Taiwan Business Brief – November 2023

Taiwan Mobile is expected to complete its acquisition of T-Star by the end of 2023.


A selection of these news stories are also covered in AmCham Taiwan’s Executive Sweet podcast, available on Apple PodcastsSpotify and online, here.

Exports Continue Downward Trend             

The International Monetary Fund has revised its forecast of Taiwan’s economic growth rate this year to 0.8%, down from the previous 2.1%. The Directorate General of Budget, Accounting and Statistics (DGBAS) has maintained its August forecast of 1.6%, while the Chung-Hua Institution for Economic Research (CIER) predicts growth of 1.38%. DGBAS Minister Chu Tzer-ming said the organization might cut its forecast in November due to weaker-than-expected economic data.  

Taiwan’s September export orders reached US$51.4 billion, a decline of 15.6% year-on-year (YoY). While this was the 13th consecutive month of decline, orders in September still increased 11.7% compared to the previous month.  

CIER attributed the export slide to continuing weak growth in the global economy. But considering the popularity of emerging technologies, CIER expects the situation to improve gradually. According to DGBAS, historical data shows that October is a peak period for inventory stockpiling, suggesting that Taiwan’s export orders may start experiencing an improvement in November. 

Meanwhile, Taiwan’s retail sales achieved record highs in September, totaling NT$374.7 billion (US$11.6 billion). The Ministry of Economic Affairs (MOEA) said department store anniversary promotions, the opening of new shopping centers, and the introduction of new brands to the market were responsible for the 6% YoY increase.  

As the economy gradually recovers, a report from the Ministry of Labor showed that annual average working hours in Taiwan increased for the first time in eight years, from 2,000 hours in 2021 to 2,008 hours last year. Taiwan ranked sixth out of 39 countries in terms of working hours, down two places from the year before. Singapore, with 2,293 hours, is the only Asian country where employees work more.  

Outward Investment Nearly Triples            

Approved outward investment from Taiwan soared to US$17.48 billion in the first nine months of the year, a year-on-year (YoY) increase of 190%. The steep uptick was largely due to US$8 billion from Taiwan Semiconductor Manufacturing Co. (TSMC) to help finance the construction of its US$40 billion plant in Arizona. The Ministry of Economic Affairs also cited two US$800 million investments by Hon Hai Precision Industry Co. (also known as Foxconn) and Yang Ming Marine Transport in their Singapore subsidiaries. 

Inward approved investment during the period totaled US$7.97 billion, the third-highest level in 15 years. Of that amount, investment from New Southbound Policy (NSP) countries totaled US$2.46 billion, an increase of 25.5%. 

Investment from Taiwan to NSP countries totaled US$4.33 billion, up 65.49%, with Singapore, Vietnam, and Thailand the top recipients. Taiwanese investment into China continued to fall, dropping 17% YoY to US$2.53 billion, while Chinese investment into Taiwan increased 38% to a total of US$26.58 million. 

Taiwan Ranked Fifth Globally For Wealth                

According to the Allianz Global Wealth Report 2023, Taiwan ranked fifth globally and second in Asia in net financial assets per capita. Taiwan’s total in that category increased by 3.1% last year, reaching €141,600 (US$149,000). The report placed the U.S. in first place at €251,800, followed by Switzerland, Denmark, Singapore, and Taiwan. Japan ranked 11th, South Korea 22nd, and China 34th. Among the top five, only Taiwan and Singapore experienced an increase in net assets last year, while the U.S., Denmark, and Switzerland all saw declines. 

Hon Hai Signs MOU on EV Batteries

Electronics contract maker Hon Hai Precision Engineering Co. (Foxconn) has signed a Memorandum of Understanding with Canadian battery supplier Blue Solutions to produce solid-state batteries for an eventual EV battery ecosystem. 

SolidEdge Solution, a subsidiary of Hon Hai, will use Blue Solutions’ Gen4 technology to power two-wheeled vehicles and integrate the Canadian company’s expertise and resources to better service customers in its target markets. The two-wheeled electric vehicle market is expected to be worth US$218 billion by 2029, with markets such as Indonesia leading growth. 

T-Star Acquisition Nearing Completion                 

The Fair Trade Commission (FTC) conditionally approved a merger between Taiwan Star Telecom (T-Star) and Taiwan Mobile. The merger should be completed by the end of the year, provided that the deal meets the conditions set by the FTC. Following Far EasTone’s acquisition of Asia Pacific Telecom Co. in July, the merger would leave Taiwan with only three telecom providers. 

The FTC said that to maintain competition in the market, Taiwan Mobile must protect the rights of subscribers and maintain service quality. The company must also accept the terms of current T-Star subscription contracts until at least December 31, 2025, and ensure that disadvantaged groups, the elderly, and those with disabilities would have access to preferential subscription plans for at least five years. Other subscribers should be offered preferential plans for at least a year.