Manufacturing output last quarter declined for a third straight quarter, shrinking 7.01 percent year-on-year to NT$3.37 trillion (US$110.46 billion), the Ministry of Economic Affairs (MOEA) said yesterday, attributing it to sluggish global economic growth due to the US-China trade conflict.
While the manufacturing sector would continue to bear the weight of the trade tensions, companies’ relocating their production back to Taiwan, new technologies and various applications, including 5G, artificial intelligence and high-performance computing, could help drive up output going forward, the ministry said.
The decline in output last quarter was led by the electronics components industry — the manufacturing sector’s most important industry — which slid 3.81 percent to NT$940.6 billion, it said.
LCD production, for one, declined as the market remained oversaturated due to increasing Chinese supplies, it said.
However, an increase in chip production as companies build inventory ahead of new product launches helped cushion the fall, it added.
Output from the computer, electronics goods and optical components industry expanded 25.85 percent on an annual basis to hit a six-year high of NT$207.2 billion, thanks to increasing production of servers, networking and communications equipment, automotive electronic control units and thermostat controllers.
New smartphone models driving up production of camera lenses further contributed to the industry’s output last quarter, the ministry said.
Affected by falling international crude oil prices and routine plant maintenance, chemical materials output fell 23.95 percent to NT$400.7 billion, the ministry said.
Base metal output sank 13.41 percent to NT$338.1 billion, as the steel market was hit by US and European tariffs, cheap imported steel products and waning demand for new vehicles, it said.
As companies put their brakes on investing in equipment due to rising market uncertainties stemming from the US-China trade dispute, the machinery equipment industry’s output contracted 13.22 percent to NT$159.2 billion.
For the eighth quarter in a row, the vehicle and auto parts industry’s output declined 4.04 percent to NT$84.4 billion, as domestic automakers faced tough import competition and customers digested inventory, it said.
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