Taiwan’s manufacturers last month reported flat views about their six-month prospects, while service providers turned conservative after the holiday season, the Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) said yesterday.
TIER economist Gordon Sun (孫明德) said several factors affected sentiment among manufacturers, including potential interest rate moves in the US, Washington’s tariff policies and foreign-exchange factors.
Although demand for electronics used in artificial intelligence (AI) remains strong, local suppliers should pay attention to potential AI server price declines after Chinese tech firms demonstrated that mature chips could be used to build AI capability, Sun said.
Photo: Taipei Times
Citing the emergence of affordable PCs in the 1980s that facilitated the decline of IBM Corp’s mainframe computers, Sun said Taiwanese firms should be observant and able to respond quickly should a similar scenario arise in AI.
“The key is whether Taiwanese manufacturers can seize the opportunity and capitalize on the trend,” he said.
Although US technology titans have aggressive AI investment intentions this year, major firms there are using China’s DeepSeek model, Sun said, adding that if start-ups and small and medium-sized enterprises worldwide do the same, the trend would grow and help push down AI costs.
Business confidence among local service providers declined for the second month in a row last month, as restaurants and hotels reported a slowdown in business after the Lunar New Year holiday, the institute’s survey showed.
That explained why a majority of retailers and travel agencies had conservative views about their business outlook, the TIER said, adding that persistent personnel shortages are adding pressure to service quality and business visibility.
Sentiment among local construction firms and property brokers improved slightly last month, although house transactions in the first two months of this year tumbled 25 percent from a year earlier in Taiwan’s six special municipalities, the survey said.
The central bank last week said that it would keep loan restrictions in place this year, although it held interest rates unchanged.
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