The nation’s exports last month fell 4.8 percent from a year earlier to US$27.72 billion, extending April’s 3.3 percent decline, as escalating US-China trade tensions cooled demand for most products and soured outlooks, the Ministry of Finance said yesterday.
“Firms have misgivings about doing business as uncertainty increases,” Department of Statistics Director-General Beatrice Tsai (蔡美娜) said.
It is the seventh straight month that the critical economic gauge posted a negative cyclical movement without any sign of improvement, Tsai added.
Photo: CNA
The Directorate-General of Budget, Accounting and Statistics last month projected that exports might remain negative for the rest of the year, rather than posting fractional growth as previously forecast.
Non-technology sectors were hardest hit as shipments of base metal products shrank 20 percent, chemical products 19.3 percent and plastic products 14 percent from levels last year, Tsai said.
The retreat is the fastest in three years, exacerbated by falling prices for raw materials and base metals, as firms hesitate over building inventories, she said.
Weak sentiment also caused shipments of machinery products to contract 12.8 percent, optical products 8.8 percent and electrical products 5.5 percent, a ministry report said.
Bucking the downturn were chipsets with a 4.4 percent increase, and information and communications products with a 22.9 percent increase, it said.
“China’s Huawei Technologies Co (華為) reportedly made purchases to manage an imminent supply crunch following Washington’s trade restrictions on the company,” Tsai said.
Imports contracted 5.9 percent last month to US$23.22 billion, allowing Taiwan to achieve a trade surplus of US$4.49 billion, the report said.
Sluggish imports came after purchases of capital equipment fell 7.4 percent to US$3.48 billion, ending five consecutive months of gains, Tsai said.
Volatile economic conditions make local companies cautious, she said.
“Exports to China dropped 6.9 percent to US$11.03 billion, as some Taiwanese companies cut dependence on the market as a manufacturing base and moved production lines back home,” Tsai said.
Shipments to the US increased 8.6 percent to US$393.7 billion, raising its share of total shipments to a record 14.2 percent thanks to the relocation of production facilities, she said.
Uncertainty weakened exports to Europe by 8 percent and ASEAN markets by 11.2 percent, the ministry said.
“Looking ahead, declines in outbound shipments this month might be 2 to 4.5 percent,” Tsai said.
For the first five months of the year, declines in exports averaged 4.2 percent, while imports fared better, dropping only 1.2 percent, the ministry said.
ARTIFICIAL INTELLIGENCE: The chipmaker last month raised its capital spending by 28 percent for this year to NT$32 billion from a previous estimate of NT$25 billion Contract chipmaker Powerchip Semiconductor Manufacturing Corp (力積電子) yesterday launched a new 12-inch fab, tapping into advanced chip-on-wafer-on-substrate (CoWoS) packaging technology to support rising demand for artificial intelligence (AI) devices. Powerchip is to offer interposers, one of three parts in CoWoS packaging technology, with shipments scheduled for the second half of this year, Powerchip chairman Frank Huang (黃崇仁) told reporters on the sidelines of a fab inauguration ceremony in the Tongluo Science Park (銅鑼科學園區) in Miaoli County yesterday. “We are working with customers to supply CoWoS-related business, utilizing part of this new fab’s capacity,” Huang said, adding that Powerchip intended to bridge
Microsoft Corp yesterday said that it would create Thailand’s first data center region to boost cloud and artificial intelligence (AI) infrastructure, promising AI training to more than 100,000 people to develop tech. Bangkok is a key economic player in Southeast Asia, but it has lagged behind Indonesia and Singapore when it comes to the tech industry. Thailand has an “incredible opportunity to build a digital-first, AI-powered future,” Microsoft chairman and chief executive officer Satya Nadella said at an event in Bangkok. Data center regions are physical locations that store computing infrastructure, allowing secure and reliable access to cloud platforms. The global embrace of AI
RIDING AI WAVE: : Most of its NT$15bn capital budget would be spent on packaging technologies used in AI and HPC chips and advanced testing technology, it said Chip testing and packaging service provider Powertech Technology Inc (PTI, 力成科技) plans to increase this year’s capital expenditure by 50 percent to expand capacity to meet growing demand for advanced memorychips used in artificial intelligence (AI) products. The company proposed to spend NT$15 billion (US$460.94 million) to expand advanced capacity and equipment, compared with a budget of NT$10 billion it planned three months ago. “We are seeing a recovery in market demand as well as new business opportunities. We will spend heavily on advanced packaging” equipment, Powertech chief executive officer Boris Hsieh (謝永達) told investors on Tuesday. “We will focus on ramping
INFLATION WATCH: A rate hike in March would help keep inflation at 2.16 percent this year, although a weak currency and higher electricity rates are an issue, S&P said Moody’s Ratings and S&P Global Ratings have reaffirmed Taiwan’s sovereign credit ratings at “As3” and “AA+” respectively with a stable outlook on the back of high income and wealth levels, a strong institutional framework and robust external positions. The affirmations came as Taiwan’s economy is gaining momentum after quarters of slowdown induced by stubborn global inflation and monetary tightening. Taiwan’s strong fiscal and external buffers have improved relative to peers as evidenced by recent shocks linked to the COVID-19 pandemic and the ongoing US-China technology dispute, the two ratings firms said. “Taiwan stands as the epicenter of the global semiconductor supply chain, accounting