Taiwan’s outbound investments hit a new high last year due to investments made by contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and other major manufacturers to boost global expansion, the central bank said on Thursday.
The net increase in outbound investments last year reached a record US$21.05 billion, while the net increase in outbound investments by Taiwanese residents reached a record US$31.98 billion, central bank data showed.
Chen Fei-wen (陳斐紋), deputy director of the central bank’s Department of Economic Research, said the increase was largely due to TSMC’s efforts to expand production in the US and Japan.
Photo: AFP
Investments by Vanguard International Semiconductor Corp (世界先進), a smaller contract chipmaker, semiconductor distributor WT Microelectronics Co (文曄科技) and iPhone assembler Hon Hai Precision Industry Co (鴻海精密) were also factors, Chen said.
The central bank said the portfolio investment account posted a net asset increase of US$66.33 billion last year, down US$5.59 billion from a year earlier.
As a result, Taiwan’s net fund outflow, which measures the flow of direct and portfolio investments, reached US$94.39 billion in the year, an increase of US$9.02 billion from the previous year.
In the fourth quarter of last year, the country’s net fund outflow totaled US$30.70 billion, an increase of US$2.53 billion from the previous year, the 58th consecutive quarter of net fund outflows — the longest streak in Taiwan’s history.
As Taiwan continues to report net fund outflows in its financial account, concerns over sustained massive overflows have deepened.
About concerns that investors might continue moving funds out of the country, the central bank said that net financial account outflows are not unusual in a country such as Taiwan, which has a long-standing current account surplus.
The central bank said countries with long-standing current account surpluses, including Japan, Singapore, South Korea and Germany, have also tended to record net financial account outflows.
The current account primarily measures a country’s exports and imports of goods and services. Last year, Taiwan recorded a current account surplus of US$113.83 billion, an increase of US$7.99 billion from the previous year, the central bank said.
In the fourth quarter alone, Taiwan recorded a current account surplus of US$34.40 billion, down US$240 million from a year earlier, it said.
Chen said if Taiwanese companies generate profits from overseas direct investments, including dividend income, the gains would be logged as primary income in the current account.
Ryanair, Transavia, Volotea and other low-cost airlines are feeling the financial pain from high jet fuel prices as a result of the Middle East war and are cutting flights. The closure of the Strait of Hormuz has taken a huge chunk of oil supplies off the market, sending the price of jet fuel soaring and triggering fears of shortages that could force airlines to cancel flights. Airlines are not waiting for a lack of supplies to react. “Travel alert: Airlines are cutting thousands of flights right now,” Travel Therapy host Karen Schaler said in an Instagram reel this past weekend.
MANAGING RISKS: Taiwan has secured LNG sufficient to cover 95 percent of electricity demand for next month, UBS said, describing the government’s approach as proactive UBS Group AG has raised its forecast for Taiwan’s economic growth this year to 8 percent, up from 6.9 percent previously, and said expansion could reach as high as 8.6 percent if external energy shocks are avoided. The upgrade reflects a stronger-than-expected first-quarter performance and sustained momentum in artificial intelligence (AI)-driven exports, which UBS said are providing a firm foundation for growth despite geopolitical and energy risks. Taiwan’s GDP expanded 13.69 percent year-on-year in the first quarter, the fastest growth since the second quarter of 1987, the Directorate-General of Budget, Accounting and Statistics (DGBAS) reported on Thursday. On a seasonally
The Fair Trade Commission’s (FTC) ongoing review of Grab Holdings Ltd’s US$600 million acquisition of Foodpanda Taiwan’s operations, announced on March 23, has taken on fresh urgency as industry experts warn that the transaction could embed significant Chinese cybersecurity vulnerabilities into Taiwan’s digital infrastructure through Grab’s deep ties to autonomous-driving firm WeRide (文遠知行). Less than 16 months after the FTC blocked Uber Eats’ direct attempt to acquire Foodpanda Taiwan — citing potential combined market shares of 80 to 90 percent — the emergence of Grab as the buyer has prompted questions about whether the same competitive harm is simply being rerouted
The list of Asian stocks that benefit from business partnership with Nvidia Corp is getting longer, as the region further integrates into the artificial intelligence (AI) chip giant’s business ecosystem. Just in the past week, South Korea’s LG Electronics Inc, Taiwan’s Nanya Technology Corp (南亞科技), as well as China’s Huizhou Desay SV Automotive Co (德賽西威) and Pateo Connect Technology Shanghai Corp (博泰車聯) have become the latest to rally on news of tie-ups, supply-chain participation or product collaboration with the US chip designer. Asian suppliers account for about 90 percent of Nvidia’s production costs, up from about 65 percent last year, data compiled
RSS