Taiwan Ratings Corp (中華信評) has raised its forecast for Taiwan’s economic growth next year from 2.1 percent to 2.4 percent, as strong demand for artificial intelligence (AI) products would provide a solid buffer against potential challenges.
“Strong and rising demand for AI-related devices will continue to propel Taiwan’s economy over the next year,” Taiwan Ratings corporate credit analyst Raymond Hsu (許智清) told a media briefing in Taipei yesterday.
Similar reasons also prompted the agency to increase its growth projection for this year from 4.2 percent to 4.4 percent.
Photo: Wu Hsin-tien, Taipei Times
Hsu said the revisions assume a scenario where US president-elect Donald Trump would not impose additional tariffs on Taiwanese goods after he takes office next month.
Trump has pledged to tighten tariffs on goods from Canada, Mexico and China, and he earlier said Taiwan should pay higher tariffs for stealing the US’ chip business.
The specter of unfavorable trading terms, as well as lingering geopolitical tensions and restrictive interest rates, would constrain economies with heavy dependence on exports such as Taiwan, Hong Kong, Singapore and South Korea, Taiwan Ratings said.
Local tech firms on the AI supply chain would fare better as they command leadership positions in technology processes, Hsu said.
Global technology giants have indicated plans to step up budgets in AI development and investment, a positive trend that would help offset an expected economic slowdown in China, the largest destination for Taiwanese exports, Taiwan Ratings said.
China’s consumer confidence remains slack, despite stimulus measures and Washington’s extra tariffs, if true, would attenuate its effort to come out of the woods, Hsu said.
The ratings agency is looking at tariff hikes from 19.3 percent currently to 25 percent after Trump’s inauguration, limiting China’s GDP growth to 4.1 percent next year, from 4.8 percent this year, he said.
Not all Taiwanese tech firms would evenly benefit from the AI fever. Demand for electronics used in AI equipment and cloud computing is strong, but that for consumer electronics and vehicles would underperform, due to a lack of breakthrough applications and sharpening competition, Hsu said.
As for non-tech sectors, the landscape appears dim going forward, Taiwan Ratings said.
Local makers of cement, base metal and mass commodity products would likely have to grapple with a persistent capacity glut and price cuts, with the Chinese market weighed down by trade disputes with the US, Hsu said.
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) is expected to share his views about the artificial intelligence (AI) industry’s prospects during his speech at the company’s 37th anniversary ceremony, as AI servers have become a new growth engine for the equipment manufacturing service provider. Lam’s speech is much anticipated, as Quanta has risen as one of the world’s major AI server suppliers. The company reported a 30 percent year-on-year growth in consolidated revenue to NT$1.41 trillion (US$43.35 billion) last year, thanks to fast-growing demand for servers, especially those with AI capabilities. The company told investors in November last year that
Intel Corp has named Tasha Chuang (莊蓓瑜) to lead Intel Taiwan in a bid to reinforce relations between the company and its Taiwanese partners. The appointment of Chuang as general manager for Intel Taiwan takes effect on Thursday, the firm said in a statement yesterday. Chuang is to lead her team in Taiwan to pursue product development and sales growth in an effort to reinforce the company’s ties with its partners and clients, Intel said. Chuang was previously in charge of managing Intel’s ties with leading Taiwanese PC brand Asustek Computer Inc (華碩), which included helping Asustek strengthen its global businesses, the company
Taiwanese suppliers to Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) are expected to follow the contract chipmaker’s step to invest in the US, but their relocation may be seven to eight years away, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. When asked by opposition Chinese Nationalist Party (KMT) Legislator Niu Hsu-ting (牛煦庭) in the legislature about growing concerns that TSMC’s huge investments in the US will prompt its suppliers to follow suit, Kuo said based on the chipmaker’s current limited production volume, it is unlikely to lead its supply chain to go there for now. “Unless TSMC completes its planned six
TikTok abounds with viral videos accusing prestigious brands of secretly manufacturing luxury goods in China so they can be sold at cut prices. However, while these “revelations” are spurious, behind them lurks a well-oiled machine for selling counterfeit goods that is making the most of the confusion surrounding trade tariffs. Chinese content creators who portray themselves as workers or subcontractors in the luxury goods business claim that Beijing has lifted confidentiality clauses on local subcontractors as a way to respond to the huge hike in customs duties imposed on China by US President Donald Trump. They say this Chinese decision, of which Agence
RSS