Fund outflows from Taiwan reached a record high in the first quarter of this year, marking the 47th consecutive quarter of cash transferring out of the country, as the central bank attributed the pattern to overseas bond investments by Taiwanese financial institutions.
It was the third straight quarter that Taiwan reported record high fund outflows.
Data compiled by the central bank showed net outflows in Taiwan’s financial account — which measures the flow of direct investment and portfolio investment — totaled US$32.22 billion in the January-to-March quarter, up from US$18.56 billion a year earlier.
Photo: CNA
The first quarter’s fund outflow also beat the US$31.78 billion recorded in the fourth quarter of last year, the central bank’s statistics showed.
A spike in US Treasury yields prompted many Taiwanese financial institutions to park funds overseas after the US Federal Reserve introduced a rate-hike cycle that began in March, bank officials said.
The increase in net fund outflows came after portfolio investments abroad posted a net asset increase of US$49.92 billion, as insurance companies raised their investment in debt securities overseas, they said.
Out of the US$49.92 billion, residents’ portfolio investment abroad posted a net increase of US$35.21 billion on the back of a rise in overseas debt securities investment by insurance companies as well as other financial institutions, bank officials said.
Non-residents’ portfolio investment recorded a net fall of US$14.72 billion, as foreign investors reduced equity holdings in the local stock market in the first quarter, when the TAIEX shed 525.37 points, or 2.88 percent, after foreign institutional investors sold a net NT$459 billion (US$15.48 billion).
Over the past 47 quarters, accumulated net fund outflows hit US$660.51 billion, equivalent to more than seven years of Taipei’s tax revenue.
Addressing concerns that investors could continue to move funds out of the country and into US dollar-denominated assets, the central bank said that net financial account outflows are common among countries like Taiwan, which have a long-term current account surplus.
Other countries, like Japan, Singapore, South Korea and Germany, which have all had such a surplus, have also tended to record net financial account outflows, the bank said.
A current account mainly measures exports and imports of merchandise and services.
Taiwan in the first quarter recorded a current account surplus of US$30.68 billion, up US$4.85 billion from a year earlier, reporting a US$20.47 billion surplus in commodity trade, up US$1.7 billion from a year earlier, due to solid global demand for technology products amid a digital transformation.
Additionally, service trade reported a surplus of US$4.34 billion, a new quarterly high, due to increases in cargo shipping revenue amid tight supply, the central bank said.
Meanwhile, the central bank’s reserve assets rose only US$260 million, as the bank entered the foreign exchange market by selling US dollars to cap the depreciation of the New Taiwan dollar against a strong greenback.
SEMICONDUCTOR SERVICES: A company executive said that Taiwanese firms must think about how to participate in global supply chains and lift their competitiveness Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said it expects to launch its first multifunctional service center in Pingtung County in the middle of 2027, in a bid to foster a resilient high-tech facility construction ecosystem. TSMC broached the idea of creating a center two or three years ago when it started building new manufacturing capacity in the US and Japan, the company said. The center, dubbed an “ecosystem park,” would assist local manufacturing facility construction partners to upgrade their capabilities and secure more deals from other global chipmakers such as Intel Corp, Micron Technology Inc and Infineon Technologies AG, TSMC said. It
EXPORT GROWTH: The AI boom has shortened chip cycles to just one year, putting pressure on chipmakers to accelerate development and expand packaging capacity Developing a localized supply chain for advanced packaging equipment is critical for keeping pace with customers’ increasingly shrinking time-to-market cycles for new artificial intelligence (AI) chips, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) said yesterday. Spurred on by the AI revolution, customers are accelerating product upgrades to nearly every year, compared with the two to three-year development cadence in the past, TSMC vice president of advanced packaging technology and service Jun He (何軍) said at a 3D IC Global Summit organized by SEMI in Taipei. These shortened cycles put heavy pressure on chipmakers, as the entire process — from chip design to mass
People walk past advertising for a Syensqo chip at the Semicon Taiwan exhibition in Taipei yesterday.
NO BREAKTHROUGH? More substantial ‘deliverables,’ such as tariff reductions, would likely be saved for a meeting between Trump and Xi later this year, a trade expert said China launched two probes targeting the US semiconductor sector on Saturday ahead of talks between the two nations in Spain this week on trade, national security and the ownership of social media platform TikTok. China’s Ministry of Commerce announced an anti-dumping investigation into certain analog integrated circuits (ICs) imported from the US. The investigation is to target some commodity interface ICs and gate driver ICs, which are commonly made by US companies such as Texas Instruments Inc and ON Semiconductor Corp. The ministry also announced an anti-discrimination probe into US measures against China’s chip sector. US measures such as export curbs and tariffs
RSS