The official manufacturing purchasing managers’ index (PMI) stood at 46.6 last month, up from 45.1 in November, as local manufacturers have yet to finalize inventory adjustments due to tepid external demand and the absence of any major innovations for technology devices, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday.
Operating conditions for the manufacturing industry have deteriorated over the past six months, and firms have dim business outlooks, the Taipei-based think tank said.
“Despite the easing pace of deterioration, the global slowdown has yet to bottom out judging from the latest data,” CIER president Wu Chung-shu (吳中書) told a media briefing.
The December data confirmed a disappointing year for Taiwanese firms’ exports and industrial output, both of which might drop to their lowest levels since the global financial crisis struck in 2008 to 2009.
The PMI seeks to gauge the health of local manufacturers, with scores above 50 signifying business expansion and values below the neutral mark indicating contraction.
The sub-indices on new orders and exports registered 45.7 and 43.8 last month, a small improvement from 44.9 and 45.7 in November, the monthly survey found.
Supply Management Institute in Taiwan (SMIT, 中華採購與供應管理協會) executive director Steve Lai (賴樹鑫) said he was not surprised at the results given the lackluster sales of Apple Inc’s iPhone 6S, iPad Pro and Apple Watch.
“Apple Watch failed to create a big splash and the iPad Pro failed to knock out laptops as the US technology giant had boasted,” Lai said, adding that iPhone 6S sales waned after first weekend sales hit a record high.
Smarter and friendlier innovations are necessary to impress users and local firms in the supply chain, Lai said.
Customers at home and abroad would refrain from active inventory building in the short term, as the first quarter is usually a slow season for consumer electronics sales, Wu said.
The slowdown in China might also raise uncertainty about the Lunar New Year demand, Wu said.
Caixin’s purchasing managers’ index for China came in weaker at 48.2 last month, down from 48.6 in November, according to a survey released yesterday.
In related news, non-manufacturing activity in Taiwan fared better last month when the NMI recovered to the neutral state with a 50 point, the CIER said.
The advent of the Lunar New Year next month and the government’s stimulus program helped shore up domestic demand, the institute said.
However, firms in services sectors are pessimistic about the landscape in the coming six months, with concerns poor exports could drag on businesses, Wu said.
HEAVY INVESTMENT: Moody’s affirmed the firm’s ‘Aa3’ rating with a ‘stable’ outlook due to its leading position in the industry and ability to match customer requirements Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) revenue this year is expected to increase about 21 percent to NT$1.29 trillion (US$44.01 billion) from NT$1.07 trillion last year, driven by strong demand for advanced 5-nanometer and 7-nanometer chips mainly used in smartphones and high-performance computing devices, a Moody’s Investors Service report on Wednesday said. TSMC’s rate of revenue growth next year is to increase to 7.5 percent, the ratings agency said. The company, which supplies 5-nanometer chips for Apple Inc’s new iPad series, has introduced the advanced chips ahead of its competitors and gained a significant share of the market for the foundry industry’s
NO VIRUS BLUES: A SEMI Taiwan official said that the virus does not slow down the global semiconductor industry’s investment in manufacturing equipment The production value of the nation’s semiconductor industry is expected to grow 16.7 percent this year from last year, outpacing the global industry’s 3.3 percent growth, industry association SEMI said yesterday. That would help Taiwan safeguard its second spot in the global semiconductor market with a production value of more than NT$3 trillion (US$102.73 billion), SEMI Taiwan president Terry Tsao (曹世綸) told a media briefing in Taipei for the Semicon Taiwan trade show beginning today. The global semiconductor industry’s production value is expected to increase to US$426 billion this year, SEMI said. In terms of semiconductor equipment investment, equipment billings from Taiwanese firms
Taipei Times: When do you think the hospitality industry can return to how it was before the COVID-19 pandemic? How does Formosa International Hotels Group (FIH, 晶華酒店集團) fare this quarter and beyond? FIH chairman Steve Pan (潘思亮): The virus outbreak will have a serious impact on business travel, driven mainly by meetings, incentive travel, conferences and exhibitions over the past three decades. For the past six months, many businesspeople have grown used to exchanging information on the Internet, where more people can participate. The trend might sustain for three to five years until people are vaccinated and it is safe to
DIGITAL COMMERCE: In 2016, only 2 percent of orders were delivered in Taiwan, but that has risen to 10 percent, Foodpanda Taiwan Co operations director Nick Yu said Online food delivery platforms have seen explosive growth in Taiwan this year, helped by business opportunities related to the COVID-19 pandemic, company executives said at a digital commerce conference in Taipei yesterday. When the threat of COVID-19 kept people from going out to eat, more people experimented with ordering food deliveries online, Foodpanda Taiwan Co Ltd (富胖達) operations director Nick Yu (余岳勳) said. Foodpanda started operations in Taiwan in 2012. “We experienced 5,000 percent growth in the past 24 months,” Yu said. “That’s more than the previous six years combined.” In 2016, only 2 percent of food orders were delivered in Taiwan, but that