Taiwan's export orders and factory production fell in February as the Lunar New Year holiday shut factories and businesses, though rising US demand for mobile phones and computer chips may return them to growth in coming months.
February export orders fell 5.1 percent from a year earlier to US$10.16 billion, the Ministry of Economic Affairs said. Factory production fell 11.5 percent year-on-year.
For the first two months of the year together, orders rose 1.9 percent from a year earlier to US$21.48 billion and production declined 0.2 percent.
Taiwan's orders and production -- which fell for 10 straight months last year -- are returning to growth as faster US growth prompts customers to restock their inventories. Orders indicate shipments in two to three months.
"Many of our important customers are demanding more wafers," said Harvey Chang (張孝威), chief financial officer at Taiwan Semiconductor Manufacturing Co (台積電), the world's biggest made-to-order chipmaker.
"This is not from a single set of customers -- it's an across-the-board situation."
TSMC, which sold four-fifths of its chips to US customers in the fourth quarter, said it may boost capital spending this year as semiconductor demand rises.
Rising overseas demand will probably help Taiwan's economy grow 0.5 percent this quarter from last year, snapping a three- quarter contraction, the government estimates. Export orders may expand as much as 2 percent this quarter and will keep accelerating for the rest of the year, said Chang Yaw-tzong (張耀聰), director-general of the ministry's statistics department.
"I do not rule out the possibility that monthly export orders will post double-digit [year-on-year] growth between May and July," Chang said.
However, Chang said his earlier forecast for annual growth this year of around five percent for export orders and manufacturing output remained unchanged.
Customers in the US, Taiwan's biggest market, increased orders by 2.7 percent last month from a year earlier, following a 0.8 percent gain in January, the ministry said.
Orders for telecommunications equipment surged 14.6 percent, suggesting demand for mobile-phone handsets and other goods is leading the rebound.
Orders for electronics, Taiwan's biggest export, fell 6.6 percent in February from a year earlier.
Orders from Hong Kong fell 5 percent, European orders slipped 13.9 percent and orders from Japan dropped 18.5 percent.
While rising US consumer spending and factory production are pulling Taiwan's biggest market out of recession, an export rebound may not gain momentum until later this year as customers wait for profit to rise before placing new orders.
"Corporate demand is still weak," said Cheng Hui-ming, chief financial officer at Winbond Electronics Corp (華邦電子), Taiwan's second-largest maker of computer memory chips by market value.
Global PC sales will probably fall 5 percent in the second quarter from the first before expanding later this year as companies delay upgrading machines, according to Salomon Smith Barney Inc.
"It's going to be a year of two halves," said Damian Gilhawley, an economist at KGI Securities Co (中信證券). "The first half will still be quite weak, and the second half strong."
RETHINK? The defense ministry and Navy Command Headquarters could take over the indigenous submarine project and change its production timeline, a source said Admiral Huang Shu-kuang’s (黃曙光) resignation as head of the Indigenous Submarine Program and as a member of the National Security Council could affect the production of submarines, a source said yesterday. Huang in a statement last night said he had decided to resign due to national security concerns while expressing the hope that it would put a stop to political wrangling that only undermines the advancement of the nation’s defense capabilities. Taiwan People’s Party Legislator Vivian Huang (黃珊珊) yesterday said that the admiral, her older brother, felt it was time for him to step down and that he had completed what he
Taiwan has experienced its most significant improvement in the QS World University Rankings by Subject, data provided on Sunday by international higher education analyst Quacquarelli Symonds (QS) showed. Compared with last year’s edition of the rankings, which measure academic excellence and influence, Taiwanese universities made great improvements in the H Index metric, which evaluates research productivity and its impact, with a notable 30 percent increase overall, QS said. Taiwanese universities also made notable progress in the Citations per Paper metric, which measures the impact of research, achieving a 13 percent increase. Taiwanese universities gained 10 percent in Academic Reputation, but declined 18 percent
CHINA REACTS: The patrol and reconnaissance plane ‘transited the Taiwan Strait in international airspace,’ the 7th Fleet said, while Taipei said it saw nothing unusual The US 7th Fleet yesterday said that a US Navy P-8A Poseidon flew through the Taiwan Strait, a day after US and Chinese defense heads held their first talks since November 2022 in an effort to reduce regional tensions. The patrol and reconnaissance plane “transited the Taiwan Strait in international airspace,” the 7th Fleet said in a news release. “By operating within the Taiwan Strait in accordance with international law, the United States upholds the navigational rights and freedoms of all nations.” In a separate statement, the Ministry of National Defense said that it monitored nearby waters and airspace as the aircraft
UNDER DISCUSSION: The combatant command would integrate fast attack boat and anti-ship missile groups to defend waters closest to the coastline, a source said The military could establish a new combatant command as early as 2026, which would be tasked with defending Taiwan’s territorial waters 24 nautical miles (44.4km) from the nation’s coastline, a source familiar with the matter said yesterday. The new command, which would fall under the Naval Command Headquarters, would be led by a vice admiral and integrate existing fast attack boat and anti-ship missile groups, along with the Naval Maritime Surveillance and Reconnaissance Command, said the source, who asked to remain anonymous. It could be launched by 2026, but details are being discussed and no final timetable has been announced, the source