Taiwanese firms last month showed more confidence about their six-month business outlook on expectations that demand for artificial intelligence (AI) applications would benefit more sectors, the Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) said yesterday.
The sentiment gauge for local manufacturers printed 99.73, rising 1.07 points from a month earlier to a new 25-month high, as business is expected to flourish for chipmakers, thanks to the arrival of the high sales season for technology products, TIER economist Gordon Sun (孫明德) said.
Semiconductor firms are responsible for making chips used in AI, smartphones, high-performance computing and other applications.
Photo: Ritchie B. Tongo, EPA-EFE
High-end servers would prove another bright spot, Sun said, adding that he is less certain about replacement demand for AI personal computers.
The Taipei-based think tank said that 28.2 percent of local manufacturers are upbeat about their business prospects, while 16.7 percent forecast their business to weaken.
That expectation is because an economic recovery remains uneven as some manufacturers are still struggling with inventory adjustments and sharp competition from regional peers, Sun said.
The challenge is particularly evident for non-tech companies, which have to cope with terminations of favorable tax terms from China, which is axing the number of items that qualified under the Economic Cooperation Framework Agreement, the economist said.
That explained why 70 percent of chemical product suppliers hold flat views about business going forward, while steel makers have unfavorable views, he said.
“It will take longer for all sectors to share the benefit of economic recovery,” he said.
Machinery equipment and base metal product makers are also positive, as inventory adjustments have come to an end and they stand to benefit from public works projects and a renewed property market, Sun said.
The confidence measure for service providers climbed 1.69 points to 97.44, augmenting for three months in a row, the institute said.
Consumer spending remained healthy, but growth momentum slowed somewhat after two consecutive years of “revenge consumption,” Sun said, adding that securities and fund houses put up strong showings on the back of the TAIEX climbing to new highs.
The sentiment readings for construction companies and real-estate brokers rose 2.89 points to 110.05, as housing transactions heated up, aided by interest subsidies and an economic recovery.
TIER said it is not sure if the uptrend could sustain as the Executive Yuan is reviewing favorable lending terms for first-home purchases.
Many have blamed a resurgence of rising housing prices on the government-backed stimulus program. The central bank in the middle of this month tightened its reserve ratio by 25 basis points.
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