Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) yesterday raised its forecast for Taiwan’s GDP growth from 3.1 percent to 3.38 percent, as exports could receive a bigger boost from global artificial intelligence (AI) demand.
“The nation’s exports would start to set sail from this quarter, thanks to better order visibility,” CIER president Yeh Chun-hsien (葉俊顯) said.
Exports, the main growth driver that accounts for 60 percent of GDP, would shift from a 9.8 percent decline last year to a 7.89 percent increase this year, as inventory adjustments come to a close, the think tank said.
Photo: Hsu Tzu-ling, Taipei Times
The low base last year would also help and explain why the recovery momentum would ease off quarter by quarter, Yeh said.
GDP growth is predicted to reach 5.57 percent last quarter, and to slow to 3.55 percent this quarter, 3 percent next quarter and 1.66 percent in the final quarter, he added.
Global AI demand has been stronger than expected and would ramp up businesses of local tech firms on its supply chain, Yeh said.
Revenue from AI server chips would more than double this year and would account for 20 percent of overall sales by 2028 from a contribution that is currently in the low teens, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) told investors on Thursday.
Yeh said the upward revision also aims to reflect an increase in government expenditure that would expand 2.68 percent this year to build up national defense and armament procurements.
Private consumption would register a healthy 2.09 percent gain, falling from an 8.32 percent uptick, as demand for outbound travel holds sturdy, especially after an earthquake which measured a 7.2 on the Richter scale jolted Hualien on April 3 and is expected to hinder tourism in eastern Taiwan, Yeh added.
CIER has a dim view on private investment, saying that the GDP component would shrink 0.2 percent this year after a deep 11.6 percent retreat last year.
Local firms remain cautious about capital spending, as the US Federal Reserve appears unlikely to cut interest rates anytime soon and Taiwan’s central bank last month unexpectedly raised borrowing costs by 0.125 percentage points, Yeh said.
Sticky inflation and spiking geopolitical tensions lent support to a conservative approach, he added.
CIER is looking at an inflation of 2.3 percent, which is above the central bank’s 2 percent alarm, mitigating little from a 2.49 percent rise last year.
ASML Holding NV’s new advanced chip machines have a daunting price tag, said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), one of the Dutch company’s biggest clients. “The cost is very high,” TSMC senior vice president Kevin Zhang (張曉強) said at a technology symposium in Amsterdam on Tuesday, referring to ASML’s latest system known as high-NA extreme ultraviolet (EUV). “I like the high-NA EUV’s capability, but I don’t like the sticker price,” Zhang said. ASML’s new chip machine can imprint semiconductors with lines that are just 8 nanometers thick — 1.7 times smaller than the previous generation. The machines cost 350 million euros (US$378 million)
EXPLOSION: A driver who was transporting waste material from the site was hit by a blunt object after an uncontrolled pressure release and thrown 6m from the truck Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) said yesterday there was no damage to its facilities after an incident at its Arizona factory construction site where a waste disposal truck driver was transported to hospital. Firefighters responded to an explosion on Wednesday afternoon at the TSMC plant in Phoenix, the Arizona Republic reported, citing the local fire department. Cesar Anguiano-Guitron, 41, was transporting waste material from the project site and stopped to inspect the tank when he was made aware of a potential problem, a police report seen by Bloomberg News showed. Following an “uncontrolled pressure release,” he was hit by a blunt
Quanta Computer Inc (廣達), which makes servers and laptop computers on a contract basis, yesterday said it expects artificial intelligence (AI) devices to bring explosive growth to Taiwan’s electronics industry, as AI applications are starting to run on edge devices such as AI PCs. Taiwanese electronics manufacturers such as chipmakers, component suppliers and hardware assemblers are likely to benefit from a rapid uptake of AI applications, Mike Yang (楊麒令), president of Quanta Cloud Technology Inc (雲達科技), a server manufacturing arm of Quanta, told reporters on the sidelines of a technology forum in Taipei yesterday. “I believe the growth potential is promising once
‘WORST OVER’: A large portion of Hon Hai’s non-operating loss came from Sharp’s large flat-screen business, but Young Liu said the situation is expected to improve Hon Hai Precision Industry Co (鴻海精密), a major iPhone assembler, yesterday reported annual growth of 72 percent in net profit last quarter, due to a dramatic decrease in losses from Sharp Corp’s display business. Net profit surged to NT$22 billion (US$678.7 million) last quarter, from NT$12.83 billion a year earlier, as Hon Hai booked a non-operating loss of NT$4.24 billion, an improvement from NT$20.12 billion in the first quarter of last year. A major portion of its non-operating loss came from Sharp’s large flat-screen business Sakai Display Products Corp. On a quarterly basis, Hon Hai’s net profit sank 59 percent from NT$53.15