred
imports of new mobile phone models with chips made by
Qualcomm (San Diego, California) on grounds that the
company violated a patent held by another California
chip maker, Broadcom Corp (Irvine), on technology that
conserves battery power. The ruling applied to chips for
use in expensive phones that transmit video and data at
high speeds.
The order to halt the ban applies to the seven companies
that sought the relief: wireless carriers AT&T and T-Mobile
USA Inc, and cell phone makers Motorola, Samsung
Electronics Corp, LG Electronics, Kyocera Wireless Corp,
and Sanyo Fisher Co, Samsung and LG are believed to have
had the most to lose if the ban remained in effect.
Both primarily make phones, utilising Qualcomm chips,
for sale in the US. But Motorola (Schaumburg, Illinois) would
also have suffered.
Motorola and the other appellants argued that, since
Broadcom filed its complaint against only Qualcomm,
the trade commission lacked authority to block imports
by companies other than Qualcomm. The judge agreed
with them.
Chicago Tribune staff reporter Mike Hughlett noted that
wireless carrier Sprint Nextel had avoided the ban by
selling phones reliant on alternative software designs that
apparently do not infringe the Broadcom patents.
❖
Verizon Wireless, another major network, dodged the ban
by concluding its own licensing agreement with Broadcom,
in July.
Qualcomm makes almost all of its chips overseas. If the
ban had stood, it could have delayed the launch of
high-end cell phones in the US during the Christmas
season, vitally important to retailers.
Economics
‘Globalization and Its Discontents’ author
sees East Asia as less vulnerable to
America’s fiscal woes
The US could face a prolonged economic downturn but
is unlikely to plunge into a recession, Nobel economics
laureate Joseph E Stiglitz said on 30
th
August.
In Chicago to attend a conference, the former World Bank
chief economist observed that East Asian countries may
withstand the US fallout well, as the region has built up large
reserves and is much more resilient after rebounding from
its own financial crisis a decade ago.
Mr Stiglitz, who won the Nobel Prize for economics in 2001
and is author of ‘Globalisation and Its Discontents,’ is a
professor of economics in the School of International and
Public Affairs of Columbia University, in New York City.
He cited the defaults on US sub-prime mortgages – which
roiled global financial markets in the summer – as having
increased the risks to the economy.
Some 1.7 million Americans are threatened with the loss
of their homes to foreclosure or bankruptcy, placing even
greater pressure on a weak housing market. Wages have
stagnated, despite the fact that the gross domestic product
of the US is some 20% higher than it was six years ago.
As reported in the
Chicago Tribune
(30
th
August), Mr Stiglitz
told reporters on the sidelines of the conference that
the credit crunch was a ‘totally predictable disaster,’
attributable to Bush administration policies of cutting taxes
for higher-income taxpayers even as the Federal Reserve
reduced interest rates. The effect was to encourage
Americans to borrow beyond their means.
Broadening his theme, Mr Stiglitz observed that the entire
country is living beyond its means, borrowing heavily even
as household savings are negligible.
“The magnitude of total government borrowings in the eight
years of [the current administration] will be over $4 trillion,”
he said. “President Bush has put America in an impossible
place.”
Mr Bush’s term runs until January 2009. Mr Stiglitz warned
that the next US president faces the daunting task of
restoring fiscal sanity.
Dorothy Fabian – Features Editor