Academia Sinica yesterday raised Taiwan’s GDP growth forecast for this year from 2.43 percent to 2.65 percent on the back of robust exports, but said that rising trade tensions and financial market volatility are risks to growth.
“Taiwan’s economy should remain on a course of stable expansion, but downside risks are growing,” Academia Sinica research fellow Ray Chou (周雨田) told a news conference.
The upward revision makes the Taipei-based institute the most optimistic among its peers, higher than the government’s projection of 2.6 percent growth.
Robust global demand has enabled Taiwan to achieve a better-than-expected trade volume and healthy manufacturing activity, Chou said.
Major economic gauges show that the growth momentum should be sustainable in the second half, Chou said, citing the official manufacturing purchasing managers’ index, industrial output and private consumption data.
Exports and imports are forecast to rise 4.03 percent and 4.91 percent respectively this year, as price hikes should help absorb the negative impact linked to the tariff row between the US and China, the institute said.
Exports advanced 10.9 percent annually in the first six months of the year and imports grew 10.8 percent from the same time last year, as Taiwan’s foreign trade benefitted from faster global economic growth, according to government statistics.
Taiwan is home to the world’s largest contract suppliers of critical electronic parts used in smartphones, laptops and TVs, as well as Internet of Things and artificial intelligence applications.
Consumer prices are forecast to increase 1.58 percent this year, after picking up 1.6 percent in the first six months, as the effect of cigarette tax hikes last year tapers off, Chou said.
The wholesale price index is likely to rise 2.89 percent for the full year, faster than the 2.37 percent advance in the first six months, he said.
A weaker New Taiwan dollar would translate into a higher cost burden for imported goods, he said.
The labor market has improved, with the jobless rates for the first time in six months standing at 3.66 percent and likely to average 3.7 percent this year, Chou said.
A stable job market should lend support to private consumption, which is forecast to expand 2.41 percent this year, he said.
Retail, wholesale and restaurant revenues grew 4.49 percent in the first half, aided by wage increases and a vigorous stock market, the institute said.
Private investment is forecast to increase 3.34 percent this year, as local firms become more active in capital expenditure, it said, adding that the government is helping by removing investment barriers.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said that its investment plan in Arizona is going according to schedule, following a local media report claiming that the company is planning to break ground on its third wafer fab in the US in June. In a statement, TSMC said it does not comment on market speculation, but that its investments in Arizona are proceeding well. TSMC is investing more than US$65 billion in Arizona to build three advanced wafer fabs. The first one has started production using the 4-nanometer (nm) process, while the second one would start mass production using the
A TAIWAN DEAL: TSMC is in early talks to fully operate Intel’s US semiconductor factories in a deal first raised by Trump officials, but Intel’s interest is uncertain Broadcom Inc has had informal talks with its advisers about making a bid for Intel Corp’s chip-design and marketing business, the Wall Street Journal reported, citing people familiar with the matter. Nothing has been submitted to Intel and Broadcom could decide not to pursue a deal, according to the Journal. Bloomberg News earlier reported that Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is in early talks for a controlling stake in Intel’s factories at the request of officials at US President Donald Trump’s administration, as the president looks to boost US manufacturing and maintain the country’s leadership in critical technologies. Trump officials raised the
‘SILVER LINING’: Although the news caused TSMC to fall on the local market, an analyst said that as tariffs are not set to go into effect until April, there is still time for negotiations US President Donald Trump on Tuesday said that he would likely impose tariffs on semiconductor, automobile and pharmaceutical imports of about 25 percent, with an announcement coming as soon as April 2 in a move that would represent a dramatic widening of the US leader’s trade war. “I probably will tell you that on April 2, but it’ll be in the neighborhood of 25 percent,” Trump told reporters at his Mar-a-Lago club when asked about his plan for auto tariffs. Asked about similar levies on pharmaceutical drugs and semiconductors, the president said that “it’ll be 25 percent and higher, and it’ll
CHIP BOOM: Revenue for the semiconductor industry is set to reach US$1 trillion by 2032, opening up opportunities for the chip pacakging and testing company, it said ASE Technology Holding Co (日月光投控), the world’s largest provider of outsourced semiconductor assembly and test (OSAT) services, yesterday launched a new advanced manufacturing facility in Penang, Malaysia, aiming to meet growing demand for emerging technologies such as generative artificial intelligence (AI) applications. The US$300 million facility is a critical step in expanding ASE’s global footprint, offering an alternative for customers from the US, Europe, Japan, South Korea and China to assemble and test chips outside of Taiwan amid efforts to diversify supply chains. The plant, the company’s fifth in Malaysia, is part of a strategic expansion plan that would more than triple
RSS