PHOTO CREDIT TKhalf of Taiwan’s exports in the first five months of this year,
those categories’ highest share ever. To meet rising demand,
many of Taiwan’s semiconductor and ICT firms have increased
capacity—a fortunate move, since Intel announced in July that
it was experiencing manufacturing delays and may outsource
chip production to third parties.
In the longer term, the Covid-19 crisis could spur demand
for products and services connected to artificial intelligence,
the Internet of Things, digitization, automation, cloud services
and 5G. Robots can deliver food, drones can disinfect tables
and automatic checkout counters can process retail purchases.
Sam Shen, senior director at the Market Intelligence &
Consulting Institute in Taipei, expects continued growth.
“There will be a very big opportunity for new technology,
new products and new platforms, from telecommunications to
computing to all kinds of applications,” he says.CONCENTRATED DEMAND
There are, of course, risks. Combined, mainland China, Hong
Kong and the US make up more than half of Taiwan’s exports.
Continued tensions between the world’s two largest economies
could reduce demand, particularly in the short term, as supply
chains are disrupted. In the longer term, countries are reviewing
their dependence on mainland-China supply chains. In June,
a bipartisan group of US lawmakers proposed the Creating
Helpful Incentives to Produce Semiconductors for America
Act (Chips for America Act), which offers $22.8 billion in tax(Still) Open For Business
Taiwan effectively contained Covid-19, clearing the path for
intermediate-term economic growth.
W
hen the news of a novel coronavirus arrived,
Taiwan acted swiftly. In January, it halted
flights from hot spots such as China, Hong
Kong and Macau; and by mid-March, the
island was closed to tourists. It suffered fewer
than 500 total Covid-19 cases as of mid-August, many of which
had been imported when people flew home from abroad.
Consequently, at present malls remain open, restaurants seat
full capacity, night markets attract visitors by the thousands and
Chinese Professional Baseball League games welcome fans in
phases. There have been hurdles, but the economy appears well
positioned going forward.
“In this Covid-19 world—where the world economy is
going down, foreseeably—I’m not sure whether Taiwan will
be impacted a lot,” says Yueh-Ping Yang, assistant professor at
National Taiwan University, College of Law.
Taiwan’s strong emphasis on high tech provides a cushion.
Supply and demand in the markets for electronics such as semi-
conductors is relatively stable, Yang says, concluding, “Taiwan’s
economy has a solid base.”
Globally, more people are working, studying, socializing,
shopping, streaming and gaming from home, increasing the
demand for computers, tablets, gaming systems and stereo
equipment. Taiwanese suppliers manufacture information and
communications technology (ICT) and other electronic com-
ponents including chips, servers, sensors and network devices.
Electronics and audiovisual products accounted for more than PHOTO CREDIT TK58 | Global Finance | September 2020
ASIA REGIONAL REPORT
TAIWAN | By Joshua Bateman