The Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) yesterday trimmed its forecast for Taiwan’s GDP growth this year from 3.81 percent to 3.45 percent and expected the pace to slow further to 2.91 percent next year, as global economic headwinds gain force.
Exports and private investment would weaken, leaving domestic demand to drive growth single-handedly, the Taipei-based think tank said.
The war in Ukraine and China’s draconian COVID-19 restrictions derailed global economic recovery this year, and fears of recession next year are developing amid drastic monetary tightening by major central banks aiming to tame inflation, TIER said.
Photo: CNA
“It would take great effort by supply chains to digest excessive inventory, so local firms had better brace for tough times that may prove longer than expected,” TIER president Chang Chien-yi (張建一) told a news conference.
The world could see low growth or recessions in the next two to four years, boding ill for Taiwan’s exports, Chang said.
High inflation in the US means that the world’s largest consumer of electronic gadgets would cut budgets for luxury items, notebook computers and smartphones, which would be unfavorable for local suppliers including mature chipmakers, he said.
FocalTech Systems Co (敦泰電子), a local supplier of touch screen integrated circuits used in flat panels, yesterday said it would shrink its payroll by 10 to 13 percent after incurring NT$2.5 billion (US$78.36 million) in inventory losses last quarter, equal to losses of NT$13.57 per share.
Flat-panel exports last month plunged 42 percent from a year earlier due to inventory adjustments and sluggish demand, government data showed.
US technology giants Tesla Inc, Twitter Inc and Facebook owner Meta Platforms Inc have announced massive layoffs to cope with poor business.
TIER expects exports to expand a modest 2.35 percent next year, from an estimated 9.86 percent increase this year, its report said.
Imports would slump from a 13.21 percent expansion this year to a mild 1.79 percent uptick, as international energy and raw material prices could fall amid tepid demand.
Private investment, a main driver of growth in recent years, would retreat from a 5.87 percent gain this year to a 2.83 percent rise next year, TIER said.
Major technology firms including Taiwan Semiconductor Manufacturing Co (台積電), the world’s top chipmaker, have cut or postponed capital expenditures due to order cancelations and concerns that inventory adjustments would persist through the first half of next year.
TIER Macroeconomic Forecasting Center director Gordon Sun (孫明德) said the US consumer prices last month grew 7.7 percent, still very high despite being milder than expected.
Semiconductor shares in China surged yesterday after Reuters reported the US had ordered chipmaking giant Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to halt shipments of advanced chips to Chinese customers, which investors believe could accelerate Beijing’s self-reliance efforts. TSMC yesterday started to suspend shipments of certain sophisticated chips to some Chinese clients after receiving a letter from the US Department of Commerce imposing export restrictions on those products, Reuters reported on Sunday, citing an unnamed source. The US imposed export restrictions on TSMC’s 7-nanometer or more advanced designs, Reuters reported. Investors figured that would encourage authorities to support China’s industry and bought shares
FLEXIBLE: Taiwan can develop its own ground station equipment, and has highly competitive manufacturers and suppliers with diversified production, the MOEA said The Ministry of Economic Affairs (MOEA) yesterday disputed reports that suppliers to US-based Space Exploration Technologies Corp (SpaceX) had been asked to move production out of Taiwan. Reuters had reported on Tuesday last week that Elon Musk-owned SpaceX had asked their manufacturers to produce outside of Taiwan given geopolitical risks and that at least one Taiwanese supplier had been pushed to relocate production to Vietnam. SpaceX’s requests place a renewed focus on the contentious relationship Musk has had with Taiwan, especially after he said last year that Taiwan is an “integral part” of China, sparking sharp criticism from Taiwanese authorities. The ministry said
CHANGING JAPAN: Nvidia-powered AI services over cellular networks ‘will result in an artificial intelligence grid that runs across Japan,’ Nvidia’s Jensen Huang said Softbank Group Corp would be the first to build a supercomputer with chips using Nvidia Corp’s new Blackwell design, a demonstration of the Japanese company’s ambitions to catch up on artificial intelligence (AI). The group’s telecom unit, Softbank Corp, plans to build Japan’s most powerful AI supercomputer to support local services, it said. That computer would be based on Nvidia’s DGX B200 product, which combines computer processors with so-called AI accelerator chips. A follow-up effort will feature Grace Blackwell, a more advanced version, the company said. The announcement indicates that Softbank Group, which until early 2019 owned 4.9 percent of Nvidia, has secured a
TECH SECURITY: The deal assures that ‘some of the most sought-after technology on the planet’ returns to the US, US Secretary of Commerce Gina Raimondo said The administration of US President Joe Biden finalized its CHIPS Act incentive awards for Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), marking a major milestone for a program meant to bring semiconductor production back to US soil. TSMC would get US$6.6 billion in grants as part of the contract, the US Department of Commerce said in a statement yesterday. Though the amount was disclosed earlier this year as part of a preliminary agreement, the deal is now legally binding — making it the first major CHIPS Act award to reach this stage. The chipmaker, which is also taking up to US$5 billion
RSS