Siddy holds a Master’s degree in Economics from the University of Antwerp and a Master's degree in Financial Management from the Vlerick Business School. Passionate by innovation and entrepreneurship, he also participated to an Executive Master in Venture Capital at the Berkeley Haas School of Business. Prior to joining Econopolis, he managed the Investor Relations & Treasury office at Orange Belgium, a telecom company. Siddy also held the position of Telecom, Media & Technology analyst at a large Belgian Asset Management firm. Further, he is also active in the advisory board of StartupVillage and The Beacon, a business and innovation hub in the center of Antwerp focused on Internet of Things and Artificial Intelligence in the domains of industry, logistics and smart city. At Econopolis, he is Portfolio Manager of the Econopolis Exponential Technologies Fund.
#MacroFriday: Taiwan's economic tides ebb and flow, as semiconductor index rides the waves
This week, one of the most important semiconductor-related company published their third quarter results, and the market responded favorably. This positive reception shouldn't come too much as a surprise, and here's why. There exists a striking correlation between Taiwan's economy and the global semiconductor industry, rooted in Taiwan's dominant position in chip manufacturing. Taiwan Semiconductor Manufacturing Company (TSMC), the world's largest contract chipmaker, along with other Taiwanese firms, plays a crucial role in the global semiconductor supply chain. This symbiotic relationship means Taiwan's economic health is intrinsically linked to the fortunes of the global chip industry. Moreover, the semiconductor industry historically served as a barometer for the broader global economy. Chips are fundamental components in a vast array of products, from smartphones and computers to automobiles and industrial equipment. As such, demand for semiconductors often reflects overall economic activity and consumer confidence worldwide. This time around one also needs to take into account the huge investment in artificial intelligence and data centers that is currently happening.
The graph below illustrates the intricate relationship between Taiwan's leading economic indicator and the Philadelphia Semiconductor Index (SOX) from 1995 to 2023. The blue line represents Taiwan's economic indicator, while the yellow line shows the annual growth of the SOX. Gray bars indicate recessions in the United States.
Focusing on recent developments, the graph shows that Taiwan's leading economic indicator has been firming up in positive territory, currently standing at 3.6. This uptick suggests a potential improvement in Taiwan's economic outlook. However, interestingly, the SOX appears not to have fully caught up with this positive trend yet. The SOX's current position, while positive at 54.5, doesn't seem to reflect the same degree of optimism as Taiwan's indicator. Who knows what is coming?
About the author
Siddy Jobe