The Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) yesterday trimmed its forecast for Taiwan’s GDP growth this year from 3.81 percent to 3.45 percent and expected the pace to slow further to 2.91 percent next year, as global economic headwinds gain force.
Exports and private investment would weaken, leaving domestic demand to drive growth single-handedly, the Taipei-based think tank said.
The war in Ukraine and China’s draconian COVID-19 restrictions derailed global economic recovery this year, and fears of recession next year are developing amid drastic monetary tightening by major central banks aiming to tame inflation, TIER said.
Photo: CNA
“It would take great effort by supply chains to digest excessive inventory, so local firms had better brace for tough times that may prove longer than expected,” TIER president Chang Chien-yi (張建一) told a news conference.
The world could see low growth or recessions in the next two to four years, boding ill for Taiwan’s exports, Chang said.
High inflation in the US means that the world’s largest consumer of electronic gadgets would cut budgets for luxury items, notebook computers and smartphones, which would be unfavorable for local suppliers including mature chipmakers, he said.
FocalTech Systems Co (敦泰電子), a local supplier of touch screen integrated circuits used in flat panels, yesterday said it would shrink its payroll by 10 to 13 percent after incurring NT$2.5 billion (US$78.36 million) in inventory losses last quarter, equal to losses of NT$13.57 per share.
Flat-panel exports last month plunged 42 percent from a year earlier due to inventory adjustments and sluggish demand, government data showed.
US technology giants Tesla Inc, Twitter Inc and Facebook owner Meta Platforms Inc have announced massive layoffs to cope with poor business.
TIER expects exports to expand a modest 2.35 percent next year, from an estimated 9.86 percent increase this year, its report said.
Imports would slump from a 13.21 percent expansion this year to a mild 1.79 percent uptick, as international energy and raw material prices could fall amid tepid demand.
Private investment, a main driver of growth in recent years, would retreat from a 5.87 percent gain this year to a 2.83 percent rise next year, TIER said.
Major technology firms including Taiwan Semiconductor Manufacturing Co (台積電), the world’s top chipmaker, have cut or postponed capital expenditures due to order cancelations and concerns that inventory adjustments would persist through the first half of next year.
TIER Macroeconomic Forecasting Center director Gordon Sun (孫明德) said the US consumer prices last month grew 7.7 percent, still very high despite being milder than expected.
AI SERVER DEMAND: ‘Overall industry demand continues to outpace supply and we are expanding capacity to meet it,’ the company’s chief executive officer said Hon Hai Precision Industry Co (鴻海精密) yesterday reported that net profit last quarter rose 27 percent from the same quarter last year on the back of demand for cloud services and high-performance computing products. Net profit surged to NT$44.36 billion (US$1.48 billion) from NT$35.04 billion a year earlier. On a quarterly basis, net profit grew 5 percent from NT$42.1 billion. Earnings per share expanded to NT$3.19 from NT$2.53 a year earlier and NT$3.03 in the first quarter. However, a sharp appreciation of the New Taiwan dollar since early May has weighed on the company’s performance, Hon Hai chief financial officer David Huang (黃德才)
The Taiwan Automation Intelligence and Robot Show, which is to be held from Wednesday to Saturday at the Taipei Nangang Exhibition Center, would showcase the latest in artificial intelligence (AI)-driven robotics and automation technologies, the organizer said yesterday. The event would highlight applications in smart manufacturing, as well as information and communications technology, the Taiwan Automation Intelligence and Robotics Association said. More than 1,000 companies are to display innovations in semiconductors, electromechanics, industrial automation and intelligent manufacturing, it said in a news release. Visitors can explore automated guided vehicles, 3D machine vision systems and AI-powered applications at the show, along
FORECAST: The greater computing power needed for emerging AI applications has driven higher demand for advanced semiconductors worldwide, TSMC said The government-supported Industrial Technology Research Institute (ITRI) has raised its forecast for this year’s growth in the output value of Taiwan’s semiconductor industry to above 22 percent on strong global demand for artificial intelligence (AI) applications. In its latest IEK Current Quarterly Model report, the institute said the local semiconductor industry would have output of NT$6.5 trillion (US$216.6 billion) this year, up 22.2 percent from a year earlier, an upward revision from a 19.1 percent increase estimate made in May. The strong showing of the local semiconductor industry largely reflected the stronger-than-expected performance of the integrated circuit (IC) manufacturing segment,
COLLABORATION: Softbank would supply manufacturing gear to the factory, and a joint venture would make AI data center equipment, Young Liu said Hon Hai Precision Industry Co (鴻海精密) would operate a US factory owned by Softbank Group Corp, setting up what is in the running to be the first manufacturing site in the Japanese company’s US$500 billion Stargate venture with OpenAI and Oracle Corp. Softbank is acquiring Hon Hai’s electric-vehicle plant in Ohio, but the Taiwanese company would continue to run the complex after turning it into an artificial intelligence (AI) server production plant, Hon Hai chairman Young Liu (劉揚偉) said yesterday. Softbank would supply manufacturing gear to the factory, and a joint venture between the two companies would make AI data
RSS