Taiwan Business Brief – December 2023

Micron’s fourth facility in Taichung will produce cutting edge DRAM technology.


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

2023 Growth Forecast Lowered to 1.42%

Taiwan’s consumer price index (CPI) rose 2.36% in the first nine months of 2023, exceeding the 2% alert set by the Central Bank. In October, the CPI increased 3.05% in this year’s highest single-month jump, according to data released by the Directorate General of Budget, Accounting and Statistics (DGBAS).  

DGBAS revised its forecast for Taiwan’s GDP growth this year from 1.61% down to 1.42%, citing disappointing levels of exports and private investment. However, the agency said it expects the economy to gain momentum in the fourth quarter. Semiconductor industry representatives have indicated a potential rebound in early 2024.  

According to the 104 Job Bank, job vacancies rose to 1.04 million in November, an increase of 4.2% year-on-year (YoY). Hotels and restaurants accounted for 215,000 vacancies, while retailers and wholesalers accounted for 168,000 and electronics and semiconductor manufacturers for 155,000.  

Real wages decreased 0.78% YoY between January and September this year, according to DGBAS, which cited inflationary pressures as a reason for the decline. Average earnings in the industrial and service sectors stood at NT$54,884 (US$1,699) in September, marking the first YoY drop in seven years. DGBAS noted that bonus payouts have been lower this year due to the slowing economy. 

Q3 2023 also marked the fourth consecutive quarter with an annual decrease in manufacturing sector output. According to the Ministry of Economic Affairs (MOEA), output was down 9.44% YoY at NT$4.54 trillion during the third quarter. The electronics component industry, a crucial export sector for Taiwan, saw an 11.95% decline to NT$1.38 trillion. Semiconductor output fell by 14.23% to NT$833.5 billion due to ongoing inventory adjustments among customers. Two areas that showed growth were the flat panel segment, which increased 28% to NT$146.8 billion, and the computer and optoelectronics sector, which rose by 17% to NT$369.5 billion.  

Micron Opens New Taichung Facility

U.S. computer memory giant Micron Technology has opened a new advanced chip assembly and testing plant in Taichung. The facility will be used to produce HBM3E chips required for Artificial Intelligence (AI) applications.  

During the opening ceremony, Micron Taiwan Corporate Vice President Lu Donghui said the company “is committed to continuing to deploy leading-edge technology while maintaining sustainable operations, advancing workforce development, and contributing to the community,” benefiting the entire ecosystem. 

Japanese Offshore Wind Companies May Pull Out        

Several Japanese companies are reportedly contemplating exiting Taiwan’s offshore wind market due to rising costs, delays, and restrictive regulations. Shikoku Electric Power Co. announced that it would pull out of the Yunlin Offshore Wind Project due to delays threatening its profitability. Oil refiner Eneos Holding has said that it may also leave the project. In June, Jera Co. completed the sale of its stake in offshore wind farm Formosa 3 to concentrate on the development of Formosa 1 and 2.  

Analysts say that global Covid aftereffects coupled with Taiwan’s stringent localization requirements have hurt the profitability of projects. In response to the news, the Ministry of Economic Affairs said that many international wind energy companies continue to invest in Taiwan, including Japanese Mitsui & Co, which is developing the Hai Long Offshore Wind Power Project with Canadian Northland Power. 

More Companies Reshore to Taiwan

Taiwanese solar cell manufacturer Sino-American Silicon Products (SAS) has obtained approval to participate in a government initiative encouraging companies abroad to reshore to Taiwan. SAS will invest NT$2.17 billion (US$68.6 million) to expand its manufacturing capacity for large solar cells in Miaoli and Yilan counties.

SAS is among five new companies approved by the government for domestic investment. More than 1,400 Taiwanese companies have committed to investing a combined NT$2.16 trillion as part of the government’s Invest in Taiwan initiative, which is expected to create around 148,000 new jobs.  

The other companies granted permission for domestic investments are Gen Asia Biotech Co., Yum Sang Industrial, Sancci Manufacture Food Co., and Better For You Co., with plans ranging from constructing new facilities to installing automated equipment and improving manufacturing efficiency.