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(Bloomberg) — South Korean President Yoon Suk Yeol banned reporters from a broadcaster his office said misrepresented comments caught on a hot mic from flying with him on an overseas trip, prompting criticism he was trying to suppress media freedom.

Yoon’s office told South Korean broadcaster MBC that its reporters wouldn’t be able to join him on the country’s Air Force One, when it departs Friday for international gatherings in Southeast Asia. 

“The boarding of the presidential jet has been a service provided to help with coverage of foreign policy and security issues, and in consideration of MBC’s repeated distorted and biased coverage of foreign policy issues recently, we have decided not to provide the service,” Yoon’s office said in a notice to the company, Yonhap News Agency reported Thursday. 

The presidential office did not specify which reports had been distorted, Yonhap added. 

“The reason why the president goes on overseas trips spending taxpayers’ money is because important national interests are at stake,” Yoon told reporters Thursday morning.

The dust-up with the broadcaster is likely to cloud a trip Yoon said would include a trilateral summit with US President Joe Biden and Japanese Prime Minister Fumio Kishida on the sidelines of regional events. Yoon is visiting Cambodia and Indonesia to attend an Association of Southeast Asian Nations meeting and a Group of 20 summit.

A joint statement from the Journalists Association of Korea and other groups, of which MBC is a member, called the decision an “unprecedented suppression of the press.” The group demanded Yoon allow MBC reporters to board and apologize.

“If the Yoon Suk Yeol administration does not take reasonable measures, we will define the latest situation as a grave threat to freedom of the press and democracy, and are willing to go on a full-scale war with the government,” said the joint statement that included groups such as the National Union of Media Workers.

Yoon, who won the presidential race by the slimmest margin in the country’s history, has seen his support slip since taking office in May. He has added to his difficulties through a series of gaffes, including a hot microphone incident during a trip to New York in September. 

The president was heard making disparaging remarks about lawmakers, which MBC broadcast and said indicated Yoon was making harsh comments about US Congress under President Joe Biden. The presidential office disputed the MBC depiction, saying the comments were taken out of context, parts were inaudible and Yoon was in no way making insults about Washington.

Biden has been seeking Yoon’s support in the face of security threats posed by the likes of North Korea and as part of Washington’s initiative to forge alliances in global supply chains of crucial components, such as semiconductors, to reduce its reliance on China.

–With assistance from Sangmi Cha.

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(Bloomberg) — Hon Hai Precision Industry Co., maker of most of the world’s iPhones, warned consumer electronics revenue will fall this quarter as it grapples with a Covid outbreak that walled off its main production base in central China.

The company, known also as Foxconn, reported earnings that missed estimates for the third quarter and said revenue growth will be flat for the current three-month period. Hon Hai is now trying to resume full production after a coronavirus flareup in October triggered a lockdown last week around its biggest factory in Zhengzhou, severely curtailing the flow of goods and people it needs to sustain iPhone assembly. 

Executives reiterated that they were working with the government to control the outbreak and get the plant back up and running. 

Foxconn’s warning on revenue underscores the toll of China’s Covid Zero policy, a rigid system of sudden lockdowns and mass testing that’s depressed the world’s No. 2 economy. The curbs at the factory dubbed “iPhone City” — a giant complex housing some 200,000 workers that cranks out an estimated four out of five of the world’s latest iPhones — dealt a blow to Apple Inc. and its most important supplier, which had struggled to stem an exodus of workers.

Harsh Covid restrictions are exacerbating the fallout from weakening demand for consumer electronics worldwide. On Thursday, Pegatron Corp., Apple’s other big iPhone-making partner, warned that sales would fall in 2022 led by a 15%-20% slide in notebook revenue in the fourth quarter. 

Read more: Pegatron Sees Overall Sales Falling Slightly in 2022

In Japan, key chip equipment supplier Tokyo Electron Ltd. slashed its forecast for operating profit this year by 24%, explaining that memory chip makers are pulling back on capital spending. The company said it will likely also lose out because of US restrictions on selling cutting-edge chip-gear to China. 

Foxconn’s net income rose 5% to NT$38.8 billion ($1.22 billion) in the September quarter, versus the NT$41 billion average estimate, the device maker said Thursday. Revenue climbed 24% to NT$1.75 trillion, exceeding the estimate of NT$1.52 trillion. Shares of the company fell 2% in Taipei.

