Taiwan enters recession on weak worldwide demand for its electronics
- Global inflation and rate-hike pressure also contributed to a second-straight quarter of economic contraction for the island, this time by more than 3 per cent
- Tech makes up 30 per cent of Taiwan’s US$800-plus billion economy, and its factories ship nearly two-thirds of the world’s computer chips
One of the world’s most important exporters of hi-tech gear has fallen into recession, owing to a drop in global demand for consumer electronics and trouble in major world markets.
Taiwan’s highest authority in charge of the budget – the Directorate-General of Budget, Accounting and Statistics – estimated on Friday that the world’s 21st-largest economy shrank by 3.02 per cent from January through March, year on year, and by 6.37 per cent compared with the final three months of last year.
“Broad-based weakness in external demand for Taiwan’s exports of electronic products and information and communication technology equipment will persist at least in the coming quarter,” said George Xu, director of sovereigns for the Fitch Ratings credit agency.
Declines in world demand for smartphones, PCs and other common electronics have throttled shipments of those devices and their parts, including semiconductor chips.
Consumers have pulled back since last year after a pandemic-induced shopping spree saw people splurge on devices needed for telework and home study. Inflation and interest rate hikes also began pressuring Western economies in 2022, in turn dampening consumer demand and leaving Taiwanese manufacturers with excess inventory.
Tech makes up 30 per cent of Taiwan’s US$800-plus billion economy, and its factories ship nearly two-thirds of the world’s computer chips.
