Taiwan’s financial system grew 2.32% within the third quarter, weaker than authorities forecasts, and regardless of synthetic intelligence (AI) gaining momentum around the globe, Taiwan’s signature high-tech devices are slowing down. His curiosity was solely gentle.
The world AI market is predicted to develop 17.3% from this yr to 2030, driving a wave of demand for chatbots, blockchain and healthcare automation functions, market analysis agency Statista predicts.
Taiwan already provides about 60% of the world’s semiconductor chips. Industry leaders and economists mentioned they anticipate to ultimately see extra orders for graphics processing items, reminiscence chips, storage {hardware} and different elements that help AI transactions.
But the third quarter numbers are simply the early beginnings of that attainable upcycle.
“The complete tech sector is drawing down inventories,” mentioned Tony Hu, an economist at Standard Chartered Bank in Taipei. “We be aware information that implies world demand for client electronics is steady.”
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Chinese authorities warns, ‘financial coercion’ is on the agenda in US-Taiwan commerce talks
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GDP progress within the newest quarter could also be partially pushed by a decline in imports, that are draining cash from Taiwan fairly than contributing to the financial system, Fu mentioned. Goldman Sachs cited a “sustained sharp decline in equipment and transportation tools imports” in a analysis be aware final week.
Economists mentioned weak abroad demand for key exports resembling high-tech components, equipment and petrochemicals additional hampered GDP progress within the July-September interval.
The International Monetary Fund expects world GDP progress to gradual from 3.5% final yr to three% in 2023 and a pair of.9% subsequent yr. The authorities blames the anticipated financial downturn on central financial institution rates of interest being raised in a number of international locations to fight inflation.
“Taiwan’s robust dependence on world demand and know-how cycles has been a headwind for Taiwan not too long ago,” mentioned Louis Cuis, Asia-Pacific chief economist at S&P Global Ratings. “Taiwan, which has outperformed in the course of the coronavirus pandemic, is predicted to be the slowest rising financial system within the Asia-Pacific area this yr.”
Taiwan’s GDP progress price for the April-June interval was 1.36%, rising from recession.
Many analysts nonetheless anticipate Taiwan’s downturn to show into dynamite in 2024. “The know-how downcycle that has severely broken Taiwan’s manufacturing sector ought to reverse,” Moody’s Analytics mentioned in its Asia-Pacific outlook launched Friday.
Taiwanese startups search various markets as cross-strait tensions rise
Taiwanese startups search various markets as cross-strait tensions rise
With the surge in demand for AI and high-performance computing, Taiwan’s semiconductor business output is predicted to achieve US$146.1 billion subsequent yr, a rise of 14.1% in comparison with 2023. The forecast got here from the federal government’s Industrial Technology Research Institute, as cited by the Taipei-based Central News Agency on Monday.
Taiwan’s Bureau of Accountancy predicts subsequent yr’s financial progress price to be 3.32%.
“Although world financial progress has slowed not too long ago, the energy of the end-user demand restoration stays steady, and industrial chains proceed to regulate stock,” Taiwan’s Ministry of Economic Affairs mentioned in a social media publish on Friday. ” he mentioned.