The government’s business climate monitor last month signaled “blue” for the fourth consecutive month, indicating a recession, as global inflation and monetary tightening continued to constrain exports and other key economic barometers, the National Development Council said yesterday.
The total score for the nine monitoring indicators shed 1 point to 10, the lowest in 14 years, which indicates that the economy is unlikely to improve in the first half of the year amid an ongoing global economic slowdown, council research director Wu Ming-huei (吳明蕙) said.
“Poor exports are to blame,” Wu told a news conference in Taipei.
Photo: AFP
The outlook for exports, which accounts for 60 percent of GDP, appears dim due to weak end-market demand in the US and Europe, she said.
Taiwan is home to the world’s largest contract makers of electronics used in smartphones, notebook computers, TVs, wearable electronics, vehicles, servers, and Internet of Things and artificial intelligence applications.
Slack demand would not only limit exports, but also negatively affect sales prices and industrial output, Wu said.
The council uses a five-color system to portray the nation’s economic health, with “green” signifying steady growth, “red” suggesting a boom and “blue” reflecting a recession. Dual colors suggest a transition to a stronger or weaker state.
The monitor is likely to remain “blue” for a few more months, with a value of 10 expected for this month, Wu said.
The Directorate-General of Budget, Accounting and Statistics (DGBAS) forecasts export contraction through the third quarter, meaning that the chances of a quick recovery are small, she said.
The index of leading indicators, which seeks to project the economic situation in the coming six months, grew 1.17 percent to 100.95, rising for the fourth straight month on the back of better export orders, business confidence, construction floor areas, stock closing prices and labor accession rates, the council said.
However, the readings on money supply and imports of semiconductor equipment continued to display negative cyclical movements, it said.
The index of coincident indicators, which aims to measure the current economic situation, fell another 1.92 percent to 90.13, dragged by listless exports, industrial output, commercial sales and electricity usage, it said.
Improvement in the coincident index series is necessary for the council to judge whether the economy has bottomed out and is starting to recover, Wu said.
Leading indicators mainly reflect better business expectations on the part of corporations, while coincident data indicate solid economic upturns, she said.
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
CARBON REDUCTION: ‘As a global leader in semiconductor manufacturing, we recognize our mission in environmental protection,’ TSMC executive Y.P. Chyn said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, yesterday launched its first zero-waste center in Taichung to repurpose major manufacturing waste, which translates into savings of NT$1.5 billion (US$46 million) in environmental costs a year. The environmental cost savings include a carbon reduction benefit of 40,000 tonnes, equivalent to the carbon offset of over 110 Daan Forest Parks, the chipmaker said. The Taichung Zero Waste Manufacturing Center is part of the chipmaker’s greater efforts to reach its net zero emissions goal in 2050, aligning with the UN’s 12th Sustainable Development Goal. The center could reduce TSMC’s outsourced waste processing
RSS