Owing to Taiwan’s advantages in the global electronics industry and multinational companies’ growing tendency to shift their production bases out of China, the local industry could benefit in the post-COVID-19 pandemic period, Yuanta Securities Investment Consulting Co (元大投顧) economist Yen Chen-hui (顏承暉) said last week.
The Taiwanese electronics industry — the pillar of the nation’s manufacturing sector — is riding on cutting-edge technology trends in the areas of 5G, artificial intelligence (AI), the Internet of Things (IoT) and blockchain, despite facing pandemic woes, Yen said in a report released on Friday.
“Tech trends are not changing because of the virus, and Taiwan is fortunately well-positioned on the tide of radical innovations such as 5G, AI, IoT, blockchain, etc, while living habits of people may change a great deal in the next few years because of technology advancement. Overall, Taiwan should have many opportunities to ride on these tech trends,” Yen said.
The report said that the global electronics industry has been characterized by “low customization, mass production” over the past two decades, with only PCs, notebook computers and mobile handsets being connected to the Internet.
As a result, manufacturers pursued “standardization and mass production” of their products, a scenario that helped turn China into the world’s factory because of its low labor, land and raw material costs, while hollowing out Taiwan’s industrial base and leading to an outflow of talented Taiwanese, the report said.
However thanks to the AI, 5G and IoT trends, the electronics industry is shifting to “high customization, small production,” with connected devices no longer being limited to PCs, notebooks and handsets, but also extending to many more devices in an interconnected world, ranging from Bluetooth-enabled headsets and wireless speakers to smart watches, vacuum cleaners, refrigerators and vehicles, the report said.
In an increasingly interconnected world, demand for modules used in connected devices is bigger than before, and it is impossible that only a few large firms could provide them all, it said.
That is because the specifications of such modules would vary among devices, thus requiring much more customization — an opportunity for Taiwan’s many small and medium-sized enterprises (SMEs) in the electronics industry that are good at flexible production, Yen said.
“This change will benefit Taiwan, as its vibrant SMEs and respect for intellectual property rights will enable Taiwanese firms to win niche opportunities, as Taiwan’s value is rediscovered and investment opportunities arise,” he said.
However, COVID-19 has knocked global growth expectations for this year off course, Moody’s Analytics said on Wednesday, forecasting that global growth might slow to 1.9 percent this year, down from the 2.6 percent it forecast in January.
China’s GDP is expected to rise 4.6 percent this year, 1.6 percentage points weaker than predicted in January, while US economic growth would be 1.4 percent this year, compared with the 1.9 percent predicted earlier, Moody’s Analytics said in a report.
The outbreak has evolved beyond being a shock emanating from China and into a truly global problem, Moody’s Analytics said, adding that its weekly business confidence survey shows expectations of current and future conditions have deteriorated to their lowest level since the global recession in 2009.
“If businesses believe that conditions six months ahead will be just as weak as they currently are, they will continue to hold back on investment and hiring, and the risk that this will become a self-fulfilling prophecy is high, adding further damage to global growth expectations,” Moody’s Analytics senior APAC economist Katrina Ell wrote.
“It is not the virus itself, but rather the fear and panic related to the virus and the associated altered economic behavior that could be a damaging tipping point, forcing the global economy onto a darker path,” she added.
MARKET BOOST: Elon Musk said Tesla would resume bitcoin transactions once there is ‘reasonable’ clean energy usage by miners and denied selling a big part of his holdings Bitcoin yesterday hit a two-week peak just shy of US$40,000, after another weekend reacting to tweets from Tesla Inc chief executive Elon Musk, who fended off criticism over his market influence and said Tesla sold bitcoin, but might resume transactions using it. Bitcoin has gyrated to Musk’s views for months since Tesla announced a US$1.5 billion bitcoin purchase in February and said it would take the cryptocurrency in payment. He later said the electric vehicle maker would not accept bitcoin due to concerns over how mining the currency requires high energy use and contributes to climate change. “When there’s confirmation of reasonable
China Steel Corp (中鋼), the nation’s biggest steelmaker, yesterday said that it would not be raising prices for some products next month, ending 12 consecutive months of increases. “There is a discrepancy between China Steel’s prices and international prices, but in consideration of price stability, we have decided not to adjust upward monthly-priced products,” the company said in a statement. That means the price of hot-rolled steel plates, hot-rolled steel coils, cold-rolled steel coils and other monthly-priced items would not change next month. However, the cost of other items priced seasonally would be going up, the company said, adding that prices of products
Synopsys Inc, a US-based electronic design automation solutions provider, yesterday said that it has signed up more than 20 of its clients for the latest device made using the most recent advanced process developed by Taiwan Semiconductor Manufacturing Co (TSMC, 台積電). Synopsys’ DesignWare IP, which is used by designers of integrated circuits, has been used by more than 20 clients in a wide range of industries, including automotive electronics, artificial intelligence, high-performance computing devices and servers, the company said in a statement. The DesignWare IP solution was made using TSMC’s advanced 5 nanometer process, its latest technology, which the semiconductor giant launched
MOVING ON UP: Taiwan improved in all four areas measured by the IMD, making its biggest leap, from 17th to sixth place, in economic performance Taiwan moved up three spots from last year to place eighth, its best performance since 2013, in the latest annual world competitiveness rankings, released yesterday by the International Institute for Management Development (IMD). Innovation, digitalization, welfare benefits and social cohesion are critical to economic performance, with Switzerland, Sweden, Denmark, the Netherlands and Singapore making up the top five on the list this year, the Switzerland-based institute said, after grading 64 countries and regions based on economic performance, infrastructure, and government and business efficiency. “Leading performers are characterized by varying degrees of investment in innovation, diversified economic activities and supportive public policy,” IMD