In the first half, the company had surpassed profit expectations thanks in part to effective management of supply during Covid lockdowns, when it secured support from local governments to keep up a critical flow of components. Foxconn has said it’s managing the Zhengzhou lockdown in concert with the authorities.  

If Foxconn can get its production back on track soon and the Covid situation under control, sales should still take a hit in the first half of November before gradually recovering, analysts at Citigroup Inc. wrote in a Nov. 6 note.

The disruption coincides with the US holiday shopping season as well as a sharp slowdown in demand for electronics worldwide. Apple warned Sunday it would ship fewer premium devices than anticipated because of the Zhengzhou lockdown. 

The US company, which is grappling with tepid demand for less expensive iPhone 14s, expects to produce at least 3 million fewer iPhone 14 handsets than originally anticipated this year. The company and its suppliers now aim to make 87 million devices or fewer, compared with a target of 90 million units earlier, Bloomberg News reported this week.

Foxconn intends to raise capital spending in 2023 and most of that will go toward its already giant production base, Chairman Young Liu told analysts on Thursday.

Longer term, Foxconn is also making a play to expand in electric vehicles. The world’s largest contract manufacturer has targeted 5% market share in EVs in 2025, helped by its acquisition of Lordstown Motors Corp.’s electric pickup trucks factory in Ohio. 

–With assistance from Vlad Savov.

(Updates with Tokyo Electron forecast in sixth paragraph.)

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(Bloomberg) — Delivery Hero SE tempered expectations for revenue and gross merchandise value this year, as the company focuses on profitability. 

Revenue rose 28% to €2.5 billion in the third quarter, the Berlin-based company said in a statement on Thursday. That compared to a €2.52 billion average forecast from analysts in a Bloomberg survey. 

Delivery Hero said GMV, which is a measure of how much customers spend on the platform, and total segment revenue this year will be on the low end of previous guidance. GMV had been projected at €44.7 billion to €46.9 billion and sales at €9.8 billion to €10.4 billion.

Food delivery companies have been facing slower growth following a pandemic-fueled surge, and have instead emphasized a path to profitability. Deliveroo Plc raised its margin guidance and lowered its growth outlook last month. 

Key Insights

• Delivery Hero reported its Spanish business, Glovo, saw GMV grow 40% from a year earlier. The growth came despite the war in Ukraine, its third-largest market.
• A tougher market, where growth dramatically slowed after Covid-19 lockdowns ended, is driving dealmaking in the sector. Istanbul-based delivery startup Getir is in advanced talks to buy Gorillas Technologies GmbH, people familiar with the matter have said.

Market Reaction

• Delivery Hero shares rose 6.4% to €37.06 as of 9:24 a.m. in Frankfurt.
• Shares have fallen 62% so far this year.
• That compares to a 30% decline in the Stoxx Europe 600 Technology Index.

Get More

• Delivery Firm Getir Said in Advanced Talks to Buy Gorillas
• Deliveroo Cuts Loss, Growth Outlook in Move Toward Profit 

(Updates with share price in Market Reaction section)

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(Bloomberg) — Switzerland and the UK, which are both excluded from a key European Union funding program for scientific research, struck an agreement to collaborate on research and innovation. 

The two nations, which between them have 10 of Europe’s top 20 research universities, signed a memorandum of understanding that will encourage cooperation in life sciences, energy technology, artificial intelligence and space as well as commercialization, according to a joint statement.

Both countries are home to some of the world’s largest pharmaceutical companies and innovative research but are currently excluded from the European Union’s Horizon Europe funding program for scientific research as neither are in the bloc. 

Britain, which wants to become the world-leading hub for medicines development and discovery, said Switzerland’s expertise in neuroscience and vaccines, quantum technology, clean technology, space and nuclear fusion makes it a “key strategic partner.” 

As part of the agreement, the Swiss National Science Foundation and UK Research and Innovation will invest in joint projects across a range of subject areas, including bioscience and medicine. 

“This agreement is more than a piece of paper: Swiss ministers and I are clear we want to drive deeper tangible co-operation in research fellowships, industrial innovation and regulatory standards in new technology sectors,” said UK Minister of State George Freeman.

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(Bloomberg) — Hon Hai Precision Industry Co. intends to keep expanding capacity in China despite persistent disruption from some of the world’s harshest Covid control measures.

