Taiwan’s industrial production index dropped for a third consecutive month, last month and is expected to face another annual decline this month as there is no growth catalyst, the Ministry of Economic Affairs said yesterday.
The industrial production index fell by 2.99 percent annually to 109.16 last month, mainly due to slowing growth in the semiconductor industry and falling output in the machinery industry because of soft global economic growth, the ministry said.
“As negative factors persist, the ministry expects this month’s industrial production output to drop by 2 percent to 3 percent from a year ago,” Department of Statistics Deputy Director-General Yang Kuei-hsien (楊貴顯) told a news conference.
Yang said the key to increasing the nation’s industrial output is the pace of inventory digestion in the manufacturing sector, especially in the semiconductor industry, which is the pillar of the sector in Taiwan.
Citing the ministry’s monthly survey of local manufacturers, Yang said the inventory-to-sales ratio for the manufacturing sector was about 71 percent last month, an improvement of one percentage point from June’s 72 percent.
Yang said that as some key industries in the manufacturing sector, such as the semiconductor and optical component industries, were slowly increasing their production last month, the ministry is optimistic that the inventory-to-sales ratio can return to a healthy level of between 60 percent and 65 percent sometime in the remainder of the year.
The launch of Apple Inc’s new iPhone models and the upcoming Christmas holiday season might spur demand for consumer electronics and benefit the production growth of Taiwan’s semiconductor and optical module industries in the second half of this year, he said.
However, Yang said local manufacturers need to closely monitor the outlook of the global economy, as well as international crude oil and steel price trends, which are the key variable factors affecting the outlook of Taiwan’s manufacturing sector.
In a separate release, the ministry said that domestic commercial sales fell for a fifth straight month last month, plunging 4.4 percent to NT$1.1892 trillion (US$36.1 billion) from a year ago, dragged down by falling revenue in the wholesale sector.
The 4.4 percent decline marked the largest drop in the past 29 months, the data showed.
Revenue in the wholesale sector, which contributed 68.68 percent of total commercial sales, plunged 5.7 percent to NT$816.8 billion last month from a year ago, mainly due to a continuous fall in purchases from Japan and weak demand for PC-related products, Yang said.
Sales in the retail sector also dropped by 1.9 percent annually to NT$336.1 billion last month, with fuel revenue plunging 23.8 percent because of falling international crude prices, he said, adding that weak jewelry sales also affected the retail sector’s sales performance.
However, revenue in the food and beverage sector increased by 2.9 percent to NT$36.3 billion from a year ago, driven by a growing number of restaurant chain locales and strong sales of beverages due to warm weather, Yang said.
Looking ahead, Yang said this month’s commercial sales are expected to drop from last year’s NT$1.2064 trillion, as he forecasts that the wholesale sector is likely to continue to be affected by fewer purchases from Japan.
However, he said the ministry expects the scale of annual decline this month to be less than last month’s 4.4 percent on the back of the shopping for Ghost Month, the seventh month of the lunar calendar, providing a boost to sales in the retail sector.
After several years flying high as Asia’s best Nvidia Corp proxy, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is increasingly vying with other artificial intelligence (AI) stocks for investor attention. Stock traders are chasing a wider array of beneficiaries as mainstream usage of AI creates demand for hardware beyond the most-advanced chips TSMC makes for Nvidia. Subthemes from the deepening memory crunch to advances in robotics are also luring bids. At the same time, investment caps on single stocks are pushing funds to diversify, while retail investors long familiar with TSMC through its US depositary receipts are being offered a broader set of
UNDER MICROSCOPE: Taiwan detained three people who allegedly conspired to buy servers in Taiwan and export them using fraudulent documentation, prosecutors said Nvidia Corp chief executive officer Jensen Huang (黃仁勳) on Saturday urged Super Micro Computer Inc to tighten up on compliance after Taiwan detained three people this week for allegedly making fraudulent declarations about artificial intelligence (AI) servers made by its US partner. The development marked the nation’s first crackdown on semiconductor smuggling, which grew after the US slapped restrictions on exports of high-end chips such as Nvidia AI accelerators to China. Nvidia is “rigorous” in explaining regulations to all of its partners, Huang told reporters after arriving in Taipei. “Ultimately Super Micro has to run their own company,” he said in response to
TECH RELIANCE: Growth is increasingly reflecting an unequal K-shaped distribution, where technology sectors outperform and other industries struggle, an expert said Standard Chartered Bank has significantly raised its forecast for Taiwan’s economic growth to 9.5 percent this year, up from 7.6 percent previously, citing surging artificial intelligence (AI) demand driving exports, semiconductor production and investment. The upgrade reflects a sustained AI supercycle that continues to fuel demand for advanced chips and technology infrastructure, which form the backbone of Taiwan’s exports, the bank said in a report this week. “We raise our 2026 growth forecast to reflect a much stronger-than-expected first-quarter GDP figure,” Standard Chartered senior economist for greater China and Asia Tommy Wu (胡東安) said in the report. Driven largely by a 35.3 percent
Two of Taiwan’s international carriers, Starlux Airlines Co (星宇航空) and EVA Airways Corp (長榮航空), have retained the five-star airline rating awarded by international airline review organization Skytrax. Starlux was awarded the distinction for a second consecutive year, while EVA Air received it for the 11th straight year, Skytrax said in statements released yesterday and on Thursday last week, respectively. The five-star rating is considered one of the airline industry's highest honors and is awarded following professional audits of airline product and frontline service standards, Skytrax said. The ratings are based on in-depth assessments using unified global quality standards rather than customer review scores
RSS