Taiwan’s economy has gradually rebounded from a slowdown that started in the second quarter of last year. GDP is set to grow by the fastest pace in three years, but over-reliance on the technology sector, a talent shortage and imbalanced power generation development might limit continued economic expansion in the coming years, Pegatron Corp chairman and Taipei Computer Association honorary chairman Tung Tzu-hsien (童子賢) said at a forum in Taipei on Friday last week.
Overseas shipments of Taiwan-made electronics, semiconductors, computers and communication devices accounted for 55 percent of the nation’s overall exports last year, Tung said, adding that the ratio could exceed 60 percent if shipments of precision machinery and optical equipment were included.
There is no doubt that steady development in the technology sector has enabled Taiwan to play a pivotal role in global supply chains, specifically in the semiconductor industry. It has become a major pillar of the nation’s economy, but is the growth sustainable?
With globalization, an ever-evolving landscape of geopolitics, stricter technology controls around the world and rising production costs due to demographic shifts and natural resource scarcity, Taiwanese technology firms must seek new niche markets to stay afloat, Tung said. “The nation’s industrial landscape needs to be more diverse,” he said.
Tung also mentioned challenges the nation is facing — including renewable energy intermittency and Taiwan’s geographical features. The government should be more cautious with energy policy and prepare for new technology, he said.
Taiwan has been working toward boosting its solar efficiency and has been using cleaner and more sustainable alternatives to fossil fuels, such as wind power and hydropower.
The economy this year would likely expand by 3.43 percent, compared with last year’s 1.31 percent, the largest increase since 2021, when the economy grew 6.62 percent, according to the Directorate-General of Budget, Accounting and Statistics (DGBAS).
The estimated growth is slightly higher than the average 3.26 percent from 2013 to 2022, indicating the growth momentum would likely return to normal this year. However, slow global economic recovery and uncertainty with geopolitical risks would drive firms to remain prudent in capital expenditure planning.
Private investment is expected to grow 1.45 percent this year, down 1.72 percentage points from the previous estimate and lower than the 6.76 percent average growth from 2013 to 2022, the DGBAS said.
This begs the question: Are there any other industries that would increase their investments and help stabilize Taiwan’s economy when the nation’s main industries are in bad shape?
Over the past few years, local media have often referred to the biotech industry as another “sacred mountain” protecting the country just like Taiwan Semiconductor Manufacturing Co. However, it is doubtful whether this industry is globally competitive.
Taiwan’s aging population and declining birthrate could also prompt the healthcare system to acquire more medical equipment and boost the development of biomedicine and pharmaceuticals. However, this would require massive investment and years of research and development.
Meanwhile, the information and communications technology industry has seen growth amid the artificial intelligence (AI) frenzy, with those focused on AI performing exceptionally well. It remains to be seen whether this industry will continue on its upward trend in the years to come.
Vice President William Lai (賴清德) is set to take office as president on May 20. Policies that can ease Taiwanese industries’ difficulties and help the economy grow would show that the new government truly believes in “Made in Taiwan.”
Concerns that the US might abandon Taiwan are often overstated. While US President Donald Trump’s handling of Ukraine raised unease in Taiwan, it is crucial to recognize that Taiwan is not Ukraine. Under Trump, the US views Ukraine largely as a European problem, whereas the Indo-Pacific region remains its primary geopolitical focus. Taipei holds immense strategic value for Washington and is unlikely to be treated as a bargaining chip in US-China relations. Trump’s vision of “making America great again” would be directly undermined by any move to abandon Taiwan. Despite the rhetoric of “America First,” the Trump administration understands the necessity of
US President Donald Trump’s challenge to domestic American economic-political priorities, and abroad to the global balance of power, are not a threat to the security of Taiwan. Trump’s success can go far to contain the real threat — the Chinese Communist Party’s (CCP) surge to hegemony — while offering expanded defensive opportunities for Taiwan. In a stunning affirmation of the CCP policy of “forceful reunification,” an obscene euphemism for the invasion of Taiwan and the destruction of its democracy, on March 13, 2024, the People’s Liberation Army’s (PLA) used Chinese social media platforms to show the first-time linkage of three new
If you had a vision of the future where China did not dominate the global car industry, you can kiss those dreams goodbye. That is because US President Donald Trump’s promised 25 percent tariff on auto imports takes an ax to the only bits of the emerging electric vehicle (EV) supply chain that are not already dominated by Beijing. The biggest losers when the levies take effect this week would be Japan and South Korea. They account for one-third of the cars imported into the US, and as much as two-thirds of those imported from outside North America. (Mexico and Canada, while
The military is conducting its annual Han Kuang exercises in phases. The minister of national defense recently said that this year’s scenarios would simulate defending the nation against possible actions the Chinese People’s Liberation Army (PLA) might take in an invasion of Taiwan, making the threat of a speculated Chinese invasion in 2027 a heated agenda item again. That year, also referred to as the “Davidson window,” is named after then-US Indo-Pacific Command Admiral Philip Davidson, who in 2021 warned that Chinese President Xi Jinping (習近平) had instructed the PLA to be ready to invade Taiwan by 2027. Xi in 2017