Manufacturing revenue shrank 0.8 percent annually to NT$12.84 trillion (US$391.92 billion) in the first half of the year, dragged down by weaker-than-expected global smartphone demand and falling global crude oil prices, the Ministry of Economic Affairs said yesterday.
Revenue in the second half may be flattish or even decline from a year earlier because of a higher comparison base last year, the ministry said.
Last quarter alone, revenue dropped 2.9 percent to NT$6.46 trillion from a year earlier, as slowing smartphone demand negatively affected the sales performance of Taiwanese chip designers.
“Sales in the second quarter contracted on an annual basis for the first time in the past seven quarters,” Department of Statistics Deputy Director-General Yang Kuei-hsien (楊貴顯) said by telephone.
Global smartphone shipments are forecast to grow 10.4 percent to 1.44 billion units this year, down from last year’s 27.5 percent annual growth, International Data Corp said in its latest report, citing soft demand from China.
Yang said Taiwan’s panel industry also saw an annual decline in revenue last quarter, due to falling average selling prices and rising competition from China, Japan and South Korea.
The continual decline in global crude and stainless steel prices further contributed to falling revenues at Taiwanese petrochemical and steel companies, he said.
While the computer component, optical module and machinery sectors saw revenue rise last quarter, the scale of their growth was not enough to offset the sales drop in other manufacturing sectors, Yang said.
The computer component and optical module sector saw a 9.1 percent annual increase in sales to NT$2.14 trillion last quarter, fueled by robust demand for servers and the Apple Watch.
The machinery sector also grew mildly by 1.8 percent annually to NT$261.8 billion last quarter, thanks to demand from Taiwanese manufacturers building new plants in Southeast Asia, ministry data showed.
For this quarter, Yang said that manufacturing revenue would grow from last quarter, supported by the launches of Apple Inc’s new iPhones and other new products by global brands.
“The manufacturing industry’s revenue in the second half of the year would depend on the sales performance of Apple’s new iPhones,” he said.
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