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  • Bit by Bit 6th Oct || WTO lowers the 2023 trade and GDP forecast || Samsung plans to go big in advanced chips & More

Bit by Bit 6th Oct || WTO lowers the 2023 trade and GDP forecast || Samsung plans to go big in advanced chips & More

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BGS Committee
October 06, 2022

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Good Morning! Adipurush's teaser may have disappointed you, but Bit by Bit will never disappoint!

Meanwhile, here are:

"5 amazing stories in 5 minutes to make you future ready"

Happy reading!

MARKETS

(Market were closed on 05/10/2022 on the occasion of Dussehra)

ECONOMY

The Story:

The World Trade Organization forecasted that global commercial trade would increase by 3.5% in 2022, slightly better than the earlier estimate of 3%. However, it reduced the forecast from 3.4% to 1% for 2023 due to the demand for imports being stifled by rising interest rates, soaring food and fertilizer prices, and spiraling energy prices. It also said that world GDP at market exchange rates will increase by 2.8% in 2022 and lowered the forecast for 2023 to 2.3% from 3.2% earlier.

It said that the conflict in Ukraine, high energy prices, inflation, and monetary tightening, among other related shocks, will weigh on trade and output. The WTO stated that if present assumptions hold, trade growth in 2022 might end up between 2% and 4.9%, underscoring the significant degree of uncertainty associated with the prediction due to changing monetary policy in advanced economies and the unpredictable nature of the Russia-Ukraine war. But it said that if the "downside risks materialize, trade growth in 2023 could be as low as -2.8%," and that if the "surprises are on the upside," trade growth could be as high as 4.6% in 2019.

With an estimated 14.6% increase, the Middle East is predicted to have the highest export growth of any WTO region this year, followed by Africa (6%), North America (3.4%), Asia (2.9%), Europe (1.8%), and South America (1.6%). According to WTO Director-General Ngozi Okonjo-Iweala, "trade restrictions may be a luring response to the supply vulnerabilities that have been exposed by the shocks of the past two years, but a retrenchment of global supply chains would only deepen inflationary pressures, leading to slower economic growth and lower living standards over time."

AUTOMOTIVE

The Story:

The Vitara Brezza, a model at the Maruti Suzuki exhibit, was the center of attention amidst the normal draw of the Auto Expo and a plethora of eye-catching wheels. The company's then-managing director and CEO, Kenichi Ayukawa, was also very enthusiastic. When introducing Maruti Suzuki's first sub-compact SUV, he said, "If the Baleno is our poster for Make in India, the Vitara Brezza is our statement for Create in India

Tata Motors has similar enthusiasm for the sub-compact SUV market."Our selection of SUVs made for more than 66% of our portfolio in FY23. Punch, the newest member of the Tata Motors family, "has become the first SUV with over 100,000 units sold in just 10 months after launch and has cemented its place as a leader in its sector," says Rajan Amba, vice-president-sales, marketing, and customer care, Tata Motors Passenger Vehicles.

The demand-supply challenge

This festive season, there won't be any significant "dhamaka deals" or discounts because there is a mismatch between supply and demand. Automobile manufacturers cannot increase production levels because of a shortage of semiconductor chips, despite the strong demand as the economy picks up steam (this will persist for a couple of more quarters). Although metal prices have begun to decline, rising input costs remain a barrier.

The price pinch

For their vehicles to function better, SUV purchasers would like a larger engine. But there is a cost associated with that ambition. Additionally, the top variants of entry-level SUVs now cost the same as mid-SUVs due to the addition of more features to fulfill growing consumer demand. Customers may go to the mid-SUV market as a result of this trend. Additionally, Bhatia of JATO Dynamics notes that while middle-class and upper-class consumer categories have largely avoided the worst effects of the economic slowdown following the epidemic, small and medium-sized businesses and entry-level purchasers of subcompact SUVs have not fared as well. Additionally, some of the potential purchasers are being influenced by competition from the used-car market.

The road ahead

When compared to UVs in other categories (with a length above 4.4 meters), which saw a growth of 63% year over year on a lower base, the compact utility vehicle (UV) segment at home in FY22 (defined as UVs with length less than 4 meters and price less than INR20 lakh, and UV 1 category with the length between 4 meters and 4.4 meters and price less than INR20 lakh) has experienced a lower growth of 41% year over year.

PHARMA

Key Facts:

  • WHO warned that 66 children's deaths in the Gambia may have been caused by the same.

  • In order to protect patients from additional harm, WHO advises that all nations identify and halt the distribution of these items

The Story:

A warning was issued by the World Health Organization (WHO) on Wednesday regarding four cough and cold syrups produced by Maiden Pharmaceuticals in India which could possibly be related to the 66 child deaths in the Gambia.

Laboratory analysis of samples of each of the four items reveals that pollutants such as diethylene glycol and ethylene glycol are present in excessive concentrations.

Regarding symptoms, specialists believe that the medication may be to blame for an increase in occurrences of acute kidney injury. Young children under the age of five are most impacted.

The contaminated products may have been distributed to other nations, even though they have only been found in the Gambia so far, said WHO Director-General Tedros Adhanom Ghebreyesus at a press conference on Wednesday.

Tedros advised caution and urged all nations to collaborate to identify and remove these products from circulation in order to protect people from future harm.

TECH

Key Facts:

The Story:

Samsung is hardly an exception to the market devastation that has been particularly noticeable in the semiconductor industry. Since early 2021, the value of its shares has decreased by over 40%, wiping off nearly $300 billion in market value.

The company’s contract chipmaking unit said it would start manufacturing chips on the 2-nanometer production process in 2025 and the 1.4-nanometer production process in 2027

Samsung makes the bulk of its chips for its own use but lags behind TSMC (Taiwan Semiconductor Manufacturing Company) in the foundry business—making chips for customers such as Apple and Nvidia.

It makes sense for Samsung to push hard into this sector, given its ample cash and technology leadership. Such a move would also help the company diversify away from the volatile memory-chip business while trying to take advantage of fear over the geopolitical tensions surrounding Taiwan.

Want More Bits?

The Story:

New data has been uncovered by an international team of researchers that suggests there may be liquid water beneath Mars' south polar ice cap.

To find minor patterns in the height of the ice cap, the team of researchers, led by the University of Cambridge with participation from the University of Sheffield, employed laser-altimeter measurements of the contour of the upper surface of the ice cap.

After that, they demonstrated how these patterns corresponded to computer estimates of the effects that a body of water beneath the ice cap would have on the surface. Their findings are in line with prior readings made using an ice-penetrating radar, which were initially thought to indicate the possibility of liquid water beneath the ice.

The researchers hypothesised that in order for the water beneath the south pole to stay liquid at such low temperatures, it may need to be extremely salty, which would make it difficult for any microbial life to exist there.

However, the fact that more livable habitats existed when the climate was less harsh in the past does provide some hope, they claimed.