The Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) yesterday raised its forecast for Taiwan’s GDP growth this year to 3.96 percent from 3.81 percent, as strong global demand for artificial intelligence (AI) bolsters exports and domestic demand receives support from improving private investment and a positive wealth effect.
“The development of artificial intelligence by major technology titans has positively impacted Taiwan’s economy as seen by robust business at local firms in its supply chain,” CIER president Lien Hsien-ming (連賢明) said.
Companies involved in making AI chips, servers and graphics processing units have posted growing revenues and profit margins, and offered guidance that the momentum would continue for the foreseeable future, CIER said.
Photo: Hsu Tzu-ling, Taipei Times
Exports are projected to expand 6.73 percent year-on-year this quarter, slowing from 8.05 percent in the preceding quarter due to a high comparison base, the Taipei-based institute said.
Imports are expected to rise 9.24 percent annually this quarter, as firms acquire capital equipment from abroad to upgrade technology processes and expand capacity, it said.
For the whole of this year, exports are likely to rebound 9.24 percent, reversing a 9.8 percent decline last year, CIER said, adding that it expects imports to emerge from a 17.86 percent contraction to log a 9.92 percent increase.
On the domestic front, private consumption is expected to gain 2.22 percent this quarter with national holidays and major retail sales seasons approaching, Lien said.
Many department stores are celebrating their anniversaries and the Singles’ Day shopping festival next month would lend further support to e-commerce revenues, the think tank said.
This quarter is also the high season for sales of hotel and restaurant coupons, as well as tour packages at home and overseas, in line with the annual travel fair next month, it said.
Overall, consumer spending might increase 2.67 percent this year on top of an 8.19 percent advance last year, it said.
The sturdy private consumption has to do with wealth inflation induced by the TAIEX, Lien said.
In addition, private investment is playing an important part in upholding domestic demand, with the key GDP component predicted to rise 2.89 percent this year, in stark contrast with an 8.24 percent retreat last year, CIER said.
Improved business orders have allowed local firms to grow more comfortable with capital expenditure, it said.
Consumer prices are expected to increase 2.17 percent this year, but fall below the central bank’s 2 percent target at 1.96 percent next year, the institute said.
Electricity rate hikes and bad weather have kept service charges and food costs elevated this year, Lien said.
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
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
The US on Friday penalized two Chinese firms that acquired US chipmaking equipment for China’s top chipmaker, Semiconductor Manufacturing International Corp (SMIC, 中芯國際), including them among 32 entities that were added to the US Department of Commerce’s restricted trade list, a US government posting showed. Twenty-three of the 32 are in China. GMC Semiconductor Technology (Wuxi) Co (吉姆西半導體科技) and Jicun Semiconductor Technology (Shanghai) Co (吉存半導體科技) were placed on the list, formally known as the Entity List, for acquiring equipment for SMIC Northern Integrated Circuit Manufacturing (Beijing) Corp (中芯北方積體電路) and Semiconductor Manufacturing International (Beijing) Corp (中芯北京), the US Federal Register posting said. The
RSS