July 2023  
Fragile global recovery and internal challenges in 2023
TIER forecast: Taiwan’s 2023 annual GDP growth rate will stand at 1.66%, 0.65 percentage points lower than previous forecast
Observing the recent domestic and international economic situations, it’s evident that the global economic recovery momentum remains fragile. Coupled with persistent core inflation pressures, even though major central banks are nearing the end of their interest rate hike cycles, economies like the US and Europe are expected to maintain high interest rates for some time. The previous global interest rate increases have increasingly impacted the real estate and financial markets, leading to signs of stress in the financial markets. On Taiwan’s domestic front, both manufacturing exports and foreign export orders have declined compared to the previous month, resulting in a significantly higher proportion of manufacturers being pessimistic about the target month’s economic performance than optimistic. However, the service industry has benefited from a strong stock market performance, which is encouraging for financial-related service industries’ outlook on the current month’s economic performance. As for the updated macroeconomic forecast by Taiwan Economic Research Institute (TIER), despite robust private consumption momentum, the first half of the year saw constrained export growth and manufacturer inventory adjustments due to sluggish global demand. This has also led to a cautious approach towards private investment. Looking at recent data on Taiwan's exports, foreign export orders, manufacturers' imports of capital equipment, and manufacturing production index, these indicators have continued to show a declining trend without significant improvement. Consequently, the latest forecast indicates that Taiwan’s economy in 2023 will experience a cool internal environment amid the external challenges. The GDP trend is expected to gradually improve throughout the year. However, given the weaker economic growth in the first half of the year than anticipated and the numerous uncertain factors influencing the economy, the prediction for Taiwan’s domestic economic growth rate in 2023 is revised down by 0.65 percentage point to 1.66%, compared to the previous forecast. ...Read more
Taiwan's TSMC 2nm wafers on track for 2025 launch
Taiwan Semiconductor Manufacturing Company (TSMC) held an online briefing on 20th July at which President C.C. Wei and Chair Mark Liu gave some company updates. According to TSMC leaders, the company is on track to meet its goal of mass-producing 3nm and 2nm chips, reported CNA. However, construction of the fab facility in the U.S. is facing delays. During the briefing, C.C. Wei said there had been rapid progress on the development of the upgraded 3nm chip wafers, which will be mass-produced by the fourth quarter of 2023. They have passed inspections and achieved the performance targets set by the company. Meanwhile, the 2nm chip wafers are on track for a late 2025 release and mass-production in early 2026, Wei said. He added that development has been smooth and the company expects the chips will be a major force in the future of next generation, high-performance computing technologies. In his remarks, Liu confirmed that construction of the new fab facility in Arizona has been delayed due to some challenges. The U.S. facility was expected to begin mass-production of wafers in late 2024. That date has since been revised and set back to late 2025. However, work on the facility in Kumamoto, Japan is still proceeding according to schedule. The fab is expected to begin operations in late 2024 (Source: Taiwan News).

Jobless rate up in June but sets 23-year low (Source: Focus Taiwan).
Industrial output falls for 13th month (Source: Taipei Times).
Taiwan Economic Research Monthly
Taiwan’s Net Zero Commitment: ESG Progress and Challenges of Top Enterprises
As an important manufacturing base in the world, Taiwan has key industries such as steel, electronics and petrochemicals. These industries have a large amount of carbon emissions. Faced with the pressure of global net zero emissions, ESG considerations are integrated into the operation strategy to prevent the impact on industrial safety, environmental pollution, and excessive energy consumption during the operation process. This article explores how top companies such as China Steel Corporation (CSC), Taiwan Semiconductor Manufacturing Co., Ltd. (TSMC), and Formosa Plastics Group have all implemented their net zero commitments, and their progress on ESG issues. From the current situation and challenges of Taiwan's top companies on the path of sustainable development, it reveals the differences and characteristics of different industries on ESG issues.
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