Analysis: Taiwan's Strong Growth, Weak Industries and AI Bubble Worries

TaiwanPlus News

Taiwan's economy is growing in many sectors, according to new data from the Chung-Hua Institution for Economic Research (CIER). But is it balanced growth? TaiwanPlus speaks to CIER's Chen Shin-hui about which sectors are still lagging, why business sentiment remains less than optimistic, and whether local tech companies are worried about a potential AI bubble.

Transcript

00:00The new PMI data released by SEER shows growth in many sectors of Taiwan's economy.

00:05We know that much of Taiwan's growth comes from the tech and AI boom,

00:09but how are other sectors doing?

00:12So why the PMI can be growing in two months?

00:16You just got the answers because the high-tech and the AI-related products are still quite strong.

00:23And now it's the end of the year, the December.

00:26For the brand company and the brand customers have given orders to 2026.

00:33So if one performs very well, then all the divergence cannot be found in GDP.

00:42But if you see the industrial category, you will find, for example, material industry still very weak.

00:50Steel materials mostly are steel and the papers.

00:54If you have papers, papers are for bucks.

00:58And also if you see the chemical industry, for example, the petrochemical industry still suffer

01:05by competing of China's industrial for lower price, also for transportation industry.

01:12While the data shows growth in much of the economy, the six-month outlook of many of these businesses

01:18remains below 50, meaning not quite optimistic.

01:21Tariffs are often cited as a concern, but what else might be keeping these outlooks down?

01:26And why people are still not optimistic about the future?

01:31But you should know that the contraction rate is slower compared to the previous months.

01:36This means that some people turn their future outlook to optimistic.

01:43That's because they're for traditional industry, we just mentioned that, and for non-manufacturing,

01:50because the geopolitical risks still will higher.

01:53So they are few about uncertainty about the future.

01:58The uncertainty is not limited for the traffic.

02:01Traffic is just one kind of geopolitical risk.

02:05And geopolitical risks not happen in the demand of the industrial product,

02:10but also for the financial market.

02:13As I just mentioned, exchange rates, the market, and the interest rate.

02:18Interest rate will impact people to buying a car, buying a house, and even to buying a machine for industry.

02:27There's been a lot of discussion about a potential AI bubble or overinvestment in the tech industry.

02:32As you interview company managers for your surveys, have any of them expressed this concern to you?

02:37So far, if I asked different managers, they will have different stories.

02:42Well, for some people, if you minimize the AI bubble to the infrastructure,

02:50they may have wondered, will we invest too much money on this infrastructure?

02:56But I have also interviewed some managers.

02:59They have produced some AI-related products, such as servers.

03:04They say, no bubbles.

03:06We have a number of orders.

03:08And the orders will be called in million billions of the United dollars.

03:14So if you talk about AI-related products,

03:17you use more detail to say infrastructure, or the software,

03:23or for robots and AI, I think you will get totally different answers.

03:29And we'll see you last week,

03:42I think we started investing in.

03:52ș

03:54This was an 언제 video.

03:55This was theyetvices.

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