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U.S.-Iran memorandum of understanding signed, though uncertainty persists over the effectiveness of implementation
Strong AI demand persists, yet global uncertainty continues to weigh on price stability, with manufacturers adopting a cautious stance |
The United States and Iran have signed a Memorandum of Understanding, advancing a ceasefire agreement and the resumption of normal navigation through the Strait of Hormuz, thereby reducing the risk of global energy supply disruptions. Nevertheless, the effectiveness of implementing these agreements remains to be seen. Overall, while the possibility of localized conflicts re-escalating cannot be ruled out, U.S.-Iran relations have moderated considerably compared to previous months, and geopolitical risks have eased.
On the domestic front, sustained expansion in AI demand has underpinned robust growth in semiconductor-related supply chains, keeping the electronics and machinery sector in expansion territory. Looking ahead, the anticipated resumption of navigation through the Strait of Hormuz is expected to alleviate raw material supply pressures and reduce costs; however, the chemical industry continues to face headwinds from sluggish end demand and intensifying market competition. By contrast, the electronics and machinery sector maintains a relatively favorable outlook ...Read more |
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| Unbalanced Growth Is the Normal Path of Development |
| Taiwan's semiconductor and AI industries have driven rapid economic expansion and equity market gains in recent years — a development that should be welcomed. Yet critics have raised concerns that simultaneous contraction in other sectors constitutes an inequity. This view misreads economic reality: unbalanced growth is not an aberration but a defining feature of economic progress. The appropriate response is to channel the gains from high-growth sectors toward those adversely affected. As a small open economy, Taiwan must maintain comparative advantages across a sufficient range of products to sustain favorable terms of trade. Semiconductors exemplify this imperative: Taiwan's near-monopolistic position in global markets underpins its long-term competitive standing. The distortions associated with this concentration are real but manageable. Measured outward investment, for instance, can relieve upward pressure on the currency and ease domestic resource constraints generated by a dominant high-productivity sector. Policymakers must, however, exercise caution: well-intentioned industrial support measures — including subsidies, labor importation, and accelerated automation — risk undermining the very employment they seek to protect. Economic growth generates fiscal space that can be directed toward improving public infrastructure and industrial capacity. Where growth-sector activity inflates land values, targeted policy instruments and public investment can foster balanced regional development and facilitate the emergence of new industries. On human capital, policymakers should be wary of over-indexing workforce development toward current high-growth sectors. Talent pipelines calibrated exclusively to present demand may prove misaligned with the requirements of future industries — trading one labor market imbalance for another. High-growth sectors should be paired with robust welfare and redistribution mechanisms, ensuring that broad segments of the population share in the gains. Crucially, governments must communicate these distributive outcomes clearly and transparently. Information asymmetries breed resentment and polarization. Imbalance is the engine of development: Taiwan's semiconductor preeminence reflects a knowledge asymmetry deliberately cultivated relative to the rest of the world. That asymmetry is an asset — and one that must be strategically leveraged. |
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Taiwan Economic Research Monthly
Navigating Industry Applications and Regulatory Policy Challenges for B5G/6G Low Earth Orbit Satellites |
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As global mobile communications advances from 5G toward B5G/6G, technical focus is shifting to Non-Terrestrial Networks (NTN) , including low Earth orbit (LEO) satellites, high-altitude platform stations (HAPS), and unmanned aerial vehicles and their integration with existing terrestrial infrastructure into heterogeneous network architectures. This convergence addresses coverage gaps in remote, maritime, aviation, and disaster-affected areas while enhancing overall network resilience and service reliability.
Operators including Starlink, OneWeb/Eutelsat, Amazon LEO, and AST SpaceMobile have entered the LEO satellite market, driving rapid commercial growth across consumer and enterprise broadband, direct-to-device satellite connectivity, and disaster recovery applications. However, integrating LEO satellite and terrestrial mobile networks introduces significant regulatory complexity across spectrum sharing, interference management, cross-border coordination, licensing, and market competition.
Leading nations including the United States, United Kingdom, Canada, and Japan are actively developing B5G/6G policy frameworks and adapting regulatory regimes for emerging services. For Taiwan, balancing industrial innovation against spectrum efficiency, communications resilience, public safety, space sustainability, and fair competition will be a defining challenge. This issue aims to help Taiwan's ICT sector strategically capitalize on next-generation communications opportunities ahead.
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