Taiwan Business Brief – February 2024

EVA Airways has ordered 18 long-range A350-1000s and 15 single-aisle A321neo aircraft from Airbus.


Exports up; Salaries Down                                 

Taiwan’s exports recorded their third-highest annual level in 2023, totaling US$432.4 billion, compared with US$479.4 billion in 2022 and US$446.4 billion in 2021. The boost was partly attributed to sales of AI applications, servers, and cloud computing equipment, which together rose 28.9% from 2022 to US$83.4 billion.  

Despite the overall increase, the export value of electronic components fell 10.7% year-on-year (YoY) in December to US$178.7 billion, while sales by semiconductor companies fell 9.5% YoY to US$166.6 billion. Imports fell 6.5% YoY to US$28.8 billion in December, marking the 14th consecutive month in which the value was lower than the same period the year before.  

Consumer Price Index (CPI) growth fell slightly from 2.9% in November to 2.7% in December, according to the Directorate-General of Budget, Accounting and Statistics (DGBAS). Core CPI, which excludes volatile items like food and energy, rose slightly from 2.39% in November to 2.43% in December. 

The National Development Council (NDC) in December said its composite index of monitoring indicators remained unchanged from the previous month, indicating that economic conditions appear to have bottomed out. The NDC said it expects export momentum to remain strong and predicts that domestic investment will continue to rise. Further optimistic signals came from the Chung-Hua Institution for Economic Research (CIER), which in January revised its 2024 GDP growth forecast to 3.1%, up slightly from the previous 3%. 

From January to November 2023, Taiwan’s average regular monthly salary was recorded at NT$41,336 (US$1,285), a minor decline of 0.02% YoY. According to DGBAS, this was the third consecutive year with a decline.  

Average real total monthly earnings (including bonuses, overtime, and other discretionary payments) in the same period fell for the first time in seven years, dropping 0.97% to NT$53,285. DGBAS said that relatively high CPI growth and reduced overtime and bonuses due to the economic downturn were the leading causes of the decline.

ProLogium Launches First-of-Kind Factory           

Taiwanese manufacturer ProLogium Technology Co. has opened a factory in Taoyuan for the world’s first commercial production of next-generation solid-state lithium batteries. The company says it expects the first electric vehicles (EV) equipped with these batteries to hit the roads later this year.  

ProLogium also announced global expansion plans, including a €5.2 billion factory in Dunkirk, France, with the objective of becoming the world’s largest solid-state lithium battery supplier by 2032. A potential U.S. factory is also being considered, the company told media.  

Airlines Report Record Revenues

All four of Taiwan’s major airlines, China Airlines (CAL), EVA Airways, StarLux Airlines, and Tigerair Taiwan, reported record revenue for 2023. CAL saw revenue growth of 22.6% to NT$184.8 billion, while EVA Airways reported an increase of 45.1% to NT$200.4 billion, with passenger revenue alone increasing 326% YoY.  

StarLux said its 2023 income increased 568% to NT$22.5 billion, adding that it plans to open new routes to Thailand and Japan in response to heightened demand. Budget carrier Tigerair reported NT$12.5 billion in revenue for 2023, largely due to robust demand for travel in Northeast Asia.  

EVA Airways has placed an order for 33 planes from European airplane manufacturer Airbus to meet increased demand. The deal is estimated to be worth US$8.5 billion. EVA Airways President Clay Sun said that the aircraft will “bring significant reductions in carbon emissions, which is in line with our company’s sustainability goals.” 

Taiwan CEOs Worry About Conflict, Carbon Emissions 

A global survey including responses from 4,700 CEOs revealed that Taiwanese business leaders worry more about conflict than their international peers. In the survey, conducted by PricewaterhouseCoopers (PwC), 39% of Taiwanese respondents said that geopolitical conflict posed a significant threat to their business, compared with 18% globally. However, a larger share of Taiwanese CEOs (48%) expressed optimism about economic growth in the coming year than those in the APAC region (40%) and globally (38%).  

On the ESG front, 75% of respondents in Taiwan said complicated and frequently changing regulations have presented a hindrance to their efforts to reduce carbon emissions. Low investment returns on climate-friendly initiatives and lack of relevant technologies were other concerning factors reported by Taiwanese CEOs. 

Cathay United Bank Expands in Cambodia

Cathay United Bank has become the first Taiwanese bank to offer clients in Cambodia the ability to open digital accounts through its mBanking mobile app. The app is integrated with the Cambodian government’s Bakong Clearing and Transaction System, which has garnered a substantial base of 7.9 million users, approximately half of Cambodia’s population.  

President of Cathay United Bank (Cambodia) Yeh Chan-hao expressed the bank’s ambition to further improve services and integrate with other third-party partners, aiming to deepen its engagement with local customers in Cambodia. 

TSMC Projects 2024 Revenue to Rebound

TSMC’s annual revenue in 2023 experienced a 4.5% year-on-year decline, primarily due to inventory adjustments within the global semiconductor industry. In December alone, the company’s revenue fell to NT$176.3 billion (US$5.6 billion), marking a 14.4% decrease from the previous month and an 8.4% drop compared with the same period last year.  

Despite these declines, TSMC’s fourth-quarter revenue met expectations, recording a 14.4% increase from the previous quarter. Overall, TSMC’s 2023 sales were the second highest in its history.  

TSMC said it expects its revenue to grow by up to 25% in 2024. The company anticipates continued strong demand in the coming year for its advanced 3-nanometer process, particularly for AI and high-performance computing applications. Further developments are also expected in 2-nanometer and 1.4-nanometer technologies, with mass production slated to begin in 2025.