Tue, Mar 26, 2019 - Page 12 News List

Electronics decline weighs down output

CONTRACTION:The index could remain soft this month, as smartphone demand might not pick up until the release of new models in the third quarter, an official said

By Crystal Hsu  /  Staff reporter

The nation’s industrial output contracted 1.8 percent last month from a year earlier as demand for electronics weakened amid a low sales season for technology products and a global economic slowdown, the Ministry of Economic Affairs said yesterday.

The critical economic index fell to 86.15 last month, down 1.8 percent year-on-year and down 19.78 percent month-on-month, Department of Statistics Deputy Director-General Wang Shu-chuan (王淑娟) said, adding that February’s fewer working days also contributed to the decline.

The index might remain soft this month, with a decline of 4 to 7 percent, as demand for smartphones might not pick up until the release of new models in the third quarter, Wang said.

Electronics makers saw output fall 6.14 percent from a year earlier, with sales for chips, flat panels and related components all taking a downturn, the ministry’s report showed.

Wang said that the retreat was the biggest since May 2016, as smartphone sales have been disappointing and the popularity of cryptocurrency mining has subsided, Wang said.

Taiwan Semiconductor Manufacturing Co’s (台積電) manufacturing incident dragged down industrial production. The supplier of chips to Apple Inc’s iPhones cut its quarterly sales forecast last month, citing a shipment of sub-standard chemicals.

Production of optical and computer-related devices bucked the trend with a 25.19 percent increase, as global technology brands upgraded camera lenses and some companies moved China-based production facilities back to Taiwan to avoid tariffs imposed by Washington on Chinese exports, Wang said.

For the first two months of the year, industrial output fell 1.41 percent from a year earlier, affirming signs of economic slowdown at home and abroad, she said.

The development of applications employing 5G technology, artificial intelligence and the Internet of Things might supply a growth catalyst, as the market for smartphones becomes increasingly saturated, Wang said.

Tepid sales extended to the domestic market with commercial sales reporting a 3.3 percent decline in February and retail sales falling by 9.1 percent from a year earlier, the ministry said.

Weak car and motorcycle sales were to blame for low retail figures, as consumers wait for newer models to hit the market, Wang said, adding that retail sales show a positive cyclical movement if car sales are excluded.

Food and beverage sales proved resilient last month with a 0.2 percent increase from a year earlier, despite a relatively high base of comparison, the ministry said, adding that the sector’s sales for January and last month rose 4.7 percent from a year earlier, the ministry said.

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