Thu, Sep 22, 2016 - Page 1 News List

Manufacturing revenue forecast to rise: ministry

CONSOLIDATION:The planned merger of two of China’s largest steelmakers is likely to provide a boost to Taiwan’s manufacturers, as it could ease oversupply

By Lauly Li  /  Staff reporter

Revenue of the nation’s manufacturing sector is expected to grow this quarter from a year earlier on the back of rising demand for consumer electronics, ending five straight quarters of annual decline, the Ministry of Economic Affairs said yesterday.

“The ministry is positive that the revenue of the manufacturing sector will expand from last year’s NT$6.56 trillion [US$208.7 billion], mainly driven by strong orders for electronics components,” Department of Statistics Deputy Director-General Wang Shu-chuan (王淑娟) said by telephone.

Demand for communications chips, flat panels and DRAM products are to be the main growth drivers for manufacturing revenue this quarter, Wang said.

The launch of Apple Inc’s iPhone 7 series smartphones and Apple Watch Series 2, as well as other international vendors’ new smartphones, are to benefit Taiwan’s semiconductor firms this quarter, she said.

International TV vendors have been shifting their panel orders from South Korean companies to Taiwanese firms over the past several months, after several South Korean firms closed some of their panel production lines, Wang said.

The reduced panel supply and rising demand resulted in a significant surge in average selling prices for panel products, lending support to Taiwanese manufacturers, she said.

Wang said the ministry forecast that revenue from the PC and optical components sectors could increase in tandem with the robust demand for electronics components.

The annual decline in the petrochemical sector’s revenue is expected to narrow this quarter from last quarter’s 9.9 percent, as global crude oil prices are rebounding to year-earlier levels, she said, adding that improving average selling prices for steel products worldwide are expected to boost revenue growth of Taiwanese steelmakers this quarter.

The planned merger of two of China’s top steelmakers, Baoshan Group (寶鋼集團) and Wuhan Iron and Steel Group (武漢鋼鐵), is likely to be good news for Taiwanese steel mills, as it could ease the supply glut in the industry, she said.

Last quarter, the nation’s manufacturing sector saw its fifth straight quarter of annual decline in revenue, falling 5.2 percent to NT$6.12 trillion from a year earlier, but the size of the annual drop shrank from the previous quarter’s 7.8 percent, the ministry said in a report.

The ministry attributed the slowing decline to improved demand for flat panels and DRAM chips, as well as inventory buildup of semiconductors.

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