Many Challenges Likely to Beset Taiwan's Manufacturing Industries in 2015: IEK

With Taiwan's economy gradually gaining steam from thriving domestic manufacturing, Industrial Economics & Knowledge Center (IEK), an industry research department under the government-funded Industrial Technology Research Institute, has raised its growth forecast of manufacturing industries' overall output to 3.26% for 2014 compared to last year, with such growth expected to slow to 2.86% in 2015 when many challenges are seen to beset local manufacturers in global competition, notes IEK.

IEK points out four major challenges and risks confronting Taiwan's manufacturing industries in 2015: increasingly faster regional economic integration worldwide, increasingly fierce competition among global industries, China's rising  localization of supply chains, and fluctuations driven by uncertainty and competition-led attrition among global markets and emerging economies.

For instance, IEK cites as example of regional economic integration of the upcoming free trade agreement between China and Korea, to greatly impact Taiwanese manufacturing whose China-bound products overlap those from Korea.

Meanwhile, growing signs of countries developing domestic industries and related technologies, such as aggressive development of advanced semiconductor processes in the U.S. and Korea, predict that competition among global industries will surely intensify in the short term, according to IEK.

China's continuous, conscientious efforts to further strength localized basic and advanced industries and reduce dependence on imports will also threaten Taiwanese manufacturing, considering that China is the biggest destination for Taiwan's exports, warns IEK.

According to IEK's report, overall output of Taiwan's manufacturing industries is expected to total  NT$17.74 trillion (US$591.33 billion) in 2014, up 3.26% from 2013, partly thanks to strong demand for replacement notebook PCs, smartphones and consumer electronics during H2. Output by the electronics and information technology sector will show a 5.42% growth. (SC)