The countries around Taiwan suffered huge losses in 2020. However, despite the challenges, Taiwan became Asia’s top-performing economy last year. The country outgrew China for the first time in decades more precisely in 30 years.
People should keep in mind that the global demand for the island’s tech exports outweighed the problems caused by the coronavirus pandemic. Importantly, the Taiwanese economy rose 2.98% in 2020 compared to a year ago, according to the advance estimates by Taiwan’s statistics office.
This result surpassed the 2.58% forecast by its central bank and edged out Vietnam’s 2.9% growth. As a reminder, some economists predicted Vietnam would be Asia’s fastest-growing economy in 2020.
It is worth noting that, Taiwan’s expansion in 2020 was also higher than China’s 2.3% full-year growth last year. Interestingly, the island last outgrew the world’s second-largest economy in 1990, when its 5.5% growth beat China’s 3.9%.
Taiwan’s strength in exports in the second half of 2020, especially of semiconductors helped the local economy to cope with any problems caused by the pandemic. Moreover, the government of Taiwan took measures that helped to limit the spread of the virus. As a result, its economy suffered fewer losses than other countries.
Economy and its main driving force
As stated above, the economy grew 2.98% in 2020. People should keep in mind that, Taiwan is a powerhouse in the production of semiconductors. It is hard to imagine the modern world without semiconductors. This is not the end of the story as the demand for chips surged around the world. It is not surprising as millions of people started to work from home and as a result, many of them bought consumer electronics such as laptops.
Importantly, a global shortage of semiconductors has the potential to create a lot of problems. For example, several automakers, including Ford Motor and Nissan Motor reduced the number of cars they produce at some of their plants due to this problem.
Interestingly, Taiwan, as well as South Korea, account for 83% of global processor chip production and 70% of memory chip output. It means the two countries have a near-monopoly status in both segments of the industry.
As mentioned above, semiconductors play an important role in the modern world. Thus, it won’t be easy to compete with Taiwan in 2021. The country has the opportunity to retain the status of a leader when it comes to semiconductors for several years.