Here is a look at more of Friday's top business stories:
Eurozone rate cuts loom: report
LONDON, Jan. 17 (UPI) -- The prospects have risen for cuts in eurozone interest rates following Germany's announcement that its economy, Europe's biggest, had all but ground to a halt last year.
Growth in Germany slid to 0.2 percent in 2002, the weakest performance for the country since 1993 and the worst performance among the 12 nations involved in monetary union, the Guardian reports Friday. Private consumption fell 0.5 percent, while capital spending slid about 8 percent.
Germany accounts for 30 percent of the eurozone's gross domestic product.
The newspaper said that "Chancellor Gerhard Schroeder's government, facing key regional elections on Feb. 2, put a brave face on the news." But at the same time, the newspaper said that it was told by its sources that the government plans to cuts its 2003 growth forecast to just 1 percent, vs. 1.5 percent previously.
The Guardian says that financial markets expect "an early response from the European Central Bank," which cut rates by 50 basis points in December. Although some analysts worry about the threat to inflation from higher oil prices, Germany's plight might force the ECB's hand.
SEC 'harder on small accounting firms'
WASHINGTON, Jan. 17 (UPI) -- The U.S. Securities and Exchange Commission took a record 598 enforcement actions last year, up 24 percent from the year before, but some SEC officials say that big accounting firms -- which audit most U.S. listed companies -- are difficult targets for the agency.
The Washington Post, which examined the SEC's enforcement record, says that in the year ended Sept. 30, the agency "took action against only two individual auditors it identified as working for Big Five accounting firms." One received a censure, a verbal reprimand.
The newspaper says that the SEC "was far more likely to discipline auditors employed by smaller accounting firms than it was to take action against those employed by the big firms. The agency took action against 15 auditors from smaller firms."
And it adds that the "cash-strapped agency has been slower to take actions involving big accounting firms partly because the big firms can deploy overwhelming resources in their defense, SEC insiders and private securities lawyers say. In contrast, small accounting firms and their employees are more likely to settle cases with the SEC because they are ill equipped to battle the government, lawyers say.
Another key difference between big and small firms, according to Charles D. Niemeier, acting chairman of the new accounting oversight board and former chief accountant in the SEC's enforcement division, was this: small firms were more likely to commit errors of incompetence, while big firms were more likely to show lapses of integrity -- finding the problems but allowing them to go uncorrected.
Intel weighs future of custom-chip division
SAN MATEO, Calif. -- Intel Corp. has stopped accepting bids from customers for its 16-month-old application specific integrated circuit business unit, according to the Web site of EE Times.
The technology site says Intel formed the unit in September 2001 under the assumption that it could "build a business by designing custom chips for outside companies." But, it said, Intel has had second thoughts about the ASIC business and began telling customers that last week. A company spokeswoman said Intel would honor existing customers, but she wouldn't disclose how many there were.
When the unit was formed, it was meant to offer a package of services including design, production, packaging and testing. It was to focus on custom-designed chips for the communications markets: broadband, local- and wide-area networking and wireless.
EE Times says there are several reasons why Intel might "have flinched. The number of ASIC design starts has fallen for the last several years as a result of the industry downturn, though there is no shortage of ASIC suppliers. This could have pushed profit margins down to unacceptable levels for the world's biggest chip maker."
Separately, the EE site says that some venture capital firms are again showing interest in certain kinds of semiconductor start-ups. It says the money available now is "cautious money ... that insists on understanding the end-market the chips will serve and on active involvement in some important decisions, such as outsourcing. But it is also money that goes in for the long term."
It quotes one venture capital investor as saying that 2003 looks like a sluggish year and 2004 is still hard to read, but it will probably bring a return to "reasonable conditions" for the electronics industry.
This timing is dire news for some companies, generally older start-ups, whose technology "matured when there was no market, and so they have never been able to ship anything," the investor, William Quigley of Clearstone Venture Partners, told EE.
He estimated that the number of failing ventures in 2003 could reach the thousands. But he said the situation was great news for other companies that might have chips completed in time for the probable 2004 recovery.
Only a few firms in any given area can expect to get funding, he told the site: "If you are not one of the first four companies to get funded, you are going to have to be something really special to get any interest."
Also, he said: "We don't fund chip designs that don't outsource to India." If a company relies on Indian contractors for the things they do well, he added, they can get a chip out for under $10 million. Otherwise, they won't be competitive. Even major Japanese chip companies, Quigley said, were starting to use Indian shops.
