The official Purchasing Managers’ Index (PMI) rose to 50.1 last month, from a marginal decline of 49.2 in November last year, as local manufacturers reported stagnating business despite the holiday season, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday.
The index, which aims to monitor the health of the manufacturing industry — as the nation is home to the world’s top contract chipmakers, chip designers and laptop and smartphone vendors — returned to the course of slow growth last month, aided by a strong recovery in the US, despite uncertainty elsewhere, CIER president Wu Chung-shu (吳中書) told a news conference.
A PMI value above 50 indicates expansion and scores below the threshold suggest contraction.
The growth last month was marginal, as firms tend to exercise caution and lower their inventory levels rather than produce new goods to fill orders during that time of the year, Wu said. The subindex on new orders, likely the most critical gauge given the nation’s heavy dependence on exports, climbed to 50.2 last month, from a contraction of 47 in November, the CIER report said.
Demand for Apple Inc’s new iPhone smartphones remains robust and wearable devices, as well as the Internet of Things might supply catalysts moving forward, Supply Management Institute Taiwan (中華採購與供應管理協會) executive director Steve Lai (賴樹鑫) said.
Firms in the food, machinery and transportation equipment sectors reported thriving business last month, while companies making chemical and optical products, as well as basic raw materials, continued to suffer from tumbling crude oil prices, the report showed. Companies in the electronics and optical sectors also recorded reduced orders due to the advent of the off season, the report said.
The subindex on output logged 50.3 last month, from 48.7 in November, moving virtually alongside the subindex on new orders, according to the report.
Looking forward, firms expressed more confidence about their business outlook in the coming six months, but the subindex stayed remained below the threshold for growth at 49.8 last month, the report said.
Firms are generally looking at a business upturn ahead, except those in the chemical and raw materials industries, the report said.
HSBC Holdings PLC arrived at similar observations, but sounded an alarm that the stagnation might persist.
The British banking group’s HSBC Taiwan Manufacturing PMI fell to 50 last month, down from 51.4 in November, ending 15 months of increase, the report said.
Taiwan’s manufacturing sector was slowing to a standstill at the end of last year, despite strong performance for much of the year, the HSBC report said.
“The slowdown might not be a one-off, given weak economic data in many of Taiwan’s export markets,” HSBC economist John Zhu (朱日平) said in the report.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to