Tech firms could slow job creation, though not necessarily lay people off, said Tony Phoo, an economist with Standard Chartered Bank in Taipei.
Chip makers are likely to delay 2023 capital expenditure, Phoo said. Those expenses normally go toward new or expanded factories.
A shedding of inventory will cut into Taiwan’s overall exports and gross domestic product (GDP) growth, said Darson Chiu, a research fellow with the Taiwan Institute of Economic Research think tank in Taipei. He too anticipated an impact on jobs in tech manufacturing.
GDP growth will come to about 2 per cent this year, Chiu forecast, down from 2.43 per cent last year. The government forecasts 2.75 per cent growth.
Technology products make up about 30 per cent of Taiwan’s economy and the island supplies 60 per cent of the world’s chips.
The Industrial Technology Research Institute had anticipated 6.1 per cent growth in the Taiwanese chip sector in November. The Canalys market research firm had said in late 2022 that Taiwan’s semiconductor revenue should grow this year by a single digit percentage.
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“Taiwan’s economy this year is not dependent on exports, but on domestic consumption,” Chiu said. “At present, there is still a shortage of workers in Taiwan’s domestic service industry.”
Capital expenditure may bounce back later in the year, Neumann said.
Chip makers are still getting brisk business from global manufacturers of high-end cars, an official with the industry group SEMI Taiwan said in January. Sales of electric vehicles and cars with automated functions are gaining market share around the world.
“Ongoing investment, especially in further high-end semiconductor capacity, will help cushion the economic impact on Taiwan’s broader economy this year,” Neumann said.
