Public and private research institutes plan to raise their forecasts for the nation’s economic growth last year and this year after major economic bellwethers turned out stronger and continue to outperform, Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) president Chang Chien-yi (張建一) said yesterday.
Chang shared his views on the nation’s economic outlook in a speech to the Third Wednesday Club (三三會), a local trade group that limits membership to the top 100 firms of each business sector.
The Directorate-General of Budget, Accounting and Statistics (DGBAS) is to release this month an advance report on the economy in the fourth quarter of last year, and next month an update of its economic projections for this year.
The DGBAS might revise up its GDP growth forecast for last year from 2.54 percent to between 2.7 and 2.8 percent, given stronger exports and other key economic indicators, Chang said.
Exports expanded 11.7 percent in the fourth quarter, beating the government’s forecast by 3.9 percentage points, thanks to robust demand for 5G wireless devices and electronics used in the work-at-home and distance-learning trends, the Ministry of Finance said earlier this month.
TIER would need to revise upward its own growth predictions, which are to be released on Monday next week, Chang said.
In November last year, the Taipei-based institute projected growth of 4.1 percent for this year.
“Taiwan appears to have emerged from an anemic economic state seen in past years, with GDP growth of 1 to 2 percent,” Chang said, adding that the economy is expected to expand by 4 to 6 percent from this year, bolstered by overseas and domestic demand.
Investment by the public and private sectors is underpinning the difference, the economist said.
Taiwan Semiconductor Manufacturing Co (台積電), the world’s largest contract chipmaker, whose clients include Apple Inc, Qualcomm Inc, Nvidia Corp, Advanced Micro Devices Inc and other global technology giants, is looking at capital spending of US$25 billion to US$28 billion this year.
The record spending would spur local firms in TSMC’s supply chain to follow suit and lend further support to private investment, Chang said.
Local companies are generally upbeat about their business outlook, based on TIER’s sentiment surveys, the economist said, as Taiwan benefits from being a reliable and trustworthy partner amid the COVID-19 pandemic and US-China trade tensions.
Rock Hsu (許勝雄), chairman of the Third Wednesday Club and contract laptop maker Compal Electronics Inc (仁寶電腦), said that order visibility at his company extends into the second quarter.
Spiking COVID-19 cases in many parts of the world would have a limited effect on Taiwan’s economy, Hsu said.
RETAIL BANKING EXIT: Clients are concerned whether their rights would be protected, while employees were caught by surprise as the bank had just upgraded its services Citibank Taiwan Ltd (花旗台灣) yesterday said that credit card clients could continue using their cards as operations would continue normally until it sells its consumer banking business. As of February, the bank had 2.86 million credit cards in circulation in Taiwan, of which 2.17 million had been used in the past six months, ranking it sixth among all banks, data from the Financial Supervisory Commission showed. Credit card spending by Citibank clients totaled NT$15.66 billion (US$552.6 million) in February, also ranking sixth among banks in Taiwan. Citibank was the only foreign bank that made it into the top six. Customers should not
FUTURE GROWTH: TSMC chief executive officer C.C. Wei said customer demand for 3 and 5-nanometer technologies is so strong that it needs to spend on more capacity Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday raised this year’s capital expenditure to a record US$30 billion, as demand for advanced chips used in high-performance-computing (HPC) applications is stronger than last quarter. The figure surpasses the chipmaker’s allocation in January of US$25 billion to US$28 billion. The investment is part of a three-year US$100 billion capital expansion plan that TSMC unveiled earlier this month. “As we enter a period of higher growth, underpinned by the multiple years of structural mega-trends of 5G-related and HPC applications, we believe a higher level of capital investment is necessary to capture the future growth opportunities,” TSMC
PANDEMIC EFFECT: Chromebook shipments in the first quarter more than tripled from a year earlier, driven primarily by educational institutions in North America Despite a semiconductor shortage, global PC shipments in the first quarter of this year increased 32 percent from a year earlier, preliminary data from research firm Gartner Inc showed. Shipments in the January-to-March period totaled 69.87 million units from 52.93 million units a year earlier, Gartner said in a report on Monday last week. The quarterly increase in shipments marked the fastest annual growth since it began tracking the PC market in 2000, Gartner said. “This growth should be viewed in the context of two unique factors: comparisons against a pandemic-constrained market and the current global semiconductor shortage,” Gartner research director Mikako Kitagawa
UNWINDING BIGGEST DEAL: Five years ago, Dell acquired VMware’s parent, EMC Corp, for US$67 billion, which helped the PC maker to branch out from its origins Dell Technologies Inc on Wednesday said that it would spin off its stake in VMware Inc, creating two publicly traded companies and raising cash to pay down debt. Its shares jumped on the announcement. The spinoff would unwind, at least in part, a consolidation created five years ago in Dell’s US$67 billion acquisition of VMware’s parent, EMC Corp. The spending spree helped Dell branch out from its origins as a PC maker, but left the company saddled with debt. VMware would distribute a special cash dividend of US$11.5 billion to US$12 billion to shareholders at the close of the deal, which is