Taiwan Manufacturing Industries' Output Value Forecast to Grow 2.86% YoY in 2015: IEK

The overall output value of Taiwan's manufacturing industries is forecast to grow by 2.86% year-on-year (YoY) to NT$18.25 trillion (US$600.83 billion) in 2015, up from a projected NT$17.74 trillion (US$593.13 billion) this year, according to the Industrial Economics & Knowledge Center (IEK), a market intelligence institute under Taiwan's government-funded Industrial Technology Research Institute.

IEK says that surging production value by Taiwan's machinery, communications equipment, semiconductor, green energy, and biomedical sectors is expected to drive the overall growth of the island's output next year, for a couple of reasons.

For one thing, the IEK believes that the 3D printers that are increasingly seen as the product that will touch off the world's third industrial revolution will likely become a growth propeller for the machinery industry. The U.S.-based Wohlers Associates Inc., a 3D printer market research firm, confirms this trend by reporting that the global output value of 3D printers is projected to grow explosively, from only US$4 billion in 2014 to USS$21 billion in 2020.

Another growth locomotive for the industry in the year ahead, IEK adds, will be industrial robots. Riding the growing trend toward industrial automation, this sector is indubitably full of growth potential and this has motivated many of Taiwan's top-end enterprises, including the Hon Hai Precision Industry Co., the world's largest EMS (electronics manufacturing service), to explore robots. According to MarketsandMarkets, a Texas-headquartered market research company, the global market for such products is expected to expand to US$39.1 billion in 2020, up from US$25 billion in 2014 for a compound annual growth rate of 7.7%.

In light of the increasingly strong market demand for communications equipment, the rapid development of 4G communications, and the continuously growing popularity of smartphones worldwide, the IEK predicts that Taiwan's communications sector will see its output rebound by a strong 17.4% to NT$1.11 trillion (US$37 billion) this year and further to NT$1.69 trillion (US$56.33 billion) in 2015.

IEK forecasts that the output value of Taiwan's semiconductor and IC industry will reach NT$2.19 trillion (US$73 billion) this year and NT$2.33 trillion (US$77.66 billion) next year, up 16.4% and 6.1%, respectively. IEK expects the Internet of Things (IOT), which involves the integration of communications, cloud computing, and networking technology, ICs, and related hardware and has been described as the “Next Big Thing” for Taiwan's high-tech firms by Morris Chang, chairman of the Taiwan Semiconductor Manufacturing Co., the world's leading semiconductor foundry, to sustain the industry's growth in the near future.

Meanwhile, IEK predicts that Taiwan's green energy industry will experience only mild growth in 2015, when output of the global smart grid sector is estimated to grow from 2014's US$40 billion to US$44 billion.

While prospects seem bright for Taiwan's manufacturing industries next year (despite a predicted slowdown in from 3.26% to 2.86% in overall growth), IEK warns that six uncertainties in the global economy may cast a shadow on the island's manufacturers in the short term: increasing pressure on the U.S. FED to raise interest rates, market worries about the collapse of China's realty market, the persistently sluggish economic growth in the euro bloc, growing geopolitical risk worldwide, the Ebola outbreak, and fluctuations in Asian currencies as the U.S. dollar appreciates. (SC)

IEK's Forecast of Overall Output Value of Taiwan's Manufacturing Industries
Year	2014	2015
Output Value	NT$17.74 trillion	NT$18.25 trillion
YoY Growth Rate	3.26%	2.86%

Source: IEK