The manufacturing purchasing managers’ index (PMI) increased to 56.5 last month, staying in expansion territory for the seventh consecutive month as demand for new-generation handsets fared stronger than expected, lending support to local firms in that supply chain, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday.
The latest PMI data bode well for the nation’s export-focused economy, which might continue to improve at a slow but stable pace, CIER president Wu Chung-shu (吳中書) said.
“The economy has embarked on the course of recovery for a while, despite the pace being modest,” Wu told a news conference.
The PMI aims to gauge the health of the manufacturing industry, with scores above 50 indicating expansion and scores below the threshold suggesting contraction.
Wu attributed the upswing primarily to the launches of next-generation mobile devices by Apple Inc, a well as Chinese firms Huawei Technologies Co (華為) and Oppo Mobile Telecommunications Corp (歐珀移動).
Taiwan is home to the world’s largest contract chipmakers, chip designers and suppliers of camera lenses, batteries and other electronic components.
The fast-growing Internet of Things sector also lent a helping hand, CIER said.
The sub-index on new orders gained 2 points to 59.3, while the reading on output increased 2.6 points to 59.9, according to the Taipei-based think tank’s monthly survey.
The upturn encompassed most sectors, with firms involved in making food, textile products and basic raw materials not improving, the survey found.
The private Nikkei Taiwan Manufacturing PMI showed similar results with a reading of 52.2, the highest in two years.
“The PMI data show a steady build of momentum across the manufacturing industry as client demand strengthened across domestic and international markets,” said Annabel Fiddes, an economist at IHS Markit, which compiles the survey.
CIER researcher Chen Shin-hui (陳馨蕙) said battery explosion problems plaguing Samsung’s Galaxy Note 7 devices boosted sales of other brands.
The landscape looks brighter this quarter and beyond given the increase in backlogs and unfinished work, the CIER and Nikkei surveys said.
The six-month outlook tracked by CIER stood at 53.5 last month, meaning most firms expect business improvement, Wu said.
The expansion mode extended to non-manufacturing sectors as the non-manufacturing index was 51 last month, above the neutral mark for the fourth consecutive month, CIER said.
However, firms in non-manufacturing sectors are downbeat over the business outlook, dragging the six-month outlook index to 40.9, worse than 43 recorded one month earlier, the survey said.
Declines in Chinese tourism and property transactions weighed on the sentiment, Wu said.
‘BIG LOSS’: This year might see the last generation of Huawei’s Kirin chips, as their production would stop next month because they are made using US technology Chinese tech giant Huawei Technologies Co (華為) is running out of processor chips to make smartphones due to US sanctions and would be forced to stop production of its own most advanced chips, a company executive has said, in a sign of growing damage to Huawei’s business from US pressure. Huawei, one of the biggest producers of smartphones and network equipment, is at the center of US-Chinese tension over technology and security. Washington last year cut off Huawei’s access to US components and technology, and those penalties were tightened in May, when the White House barred vendors worldwide from using US
’WHITE BOX’: The open platform would give local firms access to Cisco’s cloud-based mobile network to develop 5G telecom equipment and tap into the global market The Ministry of Economic Affairs (MOEA) yesterday introduced a new 5G “open lab” in collaboration with US-based information technology and networking giant Cisco Systems Inc to address the rapidly growing “white box” 5G networking equipment market. The open lab will be a platform where Taiwanese manufacturers can access Cisco’s cloud-based mobile network to develop their own 5G telecom equipment, such as small-cell base stations, network switches, modems and Internet of things (IoT) devices, a ministry statement said. The open platform would allow Taiwanese manufacturers to tap into the lucrative 5G telecom equipment market, which was previously monopolized by Nokia Oyj, Ericsson AB
CORPORATE SCANDAL: Cathay Life has invested NT$13.3 billion in Bank Mayapada since 2015, but the latest loss of NT$8.8 billion has completely written off its investment Cathay Life Insurance Co (國泰人壽) yesterday said it would recognize an investment loss of NT$8.8 billion (US$298.1 million) in Indonesia’s Bank Mayapada Internasional Tbk PT due to concerns about the lender’s operations amid a corporate scandal. The company said it would revise its earnings result for June, from a net profit of NT$6.52 billion to a net loss of NT$520 million, its first monthly loss over the past 17 months. After booking an investment loss of NT$5.2 billion in Bank Mayapada earlier this year, Cathay Life has so far recognized total investment losses of NT$14 billion in the lender, executive vice president
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported that revenue last month expanded 25 percent annually, but fell 12.8 percent month-on-month to NT$105.96 billion (US$3.59 billion). In the first seven months of this year, the chipmaker’s revenue surged 33.6 percent to NT$727.26 billion, compared with NT$544.46 billion a year earlier. TSMC has said it aims to grow its revenue by more than 20 percent this year. The company has since May 15 stopped taking new orders from Huawei Technologies Co (華為), its second-biggest customer after Apple Inc, due to the US’ restrictions on exports containing US technologies. TSMC has no plans to