The company known as Foxconn intends to raise capital spending in 2023 and the biggest portion of that expenditure will go toward its already giant production base in China, Chairman Young Liu told analysts on Thursday.

Foxconn, maker of most of the world’s iPhones, earlier warned consumer electronics revenue will fall this quarter as it grapples with a Covid outbreak that walled off its main production base.

Apple Inc.’s most important partner reported earnings that missed estimates and said revenue growth will be flat for the current three-month period. Hon Hai is now trying to resume full production after a coronavirus flareup in October triggered a lockdown around its biggest factory in Zhengzhou, severely curtailing the flow of goods and people it needs to sustain iPhone assembly. 

“The Covid outbreak in Zhengzhou is prompting the industry to consider diversifying risks,” Liu said. But the experience meant Foxconn’s plant has the most expertise in dealing with a local flare-up, he added.

Read more: IPhone Maker Warns Devices Sales to Fall After China Lockdown

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(Bloomberg) — The world’s thirst for gas to replace Russian supplies risks overshooting the crucial 1.5 degree Celsius goal needed to avert catastrophic climate damage, according to a new report.

By 2030, countries could have an oversupply of liquefied natural gas of 500 megatons, which is five times what Europe imported from Russia in 2021, according to the research group Climate Action Tracker. 

It has also found that carbon emissions coming from LNG production projects under construction, approved and proposed until 2050 would consume around 10% of the remaining emissions the world has left to keep warming below 1.5 degrees.

“We’re witnessing a major push for expanded fossil gas LNG production and import capacity across the world,” said Bill Hare, chief executive officer of CAT partner organization Climate Analytics. That “could cause global emissions to breach dangerous levels.”

The dash for gas has become a key issue at the COP27 climate conference in Sharm el-Sheikh, Egypt. The European Union is under fire for building new gas infrastructure that could tie the continent to fossil fuels for longer than expected. Germany was also accused this week by Mohamed Adow, a prominent activist for the think tank Power Shift Africa of using the continent as its gas station, as it rushes to secure alternative supplies from Senegal and Qatar following Russia’s invasion of Ukraine.

European Commissioner Kadri Simson said that the bloc would support the exploration of more gas fields in Algeria — running counter to the International Energy Agency’s assertion that there must be no new fossil fuel production if the world is to meet its climate aims. Al Gore, the former US vice president turned climate campaigner, added his voice to criticisms at the official opening of the COP27 summit, saying that rich countries had to move beyond “fossil fuel” colonialism.

“We must see the so-called ‘dash for gas’ for what it really is: a dash down a bridge to nowhere, leaving the countries of the world facing climate chaos and billions in stranded assets, especially here in Africa,” Gore said.

For its part, the EU argues that its still on track to reduce greenhouse gas emissions by 55% by the end of the decade, and that Russia’s invasion will speed up rather than slow down the shift to renewables, as a source of cheap domestic energy. It also emphasized that new relationships will give way to flows of green hydrogen in the future.

“The EU has a responsibility to make sure that we have access to the energy supplies that are necessary for our population, and we have to do so in a context where we’ve cut off supplies from Russia,” said Jacob Werksman, the EU’s lead climate negotiator at COP27. “As we enter into any kind of relationship where a country is making a choice on doubling down on investing in fossil fuel, we are offering and encouraging them to take an alternative as well.”

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(Bloomberg) — Crypto markets face weeks of deleveraging in the fallout from the crisis at digital-asset exchange FTX.com, a period of upheaval that could push Bitcoin down to $13,000, according to JPMorgan Chase & Co. strategists.

A “cascade of margin calls” is likely underway given the interplay between the exchange, its sister trading house Alameda Research and the rest of the crypto ecosystem, a team led by Nikolaos Panigirtzoglou wrote in a note.

“What makes this new phase of crypto deleveraging induced by the apparent collapse of Alameda Research and FTX more problematic is that the number of entities with stronger balance sheets able to rescue those with low capital and high leverage is shrinking” in the crypto sphere, the team said Wednesday.

Digital-asset investors are still coming to terms with the rapid unraveling at FTX.com and the concerns swirling around Alameda Research, both founded by 30-year-old Sam Bankman-Fried. There are fears that the potential bankruptcy of FTX.com could lead to contagion that takes down other crypto outfits.

