The climate gauge for the nation’s manufacturing sector in September remained “yellow-red” for the fifth consecutive month, reflecting fast growth, even though port congestion and supply chain disruptions posed uncertainty and drove up operational costs, the Taiwan Institute of Economic Research (TIER, 台經院) said yesterday.
The composite index for the manufacturing sector fell 0.21 points to 16.27 from August, as power rationing and emission restrictions in China slightly weighed on input activity, but the index remained just inside the “yellow-red” range of 16 to 18.5 points, the Taipei-based institute said.
EVERGRANDE WOES
Photo: Chen Rou-chen, Taipei Times
While cash woes plaguing Chinese property developer China Evergrande Group (恆大集團) also dampened sentiment, share prices of electronics, machinery equipment and telecommunication companies picked up, lending support to the overall score, it said.
The institute uses a five-color system to gauge manufacturing activity, with “blue” suggesting recession, “yellow-blue” a slowdown, “green” stability, “yellow-red” fast growth and “red” overheating.
It was the seventh month this year that the manufacturing sector reported a yellow-red reading, the institute said.
Among the five components in the composite index, the sub-index on the operating environment gained 0.38 points, while selling prices were flat, as the peak season might be over for some sectors with correction pressure building, it said.
The input measure lost 0.29 points and the cost tracker shed 0.01 points, it added.
The reading for industries supplying essential goods, such as textile products, was yellow-red, although lockdowns in Vietnam caused supply chain disruptions, it found.
Most Taiwanese textile companies operate manufacturing facilities in Vietnam to save on production costs.
Strong exports pushed up demand for cardboard boxes, causing their prices to increase, the institute said.
The measure also turned yellow-red for manufacturers of petrochemical and plastic products, supported by soaring crude and oil product prices, it said.
However, container shortages and port bottlenecks abroad have delayed their input schedule, it added.
Base metal suppliers reported double-digit percentage growth in business as they continued to benefit from increasing infrastructure spending in the US and Europe, the institute said, adding that machinery equipment vendors were less impressive, reporting steady sales.
Business at electronic component providers remained robust on the back of new product launches and insatiable demand for 5G technology and Internet of Things applications, the institute said.
PENT-UP DEMAND
Auto parts suppliers reported price hikes amid pent-up demand for vehicles, but port congestion and a global chip shortage stretched delivery times, causing the vehicle market in China to slow down, which has turned the reading for related sectors in Taiwan to yellow-blue, it said.
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) is expected to share his views about the artificial intelligence (AI) industry’s prospects during his speech at the company’s 37th anniversary ceremony, as AI servers have become a new growth engine for the equipment manufacturing service provider. Lam’s speech is much anticipated, as Quanta has risen as one of the world’s major AI server suppliers. The company reported a 30 percent year-on-year growth in consolidated revenue to NT$1.41 trillion (US$43.35 billion) last year, thanks to fast-growing demand for servers, especially those with AI capabilities. The company told investors in November last year that
Intel Corp has named Tasha Chuang (莊蓓瑜) to lead Intel Taiwan in a bid to reinforce relations between the company and its Taiwanese partners. The appointment of Chuang as general manager for Intel Taiwan takes effect on Thursday, the firm said in a statement yesterday. Chuang is to lead her team in Taiwan to pursue product development and sales growth in an effort to reinforce the company’s ties with its partners and clients, Intel said. Chuang was previously in charge of managing Intel’s ties with leading Taiwanese PC brand Asustek Computer Inc (華碩), which included helping Asustek strengthen its global businesses, the company
Taiwanese suppliers to Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) are expected to follow the contract chipmaker’s step to invest in the US, but their relocation may be seven to eight years away, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. When asked by opposition Chinese Nationalist Party (KMT) Legislator Niu Hsu-ting (牛煦庭) in the legislature about growing concerns that TSMC’s huge investments in the US will prompt its suppliers to follow suit, Kuo said based on the chipmaker’s current limited production volume, it is unlikely to lead its supply chain to go there for now. “Unless TSMC completes its planned six
TikTok abounds with viral videos accusing prestigious brands of secretly manufacturing luxury goods in China so they can be sold at cut prices. However, while these “revelations” are spurious, behind them lurks a well-oiled machine for selling counterfeit goods that is making the most of the confusion surrounding trade tariffs. Chinese content creators who portray themselves as workers or subcontractors in the luxury goods business claim that Beijing has lifted confidentiality clauses on local subcontractors as a way to respond to the huge hike in customs duties imposed on China by US President Donald Trump. They say this Chinese decision, of which Agence
RSS