Many people probably find the use of technological terms like nanometer or abbreviations like DRAM (dynamic random-access memory) in the headlines of newspapers perplexing. It may even be tempting to skip over such technical jargon, but for anyone who wants to know more about the state of the economy, the latest business forecasts from local technological heavyweights are essential reading.
Their comments often give an early glimpse of turning points in the economic cycle. Developments in the chip industry are especially important because the industry is the first link in the electronics food chain and also because Taiwan is one of the world’s top chip exporters.
On Thursday, Taiwan Semiconductor Manufacturing Co (TSMC) chairman and chief executive Morris Chang (張忠謀) said he expected quarterly growth at the world’s top contract chipmaker to more than halve to 8 percent, compared with 20 percent expansion last quarter. Even more worrying, Chang said that he expected “a dip” in the fourth quarter, blaming the “ailing world economy.”
The unusual warning reinforces the pessimism of those economists who believe that the nation’s export and GDP growth will be much weaker than initially forecast and highlights the unwillingness of government officials to admit that the economy is losing steam.
Chang said TSMC would experience an inventory-driven downcycle next quarter and in the first quarter of next year, as it did in 2008.
Perhaps the most recent forecasts are a closer approximation of economic reality. These take the form of a bewildering array of GDP figures that range from the government statistics agency’s optimistic 3.55 percent forecast to the forecast of 1.94 percent annual growth from Academia Sinica, which slashed its GDP growth forecast from the 3.81 percent it predicted in December last year, after axing its forecast for export growth from 5.15 percent to 0.87 percent.
TSMC is the first major technology company to report that performance will decline in the fourth quarter and, given the deteriorating global economy, it is unlikely to be the last. Watch out for more bearish news as earnings reports are released over the next few weeks.
United Microelectronics Corp (UMC) is expected to post a 7 percent increase in revenue quarter-on-quarter on the basis of technological migration and chips that cut the circuit width to 40 nanometers, or even 28 nanometers, followed by a 10 percent contraction next quarter.
UMC and TSMC generate almost half of their revenue making chips for handsets and other communications products. TSMC supplies chips to more than 2,000 clients around the world, with some chips going to gadgets like HTC Corp’s One series and Asustek’s Transformer tablets.
From the perspective of the PC industry, Nanya Technology Corp, which makes DRAMs, volatile memory chips used mostly in PCs to temporarily store data, on Wednesday forecast an unusually flat third quarter, bucking the standard growth expected during the back-to-school shopping season.
The company said the slowing global economy was dragging down PC demand.
With such a discouraging outlook for the communications and PC sectors, it is highly unlikely that the nation’s economy will escape unscathed.
Could Asia be on the verge of a new wave of nuclear proliferation? A look back at the early history of the North Atlantic Treaty Organization (NATO), which recently celebrated its 75th anniversary, illuminates some reasons for concern in the Indo-Pacific today. US Secretary of Defense Lloyd Austin recently described NATO as “the most powerful and successful alliance in history,” but the organization’s early years were not without challenges. At its inception, the signing of the North Atlantic Treaty marked a sea change in American strategic thinking. The United States had been intent on withdrawing from Europe in the years following
My wife and I spent the week in the interior of Taiwan where Shuyuan spent her childhood. In that town there is a street that functions as an open farmer’s market. Walk along that street, as Shuyuan did yesterday, and it is next to impossible to come home empty-handed. Some mangoes that looked vaguely like others we had seen around here ended up on our table. Shuyuan told how she had bought them from a little old farmer woman from the countryside who said the mangoes were from a very old tree she had on her property. The big surprise
The issue of China’s overcapacity has drawn greater global attention recently, with US Secretary of the Treasury Janet Yellen urging Beijing to address its excess production in key industries during her visit to China last week. Meanwhile in Brussels, European Commission President Ursula von der Leyen last week said that Europe must have a tough talk with China on its perceived overcapacity and unfair trade practices. The remarks by Yellen and Von der Leyen come as China’s economy is undergoing a painful transition. Beijing is trying to steer the world’s second-largest economy out of a COVID-19 slump, the property crisis and
Former president Ma Ying-jeou’s (馬英九) trip to China provides a pertinent reminder of why Taiwanese protested so vociferously against attempts to force through the cross-strait service trade agreement in 2014 and why, since Ma’s presidential election win in 2012, they have not voted in another Chinese Nationalist Party (KMT) candidate. While the nation narrowly avoided tragedy — the treaty would have put Taiwan on the path toward the demobilization of its democracy, which Courtney Donovan Smith wrote about in the Taipei Times in “With the Sunflower movement Taiwan dodged a bullet” — Ma’s political swansong in China, which included fawning dithyrambs