Australia and New Zealand Banking Group (ANZ) yesterday raised its growth forecast for Taiwan this year to 2.3 percent from its July prediction of 1.7 percent, as the effects of escalating US-China trade tensions seem to have been offset by holiday demand for electronics.
Economic data has been mixed, with resilient export orders, but slowing exports, the group said.
“Being a key player in the global information technology sector, the impact may become apparent in the coming months,” it said.
Equity flows are reflective of investor sentiment, it said, adding that after an outflow of US$11.8 billion between February and June, foreigners bought US$2.7 billion in the third quarter.
Investment sentiment might grow increasingly cautious as the trade war starts to bite, given Taiwan’s heavy participation in regional supply chains, it said.
Export orders rose in July and August and might have maintained its growth momentum last month, ANZ said, bucking the Ministry of Finance’s prediction for a mild decline due to fewer working days this year.
However, risks might rise as the trade war clouds export and growth outlooks, it said, adding that external uncertainties would also affect the pace of domestic demand to support growth.
In the second quarter, net exports were the biggest contributor to the 1.65 percentage point growth in GDP, ANZ said.
Private investment improved amid strong equipment and machinery imports in July and August, but the uptrend might prove temporary as holiday demand fades, it said.
In addition, private consumption seems to be losing steam despite a stable job market and wage increases, as evidenced by slower growth in monthly retail sales, it said.
Inflation continued to climb on the back of higher oil prices and the New Taiwan dollar’s depreciation, but headline inflation has stayed below the 2 percent alarm level and is unlikely to shift the central bank’s policy in the near term, ANZ said.
Volatility in some emerging markets seems to have had little impact on the financial market, although it is on the central bank’s radar, it said.
Liquidity remains ample and lacks signs of massive capital outflows after net foreign capital flows turned positive in July, it said, adding that foreign-exchange reserves are still increasing and could provide a buffer for external shocks if necessary.
“The central bank will therefore stay put until the first quarter of next year,” ANZ said, adding that interest rates might stay low in the near term, thanks to an accommodative monetary policy.
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