Lehman Brothers yesterday slightly trimmed its forecast for economic growth in Asian countries excluding Japan to 7.2 percent for this year primarily because of accelerating inflation driven by import material prices.
In April, Lehman Brothers projected the region’s economy would expand at a 7.3 percent annual rate this year, slowing down from last year’s 9.1 percent growth.
The US investment bank kept its GDP growth projection unchanged for Taiwan at 3.9 percent for the year, though it expected inflation to rise faster at an annual 4.3 percent, up from its previous estimate of 3.8 percent.
Lehman Brothers said China might post weaker economic growth at 9.6 percent this year, following a previous estimate of 9.8 percent. As for India, the bank maintained its GDP growth projection unchanged at 7.5 percent.
‘HOLDING UP’
“Asian exports are holding up in value terms, but adjusted for export price inflation, the volume of export growth is slowing,” Lehman economist Rob Subbaraman wrote in a report released yesterday.
Subbaraman said the cost-pushing inflation shock topped his worries “because the longer it lasts the more it will hurt growth in a region heavily dependent on imported oil.”
Lehman Brothers raised its consumer price index (CPI) outlook to 6.7 percent for Asia this year from 6.1 percent forecast in April.
MACRO IMPACT
In China, “We think the biggest and most immediate macro impact will be on inflation,” wrote Sun Mingchun (孫明春), another Lehman Brother economist.
The US bank is still assessing the impact of the floods early this year and the earthquake in Sichuan last month.
Sun said the loss of agricultural output from the natural disasters and higher energy costs resulting from this week’s 20 percent hike in average fuel prices would be the main factors driving up China’s inflation this year.
Last month, Sun raised the forecast of China’s CPI inflation this year to 6.5 percent from 5.5 percent forecast in April.
Contract chipmaker United Microelectronics Corp (UMC, 聯電) yesterday said it has signed a memorandum of understanding (MOU) with Polar Semiconductor LLC to collaborate on the production of 8-inch wafers in the US. The collaboration aims to strengthen 8-inch wafer manufacturing in the US amid Washington’s efforts to increase onshore manufacturing of semiconductors, contribute to supply chain resilience against shifting geopolitical dynamics, and ensure a secure domestic supply of power semiconductors critical to automotive, electric grids, robotic manufacturing and data centers, the companies said in a joint statement. Under the MOU, Polar and UMC will identify devices for Polar to manufacture at
TECH TITANS: Amazon’s latest chip joins Google in competing for the 90 percent market share held by Nvidia, which claims it is ‘a generation ahead of the industry’ Amazon Web Services (AWS) on Tuesday launched its in-house-built Trainium3 artificial intelligence (AI) chip, marking a significant push to compete with Nvidia Corp in the lucrative market for AI computing power. The move intensifies competition in the AI chip market, where Nvidia dominates with an estimated 80 to 90 percent market share for products used in training large language models that power the likes of ChatGPT. Google last week caused tremors in the industry when it was reported that Facebook-parent Meta Platforms Inc would employ Google AI chips in data centers, signaling new competition for Nvidia. This followed the release last month of
TARIFF TALKS: The US secretary of commerce is eyeing more than US$300 billion in investments and said Taiwan would train US workers, but Taipei has denied the latter US Secretary of Commerce Howard Lutnick said the US is expecting a large investment pledge from Taiwan in trade talks, while President William Lai (賴清德) listed areas that need improvement in order for projects to be completed. “We’re in the midst of discussions,” Lutnick said on Wednesday. “But the fact is, this administration’s goal is to bring semiconductor manufacturing to America.” Lai on Wednesday said Taiwan is supportive of US President Donald Trump’s goal of reindustrializing the US, including efforts to ramp up semiconductor production. Such a goal would require the US to reduce its reliance on Taiwan as a key source
Foxconn Technology Group (富士康科技集團) and Luxshare Precision Industry Co (立訊精密) plan to add millions of gaming devices to Vietnam’s annual output, according to documents they submitted to local authorities, reinforcing the country’s role in the global supply of game consoles. Vietnam assembles a variety of electronic products destined for foreign markets, including smartphones, computers and tablets. Information on its production of consoles is not public, but Foxconn EV Energy & Component (Vietnam) Co, a subsidiary of the Taiwanese manufacturer, has capacity to produce up to 4 million gaming devices in a factory in Northern Vietnam, according to a company document from
RSS