The Rundown: FET, TSMC, and Taiwan Hotels

A bi-weekly snapshot of Taiwan business news stories brought to you by CommonWealth and AmCham Taipei’s TOPICS

FarEasTone and APT Sign 5G Deal

FarEasTone (FET), Taiwan’s third largest telecom operator by market share, and Asia Pacific Telecom Co (APT) announced in early September that they will begin partnering to provide 5G services on Taiwan’s 3.5GHz frequency band. The 20-year deal is the first to be inked since revisions to the Telecommunications Management Act regarding sharing of networks and frequency bands took effect last June. It also signals a break from APT’s precedent of partnering closely with Taiwan’s number-two telecom, Taiwan Mobile, on previous generations of mobile technology.

The first phase of the deal will see FET’s purchase of 11.58% of APT’s preferred stock in the first phase, while APT will put down a deposit of NT$9.47 billion for around 22% of the shared 3.5GHz band. FET will raise their stake in APT to 23.8% through a share-swap deal with Hon Hai Precision Co., the current largest shareholder.

TSMC Sales Peak in August

Taiwan’s largest contract chip manufacturer reported record high monthly sales revenue of NT$122.88 billion in August, up 16% from July and 15.8% year-on-year. The spike in sales numbers was the result of surging demand for chips for 5G, IoT, and other high-tech applications. It could be a very good year for TSMC, with analysts predicting 20% annual growth, thanks to consistently strong demand from its major customers Apple, Mediatek, AMD, and NVIDIA. The company is also expected to be contracted by Intel to produce chips for the U.S. tech giant’s first graphics processor and central processing units, which could stretch its winning streak well beyond 2020.

Taiwan’s Hotels on the Upswing

A large increase in domestic tourism in Taiwan resulted in better revenues for the island’s hotels in August. Formosa International Hotels Corp., which operates the upscale Silks Place hotel chain, the FDC International Hotels Corp., owner of the Palais de Chine and Fleur de Chine hotels, and the Leofoo Tourism Group, which operates the Courtyard by Marriot, all reported revenue increases of between 5% and 12%. The jump in business is good news for the hospitality industry, which had experienced substantial declines in guest numbers in the first few months of the pandemic. However, since the majority of tourist attractions in Taiwan are outside of Taipei, business at hotels in the capital city is still uneven, with certain locations faring better than others. Some hotels, including the Sherwood and Shangri-La’s Far Eastern Plaza Hotel, have looked to other sources of revenue, such as attractive deals at their restaurants and special all-in-one vacation packages.

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