The nation’s manufacturing purchasing managers’ index (PMI) last month slowed to 57.6 from 62 in May, as companies continued to see business improve, but at the slowest pace in seven months due to the COVID-19 pandemic, IHS Markit said yesterday.
The growth momentum could cool further until operating conditions normalize, the international research body said in a report.
“The latest PMI data indicated that growth momentum softened across Taiwan’s manufacturing industry at the end of last quarter, with output and new orders both rising at the slowest rates since August last year,” IHS Markit economics associate director Annabel Fiddes said in a press release.
Photo: Wu Chun-feng, Taipei Times
The PMI report aims to capture the health of manufacturing sectors, with values larger than 50 suggesting expansion and points below the threshold indicating contraction.
Weighing on the headline index was a notably slower expansion in production, the report said, adding that the latest increase, though solid, was the softest since August last year.
Respondents indicated that production schedules were affected by raw material shortages, as well as the recent rise in domestic COVID-19 cases.
At the same time, growth in new work also slowed to a 10-month low, with companies saying the outbreak weakened domestic demand.
New export sales also rose at a weaker pace, albeit still robust overall, the report said.
Supply chain delays remained severe, with lead times for inputs deteriorating at one of the fastest rates on record, it said.
Firmer demand for inputs, low inventory levels at vendors and COVID-19 restrictions impeded supplier performance, the report said.
Difficulties in obtaining inputs drove companies to stock inventories and help push up input costs, the report said.
Input cost hikes remained rapid due to more expensive raw materials and transportation services, it said.
Companies by and large opted to pass cost burdens onto clients in the form of increased output charges, although inflation subsided compared with May.
Companies expanded their payroll at a pace that was little changed from one month earlier, the report said. The increase had to do with efforts to meet growing customer demand and capacity pressures persisted, as evidenced by a marked increase in work backlogs, it said.
Taiwanese manufacturers are generally upbeat about business one year ahead, but the degree of confidence slid to an eight-month low, IHS Markit said.
Many firms expect global conditions to gradually emerge from the COVID-19 pandemic, but voiced concern that local infections might hamper growth, it said.
The domestic unit of the Chinese-owned, Dutch-headquartered chipmaker Nexperia BV will soon be able to produce semiconductors locally within China, according to two company sources. Nexperia is at the center of a global tug-of-war over critical semiconductor technology, with a Dutch court in February ordering a probe into alleged mismanagement at the company. The geopolitical tussle has disrupted supply chains, with some carmakers reportedly forced to cut production due to chip shortages. Local production would allow Nexperia’s domestic arm, Nexperia Semiconductors (China) Ltd (安世半導體中國), to bypass restrictions in place since October on the supply of silicon wafers — etched with tiny components to
Singapore-based ride-hailing and delivery giant Grab Holdings Ltd has applied for regulatory approval to acquire the Taiwan operations of Germany-based Delivery Hero SE's Foodpanda in a deal valued at about US$600 million. Grab submitted the filing to the Fair Trade Commission on Friday last week, with the transaction subject to regulatory review and approval, the company said in a statement yesterday. Its independent governance structure would help foster a healthy and competitive market in Taiwan if the deal is approved, Grab said. Grab, which is listed on the NASDAQ, said in the filing that US-based Uber Technologies Inc holds about 13 percent of
Taiwan is open to joining a global liquefied natural gas (LNG) program if one is created, but on the condition that countries provide delivery even in a scenario where there is a conflict with China, an energy department official said yesterday. While Taiwan’s priority is to have enough LNG at home, the nation is open to exploring potential strategic reserves in other countries such as Japan or South Korea, Energy Administration Deputy Director-General Chen Chung-hsien (陳崇憲) said. While the LNG market does not have a global reserve for emergencies like that of oil, the concept has been raised a few times —
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday received government approval to deploy its advanced 3-nanometer (3nm) process at its second fab currently under construction in Japan, the Ministry of Economic Affairs said in a news release. The ministry green-lit the plan for the facility in Kumamoto, which is scheduled to start installing equipment and come online in 2028 with a monthly production capacity of 15,000 12-inch wafers, the ministry said. The Department of Investment Review in June 2024 authorized a US$5.26 billion investment for the facility, slated to manufacture 6- to 12nm chips, significantly less advanced than 3nm process. At a meeting with
RSS