The Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) on Friday played down last month’s drop in major sub-indices of the institute’s business sentiment gauge, saying that the outcome was to be expected as growth momentum cools from a standout third quarter.
Business sentiment for the manufacturing and service composite sub-indices fell for the second month in a row, while the construction sub-index was unable to sustain gains made in September, according to the institute’s latest monthly survey.
The manufacturing sector dropped 0.97 points to 100.69, while the services industry fell 2.23 points to 91.05, the survey showed.
The construction sub-index also fell 2.41 points to 93.4, stopping a rebound of 0.17 points seen in September.
The weakened sentiment in the manufacturing sector was a reflection that the nation’s technology sector is growing cautious as the peak season for consumer electronics shipments ends, while other suppliers have begun cutting imports of semiconductor equipment, the institute said.
While long holidays in the past month boosted retail consumption, insurers and securities brokerages saw revenue contract due to lower turnover on the local bourse, impacting the services sector, it said.
As for the construction sector, sentiment was dimmed by an accumulated backlog of housing projects built between 2015 and this year, while potential buyers put purchase plans on hold due to expectations that prices would fall, the report said.
Developers are expected to continue launching new projects next year despite rising land costs, the report said.
Last month’s business sentiment does not mean that Taiwan’s economic growth momentum is weakening, because strong gains during the third quarter had set a high base, Economic Forecast Center director Gordon Sun (孫明德) said.
Exports are not likely to sustain double-digit growth as seen in the third quarter, while prospects are also dimmed by the markets’ tepid reception for Apple Inc’s new iPhone devices, Sun said.
Still, following the government’s wage hike for public-sector workers, the private sector is expected to follow suit, which might add consumption-driven momentum to overall GDP growth next year, he said.
Due to improving global outlook and strong foreign trade, the Directorate-General of Budget, Accounting and Statistics on Friday adjusted its GDP growth forecast for this year to 2.58 percent, up from its August estimate of 2.11 percent, and raised its forecast for next year to 2.29 percent, an increase of 0.02 percentage points.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to