Taiwan’s economy, already an outlier last year as Covid-19 tore through most of the world, will grow at its fastest pace in seven years in 2021, the government said, buoyed by global demand for the island’s technology products.
Gross domestic product is expected to expand 4.64% this year, the statistics bureau said, up from a forecast of 3.83% growth made in November.
Exports from Taiwan’s electronics industry indicate that the economy will rise because of global demand for new technology products, the government office said Saturday. It said the island’s signature semiconductor sector should expect growth in shipments for devices that support 5G wireless, the internet of things and high-performance computing. Automotive chips, though backlogged now because of demand for consumer electronics, would offer Taiwan’s chipmakers additional revenue.
Taiwan’s whole tech hardware supply chain, a hallmark of its economy over the past 40 years, will see demand from consumers worldwide who are adapting to new work and study habits, says Tracy Tsai, Taipei-based research vice president with the market analysis firm Gartner. That demand will create orders for everyday PCs as well as built-in cameras, chips for artificial intelligence and devices that aid with cloud computing, she says.
“If you look at the supply chain from end-user all the way upstream and (contracting) in the middle, they’re all related to Taiwan and that’s going to have a direct or indirect relation to Taiwan’s GDP,” Tsai says.
Tech demand would particularly boost Taiwanese billionaire Morris Chang’s TSMC, the world’s largest contract chipmaker. PC developer Acer said this month that its January consolidated revenues had risen 73.4% year on year to an eight-year record NT$23.5 billion. The Taiwanese company pointed to Chromebooks, gaming devices and light notebooks PCs as growth reasons.
Taiwan was largely successful in handling the Covid-19 pandemic, allowing the island to keep production going last year despite business shutdowns and stay-home orders in much of the world. The government in Taipei controlled the spread of Covid-19 in early 2020 through inspections of inbound aircraft, strict quarantine rules and rigorous contact tracing. Taiwan has tallied a cumulative 942 cases and nine deaths.