The COVID-19 pandemic last month continued to weigh on business across nearly all sectors, dragging the official manufacturing purchasing managers’ index (PMI) to a record low, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday.
The PMI shed 2.8 points to 44.8, the worst showing since the launch of the survey in July 2012, as all manufacturing sectors reported declines in business, the survey found.
PMI aims to gauge the manufacturing industry’s health, with points higher than 50 indicating business expansion and values lower than the threshold suggesting contraction.
It was the second consecutive month it has retreated, with makers of electronics and biotech products no longer immune to the effects of the virus, the Taipei-based think tank said.
“Firms are generally conservative about business, although not as worried as during the height of the outbreak,” CIER president Chang Chuang-chang (張傳章) told an online media briefing.
Still, firms hesitate to speculate on a recovery, as uncertainty remains high and virus infections have not yet been brought under control in many parts of the world, Chang said.
The sub-index on new business orders fell to 35.9, the reading on industrial output slumped to 36.8 and the measure on new export orders tumbled to 34.4, the survey found.
Firms reduced headcount levels, accounting for a 3.2 point drop in the employment sub-index, it said.
However, inventory levels stayed high, driven by fears of potential supply chain disruptions, it said.
The inventory gauge and clients’ inventory readings rose 0.8 points and 4.5 points respectively to 51.3 and 55, a record high, CIER said.
Academia Sinica Institute of Economics director Kamhon Kan (簡錦漢) said high inventory levels without corresponding order growth is not a healthy signal and might lead to supply gluts later.
However, Supply Management Institute in Taiwan (中華採購與供應管理協會) executive director Steve Lai (賴樹鑫) provided a positive interpretation, saying that high inventory reflects confidence on the part of companies about their business prospects.
Major local tech companies have said that their customers were pressing ahead with 5G deployment, unaffected by poor sales of smartphones and other consumer electronics amid the pandemic.
The sub-index on the six-month business outlook remained weak at 30.8, but picked up 5.1 points from a month earlier, the survey showed.
The non-manufacturing index (NMI) rose 2.7 points from a month earlier to 45.2.
The figure suggested that most service-focused firms continued to struggle, with the exception of hotels and restaurants.
The hospitality sector rebounded to 59.7, thanks to Mother’s Day sales and confidence about social activity after Taiwan reported no new local infections for more than a month, CIER said.
CHIP RACE: Three years of overbroad export controls drove foreign competitors to pursue their own AI chips, and ‘cost US taxpayers billions of dollars,’ Nvidia said China has figured out the US strategy for allowing it to buy Nvidia Corp’s H200s and is rejecting the artificial intelligence (AI) chip in favor of domestically developed semiconductors, White House AI adviser David Sacks said, citing news reports. US President Donald Trump on Monday said that he would allow shipments of Nvidia’s H200 chips to China, part of an administration effort backed by Sacks to challenge Chinese tech champions such as Huawei Technologies Co (華為) by bringing US competition to their home market. On Friday, Sacks signaled that he was uncertain about whether that approach would work. “They’re rejecting our chips,” Sacks
Taiwan’s exports soared 56 percent year-on-year to an all-time high of US$64.05 billion last month, propelled by surging global demand for artificial intelligence (AI), high-performance computing and cloud service infrastructure, the Ministry of Finance said yesterday. Department of Statistics Director-General Beatrice Tsai (蔡美娜) called the figure an unexpected upside surprise, citing a wave of technology orders from overseas customers alongside the usual year-end shopping season for technology products. Growth is likely to remain strong this month, she said, projecting a 40 percent to 45 percent expansion on an annual basis. The outperformance could prompt the Directorate-General of Budget, Accounting and
NATIONAL SECURITY: Intel’s testing of ACM tools despite US government control ‘highlights egregious gaps in US technology protection policies,’ a former official said Chipmaker Intel Corp has tested chipmaking tools this year from a toolmaker with deep roots in China and two overseas units that were targeted by US sanctions, according to two sources with direct knowledge of the matter. Intel, which fended off calls for its CEO’s resignation from US President Donald Trump in August over his alleged ties to China, got the tools from ACM Research Inc, a Fremont, California-based producer of chipmaking equipment. Two of ACM’s units, based in Shanghai and South Korea, were among a number of firms barred last year from receiving US technology over claims they have
BARRIERS: Gudeng’s chairman said it was unlikely that the US could replicate Taiwan’s science parks in Arizona, given its strict immigration policies and cultural differences Gudeng Precision Industrial Co (家登), which supplies wafer pods to the world’s major semiconductor firms, yesterday said it is in no rush to set up production in the US due to high costs. The company supplies its customers through a warehouse in Arizona jointly operated by TSS Holdings Ltd (德鑫控股), a joint holding of Gudeng and 17 Taiwanese firms in the semiconductor supply chain, including specialty plastic compounds producer Nytex Composites Co (耐特) and automated material handling system supplier Symtek Automation Asia Co (迅得). While the company has long been exploring the feasibility of setting up production in the US to address
RSS