Singapore-based DBS Bank yesterday raised its forecast for Taiwan’s GDP growth this year to 4.2 percent, from the 3.5 percent it predicted in April, as the nation’s exports are expected to improve, aided by demand for artificial intelligence (AI) applications.
DBS senior economist Ma Teiying (馬鐵英) told a news conference in Taipei that she was aware the projection is higher than most forecasts, including the Directorate-General of Budget, Accounting and Statistics’ 3.94 percent.
Ma attributed her optimism to a robust recovery and the arrival of the high sales season for technology products.
Photo: AFP
Growth momentum would pick up quarterly, but slow year-on-year due to a base comparison effect, she said.
Generative AI is fueling demand for high-performance AI chips in data centers, as US technology titans Amazon Web Services, Alphabet Inc’s Google, Microsoft Corp and others spend lavishly on developing AI-optimized chips to enhance operational efficiency and reduce costs in delivering AI-based services, Ma said.
AI integration in PCs and smartphones would also present new opportunities for commonly used applications, she said, adding that AI-capable laptops would make up 13 percent of the market this year and soar to 74 percent by 2027.
Photo: Wu Hsin-tien, Taipei Times
At the same time, AI-enabled smartphones would comprise 11 percent of shipments this year and spike to 43 percent in the next three years, she said.
World Semiconductor Trade Statistics recently revised its forecast for global semiconductor market growth to 16 percent year-on-year, up from its previous estimate of annual growth of 13.1 percent, citing robust advancements in memory and logic chip segments, Ma said, adding that the pace of expansion would reach 12.5 percent next year.
Gartner Inc has also projected that global revenue from AI chips would swell 33 percent year-on-year this year to US$71 billion, she said.
However, recovery in non-tech manufacturing sectors would continue to lag, as China’s soft private consumption and property market have dampened demand for imports of consumer goods, Ma said.
In addition, cross-strait tensions have slowed Taiwan’s exports of petrochemicals, textiles, metals, machinery and transportation equipment, she said.
China remains Taiwan’s largest export destination with a 30 percent share, despite efforts to diversify export markets.
DBS stood by its 2.2 percent inflation estimate for Taiwan this year and described the central bank’s monetary policy as moderate, although carrying a tightening bias.
The bullish property market might continue in the coming years on the back of economic improvement until the next negative technology product cycle, likely in 2026, Ma said.
Healthy economic fundamentals might give the central bank room to tighten lending terms, if necessary, to cool the housing market, she said.
Leading Taiwanese bicycle brands Giant Manufacturing Co (巨大機械) and Merida Industry Co (美利達工業) on Sunday said that they have adopted measures to mitigate the impact of the tariff policies of US President Donald Trump’s administration. The US announced at the beginning of this month that it would impose a 20 percent tariff on imported goods made in Taiwan, effective on Thursday last week. The tariff would be added to other pre-existing most-favored-nation duties and industry-specific trade remedy levy, which would bring the overall tariff on Taiwan-made bicycles to between 25.5 percent and 31 percent. However, Giant did not seem too perturbed by the
Foxconn Technology Co (鴻準精密), a metal casing supplier owned by Hon Hai Precision Industry Co (鴻海精密), yesterday announced plans to invest US$1 billion in the US over the next decade as part of its business transformation strategy. The Apple Inc supplier said in a statement that its board approved the investment on Thursday, as part of a transformation strategy focused on precision mold development, smart manufacturing, robotics and advanced automation. The strategy would have a strong emphasis on artificial intelligence (AI), the company added. The company said it aims to build a flexible, intelligent production ecosystem to boost competitiveness and sustainability. Foxconn
TARIFF CONCERNS: Semiconductor suppliers are tempering expectations for the traditionally strong third quarter, citing US tariff uncertainty and a stronger NT dollar Several Taiwanese semiconductor suppliers are taking a cautious view of the third quarter — typically a peak season for the industry — citing uncertainty over US tariffs and the stronger New Taiwan dollar. Smartphone chip designer MediaTek Inc (聯發科技) said that customers accelerated orders in the first half of the year to avoid potential tariffs threatened by US President Donald Trump’s administration. As a result, it anticipates weaker-than-usual peak-season demand in the third quarter. The US tariff plan, announced on April 2, initially proposed a 32 percent duty on Taiwanese goods. Its implementation was postponed by 90 days to July 9, then
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)
RSS