Bank of America Corp nearly doubled its forecast for the nation’s economic growth this year, adding to a slew of upgrades even after a rip-roaring last year propelled by demand for artificial intelligence (AI).
The firm lifted its projection to 8 percent from 4.5 percent on “relentless global demand” for the hardware that Taiwanese companies make, according to a note dated yesterday by analysts including Xiaoqing Pi (皮曉青).
Taiwan’s GDP expanded 8.63 percent last year, the fastest pace since 2010.
Photo:AP
The increase “reflects our sustained optimism over Taiwan’s technology driven expansion and is reinforced by several recent developments,” including a more stable currency, a trade and investment deal with the US and spending by technology companies, Bank of America said.
Societe Generale SA yesterday also raised its growth forecast for this year to 6.3 percent from 3 percent.
Economist Michelle Lam (林雪潔) wrote in a note that “another robust year for Taiwan’s tech led exports” is expected.
The financial institutions join Goldman Sachs Group Inc, Barclays PLC and others in turning more optimistic on Taiwan even after its economy clocked one of the fastest rates of expansion globally.
Officials in Taipei have said that annual growth in the fourth quarter of last year came in at more than 12 percent, the quickest pace since 1987.
Underscoring optimism that AI would continue to shine this year, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) — Nvidia Corp’s main chipmaker — said it is earmarking as much as US$56 billion for capital spending, a projection that was stronger than anticipated.
TSMC yesterday reported a 36.8 percent annual rise in January revenue to NT$401.255 billion (US$12.7 billion), above the 30 percent revenue growth the company expects for the full year.
The monthly sales last month set a record high in the company’s history, but the annual comparison would have been affected by the Lunar New Year holiday, which last year fell in January.
Bank of America said that it does not expect the central bank to raise its policy rate this year, “given still subdued inflation, stagnant services wages, weak non-tech sectors and continued cooling in the real-estate market.”
However, Bank of America and Societe Generale see a chance of tighter monetary policy next year after a pause in place since March 2024. Lam predicts two rate hikes of 12.5 basis points each next year, as part of what she called “a shallow tightening cycle.”
“There is scope for rates to drift higher over time, even if 2026 will likely remain steady,” she said. “Key risks to this outlook include potential Section 232 tariffs” — referring to a possible outcome of a national security investigation being conducted by the US — “and the bursting of the AI bubble.”
Bank of America also highlighted risks to its forecasts from issues such as “geopolitical dynamics.”
Nanya Technology Corp (南亞科技) yesterday said the DRAM supply crunch could extend through 2028, as the artificial intelligence (AI) boom has led the world’s major memory makers to dramatically reduce production of standard DRAM and allocate a significant portion of their capacity for high-bandwidth memory (HBM) chips. The most severe supply constraints would stretch to the first half of next year due to “very limited” increases in new DRAM capacity worldwide, Nanya Technology president Lee Pei-ing (李培瑛) told a news briefing. The company plans to increase monthly 12-inch wafer capacity to 20,000 in the first half of 2028 after a
Property transactions in the nation’s six special municipalities plunged last month, as a lengthy Lunar New Year holiday combined with ongoing credit tightening dampened housing market activity, data compiled by local land administration offices released on Monday showed. The six cities recorded a total of 10,480 property transfers last month, down 42.5 percent from January and marking the second-lowest monthly level on record, the data showed. “The sharp drop largely reflected seasonal factors and tighter credit conditions,” Evertrust Rehouse Co (永慶房屋) deputy research manager Chen Chin-ping (陳金萍) said. The nine-day Lunar New Year holiday fell in February this year, reducing
New vehicle sales in Taiwan plunged about 37 percent sequentially last month as the long Lunar New Year holiday and 228 Peace Memorial Day holiday cut short the number of working days, along with the lingering uncertainty over import tax cuts on US vehicles, market researcher U-Car said in a report yesterday. New car sales last month totaled 22,043, slumping from 35,073 units in January and down 19.89 percent from 37,515 in February last year, U-Car data showed. Sales of imported luxury cars, led by Mercedes-Benz, plummeted about 45 percent to 3,109 units last month from 5,663 units in the previous month,
RATIONING: The proposal would give the Trump administration ample leverage to negotiate investments in the US as it decides how many chips to give each country US officials are debating a new regulatory framework for exporting artificial intelligence (AI) chips and are considering requiring foreign nations to invest in US AI data centers or security guarantees as a condition for granting exports of 200,000 chips or more, according to a document seen by Reuters. The rules are not yet final and could change. They would be the first attempt to regulate the flow of AI chips to US allies and partners since US President Donald Trump’s administration said it rescinded its predecessor’s so-called AI diffusion rules. Those rules sought to keep a significant amount of AI
RSS