Export orders for information and communications products reached record levels last month, but overall orders declined for the sixth consecutive month, the Ministry of Economic Affairs said yesterday.
Orders for information and communications products grew 3.3 percent from a year earlier to US$10.53 billion thanks to increased shipments for smartphones, notebook computers and network communication equipment, the ministry said.
However, total export orders declined 3.7 percent year-on-year to US$37.66 billion, although that exceeded the ministry’s forecast of US$36.5 billion, Department of Statistics Director-General Lin Lee-jen (林麗貞) said.
The ministry attributed the decline to falling global demand due to an economic slowdown and client-side inventory adjustments in the semiconductor industry, which led to a year-on-year decline of 4.6 percent in orders for electronics to US$9.72 billion.
A decrease in demand for wafer foundry, wafer probe and packaging services, as well as DRAM chips, also affected the sector, the ministry said.
Export orders for optical equipment dropped 8.9 percent to US$1.76 billion due to slipping demand for large display panels and price cuts amid increased production in China, it said.
Higher US and EU tariffs on steel products led to a decrease in demand for steel and a drop in prices, which led to a decline of 9.4 percent in export orders for base-metal products, the ministry said.
The US-China trade dispute has had a lingering effect on prices for plastic and rubber products, pushing export orders down 6.8 percent year-on-year, while the effect on chemical products was a fall of 12.5 percent, the ministry said.
Machinery equipment was also hit by the trade dispute, reporting a decrease in export orders of 21.9 percent year-on-year, mainly due to a drop in Chinese investment, it said.
The ministry gave a conservative outlook for orders this month.
Improvement should be visible by the second half of the year, Lin said.
Potential US tariff increases on more Chinese goods, including smartphones and computers, would affect exports going forward, she said.
Minister of Economic Affairs Shen Jong-chin (沈榮津) said that potential US sanctions on Huawei Technologies Co (華為) products would not affect Taiwanese firms in its smartphone supply chain too much, as they would move to supply other clients.
The US remained Taiwan’s biggest source of exports, placing US$10.25 billion in orders last month, followed by China, including Hong Kong, (US$9.51 billion) and Europe (US$7.67 billion), the ministry said.
Orders totaled US$3.46 billion for ASEAN members and US$2.2 billion for Japan, it said.
INVESTOR RESILIENCE? An analyst said that despite near-term pressures, foreign investors tend to view NT dollar strength as a positive signal for valuation multiples Morgan Stanley has flagged a potential 10 percent revenue decline for Taiwan’s tech hardware sector this year, as a sharp appreciation of the New Taiwan dollar begins to dent the earnings power of major exporters. In what appears to be the first such warning from a major foreign brokerage, the US investment bank said the currency’s strength — fueled by foreign capital inflows and expectations of US interest rate cuts — is compressing profit margins for manufacturers with heavy exposure to US dollar-denominated revenues. The local currency has surged about 10 percent against the greenback over the past quarter and yesterday breached
MARKET FACTORS: Navitas Semiconductor Inc said that Powerchip is to take over from TSMC as its supplier of high-voltage gallium nitride chips Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday in a statement said that it would phase out its compound semiconductor gallium nitride (GaN) business over the next two years, citing market dynamics. The decision would not affect its financial targets announced previously, the world’s biggest contract chipmaker said. “We are working closely with our customers to ensure a smooth transition and remain committed to meeting their needs during this period,” it said. “Our focus continues to be on delivering sustained value to our partners and the market.” TSMC’s latest move came unexpectedly, as the chipmaker had said in its annual report that it has
Gudeng Precision Industrial Co (家登精密), the sole extreme ultraviolet pod supplier to Taiwan Semiconductor Manufacturing Co (台積電), yesterday said it has trimmed its revenue growth target for this year as US tariffs are likely to depress customer demand and weigh on the whole supply chain. Gudeng’s remarks came after the US on Monday notified 14 countries, including Japan and South Korea, of new tariff rates that are set to take effect on Aug. 1. Taiwan is still negotiating for a rate lower than the 32 percent “reciprocal” tariffs announced by the US in April, which it later postponed to today. The
ELECTRONICS: Strong growth in cloud services and smart consumer electronics offset computing declines, helping the company to maintain sales momentum, Hon Hai said Hon Hai Precision Industry Co (鴻海精密) on Saturday announced that its sales for last month rose 10 percent year-on-year, driven by strong growth in cloud and networking products amid the ongoing artificial intelligence (AI) boom. The company, also known internationally as Foxconn Technology Group (富士康科技集團), reported consolidated sales of NT$540.24 billion (US$18.67 billion) for the month, the highest ever for the period, and a 10.09 percent increase from a year earlier, although it was down 12.26 percent from the previous month. Hon Hai, which is Apple Inc’s primary iPhone assembler and makes servers powered by Nvidia Corp’s AI accelerators, said its cloud
RSS