The nation’s economic growth is gathering pace this year, boosted by increased spending on equipment by local manufacturers as a better-than-expected global economic recovery is spurring on rising demand for electronics made by local firms, a Taipei-based think tank forecast yesterday.
The Taiwan Institute of Economic Research (TIER, 台經院) yesterday raised its forecast for the export-oriented economy’s growth this year for the second time to 5.11 percent year-on-year, from the 4.81 percent it estimated in January.
TIER’s forecast is higher than the government’s projection of 4.72 percent growth this year and is also the highest among local private-run think tanks, such as the Chung-Hua Institution for Economic Research (中華經濟研究院), which has forecast 4.99 percent year-on-year GDP growth.
TIER economist Chen Miao (陳淼) said strong private investment was the key.
“Local companies are more willing to invest and they are able to increase [equipment] spending, leading to an upward revision of our forecast on private investment,” Chen said.
Private investment is expected to grow 15.3 percent year-on-year to US$1.74 trillion, faster than the increase of 7.9 percent to US$1.6 trillion originally estimated, Chen said.
Taking the lead, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, has budgeted a record high of US$4.8 billion on new equipment this year.
Exports are expected to grow by 26.83 percent to US$258.3 billion, exceeding the previous estimate of a 10.51 percent increase to US$225.1 billion, as the better-than-expected recovery of the global economy is helping stimulate demand for goods made by local firms, Chen said.
“Recently, we have seen the US and Europe join the economic recovery, which had already started in other regions,” he said.
That reflected an improvement in an industrial indicator based on TIER’s survey of local manufacturers. The indicator rose to 118.27 last month, up from a revised 116.54 in February, indicating local manufacturers are more bullish about orders and demand over the next six months.
This year, imports are expected to expand to US$233.4 billion because of rising raw material prices and increasing equipment purchases, bringing the nation’s trade surplus to US$24.9 million, down from an earlier estimate of US$32.7 million.
Chen kept the private consumption forecast unchanged at 2.7 percent year-on-year because of high unemployment and stagnant payrolls.
Taiwan’s consumer price index is expected to rise mildly to 1.77 percent year-on-year, from TIER’s previous forecast of 1.54 percent, a figure that Chen said would not undermine the economic recovery.
TIER expects the New Taiwan Dollar to rise to about NT$31.35 against the US dollar by the end of this year, a faster revaluation when compared with a January forecast of NT$31.395.
Chen did not take a stronger Chinese yuan into consideration. An appreciation of the yuan against the greenback is expected to boost Asian currencies.
Yesterday, the NT dollar rose NT$0.101 against the US dollar to close at NT$31.359, a 20-month high, on turnover of US$1.199 billion.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts