BY JAMES HILL AND ALEX MYSLINSKI
Electricity Rates Rise, Exports Bounce Back
Taiwan has increased the price of electricity by 11% on average. The planned adjustments to electricity rates will be in effect from April to September, the period of highest usage due to demand for air-conditioning. For most households, the increase is between 3% and 5%, or less than NT$20 per month on average, while large industries face a steeper hike of up to 25%. The move aims to ease the financial condition of state-run Taiwan Power Co. (Taipower), which had accumulated losses totaling NT$386 billion (US$12 billion) as of the end of last year.
Despite global increases in raw material prices spurred by Russia’s invasion of Ukraine, Taiwan’s state-owned oil refiner, CPC Corp., has maintained artificially low gasoline and natural gas prices. This practice, while beneficial for consumers, has resulted in substantial losses for both CPC and Taipower.
In response to the planned electricity price hikes, the Directorate General of Budget, Accounting and Statistics (DGBAS) adjusted its growth forecast for Taiwan’s consumer price index from 1.85% to 2.03%. Taiwan’s Central Bank raised the discount rate from 1.875% to 2% to mitigate inflationary pressures.
Reflecting signs that Taiwan’s economy is stabilizing, the National Development Council (NDC) monitoring indicators flashed “green” for the second consecutive month in February. The NDC uses a five-color system to capture Taiwan’s economic state, with “green” indicating steady growth, “red” suggesting a boom, and “blue” reflecting a recession.
The TAIEX in March rose more than 400 points, or 2.1%, reaching 20,065 points, with a turnover totaling NT$486 billion on the main board. This new milestone was made possible by global funds pouring into AI-related stocks.
New Military Vehicle Passes Assessment
Taiwan’s Ministry of National Defense reported in March that an experimental eight-wheeled armored combat vehicle, armed with a 105mm gun, successfully passed its initial operational capability assessment in October last year. The prototype is based on the design of the CM-33 Clouded Leopard armored vehicle but with significantly heavier firepower and an improved chassis. Mass production is slated to begin this year.
The new vehicles will initially be deployed to the army’s combined arms brigades, with plans to subsequently upgrade all Clouded Leopard models for improved maneuverability and survivability. The Marine Corps has expressed interest in these vehicles to replace their M60A3 Patton tanks, seeking a lighter and more mobile option. Additionally, the defense ministry highlighted progress in various indigenous arms development programs, including the delivery of new light sniper rifles and advancements in infantry body-armor technology.
China Blocks US Chips for Government Use
China has unveiled guidelines aimed at phasing out US microprocessors from Intel and Advanced Micro Devices (AMD) in government PCs and servers, along with sidelining Microsoft’s Windows operating system and foreign-made database software in favor of domestic options.
China’s procurement guidance, introduced in December, mandates government agencies to prioritize “safe and reliable” processors and operating systems in their purchases. The United States has made similar efforts to boost domestic semiconductor output through the 2022 CHIPS and Science Act.
In response, Apple said it has discussed using Chinese Baidu’s generative AI in its devices within China, potentially marking a significant shift towards domestic Chinese AI solutions. Korea’s SK Hynix, one of the world’s top memory chip makers, has also pledged to expand investments in China, emphasizing the country’s importance as a production base and market.
Powerchip Announces India Foundry Plan
Taiwanese semiconductor manufacturer Powerchip has announced it will build India’s first 12-inch wafer fab in Gujarat, cooperating with India’s Tata Electronics. The fab will manufacture power management chips, display drivers, microcontrollers, and high-performance computing logic ICs for automotive, AI, data storage, and wireless communications.
Powerchip Chairman Frank Huang said the venture aligns with the global restructuring of supply chains. Valued at US$11 billion, the project is part of US$15.2 billion in semiconductor investment approved by the Indian government as it seeks to develop the country’s semiconductor industry with “Made in India” chips.
China Airlines to Launch Seattle Route
Taiwan flag carrier China Airlines will begin flying to Seattle, Washington, on July 14. The airline will offer five weekly flights between Taiwan Taoyuan International Airport and Seattle-Tacoma International Airport.
The announcement follows that of Atlanta-based Delta Air Lines, which will begin flying the Seattle-Taipei route in June, and Taiwanese carrier Starlux Airlines, which will begin flying the route in August. Seattle-Tacoma is the largest airport in the Pacific Northwest, used by more than 50 million travelers in 2023. Currently, only EVA Airways flies non-stop between Taipei and Seattle.
TSMC Confirms Chiayi Plants
Taiwan Semiconductor Manufacturing Co. (TSMC) will build two advanced chip packaging plants at the Chiayi Science Park in southern Taiwan, with construction designated to begin in May. The plants will enable TSMC to remain competitive in manufacturing chip-on-wafer-on-substrate (CoWoS) integrated circuits designed for AI applications, the company said.
The plants will be built on 12 hectares of land, with construction scheduled to be completed by 2026 and production beginning by 2028. The Chiayi County government said it expects the new fabs to create around 3,000 jobs.
