Standard Chartered Bank yesterday raised its forecast for Taiwan’s GDP growth this year from 3.1 percent to 3.7 percent, as its export-focused economy fared stronger than expected so far and would gather faster traction going forward.
Taiwan’s economy had a strong start this year, as evidenced by a 6.51 percent rebound in GDP growth during the January-to-March quarter, the fastest rise since early 2021, the bank’s senior economist Tony Phoo (符銘財) said.
Phoo said growth would gain more momentum in the second half on a global tech cycle upturn, an improvement in corporate capital expenditure and an end to the inventory adjustments.
Photo: Andy Rain, EPA-EFE
Taiwan is home to the world’s major suppliers of electronics used in artificial intelligence (AI), smartphones, notebook computers, wearables, TVs and cars.
Taiwan Semiconductor Manufacturing Co (台積電), whose clients include Apple Inc, Nvidia Corp, Intel Corp and Advanced Micro Devices Inc, is to shed light next week on its business outlook after delivering better-than-expected second-quarter revenue.
Other AI server vendors such as Hon Hai Precision Industry Co (鴻海精密), Quanta Computer Inc (廣達) and Wistron Corp (緯創) also reported robust sales.
“We believe a pickup in the tech cycle and an end to the inventory adjustments would provide strong support to Taiwan’s GDP growth,” he said.
The encouraging trends are: purchasing managers’ index being in expansionary territory for several months, a spike in exports of information communication technology products and leading tech producers turning upbeat about the growth outlook in the second half of the year, Phoo said.
Additionally, private investment, which is a tepid growth contributor, is to see a rebound after a key gauge of tech sector confidence — imports of semiconductors equipment and integrated circuit chips — rose 11.1 percent in May for the first time since September 2022, he said.
Meanwhile, Taiwan’s private consumption is to hold resilient in light of a tight labor market and a buoyant stock market, Phoo said.
The TAIEX has repeatedly rallied to new highs to date, benefiting financial service providers, recreational activity and the housing market, he said.
Taiwan is on track to meet its target of attracting 10 million tourist arrivals, lending support to entertainment and leisure facilities, Phoo said.
The inflationary pressure is decreasing, even though the headline consumer price index remained above the 2 percent target, which would allow the central bank to hold interest rates steady for the rest of this year, he said. citing that core CPI, a more reliable price tracker because it excludes volatile items, has stayed at the 2 percent target for months.
CHANGE OF FORTUNES: Concern over a pricey valuation and the risk of tighter US curbs on chip sales to China have poured cold water on TSMC’s bullish momentum Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) shares fell the most in three months yesterday upon trading resumption, joining a global technology rout as investors dramatically soured on the promises of artificial intelligence (AI). The shares declined 5.62 percent to close at NT$924 in Taipei, dragging down the benchmark TAIEX, which fell 3.29 percent to 22,119.21 points amid a technical correction, Taiwan Stock Exchange data showed. Other chip stocks also fell, with ASE Technology Holding Co (日月光投控) plunging 9.86 percent, MediaTek Inc (聯發科) dropping 2.35 percent, Realtek Semiconductor Corp (瑞昱) falling 1.33 percent and United Microelectronics Corp (聯電) retreating 1.17 percent, while Apple
Odd lot trades of contract chipmaker Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) shares surged on Friday, although the stock faced headwinds, tumbling more than 5 percent in the session, the Taiwan Stock Exchange (TWSE) said. The volume of odd lot trades of TSMC shares totaled about 9.84 million shares on Friday, up sharply by about 400 percent from Tuesday, in a session before the local stock market closed due to Typhoon Gaemi on Wednesday and Thursday, the TWSE added. Stocks in Taiwan are usually bought or sold in lots of 1,000 shares. The nation lifted a ban on odd lots during regular
GROWTH: TSMC increased its projected revenue growth for this year to more than 25 percent, citing stronger-than-expected demand for AI devices and smartphones The Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) yesterday raised its forecast for Taiwan’s GDP growth this year from 3.29 percent to 3.85 percent, as exports and private investment recovered faster than it predicted three months ago. The Taipei-based think tank also expects that Taiwan would see a 8.19 percent increase in exports this year, better than the 7.55 percent it projected in April, as US technology giants spent more money on artificial intelligence (AI) infrastructure and development. “There will be more AI servers going forward, but it remains to be seen if the momentum would extend to personal computers, smartphones and
INTEGRATION: Companies have shown a preference to keep divisions in one building, and want modern office spaces that can help boost efficiency, a consultancy said The vacancy rate for Grade-A offices in Taipei last quarter rose 0.5 percentage points, while rents climbed to a record NT$3,279 per ping (3.3m2), as demand remained healthy, property consultancy REPro Knight Frank (瑞普萊坊) said on Tuesday. Despite the uptick, the 6.4 percent vacancy rate during the April-to-June period is lower than the 20-year average and Taipei ranked the fourth-best performer in the Asia-Pacific region, after Seoul’s 1.5 percent, Tokyo’s 4.3 percent and Singapore’s 5 percent, the international broker said. The uptrend in office rents is due to inflation and the growing importance corporations assign to modern office spaces that can help