By Julia Bergström and Alex Myslinski
the Ministry of Finance (MOF). The ministry attributed the growth to strong global demand for AI applications. Exports for the month totaled US$39.94 billion, a growth of more than 3% year-over-year (YoY), while imports increased 16.2% YoY to US$35.1 billion. MOF said that while the growth came amid a steady global economic recovery and an uptick in electronic goods consumption, consumer market growth remained uneven, and Taiwan’s “old economy” goods faced decline due to global excess production capacity.
In response to the slow growth of non-tech exports, the Directorate General of Budget, Accounting and Statistics (DGBAS) adjusted its 2024 GDP growth forecast downward slightly from 3.94% to 3.9%. The agency projects that Taiwan’s economy will grow by 3.26% in 2025.
Export orders rose 4.8% YoY to US$50 billion in July, according to the Ministry of Economic Affairs (MOEA). MOEA cited strong demand for high-performance computing and AI products as contributing to the impressive growth.
Taiwan’s consumer price index (CPI) growth rate climbed to a nearly five-month high of 2.52% in July. DGBAS attributed the growth to extensive agricultural damage caused by Typhoon Gaemi in late July. Core CPI – excluding fruits, vegetables, and energy – increased by 1.84% YoY. Meanwhile, rents rose by 2.51% in July, with indications of continued increases throughout the year, according to the agency.
Real regular wages rose in the first six months of the year to an average of NT$46,227, an increase of 2.56% from 2023. Monthly earnings, which includes nonregular income such as bonuses and overtime, rose 3.74% YoY to NT$64,084. However, when inflation was taken into account, real regular wages increased slightly by 0.28% YoY, while monthly earnings rose 1.43%.
Taiwan Tops Stock Performance in APAC
Taiwan’s stock market has emerged as the best-performing in the Asia-Pacific region thus far this year, driven by optimism regarding artificial intelligence (AI). The TAIEX surged 28% in the first six months of 2024, led by a 105% rise in Hon Hai Precision Co. (Foxconn) stock and a 63% increase in Taiwan Semiconductor Manufacturing Co. (TSMC) shares.
CNBC reported that AI and central bank policy have significantly influenced global markets, with experts predicting that AI investments will continue to drive growth across various sectors. Japan’s Nikkei 225 followed TAIEX with a 19% gain, while Thailand’s SET Index had the region’s largest decline at 8%.
AUO Sells Facilities to Offset Losses
AUO, a Taiwanese company specializing in optoelectronics, has agreed to sell its factory and land in Tainan to Micron Technology for NT$7.4 billion. The Tainan facility previously produced color filters for various device screens before operations ceased as part of AUO’s efforts to optimize asset utilization. The company, which has been operating at a loss for over two years, expects that the transaction with Micron will help improve its overall financial structure. Micron plans to convert AUO’s Tainan factory into a front-end wafer-testing facility to support its DRAM chip manufacturing expansions in Taichung and Taoyuan.
In addition, AUO has agreed to sell the facilities of its solar energy subsidiary, AUO Crystal Corp., in Taichung for NT$700 million. In a filing with the Taiwan Stock Exchange, AUO anticipates gaining NT$4.2 billion and NT$544 million from these sales, respectively.
Din Tai Fung Exits North China
Din Tai Fung, Taiwan’s most well-known dumpling restaurant chain, has announced the pending closure of its 14 stores in northern China.
The Michelin-starred restaurant will complete the closures by the end of October, citing the slowdown in China’s economy and a shift in consumer preferences toward cheaper dining options. Additionally, the company’s board was unable to reach a consensus on renewing operations after its 20-year operating license expires this year.
According to Din Tai Fung’s website, the chain still operates 37 stores across eastern and southern China, as well as in Hong Kong and Macau. However, factors such as declining confidence in China’s economy and a reduction in foreign tourist visits may result in further closures.
