News Briefing （2020/09/22）
　　Massive capital gains have seen the exchange rate of the New Taiwan Dollar closing at NT$29.152 against the US Dollar and appreciation of NT$1.58 on 18 September 2020. At the time of writing, the exchange rate remains at NT$29.158 to the US Dollar at market close on 21 September 2020. 

Impact Analysis 
　　Since the beginning of 2020, the influx of capital from both Taiwanese and foreign investors has gradually increased the average exchange rate of the Taiwan Dollar against the US Dollar on a monthly basis. Compared to the closing price of NT$30.106 per US Dollar on the last trading day of 2019, the New Taiwan dollar has appreciated by 3.3% at its lowest point of NT$29.152 as of 18 September 2020. Reviewing past fluctuations of this exchange rate over the past two decades, there have been three periods of appreciation of the New Taiwan Dollar that almost surpassed the NT$29 threshold. These occurred in January 2013 (NT$29.039), and January 2018 (NT$29.069), and the third occasion is the current strengthening. This year’s strengthening can be attributed to the return of capital to the country and the comparatively weakened US Dollar. Returning capital through the general trend of de-Sinicization is expected to continue indefinitely. It is highly probable that the New Taiwan Dollar will remain strong into the third quarter of 2020, even with a reduction of an overly high price.

　　Calculated in New Taiwan Dollars, the annual growth rates of output value for Taiwan's PCB industry in the fourth quarter of 2019, the first quarter of 2020, and the second quarter of 2020 were 4.1%, 0.5%, and 6.1% respectively. If the quarterly average exchange rate is used for back-calculation, the annual growth rate of output value in US Dollars is 5.3%, 2.8%, and 10.3% respectively, with the gap between the two enlarged quarter by quarter alongside the New Taiwan Dollar’s appreciation (1.2%, 2.3% and 4.2%). Based on the current exchange rate, the gap for the growth rate of output value into the third quarter may even exceed 6%. So far this year, Taiwan's PCB manufacturers have been negatively affected by the consequences of the COVID-19 pandemic but have also been faced with rapid 5G advancements and impacted by exchange rate factors. Furthermore, PCB manufacturers are likely to face greater operational pressures in anticipation of the demands of the upcoming peak season, especially those manufacturers with a high proportion of their production based in Taiwan.