The manufacturing sector’s fixed-asset investments plunged 18 percent year-on-year to NT$233 billion (US$7.76 billion) last quarter, the first annual contraction in eight quarters and the lowest investment level in the past five quarters, the Ministry of Economic Affairs said yesterday.
The growth momentum of fixed-asset investments decelerated in the second quarter this year, only expanding 1 percent annually compared with 17 percent year-on-year growth in the first quarter of this year, the Department of Statistics said.
“Last quarter’s decline was mainly due to the comparison base being lifted by the substantial production expansion plans of a local semiconductor company the previous year,” department Deputy Director-General Wang Shu-chuan (王淑娟) said by telephone.
The equipment that the company purchased last year became operational in the first quarter, so the company slowed its equipment purchases in the second and third quarters, which consequently had a drag on the fixed-asset investments of the overall sector, she said.
The manufacturing sector’s fixed-asset investments totaled NT$759.8 billion in the first three quarters, falling 1.2 percent from the previous year, the data showed.
“The annual contraction should only be a short-term situation. The momentum should pick up soon when the company starts investing its new plant in Tainan,” Wang said.
She declined to name the semiconductor company, but it is believed that she was referring to Taiwan Semiconductor Manufacturing Co (TSMC, 台積電).
TSMC in September announced plans to build a 3-nanometer chip plant in Tainan, beating rivals in unveiling the world’s first investment plan for a 3-nanometer fab.
The government has unveiled plans to improve Taiwan’s investment environment and the ministry also has measures to attract foreign investors, both of which would help inject energy into domestic fixed-asset investments, Wang said.
In related news, revenue in the manufacturing sector rose 4.4 percent annually to NT$6.75 trillion during the July-to-September period, the fourth consecutive quarter of annual expansion, the ministry said.
The revenue increase was driven by traditional industries, such as those that manufacture chemicals, basic metals and oil products.
The quarterly result brought combined revenue to NT$19.18 trillion in the first three quarters, rising 4.5 percent year-on-year, the ministry’s data showed.
The ministry estimates that revenue in the manufacturing sector this quarter is to expand from the previous year, driven by the peak season for consumer electronics goods, Wang said.
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