The strategists pointed to Bitcoin’s production cost as a way of calibrating how much further it can fall. The production cost is mainly the electricity needed to operate the powerful computers that run the Bitcoin network.

“At the moment, this production cost stands at $15,000, but it is likely to revisit the $13,000 low seen over the summer months,” they said.

The $13,000 level is one that other prognosticators are looking at too as a possible floor. David Adams, portfolio manager of the King River Digital Assets Fund, said that’s the price he’s calling for alongside a further fall in so-called alternative tokens. He added that “we’ll start to see value” at such levels.

Hayden Hughes, chief executive of social-trading platform Alpha Impact, pointed to $13,800 as a potential support. Meanwhile, the history of previous routs suggests Bitcoin would need to fall below $13,000 to begin matching the magnitude of those drawdowns, according to data compiled by Bloomberg.

Bitcoin snapped four days of declines, including a near 16% tumble Wednesday, to add about 6% to reach $16,690 as of 7:53 a.m. in London on Thursday.

Bankman-Fried has told FTX.com investors that without a cash injection the company would need to file for bankruptcy, according to a person with direct knowledge of the matter.

The episode is the latest imbroglio to befall virtual coins, exacerbating steep losses this year caused by a withering of speculative ardor under the sobering influence of aggressive interest-rate hikes.

The last big shakeout was in May, when the TerraUSD stablecoin and its sister token Luna imploded. The JPMorgan team said the hit to overall crypto market value this time around is likely to be smaller as the TerraUSD episode already sparked a pullback in risk taking.

–With assistance from Akshay Chinchalkar.

(Updates with more views on Bitcoin from the seventh paragraph.)

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(Bloomberg) — Key chip equipment supplier Tokyo Electron Ltd. slashed its full-year outlook after memory makers cut spending and the US ramped up restrictions on cutting-edge chip-gear exports to China.

The Tokyo-based company now sees an annual operating income of 546 billion yen ($3.7 billion), down 24% from its previous forecast, despite quarter-on-quarter revenue growth worldwide. Its caution echoes pessimism at American rivals such as Applied Materials Inc. and Lam Research Corp. 

Tokyo Electron will not try to take advantage of an opportunity created by the US restrictions on its US peers, Hiroshi Kawamoto, general manager of the company’s finance unit, said at a news conference Thursday.

“We understand US makers may be facing difficulties doing business with Chinese customers. We won’t try to fill the hole they leave,” he said. The company has been operating at near-full capacity, with months-long wait-times for equipment delivery.

With a client list that includes Semiconductor Manufacturing International Corp. and Yangtze Memory Technologies Co., Tokyo Electron earns roughly a quarter of its revenue in China, although that number includes foreign firms with factories there. 

Japan chip gear exports bound for China are at record highs so far this year, up more than 20% in the September quarter from a year earlier.

“US sanctions will prompt Chinese makers to cut capital spending, leading to delays on deliveries,” Kawamoto said.

US President Joe Biden’s administration announced sweeping regulations to constrain sales of its cutting-edge semiconductors and chipmaking equipment to China, roiling the globally interconnected $550 billion industry. 

While the move dealt a major blow to China’s chip sector, it saddled American semiconductor equipment firms with stringent restrictions that will cost them billions of dollars in revenue. That was on top of spending cuts announced by memory makers from SK Hynix Inc.  to Micron Technology Inc. 

Washington has signaled to its allies its wish that they follow suit on export controls to restrict China’s access to critical chip technologies. American officials have said that if allies do not align with the US efforts, their rules would lose effectiveness over time.  

–With assistance from Debby Wu, James Mayger and Ian King.

(Adds comment from company news conference in fourth paragraph; an earlier version corrected SMIC’s name in fifth paragraph)

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(Bloomberg) — Robinhood Markets Inc has seen its biggest crypto inflows ever in the last two days, Chief Executive Officer Vlad Tenev said in a Twitter thread on Thursday, even as the market was roiled by the saga involving FTX. 

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(Bloomberg) — Bitcoin has further to fall before it finds a base to stage any recovery, if the depth of previous routs is any guide. While the crypto currency’s near 75% plunge from its 2021 high has already sent shock waves through markets, it would need to fall below $13,000 to begin matching the magnitude of previous drawbacks. How long it could take to get there is an open question: the current slump is longer than the average of past cases but still seven weeks shy of the tumble that ended in 2015.  

(Corrects year to 2015 in last sentence.)

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