After expanding by a robust 8.63 percent last year, the Taiwanese economy should continue growing this year and is likely to exceed the 3.54 percent forecast that the Directorate-General of Budget, Accounting and Statistics (DGBAS) made in November last year, Minister of Economic Affairs Kung Ming-hsin (龔明鑫) told a news conference in Taipei yesterday.
Exports are forecast to grow 3.69 percent to US$664.4 billion this year, driven by continued demand for artificial intelligence (AI), high-performance computing and new consumer electronics, Kung said, quoting DGBAS figures.
Last year’s exports increased 34.9 percent to US$640.7 billion from the previous year on the back of shipments of AI-related chips, servers and advanced electronic components, he said.
Photo: Liao Chia-ning, Taipei Times
The DGBAS’ economic growth forecast is based on a more conservative assumption about export growth, but several institutions have since raised their GDP growth projections to about 5 to 6 percent due to strong AI demand, he said.
In addition, an agreement to reduce US tariffs on Taiwanese goods from 20 percent to 15 percent, without stacking them on existing most-favored-nation rates, would benefit traditional industries and help companies better navigate market challenges, he added.
While the tariff agreement still needs to be approved by the Legislative Yuan and the Agreement on Reciprocal Trade is undergoing final procedures, Kung said he hoped the deals could be passed soon.
Any delays could leave Taiwan in the same situation as South Korea, with US President Donald Trump accusing the Seoul government of failing to honor a trade deal reached last year and slapping it with a 25 tariff, he said.
Regarding Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) announcement that it would invest US$17 billion to mass produce advanced 3-nanometer chips in Kumamoto, Japan, Kung said the company’s overseas expansion would not reduce its investment in Taiwan.
On the contrary, the company is continuing to increase spending at home, he said, adding that TSMC’s footprint in Taiwan would only expand and that future local capacity would be substantial.
Taiwan is expected to account for about 80 percent of global capacity for chips deploying 5 nanometer and more advanced processes by 2036, compared with 20 percent for the US, he said, citing ministry estimates.
The impact of an additional 3-nanometer fab in Japan on Taiwan would be only about 1 to 2 percentage points, he added.
The government aims to lift the production value of the “five trusted sectors” — semiconductors, AI, defense, security and surveillance, and next-generation communications — to NT$11 trillion this year, from NT$10 trillion last year, Kung said.
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