The US economy is likely to experience a strong rebound during the remainder of this year, which bodes well for Taiwan’s exports of smartphones and consumer electronics products, Standard Chartered Bank said yesterday.
The US could see an increased recovery in the coming months supported by rising consumer and investment spending as oil prices stabilize and a tax incentive expires at the end of next year, Steve Brice, chief investment strategist at Standard Chartered, told a media briefing in Taipei.
The increases in international crude oil prices eroded 1.5 percent of US households’ disposable income in the first half of this year, but the situation is unlikely to repeat itself in the second half, allowing Americans to spend more, Brice said.
Improving personal savings are expected to boost consumption, although the high jobless rate may continue to weigh on the US economy, the investment strategist said.
US companies will help stage a strong rebound by taking advantage of an investment tax credit, which is scheduled to expire at the end of next year, Brice said.
The stable US economic recovery is favorable for Taiwan’s export-focused economy because the US is the world’s largest end-market for consumer electronics and communications products.
Export orders — a gauge of real overseas shipments one to three months in the future — from the US rose 16.52 percent year-on-year to a record high of US$8.81 billion last month, staying above the US$8 billion mark for a fourth consecutive month, the Ministry of Economic Affairs said last week.
The ministry attributed the aggressive increase in US orders to consumer demand for smartphones and tablets.
Standard Chartered is also upbeat about the recovery elsewhere in the world.
Brice said Japan is poised for a V-shaped recovery late this quarter onward, albeit from very depressed levels.
“We have already started to see an improvement in economic activity and expect a strong rebound once Japan kicks off its reconstruction effort,” Brice said.
The devastation of a powerful earthquake and tsunami on March 11 weakened Japan’s export orders, which contracted 15.95 percent to US$3.59 billion last month from the same period last year.
In Europe, the economy will fare relatively well despite the sovereign debt crisis, Brice said, although the British banking group does not expect Europe to be a driver of global growth for the foreseeable future.
China’s GDP growth is expected to slow to 7 percent this quarter following an extended cycle of monetary policy tightening, but it may regain momentum next year as inflationary pressures subside, Standard Chartered said.
“We expect inflation to start falling next month,” Brice said. “The signs of economic slowdown may lead [Chinese] authorities to ease policy at the turn of the year, allowing the economy to rebound over 10 percent in 2012.”
The main risks to the global economic outlook include deterioration in the European sovereign debt crisis, a slower US economic recovery and a hard landing in China, Brice said, adding that ratings downgrades on US sovereign debt may also lead to a market collapse.
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