The Directorate-General of Budget, Accounting and Statistics (DGBAS) yesterday raised its forecast for Taiwan’s GDP growth this year to 6.09 percent, citing strong private investment as tech firms aggressively upgraded and expanded capacity to meet global demand.
GDP growth next year is expected to be 4.15 percent, up from a previous estimate of 3.69 percent, as capacity expansions would translate into actual exports, the main growth driver, DGBAS deputy head Tsai Hung-kun (蔡鴻坤) told a news conference in Taipei.
Capital formation gained 41.21 percent in the third quarter, with semiconductor equipment and manufacturing capital equipment imports spiking 58.9 percent and 11.73 percent respectively, the agency said in a report.
Photo: Annabelle Chih, Reuters
Taiwan is home to the world’s largest contract suppliers of chips used in smartphones, laptops, TVs and vehicles, as well as artificial intelligence and Internet of Things applications.
Customers around the world have pressed local makers to increase supply to ease shortages that have slowed vehicle production.
Local shipping and construction companies also contributed to capital formation, which added 7.2 percentage points to third-quarter GDP, more than muting a 5.6 percent decline in private consumption, it said.
GDP growth last quarter was 3.7 percent, down 0.1 percentage points from data published late last month, Tsai said.
Private investment is expected to grow 18.88 percent this year, the most since 2011, as firms move manufacturing facilities to Taiwan from abroad, boosting exports, he said.
The trend explained why exports last month surpassed US$40 billion for the first time, he said, adding that such volumes would become normal.
The DGBAS trimmed its forecast for full-year export growth by 1.18 percentage points to 16.75 percent and raised its imports forecast by 0.67 percentage points to 18.49 percent.
Tsai attributed the revision in exports to supply chain bottlenecks.
Soaring raw material prices and congestion at ports have created chaos for production schedules and delivery times, he said.
Private consumption would become a bright spot next year, with an expected 5.36 percent advance, but would show growth of only 0.07 percent this year, because a recovery is not evident, Tsai said.
The situation would improve, aided by effective controls for COVID-19 and the government’s stimulus measures, he said.
The DGBAS said that it expects consumer prices to rise 1.98 percent this year and moderate to 1.61 percent next year.
A pay increase of 5 percent next year would mitigate the pinch, Tsai said, adding that Taiwan is catching up with South Korea in per capita income and might overtake it in 2025.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, has decided to slow down its 3-nanometer chip production as Intel Corp, one of its major customers, plans to push back the launch of its new Meteor Lake tGPU chipsets to the end of next year, market researcher TrendForce Corp (集邦科技) said yesterday. That means Intel has canceled almost all of the 3-nanometer capacity booked for next year, with only a small amount of wafer input remaining for engineering verification, the Taipei-based researcher said in a report. Based on Intel’s original schedule, TSMC was to start producing the new chipsets in
DATA SHOW DOWNTURN: Manufacturing in Taiwan contracted as production and demand slumped, while growth in chip exports last month eased in South Korea World chip sales growth has decelerated for six straight months in another sign that the global economy is straining under the weight of rising interest rates and mounting geopolitical risks. Semiconductor sales rose 13.3 percent in June from a year earlier, down from 18 percent in May, data from the global peak industry body showed. The slowdown is the longest since the US-China trade dispute in 2018. The three-month moving average in chip sales has correlated with the global economy’s performance in the past few decades. The latest weakness comes as concern about a worldwide recession has prompted chipmakers such as Samsung
‘NO NEED TO WORRY’: The central bank governor said foreign selling on the TAIEX is normal for this time of year and that the nation has ample forex reserves Taiwan would emerge unscathed from China’s retaliatory actions to protest US House of Representatives Speaker Nancy Pelosi’s visit to Taipei, top monetary and financial officials said yesterday. Central bank Governor Yang Chin-long (楊金龍) shrugged off unease over potential instability in the foreign exchange and stock markets after foreign portfolio funds trimmed their holdings of local shares for two straight days amid Beijing’s threats of retaliation. “There is no need to worry,” Yang said on the sidelines of an event to celebrate the first anniversary of the opening of Central American Bank for Economic Integration’s (CABEI) Taipei office and the 30th anniversary of
Italy is close to clinching a deal initially worth US$5 billion with Intel Corp to build an advanced semiconductor packaging and assembly plant in the country, two sources briefed on discussions said yesterday. Intel’s investment in Italy is part of a wider plan announced by the US chipmaker earlier this year to invest US$88 billion in building capacity across Europe, which is striving to cut its reliance on Asian chip imports and ease a supply crunch that has curbed output in the region’s strategic auto sector. Asking not to be named due to the sensitivity of the matter, the sources said the