A trade group yesterday called on the government to stabilize the local currency, saying a strong New Taiwan dollar against its US counterpart would erode corporate profitability and undermine the nation’s exports.
Taipei-based Chinese National Association of Industry and Commerce (CNAIC, 工商協進會) chairman Lin Por-fong (林伯豐) pleaded with policymakers to give serious thought to the health of local enterprises while they seek to avoid currency manipulation charges from the US.
“A strong NT dollar could deal a heavy blow to local exports if it appreciates above the NT$27 level in Taipei against the greenback,” Lin told reporters on the sidelines of a public function.
Photo: CNA
The local currency yesterday closed virtually flat at a 23-year high of NT$28.45 against the US dollar, smashing the NT$28.5 defense reportedly set by former central bank governor Perng Fai-nan (彭淮南).
Currency analysts have forecast a continued upturn as the US Federal Reserve’s money-printing policy would keep the US dollar soft, while Taiwan’s economic recovery and vibrant exports attract capital inflows.
The trend bodes ill for local exporters, many of which have incurred foreign-exchange losses and might lose orders to regional rivals, aided by favorable tariff rates following the signing of the Regional Comprehensive Economic Partnership (RCEP) on Nov. 15, Lin said.
The trade bloc consists of 15 Asia-Pacific members — including ASEAN nations, Australia, China and New Zealand — that account for nearly 30 percent of the global population and GDP.
This year is already characterized by turbulence due to the COVID-19 pandemic, US-China trade tensions, the US presidential elections, financial market volatility and the RCEP exclusion, Lin said, adding that a strengthening NT dollar is posing an additional challenge to corporate operations.
While currencies in Malaysia, Thailand and other countries are also picking up, their pace is not as steep as that of the NT dollar, Lin said.
As of yesterday, the NT dollar had already gained 5.5 percent this year, central bank data showed.
Lin said that he understood the central bank’s effort to avoid being accused of currency manipulation, but the survival of local exporters is at stake.
Suppliers of textiles, machinery and electronics might have no choice but to move manufacturing elsewhere with a more favorable operating environment, he said.
The government should also try to pursue free-trade agreements with other countries and help returning companies purchase land for industrial use at reasonable rates, CNAIC said.
The domestic unit of the Chinese-owned, Dutch-headquartered chipmaker Nexperia BV will soon be able to produce semiconductors locally within China, according to two company sources. Nexperia is at the center of a global tug-of-war over critical semiconductor technology, with a Dutch court in February ordering a probe into alleged mismanagement at the company. The geopolitical tussle has disrupted supply chains, with some carmakers reportedly forced to cut production due to chip shortages. Local production would allow Nexperia’s domestic arm, Nexperia Semiconductors (China) Ltd (安世半導體中國), to bypass restrictions in place since October on the supply of silicon wafers — etched with tiny components to
Taiwan’s foreign exchange reserves fell below the US$600 billion mark at the end of last month, with the central bank reporting a total of US$596.89 billion — a decline of US$8.6 billion from February — ending a three-month streak of increases. The central bank attributed the drop to a combination of factors such as outflows by foreign institutional investors, currency fluctuations and its own market interventions. “The large-scale outflows disrupted the balance of supply and demand in the foreign exchange market, prompting the central bank to intervene repeatedly by selling US dollars to stabilize the local currency,” Department of Foreign
Taiwan is open to joining a global liquefied natural gas (LNG) program if one is created, but on the condition that countries provide delivery even in a scenario where there is a conflict with China, an energy department official said yesterday. While Taiwan’s priority is to have enough LNG at home, the nation is open to exploring potential strategic reserves in other countries such as Japan or South Korea, Energy Administration Deputy Director-General Chen Chung-hsien (陳崇憲) said. While the LNG market does not have a global reserve for emergencies like that of oil, the concept has been raised a few times —
AI-FUELED DEMAND: The company has been benefiting from the skyrocketing prices for DRAM chips amid the AI frenzy, especially its core product — DDR4 DRAM chips DRAM chipmaker Nanya Technology Corp (南亞科技) yesterday reported that its revenue for the first quarter surged 582.91 percent to NT$49.09 billion (US$1.54 billion) from NT$7.19 billion a year earlier, as the supply crunch caused chip price spikes. Last quarter’s figure is the highest on record. On a quarterly basis, revenue jumped 63.14 percent from NT$30.09 billion, the company said. In January, Nanya Technology expected global DRAM supply scarcity to continue through the first half of 2028, thanks to strong demand for artificial intelligence (AI) applications. Market researcher TrendForce Corp (集邦科技) forecast prices of standard DRAM chips would rise between 58 percent and 63
RSS