After seeing annual GDP contract 0.16 percent in the second quarter, Taiwan could slide into a recession if global growth wobbled and demand for electronic products failed to recover, Moody’s Analytics said in a report yesterday.
The report came a day ahead of the Directorate-General of Budget, Accounting and Statistics’ (DGBAS) release of GDP growth and other major economic data.
“Taiwan’s recovery will falter if the US economy continues to underperform,” Moody’s Analytics economist Katrina Ell said in a note.
If the Chinese slowdown worsens, Taiwan will also suffer, she said.
The fiscal woes across the eurozone have already weighed on Taiwanese exports and played havoc on the earnings of major technology firms, including PC maker Acer Inc (宏碁) and smartphone maker HTC Corp (宏達電).
Acer, which saw its net income slump 72.1 percent year-on-year to NT$331 million in the first quarter, is scheduled to report its second-quarter results today.
HTC said last month its second-quarter net profit fell 57.77 percent from a year earlier to NT$7.4 billion, although it was up 65.55 percent from the NT$4.47 billion profit it made in the first quarter.
A recession occurs when a nation reports two consecutive quarters of economic downturn. Taiwan’s GDP edged up 0.4 percent year-on-year in the first quarter before contracting in the second quarter, rendering the reading this quarter critical.
However, Moody’s Analytics does not expect a recession to materialize for Taiwan as it projects 2 percent growth for this year, Ell said, betting on an improvement in the second half driven by product launches next quarter and an upturn in global demand.
“An improved fourth quarter is expected on the back of strengthening global demand and as Chinese stimulus measures lift regional growth,” the Sydney-based economist said in the note.
“But risks are tilted to the downside,” she wrote.
Forward-looking indicators of tech demand, including the US semiconductor industry’s book-to-bill ratio and manufacturing orders, have shown positive signs for the time being, Ell said.
Moody’s Analytics does not expect the central bank to shift its monetary policy in either direction throughout this year, as inflation is starting to test its 2 percent limit after heavy rain damaged crops and pushed up vegetable prices 32.8 percent last month.
China’s Huawei Technologies Co (華為) plans to start mass-producing its most advanced artificial intelligence (AI) chip in the first quarter of next year, even as it struggles to make enough chips due to US restrictions, two people familiar with the matter said. The telecoms conglomerate has sent samples of the Ascend 910C — its newest chip, meant to rival those made by US chipmaker Nvidia Corp — to some technology firms and started taking orders, the sources told Reuters. The 910C is being made by top Chinese contract chipmaker Semiconductor Manufacturing International Corp (SMIC, 中芯) on its N+2 process, but a lack
TECH BOOST: New TSMC wafer fabs in Arizona are to dramatically improve US advanced chip production, a report by market research firm TrendForce said With Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) pouring large funds into Arizona, the US is expected to see an improvement in its status to become the second-largest maker of advanced semiconductors in 2027, Taipei-based market researcher TrendForce Corp (集邦科技) said in a report last week. TrendForce estimates the US would account for a 21 percent share in the global advanced integrated circuit (IC) production market by 2027, sharply up from the current 9 percent, as TSMC is investing US$65 billion to build three wafer fabs in Arizona, the report said. TrendForce defined the advanced chipmaking processes as the 7-nanometer process or more
NVIDIA PLATFORM: Hon Hai’s Mexican facility is to begin production early next year and a Taiwan site is to enter production next month, Nvidia wrote on its blog Hon Hai Precision Industry Co (鴻海精密), the world’s biggest electronics manufacturer, yesterday said it is expanding production capacity of artificial intelligence (AI) servers based on Nvidia Corp’s Blackwell chips in Taiwan, the US and Mexico to cope with rising demand. Hon Hai’s new AI-enabled factories are to use Nvidia’s Omnivores platform to create 3D digital twins to plan and simulate automated production lines at a factory in Hsinchu, the company said in a statement. Nvidia’s Omnivores platform is for developing industrial AI simulation applications and helps bring facilities online faster. Hon Hai’s Mexican facility is to begin production early next year and the
Who would not want a social media audience that grows without new content? During the three years she paused production of her short do-it-yourself (DIY) farmer’s lifestyle videos, Chinese vlogger Li Ziqi (李子柒), 34, has seen her YouTube subscribers increase to 20.2 million from about 14 million. While YouTube is banned in China, her fan base there — although not the size of YouTube’s MrBeast, who has 330 million subscribers — is close to 100 million across the country’s social media platforms Douyin (抖音), Sina Weibo (新浪微博) and Xiaohongshu (小紅書). When Li finally released new videos last week — ending what has
RSS