Taiwan Economics in Brief – October 2020

Trade Keeps Rising, As Do Spirits

Spirits were high at the SEMICON Taiwan 2020 international conference, held both online and offline at the Nangang Exhibition Center in late September. One of the recurring themes was the post-COVID-19 economic rally that Taiwan is experiencing, in contrast to most markets in the West. The government’s effective early handling of the pandemic has allowed business and life to operate nearly as normal throughout the year.

In addition, strong demand – both domestic and international – for semiconductors and other high-quality tech products has kept much of Taiwan’s ICT industry busy and in the black since Q2. The Market Intelligence and Consulting Institute (MIC) predicts that demand from the new stay-at-home economy will drive the production value of Taiwan’s integrated circuit packaging and testing industry up 9% this year from a year earlier.

Trade value has also remained high. Exports in August increased by 8.32% year-on-year, due to strong market demand for ICT parts and components. Imports also increased by a staggering 23.9% from August 2019, brought on in part by expansion projects at several semiconductor firms. Taiwan’s trade surplus for August, US$33.18 billion, represented an increase of 11.89% from the same month last year.

Not surprisingly, Taiwan’s manufacturers are expressing increased optimism, with 35.3% of firms perceiving business to be better in August, a rise of 6 percentage points from the previous month, according to the Taiwan Institute of Economic Research. Many companies also seem to be anticipating that recent trends will continue, with 27.7% expressing the expectation that business will improve over the next half year, up 7.6 percentage points from the previous month.